Form 497K J.P. Morgan Exchange-Tra
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Summary Prospectus July 1, 2021
JPMorgan High Yield Research Enhanced ETF
Ticker: JPHY
Before you invest, you may want to review the Fund’s Prospectus,
which contains more information about the Fund and its risks. You can find the Fund’s Prospectus and other information about the Fund, including the
Statement of Additional Information, online at www.jpmorganfunds.com/funddocuments. You can also get this information at no cost by calling 1-844-457-6383 or by sending an e-mail request to [email protected] or by asking any
financial intermediary that offers shares of the Fund. The Fund’s Prospectus and Statement of Additional Information, both dated July 1, 2021, as may be
supplemented from time to time are incorporated by reference into this Summary Prospectus.
What is the goal
of the Fund?
The Fund seeks to provide a high level of income. Capital appreciation is a secondary objective.
Fees and Expenses of the Fund
The following table describes the fees and expenses that you may pay if you buy, hold and sell Shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the
tables and examples below.
| ANNUAL FUND OPERATING EXPENSES1 (Expenses that you pay each year as a percentage of the value
of your investment) | |
| Management Fees |
0.24% |
| Other Expenses |
0.00 |
| Total Annual Fund Operating Expenses |
0.24 |
1
The Fund's management
agreement provides that the adviser will pay substantially all expenses of the Fund (including expenses of the Trust relating to the Fund), except for the management fees, payments under the Fund’s 12b-1 plan (if any), interest expenses,
dividend and interest expenses related to short sales, taxes, acquired fund fees and expenses (other than fees
for funds advised by the adviser and/or its affiliates), costs of holding shareholder meetings, and litigation and potential litigation and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. Additionally, the Fund shall be
responsible for its non-operating expenses, including brokerage commissions and fees and expenses associated with
that Fund’s securities lending program, if applicable.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in
other funds. The Example does not take into account brokerage commissions that you pay when purchasing or
selling Shares of the Fund. The Example assumes that you invest $10,000 in the Fund for the time periods
indicated. The Example also assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same. Your actual costs may be higher or lower.
| WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | ||||
| |
1 Year |
3 Years |
5 Years |
10 Years |
| SHARES ($) |
25
|
77
|
135
|
306 |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher
transaction costs and may result in higher taxes when Shares are held in a taxable account. These costs, which
are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance.
During the Fund’s most recent fiscal year, the Fund’s portfolio turnover rate was 50% of the average value of its portfolio.
What are the Fund’s main investment strategies?
The Fund is actively managed and invests primarily in high yield, high risk debt securities. As part of its main investment strategy, the Fund may invest in debt obligations structured as
bonds and other debt securities issued by corporate and non-corporate issuers, private placements, other
unregistered securities, convertible securities, debt and convertible securities of Real Estate Investment
Trusts (REITs), preferred stock, variable and floating rate instruments, and zero coupon, pay-in-kind and
deferred payment securities. Issuers may be domestic or foreign, but the Fund only will invest in U.S. dollar
denominated investments. The Fund may invest in debt securities issued by small and mid-cap
companies.
Under normal circumstances, the Fund invests at least 80% of
its Assets in high yield securities. For purposes of this policy a “high yield security” means the
security, at the time of purchase, is rated below investment grade or unrated if the Fund’s adviser, J.P.
Morgan Investment Management Inc. (JPMIM or the adviser) believes it to be of comparable quality to securities
that are rated below investment grade. For purposes of this policy, “Assets” means net assets plus the amount of borrowings for investment purposes. The Fund will provide shareholders with at least 60 days prior notice of any change to this
policy.
In implementing its strategy and seeking to achieve its
investment objective, the Fund constructs a portfolio of holdings that seeks to outperform the Bloomberg
Barclays U.S. Corporate High Yield – 2% Issuer Capped Index (the benchmark) over time while generally
maintaining similar risk characteristics.
The Fund may invest up to 100% of
its total assets in below investment grade or unrated securities. Such securities are also known as “junk
bonds,” “high yield bonds” and “non-investment grade bonds.” Such securities may include “distressed debt.” Distressed debt includes securities of issuers experiencing financial or operating difficulties, securities where the issuer
has defaulted in the payment of interest or principal or in the
1
performance of its covenants or
agreements, securities of issuers that may be involved in bankruptcy proceedings, reorganizations or financial
restructurings of securities of issuers operating in troubled industries.
The Fund mainly invests in securities included within the universe of the benchmark, however, the Fund may
also invest in securities not included within the benchmark or securities or instruments with similar economic
characteristics.
Under normal circumstances, the Fund targets a similar
duration to the benchmark, but is not required to maintain a specific duration and may invest in securities of
any maturity or duration. As of May 31, 2021, the effective duration of the benchmark was 4.12
years.
Investment Process: In managing the Fund, the adviser combines fundamental research with a disciplined portfolio construction process. The adviser utilizes proprietary research,
risk management techniques and issuer and individual security selection in constructing the Fund’s
portfolio. In-depth, fundamental research into issuers and individual securities is conducted by research
analysts who emphasize each issuer’s long-term prospects. This research allows the adviser to rank
issuers within each sector group according to what it believes to be their relative value. The adviser will
ordinarily overweight issuers, securities and sectors that it deems to be attractive and under-weight or not
invest in those issuers, securities and sectors that it believes are unattractive. The adviser may sell a
security as its valuations or rankings change or if more attractive investments become available.
As part of its
credit analysis, the adviser generally also evaluates whether environmental, social and governance factors
could have a material negative or positive impact on the cash flows or risk profiles of companies in the
universe in which the Fund may invest. These determinations may not be conclusive and securities of issuers
that may be negatively impacted by such factors may be purchased and retained by the Fund while the Fund may
divest or not invest in securities of issuers that may be positively impacted by such factors.
The Fund’s Main Investment Risks
The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular instruments or markets are not met.
An investment in this Fund or any other fund may not provide a complete investment program. The
suitability of an investment in the Fund should be considered based on the investment objective, strategies and
risks described in this prospectus, considered in light of all of the other investments in your portfolio, as
well as your risk tolerance, financial goals and time horizons. You may want to consult with a financial
advisor to determine if this Fund is suitable for you.
The Fund is subject to the main risks noted below, any of which may adversely affect the Fund’s net
asset value (NAV), market price, performance and ability to meet its investment objective.
General Market Risk. Economies and financial markets throughout the world are becoming increasingly interconnected, which increases the likelihood that events or conditions in one country or region will adversely impact markets or issuers
in other countries or regions. Securities in the Fund’s portfolio may
underperform in comparison to securities in general financial markets, a particular financial market or other asset classes due to a number of factors, including inflation (or
expectations for inflation), deflation (or expectations for deflation), interest rates, global demand for
particular products or resources, market instability, debt crises and downgrades, embargoes, tariffs, sanctions
and other trade barriers, regulatory events, other governmental trade or market control programs and related
geopolitical events. In addition, the value of the Fund’s investments may be negatively affected by the occurrence of global events such as war, terrorism, environmental disasters, natural disasters or events, country instability, and
infectious disease epidemics or pandemics.
For example, the outbreak of COVID-19, a novel coronavirus disease, has negatively affected economies,
markets and individual companies throughout the world, including those in which the Fund invests. The effects
of this pandemic to public health and business and market conditions, including exchange trading suspensions
and closures may continue to have a significant negative impact on the performance of the Fund’s
investments, increase the Fund’s volatility, negatively impact the Fund’s arbitrage and pricing
mechanisms, exacerbate pre-existing political, social and economic risks to the Fund, and negatively impact
broad segments of businesses and populations. The Fund’s operations may be interrupted as a result, which
may contribute to the negative impact on investment performance. In addition, governments, their regulatory agencies, or self-regulatory organizations may take actions in response to the pandemic that affect the instruments in which the Fund invests, or the issuers of such instruments, in ways that could have a significant negative impact on the
Fund’s investment performance. The full impact of the COVID-19 pandemic, or other future epidemics or
pandemics, is currently unknown.
High Yield Securities Risk. The Fund invests in securities including junk bonds and instruments that are issued by companies that are highly leveraged, less creditworthy or financially distressed. These investments are considered to be speculative and may be subject to greater risk of loss, greater
sensitivity to economic changes, valuation difficulties and potential illiquidity. Such investments may be
subject to additional risks including subordination to other creditors, no collateral or limited rights in
collateral, lack of a regular trading market, liquidity risks, prepayment risks, and lack of publicly available information. High yield securities that are deemed to be liquid at the time of purchase may become illiquid.
In recent years,
there has been a broad trend of weaker or less restrictive covenant protections in the high yield market. Among
other things, under such weaker or less restrictive covenants, borrowers might be able to exercise more
flexibility with respect to certain activities than borrowers who are subject to stronger or more protective
covenants. For example, borrowers might be able to incur more debt, including secured debt, return more capital
to shareholders, remove or reduce assets that are designated as collateral securing high yield securities, increase the claims against assets that are permitted against collateral securing high yield securities or otherwise manage their
business in ways that could impact creditors negatively. In addition, certain privately held borrowers might be
permitted to file less frequent, less detailed or less timely financial reporting or other
2
information, which could negatively
impact the value of the high yield securities issued by such borrowers. Each of these factors might negatively
impact the high yield instruments held by the Fund.
No active trading market may exist for some instruments and certain investments may be subject to restrictions on resale. The inability to dispose of the Fund’s securities and
other investments in a timely fashion could result in losses to the Fund. Because some instruments may have a
more limited secondary market, liquidity and valuation risk may be more pronounced for the Fund. When
instruments are prepaid, the Fund may have to reinvest in instruments with a lower yield or fail to recover
additional amounts (i.e., premiums) paid for these instruments, resulting in an unexpected capital loss and/or
a decrease in the amount of dividends and yield.
Interest Rate Risk. The Fund’s investments in bonds and other debt securities will change in value based on changes in interest rates. If rates rise, the value of these investments
generally declines. Securities with greater interest rate sensitivity and longer maturities are subject to
greater fluctuations in value. The Fund may invest in variable and floating rate loans and other variable and
floating rate securities. Although these instruments are generally less sensitive to interest rate changes than
fixed rate instruments, the value of floating rate loans and other securities may decline if their interest rates do not rise as quickly, or as much, as general interest rates. The Fund may face a heightened level of interest rate risk due to certain
changes in monetary policy. During periods when interest rates are low or there are negative interest rates,
the Fund’s yield (and total return) also may be low or the Fund may be unable to maintain positive
returns.
Credit Risk. The Fund’s investments are subject to the risk that issuers and/or counterparties will fail to make payments when
due or default completely. If an issuer’s or counterparty’s financial condition worsens, the credit
quality of the issuer or counterparty may deteriorate, making it difficult for the Fund to sell such
investments.
Smaller Company Risk. Investments in smaller companies (small cap and mid cap companies) may be riskier, less liquid, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. The securities of smaller companies may trade less frequently and in smaller volumes than securities of larger
companies. As a result, changes in the price of debt or equity issued by such companies may be more sudden or
erratic than the prices of securities, of large capitalization companies, especially over the short
term.
Foreign Securities Risk. U.S. dollar denominated securities of foreign issuers or U.S. affiliates of foreign issuers may be subject to additional risks not faced by domestic issuers. These risks include political and economic risks, civil conflicts
and war, greater volatility, expropriation and nationalization risks, sanctions or other measures by the United
States or other governments, higher transaction costs, delayed settlement, possible foreign controls on
investments, liquidity risks and less stringent investor protection and disclosure standards of foreign markets.
In certain markets where securities and other instruments are not traded “delivery versus payment,”
the Fund may not receive timely payment for securities or other instruments it has delivered or receive
delivery of securities paid for and may be subject to increased risk that the counterparty will fail to make
payments or delivery when due or
default completely. Events and evolving conditions in certain economies or markets may alter the risks
associated with investments tied to countries or regions that historically were perceived as comparatively stable
becoming riskier and more volatile.
Convertible Securities Risk. The value of convertible securities tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the
market value of the underlying securities.
Zero-Coupon, Pay-In-Kind and Deferred Payment Securities Risk. The market value of a zero-coupon, pay-in-kind or deferred payment security is generally more volatile than the market value
of, and is more likely to respond to a greater degree to changes in interest rates and credit quality than,
other fixed income securities with similar maturities and credit quality that pay interest periodically. In
addition, federal income tax law requires that the holder of a zero-coupon security accrue a portion of the
discount at which the security was purchased as taxable income each year. The Fund may consequently have to dispose of portfolio securities under disadvantageous circumstances to generate cash to satisfy its requirement as a regulated
investment company to distribute all of its net income (including non-cash income attributable to zero-coupon
securities). These actions may reduce the assets to which the Fund’s expenses could otherwise be
allocated and may reduce the Fund’s rate of return.
ETF Shares Trading Risk. Shares are listed for trading on the Cboe BZX Exchange, Inc. (the “Exchange”) and are bought and sold in the secondary market at market prices. The
market prices of Shares are expected to fluctuate, in some cases materially, in response to changes in the
Fund’s NAV, the intraday value of the Fund’s holdings, and supply and demand for Shares. The
adviser cannot predict whether Shares will trade above, below or at their NAV. Disruptions to creations and
redemptions, the existence of significant market volatility or potential lack of an active trading market for
the Shares (including through a trading halt), as well as other factors, may result in the Shares trading
significantly above (at a premium) or below (at a discount) to NAV or to the intraday value of the Fund’s
holdings. During such periods, you may incur significant losses if you sell your Shares.
The securities held by the Fund may be traded in markets that close at a different time than the Exchange. Liquidity in those securities may be reduced after the applicable closing
times. Accordingly, during the time when the Exchange is open but after the applicable market closing, fixing
or settlement times, bid-ask spreads on the Exchange and the corresponding premium or discount to the
Shares’ NAV may widen.
Authorized Participant
Concentration Risk. Only an authorized participant may engage in creation or redemption transactions directly with the Fund. The Fund has a limited number of intermediaries that act as authorized participants and none of
these authorized participants is or will be obligated to engage in creation or redemption transactions. To the
extent that these intermediaries exit the business or are unable to or choose not to proceed with creation
and/or redemption orders with respect to the Fund and no other authorized participant creates or redeems,
Shares may trade at a discount to NAV and possibly face trading halts and/or delisting.
3
Industry and
Sector Focus Risk. At times the Fund may increase the relative emphasis of its investments in a particular
industry or sector. The prices of securities of issuers in a particular industry or sector may be more
susceptible to fluctuations due to changes in economic or business conditions, government regulations,
availability of basic resources or supplies, or other events that affect that industry or sector more than securities of issuers in other industries and sectors. To the extent that the Fund increases the relative emphasis of its investments in a
particular industry or sector, the Fund’s Share values may fluctuate in response to events affecting that
industry or sector.
Preferred Stock Risk. Preferred stock generally has a preference as to dividends and liquidation over an issuer’s common stock but ranks junior to debt securities in an issuer’s capital structure. Unlike interest payments on debt securities,
preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred
stock also may be subject to optional or mandatory redemption provisions.
Privately Placed Securities Risk. Privately placed securities generally are less liquid than publicly traded securities and the Fund may not always be able to sell such securities
without experiencing delays in finding buyers or reducing the sale price for such securities. The disposition
of some of the securities held by the Fund may be restricted under federal securities laws. As a result, the
Fund may not be able to dispose of such investments at a time when, or at a price at which, it desires to do so
and may have to bear expenses of registering these securities, if necessary. These securities may also be difficult to value.
REITs Risk. The Fund’s investments in debt and convertible securities of REITs are subject to the same risks as direct
investments in real estate and mortgages, and their value will depend on the value of the underlying real
estate interests. These risks include default, prepayments, changes in value resulting from changes in interest
rates and demand for real and rental property, and the management skill and creditworthiness of REIT issuers.
Debt and convertible securities of REITs are subject to the risks of debt and convertible securities in general. For example, such securities are more sensitive to interest rates than equity securities of REITs.
Cash Transactions Risk. Unlike certain ETFs, the Fund may effect creations and redemptions in cash or partially in cash. Therefore, it may be required to sell portfolio securities and subsequently recognize gains on such sales that the Fund
might not have recognized if it were to distribute portfolio securities in kind. As such, investments in Shares
may be less tax-efficient than an investment in an ETF that distributes portfolio securities entirely in
kind.
Investments in the Fund are not deposits or obligations of, or guaranteed or endorsed by, any
bank and are not insured or guaranteed by the FDIC, the Federal Reserve Board or any other government
agency.
You could lose money investing in the
Fund.
The Fund’s Past Performance
This section provides some indication of the risks of investing in the Fund. The bar chart shows the performance of the Fund’s Shares over the past four calendar years. The table shows the average annual total returns for the past one year and life of
the
Fund. It compares that performance to
the Bloomberg Barclays U.S. Corporate High Yield - 2% Issuer Capped Index. As of 9/9/19, the Fund changed its
investment strategies. In view of these changes, the Fund’s performance record prior to this period might
be less pertinent for investors considering whether to purchase shares of the Fund. Past performance (before
and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available by visiting www.jpmorganfunds.com or by
calling 1-844-457-6383 (844-4JPM ETF).
| YEAR-BY-YEAR RETURNS |
| Best Quarter |
2nd
quarter, 2020 |
8.55% |
| Worst Quarter |
1st
quarter, 2020 |
-11.81% |
| The
Fund’s year-to-date total return |
through |
3/31/21 |
was |
0.15% |
. |
| AVERAGE ANNUAL TOTAL RETURNS (For periods ended December 31, 2020) | ||
| |
Past |
Life of Fund
since |
| |
1 Year |
09/14/2016 |
| SHARES |
|
|
| Return Before Taxes |
5.27% |
5.87% |
| Return After Taxes on Distributions |
3.17 |
3.73 |
| Return After Taxes on Distributions and Sale of
Fund Shares |
3.05 |
3.53 |
| BLOOMBERG BARCLAYS U.S. CORPORATE HIGH YIELD - 2% ISSUER CAPPED INDEX (Reflects No Deduction for Fees, Expenses, or Taxes) |
7.05 |
6.80 |
After-tax returns are calculated using the historical highest individual federal marginal income tax rates
and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown, and the after-tax returns shown are not
relevant to investors who hold their shares through tax-deferred arrangements such as 401(k) plans or
individual retirement accounts.
4
Management
J.P. Morgan Investment Management Inc. (the adviser)
| Portfolio Manager |
Managed the Fund Since |
Primary Title with
Investment Adviser |
| James P. Shanahan |
2016
|
Managing Director |
| Bhupinder Bahra |
2016
|
Managing Director |
| Frederick Bourgoin |
2016
|
Managing Director |
| Alexander Sammarco |
2016
|
Executive Director |
Purchase and Sale of Shares
Individual Shares of the Fund may only be purchased and sold in secondary market transactions through brokers
or financial intermediaries. Shares of the Fund are listed for trading on the Exchange, and because Shares
trade at market prices rather than NAV, Shares of the Fund may trade at a price greater than NAV (premium) or
less than NAV (discount). Certain affiliates of the Fund and the adviser may purchase and resell Shares
pursuant to this prospectus.
An investor may incur costs attributable to the difference between the highest price a buyer is willing to
pay to purchase Shares of the Fund (bid) and the lowest price a seller is willing to accept for Shares (ask)
when buying or selling Shares in the secondary market (the “bid-ask spread”).
Recent information, including
information about the Fund’s NAV, market price, premiums and discounts, and bid-ask spreads, is included
on the Fund’s website at jpmorganfunds.com.
Tax Information
To the extent the Fund makes distributions, those distributions will be taxed as ordinary income or capital
gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan, in which
case you may be subject to federal income tax upon withdrawal from the tax-advantaged investment
plan.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase Shares of the Fund through a broker-dealer or other financial intermediary (such as a bank),
the adviser and its related companies may pay the financial intermediary for the sale of Shares and related
services. These payments may create a conflict of interest by influencing the broker-dealer or financial
intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit
your financial intermediary’s website for more information.
5
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