UNDER
THE SECURITIES ACT OF 1933 |
☒ |
Pre-Effective Amendment No. | ☐ |
Post-Effective Amendment No. 250 | ☒ |
UNDER
THE INVESTMENT COMPANY ACT OF 1940 |
☒ |
Amendment No. 252 | ☒ |
Elizabeth
A. Davin, Esq.
JPMorgan Chase & Co. 1111 Polaris Parkway Columbus, OH 43240 |
Jon
S. Rand, Esq.
Dechert LLP 1095 Avenue of the Americas New York, NY 10036 |
☐ | immediately upon filing pursuant to paragraph (b) |
☒ | on March 1, 2020 pursuant to paragraph (b) |
☐ | 60 days after filing pursuant to paragraph (a)(1) |
☐ | on (date) pursuant to paragraph (a)(1) |
☐ | 75 days after filing pursuant to paragraph (a)(2) |
☐ | on (date) pursuant to paragraph (a)(2) |
☐ | The post-effective amendment designates a new effective date for a previously filed post-effective amendment. |
Ticker | Listing Exchange | |
JPMorgan BetaBuilders Canada ETF | BBCA | Cboe BZX Exchange, Inc. |
JPMorgan BetaBuilders Developed Asia ex-Japan ETF | BBAX | Cboe BZX Exchange, Inc. |
JPMorgan BetaBuilders Europe ETF | BBEU | Cboe BZX Exchange, Inc. |
JPMorgan BetaBuilders Japan ETF | BBJP | Cboe BZX Exchange, Inc. |
JPMorgan BetaBuilders U.S. Equity ETF | BBUS | Cboe BZX Exchange, Inc. |
JPMorgan Diversified Return Emerging Markets Equity ETF | JPEM | NYSE Arca |
JPMorgan Diversified Return Europe Equity ETF | JPEU | NYSE Arca |
JPMorgan Diversified Return Global Equity ETF | JPGE | NYSE Arca |
JPMorgan Diversified Return International Equity ETF | JPIN | NYSE Arca |
JPMorgan Diversified Return U.S. Equity ETF | JPUS | NYSE Arca |
JPMorgan Diversified Return U.S. Mid Cap Equity ETF | JPME | NYSE Arca |
JPMorgan Diversified Return U.S. Small Cap Equity ETF | JPSE | NYSE Arca |
JPMorgan U.S. Dividend ETF | JDIV | NYSE Arca |
JPMorgan U.S. Minimum Volatility ETF | JMIN | NYSE Arca |
JPMorgan U.S. Momentum Factor ETF | JMOM | NYSE Arca |
JPMorgan U.S. Quality Factor ETF | JQUA | NYSE Arca |
JPMorgan U.S. Value Factor ETF | JVAL | NYSE Arca |
Risk/Return Summaries: | |
|
1 |
|
6 |
|
12 |
|
18 |
|
23 |
|
27 |
|
33 |
|
39 |
|
44 |
|
49 |
|
54 |
|
59 |
|
64 |
|
69 |
|
74 |
|
79 |
|
84 |
|
89 |
|
89 |
|
100 |
|
112 |
|
112 |
|
114 |
|
114 |
|
118 |
|
118 |
|
118 |
|
119 |
|
123 |
|
123 |
|
123 |
|
123 |
|
125 |
|
126 |
|
126 |
|
127 |
|
127 |
|
128 |
|
128 |
|
128 |
|
130 |
|
Back cover |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.19% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.19 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 19 | 61 | 107 | 243 |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 15.63% |
Worst Quarter | 3rd quarter, 2019 | 1.02% |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.19% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.19 |
1 | The Fund's management agreement provides that the adviser will pay substantially all expenses of the Fund (including expenses of the Trust relating to the Fund), except for the management fees, payments under the Fund’s 12b-1 plan (if any), interest expenses, dividend and interest expenses related to short sales, taxes, acquired fund fees and expenses (other than fees for funds advised by the adviser and/or its affiliates), costs of holding shareholder meetings, and litigation and potential litigation and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. Additionally, the Fund shall be responsible for its non-operating expenses, including brokerage commissions and fees and expenses associated with that Fund’s securities lending program, if applicable. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 19 | 61 | 107 | 243 |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 12.17% |
Worst Quarter | 3rd quarter, 2019 | -5.28% |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.09% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.09 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 9 | 29 | 51 | 115 |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 10.83% |
Worst Quarter | 3rd quarter, 2019 | -1.84% |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.19% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.19 |
1 | The Fund's management agreement provides that the adviser will pay substantially all expenses of the Fund (including expenses of the Trust relating to the Fund), except for the management fees, payments under the Fund’s 12b-1 plan (if any), interest expenses, dividend and interest expenses related to short sales, taxes, acquired fund fees and expenses (other than fees for funds advised by the adviser and/or its affiliates), costs of holding shareholder meetings, and litigation and potential litigation and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. Additionally, the Fund shall be responsible for its non-operating expenses, including brokerage commissions and fees and expenses associated with that Fund’s securities lending program, if applicable. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 19 | 61 | 107 | 243 |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 7.27% |
Worst Quarter | 2nd quarter, 2019 | 0.66% |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.02% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.02 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 2 | 6 | 11 | 26 |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.44% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.44 |
1 | The Fund's management agreement provides that the adviser will pay substantially all expenses of the Fund (including expenses of the Trust relating to the Fund), except for the management fees, payments under the Fund’s 12b-1 plan (if any), interest expenses, dividend and interest expenses related to short sales, taxes, acquired fund fees and expenses (other than fees for funds advised by the adviser and/or its affiliates), costs of holding shareholder meetings, and litigation and potential litigation and other extraordinary expenses not incurred in the ordinary course of the Fund’s business. Additionally, the Fund shall be responsible for its non-operating expenses, including brokerage commissions and fees and expenses associated with that Fund’s securities lending program, if applicable. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 45 | 141 | 246 | 555 |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their region and super-sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their region and super-sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their region and super-sector peers as measured by profitability, earnings quality and solvency/financial risk. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2017 | 10.08% |
Worst Quarter | 2nd quarter, 2018 | -9.58% |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2017 | Managing Director |
Joe Staines | 2017 | Vice President |
Kartik Aiyar | 2017 | Associate |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.37% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.37 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 38 | 119 | 208 | 468 |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 10.57% |
Worst Quarter | 4th quarter, 2018 | -12.81% |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.29% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.29 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 30 | 93 | 163 | 368 |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their region and/or sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their region and/or sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their region and/or sector peers as measured by profitability, earnings quality and solvency/financial risk. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 9.28% |
Worst Quarter | 4th quarter, 2018 | -10.88% |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.37% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.37 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 38 | 119 | 208 | 468 |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their region and/or sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their region and/or sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their region and/or sector peers as measured by profitability, earnings quality and solvency/financial risk. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 8.59% |
Worst Quarter | 4th quarter, 2018 | -11.66% |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.18% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.18 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 18 | 58 | 101 | 230 |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 13.18% |
Worst Quarter | 4th quarter, 2018 | -12.32% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 09/29/2015) |
||
SHARES | |||
Return Before Taxes | 25.62% | 13.37% | |
Return After Taxes on Distributions | 24.94 | 12.93 | |
Return After Taxes on Distributions and Sale of Fund Shares | 15.55 | 10.57 | |
JP MORGAN DIVERSIFIED FACTOR US EQUITY INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 25.90 | 13.73 | |
RUSSELL 1000 INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 31.43 | 15.59 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2016 | Managing Director |
Jonathan Msika | 2016 | Vice President |
Joe Staines | 2016 | Vice President |
Yegang (Steven) Wu | 2016 | Analyst |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 25 | 77 | 135 | 306 |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 13.73% |
Worst Quarter | 4th quarter, 2018 | -14.12% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 05/11/2016) |
||
SHARES | |||
Return Before Taxes | 25.27% | 11.60% | |
Return After Taxes on Distributions | 24.71 | 11.18 | |
Return After Taxes on Distributions and Sale of Fund Shares | 15.26 | 9.06 | |
JP MORGAN DIVERSIFIED FACTOR US MID CAP EQUITY INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 25.60 | 11.92 | |
RUSSELL MIDCAP INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 30.54 | 12.91 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2016 | Managing Director |
Jonathan Msika | 2016 | Vice President |
Joe Staines | 2016 | Vice President |
Yegang (Steven) Wu | 2016 | Analyst |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.29% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.29 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 30 | 93 | 163 | 368 |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 13.00% |
Worst Quarter | 4th quarter, 2018 | -17.07% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 11/15/2016) |
||
SHARES | |||
Return Before Taxes | 22.67% | 9.96% | |
Return After Taxes on Distributions | 22.22 | 9.66 | |
Return After Taxes on Distributions and Sale of Fund Shares | 13.59 | 7.71 | |
JP MORGAN DIVERSIFIED FACTOR US SMALL CAP EQUITY INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 22.96 | 10.25 | |
RUSSELL 2000 INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 25.52 | 9.76 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2016 | Managing Director |
Jonathan Msika | 2016 | Vice President |
Joe Staines | 2016 | Vice President |
Yegang (Steven) Wu | 2016 | Analyst |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.12% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.12 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 12 | 39 | 68 | 154 |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 12.86% |
Worst Quarter | 4th quarter, 2018 | -9.74% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 11/08/2017) |
||
SHARES | |||
Return Before Taxes | 23.83% | 9.33% | |
Return After Taxes on Distributions | 22.75 | 8.18 | |
Return After Taxes on Distributions and Sale of Fund Shares | 14.66 | 6.91 | |
JP MORGAN US DIVIDEND INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 23.94 | 9.62 | |
RUSSELL 1000 INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 31.43 | 12.80 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2017 | Managing Director |
Jonathan Msika | 2017 | Vice President |
Joe Staines | 2017 | Vice President |
Yegang (Steven) Wu | 2017 | Analyst |
Aijaz Hussain | 2017 | Analyst |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.12% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.12 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 12 | 39 | 68 | 154 |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 12.53% |
Worst Quarter | 4th quarter, 2018 | -7.96% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 11/08/2017) |
||
SHARES | |||
Return Before Taxes | 28.23% | 13.60% | |
Return After Taxes on Distributions | 27.63 | 12.94 | |
Return After Taxes on Distributions and Sale of Fund Shares | 17.04 | 10.39 | |
JP MORGAN US MINIMUM VOLATILITY INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 28.36 | 13.76 | |
RUSSELL 1000 INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 31.43 | 12.80 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2017 | Managing Director |
Jonathan Msika | 2017 | Vice President |
Joe Staines | 2017 | Vice President |
Yegang (Steven) Wu | 2017 | Analyst |
Aijaz Hussain | 2017 | Analyst |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.12% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.12 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 12 | 39 | 68 | 154 |
UNDERLYING INDEX CHARACTERISTIC |
Momentum – A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 14.86% |
Worst Quarter | 4th quarter, 2018 | -15.83% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 11/08/2017) |
||
SHARES | |||
Return Before Taxes | 28.36% | 11.04% | |
Return After Taxes on Distributions | 27.99 | 10.66 | |
Return After Taxes on Distributions and Sale of Fund Shares | 17.00 | 8.45 | |
JP MORGAN US MOMENTUM FACTOR INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 28.52 | 11.22 | |
RUSSELL 1000 INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 31.43 | 12.80 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2017 | Managing Director |
Jonathan Msika | 2017 | Vice President |
Joe Staines | 2017 | Vice President |
Yegang (Steven) Wu | 2017 | Analyst |
Aijaz Hussain | 2017 | Analyst |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.12% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.12 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 12 | 39 | 68 | 154 |
UNDERLYING INDEX CHARACTERISTIC |
Quality – Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 13.66% |
Worst Quarter | 4th quarter, 2018 | -11.49% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 11/08/2017) |
||
SHARES | |||
Return Before Taxes | 28.06% | 13.30% | |
Return After Taxes on Distributions | 27.49 | 12.70 | |
Return After Taxes on Distributions and Sale of Fund Shares | 16.92 | 10.16 | |
JP MORGAN US QUALITY FACTOR INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 28.20 | 13.53 | |
RUSSELL 1000 INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 31.43 | 12.80 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2017 | Managing Director |
Jonathan Msika | 2017 | Vice President |
Joe Staines | 2017 | Vice President |
Yegang (Steven) Wu | 2017 | Analyst |
Aijaz Hussain | 2017 | Analyst |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.12% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.12 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 12 | 39 | 68 | 154 |
UNDERLYING INDEX CHARACTERISTIC |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 12.39% |
Worst Quarter | 4th quarter, 2018 | -13.02% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 11/08/2017) |
||
SHARES | |||
Return Before Taxes | 28.42% | 10.02% | |
Return After Taxes on Distributions | 27.56 | 9.26 | |
Return After Taxes on Distributions and Sale of Fund Shares | 17.31 | 7.58 | |
JP MORGAN US VALUE FACTOR INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 29.02 | 10.53 | |
RUSSELL 1000 INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 31.43 | 12.80 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2017 | Managing Director |
Jonathan Msika | 2017 | Vice President |
Joe Staines | 2017 | Vice President |
Yegang (Steven) Wu | 2017 | Analyst |
Aijaz Hussain | 2017 | Analyst |
• | China |
• | Asia Pacific ex China — Indonesia, Malaysia, Philippines, Thailand, India, Pakistan, Taiwan |
• | EMEA — Czech Republic, Egypt, Greece, Hungary, Kuwait, Qatar, Russia, Saudi Arabia, South Africa, Turkey, United Arab Emirates |
• | Latin America — Brazil, Chile, Colombia, Mexico, Peru |
• | Consumers: consumer services, consumer goods |
• | Commodities: basic materials, oil & gas, |
• | Industrials: industrials, technology |
• | Financials |
• | Defensives: health care, telecommunications and utilities. |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their region and super-sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their region and super-sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their region and super-sector peers as measured by profitability, earnings quality and solvency/financial risk. |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their region and/or sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their region and/or sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their region and/or sector peers as measured by profitability, earnings quality and solvency/financial risk. |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their region and/or sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their region and/or sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their region and/or sector peers as measured by profitability, earnings quality and solvency/financial risk. |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
UNDERLYING INDEX CHARACTERISTICS |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental char- acteristics of book yield, earnings yield, dividend yield and cash flow yield. |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
UNDERLYING INDEX CHARACTERISTIC |
Momentum — A tendency that stocks that are rising in price tend to continue to rise, while those that are falling tend to continue to fall. Targets equity securities which have higher risk-adjusted returns relative to those of their sector peers over a twelve month period. The twelve month returns are divided by the twelve month volatility of the returns to get the risk-adjusted returns. |
UNDERLYING INDEX CHARACTERISTIC |
Quality — Targets equity securities with higher quality characteristics relative to their sector peers as measured by profitability, earnings quality and solvency/financial risk. |
UNDERLYING INDEX CHARACTERISTIC |
Value — Targets equity securities with attractive prices relative to their sector peers based on fundamental characteristics of book yield, earnings yield, dividend yield and cash flow yield. |
• | Other equity securities, including U.S. or foreign equity securities (only U.S. securities for the U.S. Funds) which are not included in the Underlying Index. The foreign securities may be in the form of depositary receipts. |
• | Derivatives, including futures and forward foreign currency contracts, for the efficient management of cash flows. |
NON-FUNDAMENTAL INVESTMENT OBJECTIVES |
An investment objective is fundamental if it cannot be changed without the consent of a majority of the outstanding Shares of each Fund. Each Fund’s investment objective is not fundamental and may be changed without the consent of a majority of the outstanding Shares of the Fund. |
BetaBuilders Canada ETF | BetaBuilders Developed Asia ex-Japan ETF | BetaBuilders Europe ETF | BetaBuilders Japan ETF | BetaBuilders U.S. Equity ETF | Diversified Return Emerging Markets Equity ETF | Diversified Return Europe Equity ETF | Diversified Return Global Equity ETF | Diversified Return International Equity ETF | |
Authorized Participant Concentration Risk | • | • | • | • | • | • | • | • | • |
Cash Transactions Risk | • | ||||||||
Concentration Risk | • | • | • | • | • | ○ | ○ | ○ | ○ |
Consumer Discretionary Risk | • | ||||||||
Currency Risk | • | • | • | • | • | • | • | • | |
Derivatives Risk | • | • | • | • | • | • | • | • | • |
Diversification Risk | • | • | • | • | • | ||||
Energy Sector Risk | • | ||||||||
Equity Market Risk | • | • | • | • | • | • | • | • | • |
Exchange-Traded Fund (ETF) and Investment Company Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Financials Sector Risk | • | • | • | • | |||||
Foreign Securities and Emerging Markets Risk | • | • | • | • | • | • | • | • | |
General Market Risk | • | • | • | • | • | • | • | • | • |
Geographic Focus Risk | • | • | • | • | • | • | • | • | |
Index Related Risk | • | • | • | • | • | • | • | • | • |
Industrials Sector Risk | • | ||||||||
Industry and Sector Focus Risk | • | • | • | • | • | • | • | • | • |
Information Technology Sector Risk | • | ||||||||
Large Cap Company Risk | • | • | • | • | • | • | • | • | • |
Market Trading Risk | • | • | • | • | • | • | • | • | • |
Passive Management Risk | • | • | • | • | • | • | • | • | • |
Preferred Stock Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Sampling Risk | • | • | • | • | • | • | • | • | • |
Securities Lending Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Smaller Company Risk | • | • | • | • | • | • | • | • | • |
Transactions and Liquidity Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Volcker Rule Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
• | Main Risks |
○ | Additional Risks |
Diversified Return U.S. Equity ETF | Diversified Return U.S. Mid Cap Equity ETF | Diversified Return U.S. Small Cap Equity ETF | U.S. Dividend ETF | U.S. Minimum Volatility ETF | U.S. Momentum Factor ETF | U.S. Quality Factor ETF | U.S. Value Factor ETF | |
Authorized Participant Concentration Risk | • | • | • | • | • | • | • | • |
Concentration Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Consumer Goods Sector Risk | • | |||||||
Derivatives Risk | • | • | • | • | • | • | • | • |
Dividend Paying Securities Risk | • | |||||||
Equity Market Risk | • | • | • | • | • | • | • | • |
Exchange-Traded Fund (ETF) and Investment Company Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Financials Sector Risk | • | • | • | • | ||||
General Market Risk | • | • | • | • | • | • | • | • |
Health Care Sector Risk | • | |||||||
Index Related Risk | • | • | • | • | • | • | • | • |
Industry and Sector Focus Risk | • | • | • | • | • | • | • | • |
Large Cap Company Risk | • | • | • | • | • | • | ||
Market Trading Risk | • | • | • | • | • | • | • | • |
Momentum Investing Risk | • | |||||||
Passive Management Risk | • | • | • | • | • | • | • | • |
Preferred Stock Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Risk of Investing in Quality Companies | • | |||||||
Sampling Risk | • | • | • | • | • | • | • | • |
Securities Lending Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Smaller Company Risk | • | • | • | • | • | • | • | • |
Technology Sector Risk | • | • | • | |||||
Transactions and Liquidity Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
Utilities Sector Risk | • | • | ||||||
Value Investing Risk | • | |||||||
Volatility Risk | • | |||||||
Volcker Rule Risk | ○ | ○ | ○ | ○ | ○ | ○ | ○ | ○ |
• | Main Risks |
○ | Additional Risks |
WHAT IS A DERIVATIVE? |
Derivatives are securities or contracts (for example, futures) that derive their value from the performance of underlying assets or securities. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are chosen to provide diversification across emerging market regions and super-sectors; |
3. | To provide diversification, securities are selected using the following factors: value, momentum and quality, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are chosen to provide diversification across industries; |
3. | To provide diversification, securities are selected using the following factors: value, momentum, and quality, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are chosen to provide diversification across global regions and sectors; |
3. | To provide diversification, securities are selected using the following factors: value, momentum and quality, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are chosen to provide diversification across international regions and sectors; |
3. | To provide diversification, securities are selected using the following factors: value, momentum and quality, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are weighted to provide diversification across sectors; |
3. | Securities are selected using the following factors: value, momentum and quality, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are weighted to provide diversification across sectors; |
3. | Securities are selected using the following factors: value, momentum and quality, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are weighted to provide diversification across sectors; |
3. | Securities are selected using the following factors: relative valuation, price momentum, and quality, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are weighted to provide diversification across sectors and to focus on higher yielding sectors; |
3. | High dividend yielding securities over a rolling twelve month period are selected for the index; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are weighted to provide diversification of risk across sectors and to reduce portfolio volatility; |
3. | Securities with lower volatility of returns are chosen for the index; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are market capitalization weighted to pro- vide diversification across sectors; |
3. | Securities are selected using momentum characteristics, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are market capitalization weighted to pro- vide diversification across sectors; |
3. | Securities are selected using quality characteristics, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
1. | Liquidity of eligible securities is considered to ensure an investable index; |
2. | Eligible securities are market capitalization weighted to pro- vide diversification across sectors; |
3. | Securities are selected using relative valuation characteristics, as described in the Fund’s Risk/Return Summary; and |
4. | Individual security weights are determined in order to ensure stock level diversification. |
BetaBuilders Canada ETF | 0.10 % |
BetaBuilders Developed Asia ex-Japan ETF | 0.08 |
BetaBuilders Europe ETF | 0.01 |
BetaBuilders Japan ETF | 0.11 |
Emerging Markets Equity ETF | 0.15 |
Europe Equity ETF | 0.00 |
Global Equity ETF | 0.18 |
International Equity ETF | 0.23 |
U.S. Equity ETF | 0.13 |
U.S. Mid Cap Equity ETF | 0.13 |
U.S. Small Cap Equity ETF | 0.17 |
U.S. Dividend ETF | 0.00 |
U.S. Minimum Volatility ETF | 0.00 |
U.S. Momentum Factor ETF | 0.00 |
U.S. Quality Factor ETF | 0.00 |
U.S. Value Factor ETF | 0.00 |
BetaBuilders Canada ETF | 0.19 % |
BetaBuilders Developed Asia ex-Japan ETF | 0.19 |
BetaBuilders Europe ETF | 0.09 |
BetaBuilders Japan ETF | 0.19 |
Emerging Markets Equity ETF | 0.44 |
Europe Equity ETF | 0.37 |
Global Equity ETF | 0.29 |
International Equity ETF | 0.37 |
U.S. Equity ETF | 0.18 |
U.S. Mid Cap Equity ETF | 0.24 |
U.S. Small Cap Equity ETF | 0.29 |
U.S. Dividend ETF | 0.12 |
U.S. Minimum Volatility ETF | 0.12 |
U.S. Momentum Factor ETF | 0.12 |
U.S. Quality Factor ETF | 0.12 |
U.S. Value Factor ETF | 0.12 |
Per share operating performance | ||||||||
Investment Operations | Distributions | |||||||
|
Net asset value, beginning of period |
Net investment income (loss) (b) |
Net
realized
and unrealized gains (losses) on investments |
Total from investment operations |
Net investment income |
Net asset value, end of period |
Market price, end of period |
|
JPMorgan BetaBuilders Canada ETF | ||||||||
Year Ended October 31, 2019 | $ 22.59 | $0.66 | $ 2.24 | $ 2.90 | $(0.60) | $ 24.89 | $ 24.90 | |
August 7, 2018 (g) through October 31, 2018 | 24.65 | 0.14 | (2.15) | (2.01) | (0.05) | 22.59 | 22.62 | |
JPMorgan BetaBuilders Developed Asia ex-Japan ETF | ||||||||
Year Ended October 31, 2019 | 22.68 | 1.05 | 2.58 | 3.63 | (1.00) | 25.31 | 25.27 | |
August 7, 2018 (g) through October 31, 2018 | 25.36 | 0.22 | (2.73) | (2.51) | (0.17) | 22.68 | 22.69 | |
JPMorgan BetaBuilders Europe ETF | ||||||||
Year Ended October 31, 2019 | 22.59 | 0.90 | 1.65 | 2.55 | (0.78) | 24.36 | 24.39 | |
June 15, 2018 (g) through October 31, 2018 | 24.79 | 0.13 | (2.30) | (2.17) | (0.03) | 22.59 | 22.64 | |
JPMorgan BetaBuilders Japan ETF | ||||||||
Year Ended October 31, 2019 | 22.72 | 0.48 | 1.48 | 1.96 | (0.14) | 24.54 | 24.57 | |
June 15, 2018 (g) through October 31, 2018 | 24.79 | 0.24 | (2.31) | (2.07) | — | 22.72 | 22.68 | |
JPMorgan BetaBuilders U.S. Equity ETF | ||||||||
March 12, 2019 (g) through October 31, 2019 | 50.14 | 0.68 | 4.29 | 4.97 | (0.51) | 54.60 | 54.61 |
(a) | Annualized for periods less than one year, unless otherwise indicated. |
(b) | Calculated based upon average shares outstanding. |
(c) | Not annualized for periods less than one year. |
(d) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions. |
(e) | Market price total return is calculated assuming an initial investment made at the beginning of the period market price, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. The market price presented to calculate the market price total return is the mid-point of the bid/ask spread at the close of business on the Cboe BZX Exchange, Inc. |
(f) | Certain non-recurring expenses incurred by the Fund were not annualized for the periods indicated. |
(g) | Commencement of operations. |
(h) | Since the Shares of the Fund did not trade in the secondary market until the day after the Fund’s inception, for the period from the inception to the first day of secondary market trading, the NAV is used as a proxy for the secondary market trading price to calculate the market returns. |
Ratios/Supplemental data | ||||||
Ratios to average net assets (a) | ||||||
Total return (c)(d) |
Market price total return (c)(e) |
Net assets, end of period |
Net expenses |
Net investment income (loss) |
Expenses without waivers and reimbursements |
Portfolio turnover rate (c) |
13.08% | 12.97% | $ 3,800,754,020 | 0.19% | 2.73% | 0.34% | 7% |
(8.18) | (8.05)(h) | 2,044,698,826 | 0.19(f) | 2.55 | 0.37(f) | 1 |
16.18 | 15.94 | 1,442,853,830 | 0.19 | 4.22 | 0.39 | 7 |
(9.97) | (9.93)(h) | 603,313,934 | 0.19(f) | 3.94 | 0.45 (f) | 2 |
11.43 | 11.32 | 3,853,145,624 | 0.09 | 3.83 | 0.25 | 7 |
(8.75) | (8.55) (h) | 1,314,930,292 | 0.09(f) | 1.45 | 0.34(f) | 2 |
8.74 | 9.07 | 4,318,521,919 | 0.19 | 2.14 | 0.33 | 4 |
(8.35) | (8.51) (h) | 2,336,087,667 | 0.19(f) | 2.63 | 0.37(f) | 5 |
9.95 | 9.97(h) | 46,409,125 | 0.02 | 2.01 | 0.02 | 3 |
Per share operating performance | ||||||||
Investment Operations | Distributions | |||||||
|
Net asset value, beginning of period |
Net investment income (loss) (b) |
Net
realized
and unrealized gains (losses) on investments |
Total from investment operations |
Net investment income |
Net asset value, end of period |
Market price, end of period |
|
JPMorgan Diversified Return Emerging Markets Equity ETF | ||||||||
Year Ended October 31, 2019 | $ 50.91 | $ 2.07 | $ 2.97 | $ 5.04 | $ (1.52) | $ 54.43 | $ 54.50 | |
Year Ended October 31, 2018 | 57.15 | 1.59 | (5.37) | (3.78) | (2.46) | 50.91 | 50.83 | |
Year Ended October 31, 2017 | 48.68 | 1.50 | 7.56 | 9.06 | (0.59) | 57.15 | 57.36 | |
Year Ended October 31, 2016 | 45.23 | 1.04 | 3.72 | 4.76 | (1.31) | 48.68 | 48.98 | |
January 7, 2015 (f) through October 31, 2015 | 50.00 | 1.29 | (6.06) | (4.77) | — | 45.23 | 45.27 | |
JPMorgan Diversified Return Europe Equity ETF | ||||||||
Year Ended October 31, 2019 | 53.44 | 1.40 | 4.46 (j) | 5.86 | (1.70) | 57.60 | 57.58 | |
Year Ended October 31, 2018 | 61.15 | 1.65 | (6.36) | (4.71) | (3.00) | 53.44 | 53.56 | |
Year Ended October 31, 2017 | 49.88 | 1.57 | 10.82 | 12.39 | (1.12) | 61.15 | 61.42 | |
December 18, 2015 (f) through October 31, 2016 | 50.00 | 1.39 | (1.51) | (0.12) | — (i) | 49.88 | 49.95 | |
JPMorgan Diversified Return Global Equity ETF | ||||||||
Year Ended October 31, 2019 | 56.52 | 1.59 | 4.25 | 5.84 | (1.63) | 60.73 | 60.57 | |
Year Ended October 31, 2018 | 61.00 | 1.42 | (3.93) | (2.51) | (1.97) | 56.52 | 56.47 | |
Year Ended October 31, 2017 | 51.70 | 1.15 | 9.28 | 10.43 | (1.13) | 61.00 | 61.14 | |
Year Ended October 31, 2016 | 50.53 | 1.14 | 0.99 | 2.13 | (0.96) | 51.70 | 51.91 | |
Year Ended October 31, 2015 | 49.69 | 1.08 | 0.08 | 1.16 | (0.32) | 50.53 | 50.67 | |
JPMorgan Diversified Return International Equity ETF | ||||||||
Year Ended October 31, 2019 | 53.10 | 1.77 | 1.90 | 3.67 | (1.71) | 55.06 | 55.02 | |
Year Ended October 31, 2018 | 59.18 | 1.51 | (5.29) | (3.78) | (2.30) | 53.10 | 52.98 | |
Year Ended October 31, 2017 | 50.00 | 1.43 | 8.57 | 10.00 | (0.82) | 59.18 | 59.36 | |
Year Ended October 31, 2016 | 51.17 | 1.28 | (1.37)(j) | (0.09) | (1.08) | 50.00 | 50.17 | |
November 5, 2014 (f) through October 31, 2015 | 50.00 | 1.39 | (0.07) | 1.32 | (0.15) | 51.17 | 51.05 | |
JPMorgan Diversified Return U.S. Equity ETF | ||||||||
Year Ended October 31, 2019 | 69.92 | 1.66 | 6.34 | 8.00 | (1.48) | 76.44 | 76.45 | |
Year Ended October 31, 2018 | 68.52 | 1.39 | 1.88 | 3.27 | (1.87) | 69.92 | 69.93 | |
Year Ended October 31, 2017 | 57.06 | 1.17 | 10.75 | 11.92 | (0.46) | 68.52 | 68.55 | |
Year Ended October 31, 2016 | 54.13 | 1.10 | 2.09(j) | 3.19 | (0.26) | 57.06 | 57.08 | |
September 29, 2015 (f) through October 31, 2015 | 50.00 | 0.06 | 4.07 | 4.13 | — | 54.13 | 54.16 | |
JPMorgan Diversified Return U.S. Mid Cap Equity ETF | ||||||||
Year Ended October 31, 2019 | 62.24 | 1.18 | 4.78 | 5.96 | (1.07) | 67.13 | 67.17 | |
Year Ended October 31, 2018 | 62.06 | 1.06 | 0.59 | 1.65 | (1.47) | 62.24 | 62.25 | |
Year Ended October 31, 2017 | 51.65 | 0.89 | 10.02 | 10.91 | (0.50) | 62.06 | 62.08 | |
May 11, 2016 (f) through October 31, 2016 | 50.00 | 0.42 | 1.23 | 1.65 | — | 51.65 | 51.64 | |
JPMorgan Diversified Return U.S. Small Cap Equity ETF | ||||||||
Year Ended October 31, 2019 | 29.58 | 0.42 | 1.22 | 1.64 | (0.38) | 30.84 | 30.87 | |
Year Ended October 31, 2018 | 28.95 | 0.33 | 0.73 | 1.06 | (0.43) | 29.58 | 29.58 | |
November 15, 2016 (f) through October 31, 2017 | 25.00 | 0.28 | 3.71 | 3.99 | (0.04) | 28.95 | 29.00 |
(a) | Annualized for periods less than one year, unless otherwise indicated. |
(b) | Calculated based upon average shares outstanding. |
(c) | Not annualized for periods less than one year. |
(d) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions. |
(e) | Market price total return is calculated assuming an initial investment made at the beginning of the period market price, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. The market price presented to calculate the market price total return is the mid-point of the bid/ask spread at the close of business on the NYSE Arca, Inc. |
(f) | Commencement of operations. |
(g) | Since the Shares of the Fund did not trade in the secondary market until the day after the Fund’s inception, for the period from the inception to the first day of secondary market trading, the NAV is used as a proxy for the secondary market trading price to calculate the market returns. |
(h) | Certain non-recurring expenses incurred by the Fund were not annualized for the periods indicated. |
(i) | Amount rounds to less than $0.005. |
(j) | Calculation of the net realized and unrealized gains (losses) per share do not correlate with the Fund’s net realized and unrealized gains (losses) presented in the Statement of Operations due to the timing of capital transactions in relation to the fluctuating market values of the Fund’s investments. |
(k) | Amount rounds to less than 0.5%. |
Ratios/Supplemental data | ||||||
Ratios to average net assets (a) | ||||||
Total return (c)(d) |
Market price total return (c)(e) |
Net assets, end of period |
Net expenses |
Net investment income (loss) |
Expenses without waivers and reimbursements |
Portfolio turnover rate (c) |
10.00% | 10.31% | $ 353,795,416 | 0.45% | 3.87% | 0.87% | 51% |
(6.93) | (7.43) | 213,804,252 | 0.45 | 2.80 | 0.96 | 53 |
18.95 | 18.65 | 165,741,046 | 0.45 | 2.85 | 1.06 | 60 |
11.02 | 11.63 | 43,809,461 | 0.45 | 2.33 | 1.91 | 44 |
(9.54) | (9.46)(g) | 36,185,674 | 0.45(h) | 3.18 | 2.07(h) | 46 |
11.09 | 10.81 | 17,280,937 | 0.38 | 2.58 | 1.01 | 20 |
(8.11) | (8.33) | 74,820,788 | 0.40 | 2.77 | 0.70 | 51 |
25.42 | 25.80 | 79,492,357 | 0.43 | 2.89 | 0.80 | 18 |
(0.23) | (0.09)(g) | 59,859,633 | 0.43(h) | 3.14 | 1.14(h) | 15 |
10.49 | 10.30 | 145,749,540 | 0.38 | 2.73 | 0.50 | 23 |
(4.34) | (4.65) | 203,457,264 | 0.38 | 2.30 | 0.56 | 29 |
20.61 | 20.40 | 103,695,070 | 0.38 | 2.06 | 0.80 | 26 |
4.31 | 4.44 | 77,556,933 | 0.38 | 2.26 | 0.93 | 22 |
2.36 | 1.82 | 50,530,034 | 0.38 | 2.16 | 1.52 | 18 |
7.05 | 7.23 | 1,282,867,303 | 0.38 | 3.27 | 0.41 | 25 |
(6.72) | (7.22) | 1,444,332,261 | 0.40 | 2.57 | 0.44 | 28 |
20.35 | 20.30 | 1,159,887,006 | 0.43 | 2.63 | 0.51 | 29 |
(0.15) | 0.41 | 470,042,716 | 0.43 | 2.56 | 0.75 | 27 |
2.65 | 2.40(g) | 92,113,607 | 0.43(h) | 2.72 | 1.33(h) | 20 |
11.65 | 11.65 | 802,625,997 | 0.19 | 2.27 | 0.37 | 24 |
4.74 | 4.70 | 559,362,329 | 0.19 | 1.95 | 0.41 | 32 |
20.99 | 21.02 | 356,298,771 | 0.21 | 1.83 | 0.47 | 27 |
5.92 | 5.90 | 125,538,258 | 0.29 | 1.95 | 0.90 | 22 |
8.26 | 8.32 (g) | 10,826,623 | 0.29(h) | 1.20 | 5.75(h) | — (k) |
9.73 | 9.78 | 187,973,791 | 0.24 | 1.82 | 0.43 | 25 |
2.59 | 2.57 | 112,028,180 | 0.24 | 1.64 | 0.50 | 35 |
21.25 | 21.31 | 62,063,250 | 0.26 | 1.54 | 0.62 | 31 |
3.30 | 3.28 (g) | 36,153,888 | 0.34(h) | 1.69 | 1.02(h) | 15 |
5.64 | 5.75 | 140,343,327 | 0.29 | 1.40 | 0.54 | 43 |
3.61 | 3.43 | 96,135,254 | 0.29 | 1.08 | 0.61 | 30 |
15.96 | 16.16(g) | 55,011,105 | 0.31(h) | 1.08 | 0.97(h) | 24 |
Per share operating performance | ||||||||
Investment Operations | Distributions | |||||||
|
Net asset value, beginning of period |
Net investment income (loss) (b) |
Net
realized
and unrealized gains (losses) on investments |
Total from investment operations |
Net investment income |
Net asset value, end of period |
Market price, end of period |
|
JPMorgan U.S. Dividend ETF | ||||||||
Year Ended October 31, 2019 | $ 24.92 | $0.93 | $ 2.11 | $ 3.04 | $(0.87) | $ 27.09 | $ 27.10 | |
November 8, 2017 (g) through October 31, 2018 | 25.00 | 0.96 | (0.17) | 0.79 | (0.87) | 24.92 | 24.90 | |
JPMorgan U.S. Minimum Volatility ETF | ||||||||
Year Ended October 31, 2019 | 26.14 | 0.64 | 3.95 | 4.59 | (0.52) | 30.21 | 30.23 | |
November 8, 2017 (g) through October 31, 2018 | 25.00 | 0.59 | 1.08 | 1.67 | (0.53) | 26.14 | 26.14 | |
JPMorgan U.S. Momentum Factor ETF | ||||||||
Year Ended October 31, 2019 | 25.98 | 0.37 | 2.99 | 3.36 | (0.30) | 29.04 | 29.05 | |
November 8, 2017 (g) through October 31, 2018 | 25.00 | 0.35 | 0.95 | 1.30 | (0.32) | 25.98 | 25.99 | |
JPMorgan U.S. Quality Factor ETF | ||||||||
Year Ended October 31, 2019 | 26.56 | 0.58 | 3.11 | 3.69 | (0.51) | 29.74 | 29.76 | |
November 8, 2017 (g) through October 31, 2018 | 25.00 | 0.52 | 1.52 | 2.04 | (0.48) | 26.56 | 26.56 | |
JPMorgan U.S. Value Factor ETF | ||||||||
Year Ended October 31, 2019 | 25.21 | 0.75 | 1.97 | 2.72 | (0.64) | 27.29 | 27.30 | |
November 8, 2017 (g) through October 31, 2018 | 25.00 | 0.64 | 0.16 | 0.80 | (0.59) | 25.21 | 25.21 |
(a) | Annualized for periods less than one year, unless otherwise indicated. |
(b) | Calculated based upon average shares outstanding. |
(c) | Not annualized for periods less than one year. |
(d) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions. |
(e) | Market price total return is calculated assuming an initial investment made at the beginning of the period market price, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. The market price presented to calculate the market price total return is the mid-point of the bid/ask spread at the close of business on the NYSE Arca, Inc. |
(f) | Certain non-recurring expenses incurred by the Fund were not annualized for the periods indicated. |
(g) | Commencement of operations. |
(h) | Since the Shares of the Fund did not trade in the secondary market until the day after the Fund’s inception, for the period from the inception to the first day of secondary market trading, the NAV is used as a proxy for the secondary market trading price to calculate the market returns. |
Ratios/Supplemental data | ||||||
Ratios to average net assets (a) | ||||||
Total return (c)(d) |
Market price total return (c)(e) |
Net assets, end of period |
Net expenses |
Net investment income (loss) |
Expenses without waivers and reimbursements |
Portfolio turnover rate (c) |
12.57% | 12.69% | $ 40,631,525 | 0.12% | 3.59% | 0.63% | 20% |
3.08 | 2.99(h) | 27,411,126 | 0.12(f) | 3.81 | 0.76(f) | 24 |
17.82 | 17.90 | 107,244,658 | 0.12 | 2.22 | 0.54 | 15 |
6.69 | 6.69(h) | 27,445,770 | 0.12(f) | 2.33 | 0.76(f) | 17 |
13.06 | 13.06 | 56,620,589 | 0.12 | 1.35 | 0.55 | 52 |
5.17 | 5.21(h) | 28,575,370 | 0.12(f) | 1.32 | 0.74(f) | 44 |
14.10 | 14.18 | 107,067,872 | 0.12 | 2.05 | 0.50 | 21 |
8.15 | 8.15(h) | 29,215,267 | 0.12(f) | 2.01 | 0.74(f) | 22 |
11.01 | 11.05 | 66,849,642 | 0.12 | 2.90 | 0.52 | 22 |
3.12 | 3.12(h) | 28,986,509 | 0.12(f) | 2.52 | 0.75(f) | 26 |
Ticker | Listing Exchange | |
JPMorgan Diversified Alternatives ETF | JPHF | NYSE Arca |
JPMorgan Event Driven ETF | JPED | NYSE Arca |
JPMorgan Long/Short ETF | JPLS | NYSE Arca |
JPMorgan Managed Futures Strategy ETF | JPMF | NYSE Arca |
Risk/Return Summaries: | |
|
1 |
|
8 |
|
14 |
|
20 |
|
27 |
|
27 |
|
35 |
|
45 |
|
45 |
|
45 |
|
45 |
|
46 |
|
49 |
|
49 |
|
49 |
|
49 |
|
51 |
|
52 |
|
52 |
|
53 |
|
53 |
|
53 |
|
54 |
|
56 |
|
Back cover |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.85% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.85 |
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 and any subsidiary expenses), 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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 87 | 271 | 471 | 1,049 |
• | Equity Long/Short: Equity Long/Short strategies involve simultaneously investing in equities (i.e., investing long) that the adviser believes are attractive based on relevant return factors and taking short positions in equity securities that the adviser believes are unattractive based on the relevant return factors. As opposed to only holding long positions that the Fund’s adviser expects to outperform, taking short positions allows the Fund to more fully exploit insights in instruments that the adviser expects to underperform. |
• | Event Driven: Event Driven strategies seek to profit from investing in securities of companies that the Fund’s adviser believes will be impacted by pending or anticipated corporate or special situation events. In executing this investment strategy, the Fund seeks to capture the price difference between a security’s market price and the anticipated value post-event, based on the assumption that an event or catalyst will affect future pricing. For example, merger arbitrage strategies seek to capitalize on price discrepancies and returns generated by a corporate transaction. The Fund will purchase the common stock of the company being acquired and may take a short position in the common stock of the acquirer in expectation of profiting from the price differential between the purchase price of the securities and the value received for the securities as a result of or in expectation of the consummation of the merger. |
• | Macro/Managed Futures Strategies: These strategies aim to exploit macro-economic imbalances across the globe. The strategies may be implemented through a broad range of asset classes including, but not limited to, equities, fixed income, currency and commodities based on a systematic assessment of their attractiveness. For example, this strategy may invest in the long-end of the government bond markets with the highest inflation adjusted yields and take a short position in the long-end of the government bond markets with the lowest inflation adjusted yields. As an alternative example, the strategy may seek to exploit supply and demand imbalances that occur in a given commodity market by utilizing long and short exposures achieved through different derivative instruments. |
1 | In this example, the total return swap is a contract in which one party makes payments based on a set rate while the other makes payments based on the return of the underlying assets. In our example, the swap will be based on the return of the designated long and short positions. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 3.62% |
Worst Quarter | 4th quarter, 2018 | -3.69% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 09/12/2016) |
||
SHARES | |||
Return Before Taxes | 3.28% | 0.05% | |
Return After Taxes on Distributions | 1.66 | -0.54 | |
Return After Taxes on Distributions and Sale of Fund Shares | 2.16 | -0.17 | |
ICE BOFAML 3-MONTH US TREASURY BILL INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 2.28 | 1.55 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2016 | Managing Director |
Wei (Victor) Li | 2016 | Executive Director |
Alistair Lowe | 2019 | Managing Director |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.85% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.85 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 87 | 271 | 471 | 1,049 |
• | merger arbitrage — seeks to capitalize on price discrepancies and returns generated by a corporate transaction. The Fund will purchase the common stock of the company being acquired and may take a short position in the common stock of the acquirer in expectation of profiting from the price differential between the purchase price of the securities and the value received for the securities as a result of or in expectation of the consummation of the merger |
• | activism tracking — invests in companies that are the target of activist investors |
• | share buybacks — attempts to exploit the outperformance of a company engaged in a share buyback program |
• | parents and spinoffs — attempts to capture positive performance of a parent company after the spinoff announcement; this typically leads to a revaluation of the company |
• | index arbitrage — attempts to profit from the price changes of assets as they are added to or deleted from indices |
• | post-reorganization equities — attempts to profit from the mispricing of companies as they emerge from bankruptcy |
1 | In this example, the total return swap is a contract in which one party makes payments based on a set rate while the other makes payments based on the return of the underlying assets. In our example, the swap will be based on the return of the designated long and short positions. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 1st quarter, 2019 | 8.59% |
Worst Quarter | 4th quarter, 2018 | -8.19% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 11/29/2017) |
||
SHARES | |||
Return Before Taxes | 15.54% | 5.40% | |
Return After Taxes on Distributions | 14.96 | 4.45 | |
Return After Taxes on Distributions and Sale of Fund Shares | 9.38 | 3.78 | |
ICE BOFAML 3-MONTH US TREASURY BILL INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 2.28 | 2.05 |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.69% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.69 |
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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 70 | 221 | 384 | 859 |
• | Value — the Fund seeks to purchase “cheap” stocks based on the ratios of their price to certain company characteristics and take short positions in stocks that are relatively more expensive based on the same considerations |
• | Momentum — the Fund seeks to capture the tendency that a security’s recent performance may continue in the near future. This is achieved by purchasing stocks that have appreciated in value more (or depreciated less) than others and by taking short positions in stocks that have appreciated less (or depreciated more) |
• | Size — the Fund seeks to purchase small cap stocks and take short positions in large cap stocks |
• | Quality — the Fund seeks to buy high quality stocks and take short positions in lower ranked stocks |
1 | In this example, the total return swap is a contract in which one party makes payments based on a set rate while the other makes payments based on the return of the underlying assets. In our example, the swap will be based on the return of the designated long and short positions. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 3rd quarter, 2019 | 1.25% |
Worst Quarter | 1st quarter, 2019 | -2.93% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 01/23/2018) |
||
SHARES | |||
Return Before Taxes | -2.93% | -6.69% | |
Return After Taxes on Distributions | -2.93 | -6.69 | |
Return After Taxes on Distributions and Sale of Fund Shares | -1.73 | -5.06 | |
ICE BOFAML 3-MONTH US TREASURY BILL INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 2.28 | 2.10 |
Portfolio Manager |
Managed
the
Fund Since |
Primary
Title with
Investment Adviser |
Yazann Romahi | 2018 | Managing Director |
Wei (Victor) Li | 2018 | Executive Director |
Alistair Lowe | 2019 | Managing Director |
Jonathan Msika | 2018 | Vice President |
Yegang (Steven) Wu | 2018 | Analyst |
ANNUAL
FUND OPERATING EXPENSES1
(Expenses that you pay each year as a percentage of the value of your investment) |
|
Management Fees | 0.59% |
Other Expenses | 0.00 |
Total Annual Fund Operating Expenses | 0.59 |
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 and any subsidiary expenses), 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. |
WHETHER OR NOT YOU SELL YOUR SHARES, YOUR COST WOULD BE: | |||||||
1 Year | 3 Years | 5 Years | 10 Years | ||||
SHARES ($) | 60 | 189 | 329 | 738 |
• | Momentum — These strategies seek to capture the tendency that an asset’s recent performance based on its price will continue in the near future. The Fund seeks to choose investments that have performed relatively well over those that have underperformed over the medium-term. The Fund will implement the momentum return factor in the following ways: |
• | Looking at the relative value of prices of commodities and developed market currencies over time. The Fund intends to invest in futures or forward contracts to hold the best opportunities long while also taking short positions in the worst opportunities within these asset classes. |
• | Looking across developed market fixed income, developed market equity indices and international (including emerging market) commodities, the Fund seeks to utilize futures contracts to exploit price momentum trends across the asset classes. At any particular time, the Fund may hold only long or only short futures in a particular asset class as part of this strategy. |
• | Carry Trades — In the carry strategies, the Fund seeks to take a short position in a low yielding instrument while also taking a long position in another instrument that is higher yielding. The strategies seek to capture the tendency for higher yielding assets to provide higher returns than lower-yielding assets. The Fund implements these strategies through derivatives instead of holding long and shorting securities physically. The Fund uses the following asset classes in implementing this strategy: |
• | Fixed Income — the Fund seeks to benefit from differences in the yields of interest rates, caused by uncertainty in interest rates. The Fund invests in instruments with higher interest rate yields and takes short positions in those with lower yields. |
• | Currency — the Fund seeks to benefit from differences in the relative yields of various currencies. The Fund invests in higher yielding currencies and takes short positions in those with lower yields. |
• | Commodities — the Fund seeks to benefit from differences in the price of commodities futures contracts trading below the expected market price at contract maturity and those trading above the expected market price at contract maturity. |
YEAR-BY-YEAR RETURNS |
Best Quarter | 3rd quarter, 2019 | 4.19% |
Worst Quarter | 4th quarter, 2019 | -4.08% |
AVERAGE
ANNUAL TOTAL RETURNS
(For periods ended December 31, 2019) |
|||
Past
1 Year |
Life
of Fund
(since 12/05/2017) |
||
SHARES | |||
Return Before Taxes | 3.95% | -0.93% | |
Return After Taxes on Distributions | 2.10 | -1.93 | |
Return After Taxes on Distributions and Sale of Fund Shares | 2.34 | -1.12 | |
ICE BOFAML 3-MONTH US TREASURY BILL INDEX | |||
(Reflects No Deduction for Fees, Expenses, or Taxes) | 2.28 | 2.05 |
• | Equity Long/Short: Equity Long/Short strategies involve simultaneously investing in equities (i.e., investing long) that the adviser believes are attractive based on relevant return factors and taking short positions in equity securities that the adviser believes are unattractive based on the relevant return factors. As opposed to only holding long positions that the Fund’s adviser expects to outperform, taking short positions allows the Fund to more fully exploit insights in instruments that the adviser expects to underperform. |
• | Event Driven: Event Driven strategies seek to profit from investing in securities of companies that the Fund’s adviser believes will be impacted by pending or anticipated corporate or special situation events. In executing this investment strategy, the Fund seeks to capture the price difference between a security’s market price and the anticipated value post-event, based on the assumption that an event or catalyst will affect future pricing. For example, merger arbitrage strategies seek to capitalize on price discrepancies and returns generated by a corporate transaction. The Fund will purchase the common stock of the company being acquired and may take a short position in the common stock of the acquirer in expectation of profiting from the price differential between the purchase price of the securities and the value received for the securities as a result of or in expectation of the consummation of the merger. |
• | Macro/Managed Futures Strategies: These strategies aim to exploit macro-economic imbalances across the globe. The strategies may be implemented through a broad range of asset classes including, but not limited to, equities, fixed income, currency and commodities based on a systematic assessment of their attractiveness. For example, this strategy may invest in the long-end of the government bond markets with the highest inflation adjusted yields and take a short position in the long-end of the government bond markets with the lowest inflation adjusted yields. As an alternative example, the strategy may seek to exploit supply and demand imbalances that occur in a given commodity market by utilizing long and short exposures achieved through different derivative instruments. |
1 | In this example, the total return swap is a contract in which one party makes payments based on a set rate while the other makes payments based on the return of the underlying assets. In our example, the swap will be based on the return of the designated long and short positions. |
• | common stock |
• | foreign securities (including in emerging markets), which may be in the form of depositary receipts |
• | securities denominated in U.S. dollars, major reserve currencies, and currencies of other countries in which the Fund may invest |
• | sovereign debt (including in emerging markets) |
• | derivatives, including swaps, options, futures, and forward contracts. Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may also be used as substitutes for securities in which the Fund can invest. The Fund may use swaps (including total return swaps, interest rate swaps, credit default swaps and currency swaps), options, futures, forward contracts and other derivative instruments to increase gain, to effectively gain targeted equity exposure from its cash positions, to hedge various investments and/or for risk management. For example, the Fund, among other reasons, may use a total return swap to establish both long and short positions in order to gain the desired exposure, may utilize foreign currency transactions including forward foreign currency contracts to hedge non-dollar investments or to establish or adjust exposure to particular foreign securities, markets or currencies, and/or may use exchange traded futures for cash management and to gain exposure to various investments. |
• | securities issued or guaranteed by the U.S. government and its agencies or instrumentalities |
• | high quality commercial paper and other short-term debt securities |
• | bank obligations, including time deposits |
• | other investment companies |
• | mutual funds |
• | affiliated money market funds |
• | exchange-traded funds (ETFs) |
• | inflation-linked debt securities, such as Treasury Inflation Protected Securities (TIPS), which are adjusted periodically to a specified rate of inflation |
• | high yield securities which are below investment grade (junk bonds) and securities in the lowest investment grade category |
• | obligations of supranational agencies |
• | merger arbitrage — seeks to capitalize on price discrepancies and returns generated by a corporate transaction. The Fund will purchase the common stock of the company being acquired and may take a short position in the common stock of the acquirer in expectation of profiting from the price differential between the purchase price of the securities and the value received for the securities as a result of or in expectation of the consummation of the merger |
• | activism tracking — invests in companies that are the target of activist investors |
• | share buybacks — attempts to exploit the outperformance of a company engaged in a share buyback program |
• | parents and spinoffs — attempts to capture positive performance of a parent company after the spinoff announcement; this typically leads to a revaluation of the company |
• | index arbitrage — attempts to profit from the price changes of assets as they are added to or deleted from indices |
• | post-reorganization equities — attempts to profit from the mispricing of companies as they emerge from bankruptcy |
• | common stock |
• | foreign securities, which may be in the form of depositary receipts |
• | securities denominated in U.S. dollars, major reserve currencies, and currencies of other countries in which the Fund may invest |
• | derivatives, including swaps, options, futures, and forward contracts. Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may also be used as substitutes for securities in which the Fund can invest. The Fund may use swaps (including total return swaps, and credit default swaps), options, futures, forward contracts and other derivative instruments to increase gain, to effectively gain targeted equity exposure from its cash positions, to hedge various investments and/or for risk management. For example, the Fund, among other reasons, may use a total return swap to establish both long and short positions in order to gain the desired exposure, may utilize foreign currency transactions including forward foreign currency contracts to hedge non-dollar investments or to establish or adjust exposure to particular foreign securities, markets or currencies, and/or may use exchange traded futures for cash management and to gain exposure to various investments. |
• | securities issued by the U.S. government and by other sovereign governments |
• | high quality commercial paper and other short-term debt securities |
• | bank obligations, including time deposits |
• | affiliated money market funds |
• | Value — the Fund seeks to purchase “cheap” stocks based on the ratios of their price to certain company characteristics and take short positions in stocks that are relatively more expensive based on the same considerations |
• | Momentum — the Fund seeks to capture the tendency that a security’s recent performance may continue in the near future. This is achieved by purchasing stocks that have appreciated in value more (or depreciated less) than others and by taking short positions in stocks that have appreciated less (or depreciated more) |
• | Size — the Fund seeks to purchase small cap stocks and take short positions in large cap stocks |
• | Quality — the Fund seeks to buy high quality stocks and take short positions in lower ranked stocks |
• | preferred stock |
• | convertible securities |
• | trust or partnership interests |
• | warrants and rights to buy common stock |
• | equity securities purchased in initial public offerings |
• | master limited partnerships |
• | common stock |
• | foreign securities, which may be in the form of depositary receipts |
• | securities denominated in U.S. dollars, major reserve currencies, and currencies of other countries in which the Fund may invest |
• | derivatives, including swaps, options, futures, and forward contracts. Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may also be used as substitutes for securities in which the Fund can invest. The Fund may use swaps (including total return swaps, and credit default swaps), options, futures, forward contracts and other derivative instruments to increase gain, to effectively gain targeted equity exposure from its cash positions, to hedge various investments and/or for risk management. For example, a Fund, among other reasons, may use a total return swap to establish both long and short positions in order to gain the desired exposure, may utilize foreign currency transactions including forward foreign currency contracts to hedge non-dollar investments or to establish or adjust exposure to particular foreign securities, markets or currencies, and/or may use exchange traded futures for cash management and to gain exposure to various investments. |
• | securities issued or guaranteed by the U.S. government and its agencies or instrumentalities |
• | securities issued by other sovereign governments or supranational entities |
• | high quality commercial paper and other short-term debt securities |
• | bank obligations, including time deposits |
• | affiliated money market funds |
• | Momentum — These strategies seek to capture the tendency that an asset’s recent performance based on its price will continue in the near future. The Fund seeks to choose investments that have performed relatively well over those that have underperformed over the medium-term. The Fund will implement the momentum return factor in the following ways: |
• | Looking at the relative value of prices of commodities and developed market currencies over time. The Fund intends to invest in futures or forward contracts to hold the best opportunities long while also taking short positions in the worst opportunities within these asset classes. |
• | Looking across developed market fixed income, developed market equity indices and international (including emerging market) commodities, the Fund seeks to utilize futures contracts to exploit price momentum trends across the asset classes. At any particular time, the Fund may hold only long or only short futures in a particular asset class as part of this strategy. |
• | Carry Trades — In the carry strategies, the Fund seeks to take a short position in a low yielding instrument while also taking a long position in another instrument that is higher yielding. The strategies seek to capture the tendency for higher yielding assets to provide higher returns than lower-yielding assets. The Fund implements these strategies through derivatives instead of holding long and shorting securities physically. The Fund uses the following asset classes in implementing this strategy: |
• | Fixed Income — the Fund seeks to benefit from differences in the yields of interest rates, caused by uncertainty in interest rates. The Fund invests in instruments with higher interest rate yields and takes short positions in those with lower yields. |
• | Currency — the Fund seeks to benefit from differences in the relative yields of various currencies. The Fund invests in higher yielding currencies and takes short positions in those with lower yields. |
• | Commodities — the Fund seeks to benefit from differences in the price of commodities futures contracts trading below the expected market price at contract maturity and those trading above the expected market price at contract maturity. |
• | foreign securities, which may be in the form of depositary receipts |
• | securities denominated in U.S. dollars, major reserve currencies, and currencies of other countries in which the Fund may invest |
• | derivatives, including swaps, options, futures, and forward contracts. Derivatives, which are instruments that have a value based on another instrument, exchange rate or index, may also be used as substitutes for securities in which the Fund can invest. The Fund may use swaps (including total return swaps, and credit default swaps), options, futures, forward contracts and other derivative instruments to increase gain, to effectively gain targeted equity exposure from its cash positions, to hedge various investments and/or for risk management. For example, a Fund, among other reasons, may use a total return swap to establish both long and short positions in order to gain the desired exposure, may utilize foreign currency transactions including forward foreign currency contracts to hedge non-dollar investments or to establish or adjust exposure to particular foreign securities, markets or currencies, and/or may use exchange traded futures for cash management and to gain exposure to various investments. |
• | securities issued or guaranteed by the U.S. government and its agencies or instrumentalities |
• | securities issued by other sovereign governments or supranational entities |
• | high quality commercial paper and other short-term debt securities |
• | bank obligations, including time deposits |
• | affiliated money market funds |
NON-FUNDAMENTAL INVESTMENT OBJECTIVES |
An investment objective is fundamental if it cannot be changed without the consent of a majority of the outstanding Shares of each Fund. Each Fund’s investment objective is not fundamental and may be changed without the consent of a majority of the outstanding Shares of the Fund. |
Diversified Alternatives ETF | Event Driven ETF | Long/Short ETF | Managed Futures Strategy ETF | |
Alternatives/Managed Futures Strategies and Return Factors Risk | • | • | ||
Authorized Participant Concentration Risk | • | • | • | • |
Cash Transactions Risk | • | • | • | • |
CFTC Regulation Risk | ○ | ○ | ○ | |
Commodity Risk | • | • | ||
Credit Risk | • | ○ | • | |
Currency Risk | • | • | • | • |
Derivatives Risk | • | • | • | • |
Emerging Markets Risk | ○ | ○ | ||
Equity Market Risk | • | • | • | • |
Event Driven Strategies Risk | • | |||
Exchange-Traded Fund (ETF) and Investment Company Risk | ○ | ○ | ○ | ○ |
Foreign Securities and Emerging Markets Risk | • | • | • | • |
General Market Risk | • | • | • | • |
Geographic Focus Risk | • | • | • | • |
Government Securities Risk | • | • | • | • |
High Portfolio Turnover Risk | • | • | • | |
High Yield Securities Risk | ○ | ○ | ||
Illiquidity Risk | • | • | • | • |
Industry and Sector Focus Risk | • | • | • | • |
Inflation-Protected Securities Risk | ○ | |||
Interest Rate Risk | • | ○ | • | |
Long/Short Strategy and Return Factors Risk | • | |||
Market Trading Risk | • | • | • | • |
Model and Data Risk | • | • | • | • |
Non-Diversified Fund Risk | • | |||
Rolling Futures Contract Risk | • |
•
• Main Risks
|
Diversified Alternatives ETF | Event Driven ETF | Long/Short ETF | Managed Futures Strategy ETF | |
Securities Lending Risk | ○ | ○ | ||
Short Positions Risk | • | • | • | • |
Smaller Company Risk | • | • | • | • |
Sovereign Debt Risk | • | ○ | • | • |
Subsidiary Risk | • | • | ||
Tax Risk | • | • | ||
Transactions and Liquidity Risk | ○ | ○ | ○ | ○ |
Value Investing Risk | • | |||
Volcker Rule Risk | ○ | ○ | ○ | ○ |
• | Main Risks |
○ | Additional Risks |
WHAT IS A DERIVATIVE? |
Derivatives are securities or contracts (for example, futures and options) that derive their value from the performance of underlying assets or securities. |
WHAT IS A CASH EQUIVALENT? |
Cash equivalents are highly liquid, high-quality instruments with maturities of three months or less on the date they are purchased. They include securities issued by the U.S. government, its agencies and instrumentalities, repurchase agreements, certificates of deposit, bankers’ acceptances, commercial paper, money market mutual funds, and bank deposit accounts. |
Diversified Alternatives ETF | 0.50 % |
Event Driven ETF | 0.09 |
Long/Short ETF | 0.00 |
Managed Futures Strategy ETF | 0.04 |
Diversified Alternatives ETF | 0.85 % |
Event Driven ETF | 0.85 |
Long/Short ETF | 0.69 |
Managed Futures Strategy ETF | 0.59 |
Per share operating performance | ||||||||
Investment Operations | Distributions | |||||||
|
Net asset value, beginning of period |
Net investment income (loss) (b) |
Net
realized
and unrealized gains (losses) on investments |
Total from investment operations |
Net investment income |
Net realized gain |
Total distributions |
|
JPMorgan Diversified Alternatives ETF (1) | ||||||||
Year Ended October 31, 2019 | $ 24.29 | $ 0.29 | $ 0.37 | $ 0.66 | $ — | $ — | $ — | |
Year Ended October 31, 2018 | 26.06 | 0.17 | (1.94) | (1.77) | — (f) | — | — (f) | |
Year Ended October 31, 2017 | 25.35 | 0.07 | 0.86 | 0.93 | (0.21) | (0.01) | (0.22) | |
September 12, 2016 (g) through October 31, 2016 | 25.00 | (0.02) | 0.37 | 0.35 | — | — | — | |
JPMorgan Event Driven ETF | ||||||||
Year Ended October 31, 2019 | 25.03 | 0.24 | 1.19 | 1.43 | (0.83) | — | (0.83) | |
November 29, 2017 (g) through October 31, 2018 | 25.00 | 0.15 | (0.11) | 0.04 | (0.01) | — | (0.01) | |
JPMorgan Long/Short ETF | ||||||||
Year Ended October 31, 2019 | 22.34 | 0.31 | (0.73) | (0.42) | — | — | — | |
January 23, 2018 (g) through October 31, 2018 | 25.00 | 0.20 | (2.86) | (2.66) | — | — | — | |
JPMorgan Managed Futures Strategy ETF (1) | ||||||||
Year Ended October 31, 2019 | 23.63 | 0.39 | 1.26 | 1.65 | (0.16) | — | (0.16) | |
December 5, 2017 (g) through October 31, 2018 | 25.00 | 0.19 | (1.55) | (1.36) | (0.01) | — | (0.01) |
(a) | Annualized for periods less than one year, unless otherwise indicated. |
(b) | Calculated based upon average shares outstanding. |
(c) | Not annualized for periods less than one year. |
(d) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset values for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions. |
(e) | Market price total return is calculated assuming an initial investment made at the beginning of the period market price, reinvestment of all dividends and distributions at market price during the period, and sale at the market price on the last day of the period. The market price presented to calculate the market price total return is the mid-point of the bid/ask spread at the close of business on the NYSE Arca, Inc. |
(f) | Amount rounds to less than $0.005. |
(g) | Commencement of operations. |
(h) | Since the Shares of the Fund did not trade in the secondary market until the day after the Fund’s inception, for the period from the inception to the first day of secondary market trading, the NAV is used as a proxy for the secondary market trading price to calculate the market returns. |
(i) | Certain non-recurring expenses incurred by the Fund were not annualized for the period indicated. |
(j) | Portfolio turnover is calculated by dividing the lesser of total purchases or sales of portfolio securities for the reporting period by the monthly average of portfolio securities owned during the reporting period. Excluded from both the numerator and denominator are amounts relating to derivatives and securities whose maturities or expiration dates at the time of acquisition were one year or less. |
(1) | Consolidated Financial Highlights. |
Ratios/Supplemental data | ||||||||||
Ratios to average net assets (a) | ||||||||||
Net asset value, end of period |
Market price, end of period |
Total return (c)(d) |
Market price total return (c)(e) |
Net assets, end of period |
Net expenses |
Net investment income (loss) |
Expenses without waivers and reimbursements |
Portfolio turnover rate (c) |
||
$ 24.95 | $ 24.95 | 2.72% | 2.55% | $ 104,798,391 | 0.78% | 1.16% | 1.02% | 123% | ||
24.29 | 24.33 | (6.79) | (6.75) | 201,628,562 | 0.79 | 0.69 | 1.08 | 145 | ||
26.06 | 26.09 | 3.68 | 3.51 | 153,782,741 | 0.76 | 0.25 | 1.31 | 107 | ||
25.35 | 25.42 | 1.44 | 1.68(h) | 51,977,433 | 0.85(i) | 0.47 | 6.65(i) | 5 | ||
25.63 | 25.72 | 6.17 | 6.07 | 29,475,685 | 0.83 | 0.94 | 1.56 | 206 | ||
25.03 | 25.14 | 0.18 | 0.62(h) | 26,284,405 | 0.74(i) | 0.64 | 1.85(i) | 141 | ||
21.92 | 22.04 | (1.88) | (2.04) | 28,498,988 | 0.65 | 1.43 | 1.51 | 114 | ||
22.34 | 22.50 | (10.64) | (10.00)(h) | 23,456,272 | 0.60(i) | 1.15 | 1.95(i) | 99 | ||
25.12 | 25.06 | 7.05 | 6.38 | 51,499,845 | 0.46 | 1.63 | 1.04 | —(j) | ||
23.63 | 23.72 | (5.45) | (5.09)(h) | 50,797,949 | 0.45(i) | 0.88 | 1.35(i) | —(j) |
Fund Name | Ticker |
Listing
Exchange |
JPMorgan BetaBuilders Canada ETF (the “BetaBuilders Canada ETF”) | BBCA | Cboe BZX Exchange, Inc. |
JPMorgan BetaBuilders Developed Asia ex-Japan ETF (the “BetaBuilders Developed Asia ex-Japan ETF”) | BBAX | Cboe BZX Exchange, Inc. |
JPMorgan BetaBuilders Europe ETF (the “BetaBuilders Europe ETF”) | BBEU | Cboe BZX Exchange, Inc. |
JPMorgan BetaBuilders Japan ETF (the “BetaBuilders Japan ETF”) | BBJP | Cboe BZX Exchange, Inc. |
JPMorgan BetaBuilders U.S. Equity ETF (the “BetaBuilders U.S. Equity ETF”) | BBUS | Cboe BZX Exchange, Inc. |
JPMorgan Diversified Return Emerging Markets Equity ETF (the “Emerging Markets Equity ETF”) | JPEM | NYSE Arca |
JPMorgan Diversified Return Europe Equity ETF (the “Europe Equity ETF”) | JPEU | NYSE Arca |
JPMorgan Diversified Return Global Equity ETF (the “Global Equity ETF”) | JPGE | NYSE Arca |
JPMorgan Diversified Return International Equity ETF (the “International Equity ETF”) | JPIN | NYSE Arca |
JPMorgan Diversified Return U.S. Equity ETF (the “U.S. Equity ETF”) | JPUS | NYSE Arca |
JPMorgan Diversified Return U.S. Mid Cap Equity ETF (the “U.S. Mid Cap Equity ETF”) | JPME | NYSE Arca |
JPMorgan Diversified Return U.S. Small Cap Equity ETF (the “U.S. Small Cap Equity ETF”) | JPSE | NYSE Arca |
JPMorgan U.S. Dividend ETF (the “U.S. Dividend ETF”) | JDIV | NYSE Arca |
JPMorgan U.S. Minimum Volatility ETF (the “U.S. Minimum Volatility ETF”) | JMIN | NYSE Arca |
JPMorgan U.S. Momentum Factor ETF (the “U.S. Momentum Factor ETF”) | JMOM | NYSE Arca |
JPMorgan U.S. Quality Factor ETF (the “U.S. Quality Factor ETF”) | JQUA | NYSE Arca |
JPMorgan U.S. Value Factor ETF (the “U.S. Value Factor ETF”) | JVAL | NYSE Arca |
|
1 |
|
1 |
|
1 |
|
1 |
|
2 |
|
3 |
|
3 |
|
6 |
|
6 |
|
7 |
|
7 |
|
7 |
|
8 |
|
9 |
|
9 |
|
10 |
|
10 |
|
11 |
|
11 |
|
15 |
|
16 |
|
17 |
|
17 |
|
18 |
|
19 |
|
19 |
|
20 |
|
21 |
|
21 |
|
22 |
|
22 |
|
22 |
|
22 |
|
22 |
|
23 |
|
23 |
|
23 |
|
23 |
|
24 |
FUND NAME | FUND CODE |
BetaBuilders Canada ETF | 1 |
BetaBuilders Developed Asia ex-Japan ETF | 2 |
FUND NAME | FUND CODE |
BetaBuilders Europe ETF | 3 |
BetaBuilders Japan ETF | 4 |
BetaBuilders U.S. Equity ETF | 5 |
Emerging Markets Equity ETF | 6 |
Europe Equity ETF | 7 |
Global Equity ETF | 8 |
International Equity ETF | 9 |
U.S. Equity ETF | 10 |
U.S. Mid Cap Equity ETF | 11 |
U.S. Small Cap Equity ETF | 12 |
U.S. Dividend ETF | 13 |
U.S. Minimum Volatility ETF | 14 |
U.S. Momentum Factor ETF | 15 |
U.S. Quality Factor ETF | 16 |
U.S. Value Factor ETF | 17 |
Instrument | Fund Code |
Part
II
Section Reference |
Bank Obligations: Bankers’ acceptances, certificates of deposit and time deposits. Bankers’ acceptances are bills of exchange or time drafts drawn on and accepted by a commercial bank. Maturities are generally six months or less. Certificates of deposit are negotiable certificates issued by a bank for a specified period of time and earning a specified return. Time deposits are non-negotiable receipts issued by a bank in exchange for the deposit of funds. | 1-5, 11-17 | Bank Obligations |
Borrowings: A Fund may borrow for temporary purposes and/or for investment purposes. Such a practice will result in leveraging of a Fund’s assets and may cause a Fund to liquidate portfolio positions when it would not be advantageous to do so. A Fund must maintain continuous asset coverage of 300% of the amount borrowed, with the exception for borrowings not in excess of 5% of the Fund’s total assets made for temporary administrative purposes. | 1-17 | Miscellaneous Investment Strategies and Risks |
Commercial Paper: Secured and unsecured short-term promissory notes issued by corporations and other entities. Maturities generally vary from a few days to nine months. | 1-5 | Commercial Paper |
Common Stock: Shares of ownership of a company. | 1-17 | Equity Securities, Warrants and Rights |
Common Stock Warrants and Rights: Securities, typically issued with preferred stock or bonds, that give the holder the right to buy a proportionate amount of common stock at a specified price. | 1-17 | Equity Securities, Warrants and Rights |
Convertible Securities: Bonds or preferred stock that can convert to common stock. | 1-17 | Convertible Securities |
Emerging Market Securities: Securities issued by issuers or governments in countries with emerging economies or securities markets which may be undergoing significant evolution and rapid development. | 6 | Foreign Investments (including Foreign Currencies) |
Exchange-Traded Funds (“ETFs”): Ownership interest in unit investment trusts, depositary receipts, and other pooled investment vehicles that hold a portfolio of securities or stocks designed to track the price performance and dividend yield of a particular broad-based, sector or international index. ETFs include a wide range of investments. | 1-17 | Investment Company Securities and Exchange-Traded Funds |
Instrument | Fund Code |
Part
II
Section Reference |
Foreign Currency Transactions: Strategies used to hedge against currency risks, for other risk management purposes or to increase income or gain to the Fund. These strategies may consist of use of any of the following: options on currencies, currency futures, options on such futures, forward foreign currency transactions (including non-deliverable forwards (“NDFs”)), forward rate agreements and currency swaps, caps and floors. | 1-4, 6-17 | Foreign Investments (including Foreign Currencies) |
Foreign Investments: Equity securities of foreign entities and obligations of foreign branches of U.S. banks and foreign banks. Foreign securities may also include American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”), European Depositary Receipts (“EDRs”) and American Depositary Securities (“ADSs”). A Fund may also use forward foreign currency contracts in connection with its foreign investments. | 1-4, 6-17 | Foreign Investments (including Foreign Currencies) |
Futures Transactions: A Fund may purchase and sell futures contracts on securities and indexes of securities. | 1-17 | Futures Transactions |
Investment Company Securities: Shares of other investment companies, including money market funds for which the Adviser and/or its affiliates serve as investment adviser or administrator. The Adviser will waive certain fees when investing in funds for which it serves as investment adviser, to the extent required by law or by contract. | 1-17 | Investment Company Securities and Exchange-Traded Funds |
Master Limited Partnerships (“MLPs”): Limited partnerships that are publicly traded on a securities exchange. | 5, 8, 10-17 | Master Limited Partnerships |
New Financial Products: New options and futures contracts and other financial products continue to be developed and a Fund may invest in such options, contracts and products. | 1-5 | Miscellaneous Investment Strategies and Risks |
Options and Futures Transactions: A Fund may purchase and sell (a) exchange traded and over-the-counter put and call options on securities, indexes of securities and futures contracts on securities and indexes of securities and (b) futures contracts on securities and indexes of securities. | 1-17 | Options and Futures Transactions |
Preferred Stock: A class of stock that generally pays a dividend at a specified rate and has preference over common stock in the payment of dividends and in liquidation. | 1-17 | Equity Securities, Warrants and Rights |
Private Placements, Restricted Securities and Other Unregistered Securities: Securities not registered under the Securities Act of 1933, such as privately placed commercial paper and Rule 144A securities. | 6-17 | Miscellaneous Investment Strategies and Risks |
Real Estate Investment Trusts (“REITs”): Pooled investment vehicles which invest primarily in income producing real estate or real estate related loans or interest. | 1-17 | Real Estate Investment Trusts |
Securities Issued in Connection with Reorganizations and Corporate Restructurings: In connection with reorganizing or restructuring of an issuer, an issuer may issue common stock or other securities to holders of its debt securities. | 1-17 | Miscellaneous Investment Strategies and Risks |
Securities Lending: The lending of up to 33 1⁄3% of a Fund’s total assets. In return a Fund will receive cash as collateral. | 1-17 | Securities Lending |
Instrument | Fund Code |
Part
II
Section Reference |
U.S. Government Obligations: May include direct obligations of the U.S. Treasury, including Treasury bills, notes and bonds, all of which are backed as to principal and interest payments by the full faith and credit of the United States, and separately traded principal and interest component parts of such obligations that are transferable through the Federal book-entry system known as Separate Trading of Registered Interest and Principal of Securities (“STRIPS”) and Coupons Under Book Entry Safekeeping (“CUBES”). | 1-5 | U.S. Government Obligations |
When-Issued Securities, Delayed Delivery Securities and Forward Commitments: Purchase or contract to purchase securities at a fixed price for delivery at a future date. | 1-5 | When-Issued Securities, Delayed Delivery Securities and Forward Commitments |
Fiscal Year Ended October 31, | ||||
Fund | 2018 | 2019 | ||
BetaBuilders Canada ETF1 | 1% | 7% | ||
BetaBuilders Developed Asia ex-Japan ETF1 | 2% | 7% | ||
BetaBuilders Europe ETF2 | 2% | 7% | ||
BetaBuilders Japan ETF2 | 5% | 4% |
Fiscal Year Ended October 31, | ||||
Fund | 2018 | 2019 | ||
BetaBuilders U.S. Equity ETF3 | N/A | 3% | ||
Emerging Markets Equity ETF | 53% | 51% | ||
Europe Equity ETF | 51% | 20% | ||
Global Equity ETF | 29% | 23% | ||
International Equity ETF | 28% | 25% | ||
U.S. Equity ETF | 32% | 24% | ||
U.S. Mid Cap Equity ETF | 35% | 25% | ||
U.S. Small Cap Equity ETF | 30% | 43% | ||
U.S. Dividend ETF4 | 24% | 20% | ||
U.S. Minimum Volatility ETF4 | 17% | 15% | ||
U.S. Momentum Factor ETF4 | 44% | 52% | ||
U.S. Quality Factor ETF4 | 22% | 21% | ||
U.S. Value Factor ETF4 | 26% | 22% |
1 | The Fund commenced operations on 8/7/2018. |
2 | The Fund commenced operations on 6/15/2018. |
3 | The Fund commenced operations on 3/12/2019. |
4 | The Fund commenced operations on 11/8/2017. |
Name of Trustee |
Dollar
Range
of Equity Securities in BetaBuilders Canada ETF |
Dollar
Range
of Equity Securities in BetaBuilders Developed Asia ex- Japan ETF |
Dollar
Range
of Equity Securities in BetaBuilders Europe ETF |
Dollar
Range
of Equity Securities in BetaBuilders Japan ETF |
Dollar
Range
of Equity Securities in BetaBuilders U.S. Equity ETF |
|||||
Independent Trustees | ||||||||||
Gary L. French | None | None | None | $10,001–$50,000 | None | |||||
Robert J. Grassi | None | None | None | None | None | |||||
Thomas P. Lemke | None | None | None | None | None | |||||
Lawrence R. Maffia | None | None | None | None | None | |||||
Emily A. Youssouf | None | None | None | None | None | |||||
Interested Trustee | ||||||||||
Robert Deutsch | None | None | None | None | None |
Name of Trustee |
Dollar
Range
of Equity Securities in Emerging Markets Equity ETF |
Dollar
Range
of Equity Securities in Europe Equity ETF |
Dollar
Range
of Equity Securities in Global Equity ETF |
Dollar
Range
of Equity Securities in International Equity ETF |
Dollar
Range
of Equity Securities in U.S. Equity ETF |
|||||
Independent Trustees | ||||||||||
Gary L. French | None | None | $10,001–$50,000 | None | None | |||||
Robert J. Grassi | $10,001–$50,000 | None | None | $10,001–$50,000 | None | |||||
Thomas P. Lemke | None | None |
Over
$100,000 |
None | None | |||||
Lawrence R. Maffia | $10,001–$50,000 | None | $10,001–$50,000 | None | None | |||||
Emily A. Youssouf | None | None | $10,001–$50,000 | None | None |
Name of Trustee |
Dollar
Range
of Equity Securities in Emerging Markets Equity ETF |
Dollar
Range
of Equity Securities in Europe Equity ETF |
Dollar
Range
of Equity Securities in Global Equity ETF |
Dollar
Range
of Equity Securities in International Equity ETF |
Dollar
Range
of Equity Securities in U.S. Equity ETF |
|||||
Interested Trustee | ||||||||||
Robert Deutsch | None | None | $10,001–$50,000 |
Over
$100,000 |
None |
Name of Trustee |
Dollar
Range
of Equity Securities in U.S. Mid Cap Equity ETF |
Dollar
Range
of Equity Securities in U.S. Small Cap Equity ETF |
Dollar
Range
of Equity Securities in U.S. Dividend ETF |
Dollar
Range
of Equity Securities in U.S. Minimum Volatility ETF |
Dollar
Range
of Equity Securities in U.S. Momentum Factor ETF |
|||||
Independent Trustees | ||||||||||
Gary L. French | None | None | None | None | None | |||||
Robert J. Grassi | $10,001–$50,000 | $10,001–$50,000 | None | None | None | |||||
Thomas P. Lemke | None | None | None | None | None | |||||
Lawrence R. Maffia | None | None | None | None | None | |||||
Emily A. Youssouf | None | None | None | None | None | |||||
Interested Trustee | ||||||||||
Robert Deutsch | None | None | None | None | None |
Name of Trustee |
Dollar
Range
of Equity Securities in U.S. Quality Factor ETF |
Dollar
Range
of Equity Securities in U.S. Value Factor ETF |
Aggregate
Dollar Range
of Equity Securities in all Registered Investment Companies Overseen by the Trustee in Family of Investment Companies1 |
|||
Independent Trustees | ||||||
Gary L. French | None | None | $50,001–$100,000 | |||
Robert J. Grassi | None | None | Over $100,000 | |||
Thomas P. Lemke | None | None | Over $100,000 | |||
Lawrence R. Maffia | None | None | Over $100,000 | |||
Emily A. Youssouf | None | None | $10,001–$50,000 | |||
Interested Trustee | ||||||
Robert Deutsch | None | None | Over $100,000 |
1 | A Family of Investment Companies means any two or more registered investment companies that share the same investment adviser or principal underwriter and hold themselves out to investors as related companies for purposes of investment and investor services. The Family of Investment Companies for which the Board of Trustees currently serves includes one registered investment company, 39 Funds and one Trust. |
Name of Trustee |
BetaBuilders
Canada ETF |
BetaBuilders
Developed Asia ex- Japan ETF |
BetaBuilders
Europe ETF |
BetaBuilders
Japan ETF |
BetaBuilders
U.S. Equity ETF |
|||||
Independent Trustees | ||||||||||
Gary L. French | $17,268 | $6,921 | $20,113 | $20,449 | $ 52 | |||||
Robert J. Grassi | 16,252 | 6,514 | 18,930 | 19,246 | 49 | |||||
Thomas P. Lemke | 17,335 | 6,948 | 20,192 | 20,529 | 52 | |||||
Lawrence Maffia | 16,252 | 6,514 | 18,930 | 19,246 | 49 | |||||
Emily Youssouf | 17,065 | 6,839 | 19,876 | 20,209 | 51 | |||||
Interested Trustee | ||||||||||
Robert Deutsch2 | None | None | None | None | None |
Name of Trustee |
Emerging
Markets Equity ETF |
Europe
Equity ETF |
Global
Equity ETF |
International
Equity ETF |
U.S.
Equity ETF |
|||||
Independent Trustees | ||||||||||
Gary L. French | $1,670 | $ 111 | $ 985 | $8,229 | $3,924 |
Name of Trustee |
Emerging
Markets Equity ETF |
Europe
Equity ETF |
Global
Equity ETF |
International
Equity ETF |
U.S.
Equity ETF |
|||||
Robert J. Grassi | $1,572 | $ 105 | $ 927 | $7,745 | $3,693 | |||||
Thomas P. Lemke | 1,677 | 112 | 989 | 8,261 | 3,939 | |||||
Lawrence Maffia | 1,572 | 105 | 927 | 7,745 | 3,693 | |||||
Emily Youssouf | 1,651 | 110 | 974 | 8,132 | 3,877 | |||||
Interested Trustee | ||||||||||
Robert Deutsch2 | None | None | None | None | None |
Name of Trustee |
U.S.
Mid Cap Equity ETF |
U.S.
Small Cap Equity ETF |
U.S.
Dividend ETF |
U.S.
Minimum Volatility ETF |
U.S.
Momentum Factor ETF |
|||||
Independent Trustees | ||||||||||
Gary L. French | $ 878 | $ 764 | $ 174 | $ 275 | $ 240 | |||||
Robert J. Grassi | 827 | 719 | 163 | 258 | 226 | |||||
Thomas P. Lemke | 882 | 767 | 174 | 276 | 241 | |||||
Lawrence Maffia | 827 | 719 | 163 | 258 | 226 | |||||
Emily Youssouf | 868 | 755 | 171 | 271 | 237 | |||||
Interested Trustee | ||||||||||
Robert Deutsch2 | None | None | None | None | None |
Name of Trustee |
U.S.
Quality Factor ETF |
U.S.
Value Factor ETF |
Total
Compensation Paid From Fund Complex1 |
|||
Independent Trustees | ||||||
Gary L. French | $ 325 | $ 307 | $127,500 | |||
Robert J. Grassi | 306 | 289 | 120,000 | |||
Thomas P. Lemke | 326 | 309 | 128,000 | |||
Lawrence Maffia | 306 | 289 | 120,000 | |||
Emily Youssouf | 321 | 304 | 126,000 | |||
Interested Trustee | ||||||
Robert Deutsch2 | None | None | None |
1 | A Fund Complex means two or more registered investment companies that (i) hold themselves out to investors as related companies for purposes of investment and investor services or (ii) have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other registered investment companies. The J.P. Morgan Funds Complex for which the Board of Trustees currently serves includes 39 Funds and one Trust. |
2 | Mr. Deutsch received no compensation directly from the Trust. |
Fiscal Year Ended | ||||||||||||
October 31, 2017 | October 31, 2018 | October 31, 2019 | ||||||||||
Fund | Paid | Waived | Paid | Waived | Paid | Waived | ||||||
BetaBuilders Canada ETF1 | N/A | N/A | $ 287,567 | $(302,590) | $3,113,516 | $(2,711,035) | ||||||
BetaBuilders Developed Asia ex-Japan ETF1 | N/A | N/A | 82,303 | (150,645) | 954,491 | (1,326,009) | ||||||
BetaBuilders Europe ETF2 | N/A | N/A | — | (271,259) | 227,530 | (2,845,982) |
Fiscal Year Ended | ||||||||||||
October 31, 2017 | October 31, 2018 | October 31, 2019 | ||||||||||
Fund | Paid | Waived | Paid | Waived | Paid | Waived | ||||||
BetaBuilders Japan ETF2 | N/A | N/A | $ 487,814 | $(529,186) | $3,905,677 | $(2,916,179) | ||||||
Emerging Markets Equity ETF | $ 27,378 | $(504,504) | 158,711 | (756,417) | 467,023 | (858,821) | ||||||
Europe Equity ETF | 15,639 | (180,006) | 100,193 | (139,724) | — | (78,723) | ||||||
Global Equity ETF | — | (191,686) | 336,486 | (139,931) | 312,059 | (114,616) | ||||||
International Equity ETF | 1,569,831 | (272,288) | 3,216,192 | (257,750) | 3,463,170 | (175,219) | ||||||
U.S. Equity ETF | 165,840 | (372,992) | 495,089 | (650,418) | 868,546 | (691,731) | ||||||
U.S. Mid Cap Equity ETF | — | (128,187) | 75,386 | (159,715) | 210,366 | (169,563) | ||||||
U.S. Small Cap Equity ETF3 | — | (90,324) | 76,869 | (150,571) | 232,143 | (155,605) | ||||||
U.S. Dividend ETF4 | N/A | N/A | — | (60,332) | — | (72,160) | ||||||
U.S. Minimum Volatility ETF4 | N/A | N/A | — | (60,404) | — | (115,989) | ||||||
U.S. Momentum Factor ETF4 | N/A | N/A | — | (63,136) | — | (101,601) | ||||||
U.S. Quality Factor ETF4 | N/A | N/A | — | (62,075) | — | (137,273) | ||||||
U.S. Value Factor ETF4 | N/A | N/A | — | (61,561) | — | (120,947) |
1 | The Fund commenced operations on 8/7/2018. |
2 | The Fund commenced operations on 6/15/2018. |
3 | The Fund commenced operations on 11/15/2016. |
4 | The Fund commenced operations on 11/8/2017. |
Fiscal Period Ended | ||
Fund | October 31, 2019 | |
BetaBuilders U.S. Equity ETF1 | $4,259 |
1 | The Fund commenced operations on 3/12/2019. |
Fiscal Year Ended | ||||||||||||
October 31, 2017 | October 31, 2018 | October 31, 2019 | ||||||||||
Fund | Paid | Waived | Paid | Waived | Paid | Waived | ||||||
BetaBuilders Canada ETF1 | N/A | N/A | $ 62,322 | $(201,698) | $ 527,913 | $(1,807,086) | ||||||
BetaBuilders Developed Asia ex-Japan ETF1 | N/A | N/A | 4,721 | (99,493) | 28,162 | (883,670) | ||||||
BetaBuilders Europe ETF2 | N/A | N/A | — | (256,188) | 690,521 | (1,897,013) | ||||||
BetaBuilders Japan ETF2 | N/A | N/A | 102,260 | (352,718) | 795,038 | (1,943,713) | ||||||
Emerging Markets Equity ETF | $ — | $(102,750) | — | (176,788) | — | (229,763) | ||||||
Europe Equity ETF | — | (55,433) | — | (67,977) | — | (20,722) |
Fiscal Year Ended | ||||||||||||
October 31, 2017 | October 31, 2018 | October 31, 2019 | ||||||||||
Fund | Paid | Waived | Paid | Waived | Paid | Waived | ||||||
Global Equity ETF | $ — | $ (67,889) | $ 76,253 | $ (92,482) | $ 60,684 | $ (76,074) | ||||||
International Equity ETF | 181,526 | (179,342) | 1,065,330 | (165,050) | 1,048,067 | (112,373) | ||||||
U.S. Equity ETF | — | (199,134) | — | (423,343) | 59,691 | (458,508) | ||||||
U.S. Mid Cap Equity ETF | — | (45,400) | — | (83,267) | 8,770 | (112,106) | ||||||
U.S. Small Cap Equity ETF3 | — | (26,474) | — | (66,664) | — | (101,917) | ||||||
U.S. Dividend ETF4 | N/A | N/A | — | (22,297) | — | (23,984) | ||||||
U.S. Minimum Volatility ETF4 | N/A | N/A | — | (22,323) | — | (38,317) | ||||||
U.S. Momentum Factor ETF4 | N/A | N/A | — | (23,333) | — | (33,626) | ||||||
U.S. Quality Factor ETF4 | N/A | N/A | — | (22,941) | — | (45,323) | ||||||
U.S. Value Factor ETF4 | N/A | N/A | — | (22,751) | — | (39,958) |
1 | The Fund commenced operations on 8/7/2018. |
2 | The Fund commenced operations on 6/15/2018. |
3 | The Fund commenced operations on 11/15/2016. |
4 | The Fund commenced operations on 11/8/2017. |
Non-Performance Based Fee Advisory Accounts | ||||||||||||
Registered
Investment Companies |
Other
Pooled
Investment Vehicles |
Other Accounts | ||||||||||
Fund |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
||||||
BetaBuilders Canada ETF | ||||||||||||
Nicholas D’Eramo | 14 | $29,630,447 | 8 | $16,824,549 | 4 | $ 118,047 | ||||||
Michael Loeffler | 14 | 29,630,447 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Oliver Furby | 10 | 15,695,327 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Alex Hamilton | 10 | 15,695,327 | 8 | 16,824,549 | 4 | 118,047 | ||||||
BetaBuilders Developed Asia ex-Japan ETF | ||||||||||||
Nicholas D’Eramo | 14 | 31,993,735 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Michael Loeffler | 14 | 31,993,735 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Oliver Furby | 10 | 18,058,614 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Alex Hamilton | 10 | 18,058,614 | 8 | 16,824,549 | 4 | 118,047 | ||||||
BetaBuilders Europe ETF | ||||||||||||
Nicholas D’Eramo | 14 | 29,595,529 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Michael Loeffler | 14 | 29,595,529 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Oliver Furby | 10 | 15,660,408 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Alex Hamilton | 10 | 15,660,408 | 8 | 16,824,549 | 4 | 118,047 | ||||||
BetaBuilders Japan ETF | ||||||||||||
Nicholas D’Eramo | 14 | 29,093,071 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Michael Loeffler | 14 | 29,093,071 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Oliver Furby | 10 | 15,157,951 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Alex Hamilton | 10 | 15,157,951 | 8 | 16,824,549 | 4 | 118,047 | ||||||
BetaBuilders U.S. Equity ETF | ||||||||||||
Nicholas D’Eramo | 14 | 33,392,013 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Michael Loeffler | 14 | 33,392,013 | 8 | 16,824,549 | 4 | 118,047 |
Non-Performance Based Fee Advisory Accounts | ||||||||||||
Registered
Investment Companies |
Other
Pooled
Investment Vehicles |
Other Accounts | ||||||||||
Fund |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
||||||
Oliver Furby | 10 | $19,456,893 | 8 | $16,824,549 | 4 | $ 118,047 | ||||||
Alex Hamilton | 10 | 19,456,893 | 8 | 16,824,549 | 4 | 118,047 | ||||||
Emerging Markets Equity ETF | ||||||||||||
Yazann Romahi | 17 | 3,420,393 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Joe Staines | 14 | 3,044,150 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Kartik Aiyar | 3 | 1,443,744 | 2 | 26,727 | 8 | 2,130,837 | ||||||
Europe Equity ETF | ||||||||||||
Yazann Romahi | 17 | 3,757,002 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Kartik Aiyar | 3 | 1,780,353 | 2 | 26,727 | 8 | 2,130,837 | ||||||
Wei (Victor) Li | 8 | 2,302,381 | 6 | 1,585,809 | 0 | 0 | ||||||
Jonathan Msika | 11 | 1,983,424 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 3,380,760 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Global Equity ETF | ||||||||||||
Yazann Romahi | 17 | 3,628,585 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Kartik Aiyar | 3 | 1,651,936 | 2 | 26,727 | 8 | 2,130,837 | ||||||
Wei (Victor) Li | 8 | 2,173,964 | 6 | 1,585,809 | 0 | 0 | ||||||
Joe Staines | 14 | 3,252,343 | 3 | 111,266 | 8 | 2,130,837 | ||||||
International Equity ETF | ||||||||||||
Yazann Romahi | 17 | 2,493,499 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Wei (Victor) Li | 8 | 1,038,878 | 6 | 1,585,809 | 0 | 0 | ||||||
Joe Staines | 14 | 2,117,257 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Kartik Aiyar | 3 | 516,850 | 2 | 26,727 | 8 | 2,130,837 | ||||||
U.S. Equity ETF | ||||||||||||
Yazann Romahi | 17 | 2,971,402 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Jonathan Msika | 11 | 1,197,824 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 2,595,160 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Yegang (Steven) Wu | 9 | 741,613 | 3 | 46,460 | 7 | 1,878,302 | ||||||
U.S. Mid Cap Equity ETF | ||||||||||||
Yazann Romahi | 17 | 3,586,218 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Jonathan Msika | 11 | 1,812,640 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 3,209,975 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Yegang (Steven) Wu | 9 | 1,356,429 | 3 | 46,460 | 7 | 1,878,302 | ||||||
U.S. Small Cap Equity ETF | ||||||||||||
Yazann Romahi | 17 | 3,633,874 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Jonathan Msika | 11 | 1,860,296 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 3,257,631 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Yegang (Steven) Wu | 9 | 1,404,085 | 3 | 46,460 | 7 | 1,878,302 | ||||||
U.S. Dividend ETF | ||||||||||||
Yazann Romahi | 17 | 3,733,591 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Jonathan Msika | 11 | 1,960,013 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 3,357,349 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Yegang (Steven) Wu | 9 | 1,503,803 | 3 | 46,460 | 7 | 1,878,302 | ||||||
Aijaz Hussain | 4 | 338,015 | 2 | 26,727 | 0 | 0 | ||||||
U.S. Minimum Volatility ETF | ||||||||||||
Yazann Romahi | 17 | 3,666,969 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Jonathan Msika | 11 | 1,893,391 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 3,290,727 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Yegang (Steven) Wu | 9 | 1,437,181 | 3 | 46,460 | 7 | 1,878,302 | ||||||
Aijaz Hussain | 4 | 271,393 | 2 | 26,727 | 0 | 0 | ||||||
U.S. Momentum Factor ETF | ||||||||||||
Yazann Romahi | 17 | 3,717,602 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Jonathan Msika | 11 | 1,944,023 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 3,341,359 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Yegang (Steven) Wu | 9 | 1,487,813 | 3 | 46,460 | 7 | 1,878,302 | ||||||
Aijaz Hussain | 4 | 322,025 | 2 | 26,727 | 0 | 0 | ||||||
U.S. Quality Factor ETF | ||||||||||||
Yazann Romahi | 17 | 3,667,150 | 7 | 2,001,049 | 2 | 271,509 |
Non-Performance Based Fee Advisory Accounts | ||||||||||||
Registered
Investment Companies |
Other
Pooled
Investment Vehicles |
Other Accounts | ||||||||||
Fund |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
||||||
Jonathan Msika | 11 | $ 1,893,572 | 2 | $ 32,903 | 0 | $ 0 | ||||||
Joe Staines | 14 | 3,290,908 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Yegang (Steven) Wu | 9 | 1,437,361 | 3 | 46,460 | 7 | 1,878,302 | ||||||
Aijaz Hussain | 4 | 271,573 | 2 | 26,727 | 0 | 0 | ||||||
U.S. Value Factor ETF | ||||||||||||
Yazann Romahi | 17 | 3,707,371 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Jonathan Msika | 11 | 1,933,793 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 3,331,128 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Yegang (Steven) Wu | 9 | 1,477,582 | 3 | 46,460 | 7 | 1,878,302 | ||||||
Aijaz Hussain | 4 | 311,794 | 2 | 26,727 | 0 | 0 |
Performance Based Fee Advisory Accounts | ||||||||||||
Registered
Investment Companies |
Other
Pooled
Investment Vehicles |
Other Accounts | ||||||||||
Fund |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
||||||
BetaBuilders Canada ETF | ||||||||||||
Nicholas D’Eramo | 0 | $0 | 0 | $0 | 0 | $ 0 | ||||||
Michael Loeffler | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Oliver Furby | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Alex Hamilton | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
BetaBuilders Developed Asia ex-Japan ETF | ||||||||||||
Nicholas D’Eramo | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Michael Loeffler | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Oliver Furby | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Alex Hamilton | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
BetaBuilders Europe ETF | ||||||||||||
Nicholas D’Eramo | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Michael Loeffler | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Oliver Furby | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Alex Hamilton | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
BetaBuilders Japan ETF | ||||||||||||
Nicholas D’Eramo | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Michael Loeffler | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Oliver Furby | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Alex Hamilton | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
BetaBuilders U.S. Equity ETF | ||||||||||||
Nicholas D’Eramo | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Michael Loeffler | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Oliver Furby | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Alex Hamilton | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Emerging Markets Equity ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Kartik Aiyar | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Europe Equity ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Kartik Aiyar | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Wei (Victor) Li | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Global Equity ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Kartik Aiyar | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Wei (Victor) Li | 0 | 0 | 0 | 0 | 1 | 460,648 |
Performance Based Fee Advisory Accounts | ||||||||||||
Registered
Investment Companies |
Other
Pooled
Investment Vehicles |
Other Accounts | ||||||||||
Fund |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
||||||
Joe Staines | 0 | $0 | 0 | $0 | 0 | $ 0 | ||||||
International Equity ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Wei (Victor) Li | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Kartik Aiyar | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
U.S. Equity ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
U.S. Mid Cap Equity ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
U.S. Small Cap Equity ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
U.S. Dividend ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Aijaz Hussain | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
U.S. Minimum Volatility ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Aijaz Hussain | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
U.S. Momentum Factor ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Aijaz Hussain | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
U.S. Quality Factor ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Aijaz Hussain | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
U.S. Value Factor ETF | ||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | ||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | ||||||
Aijaz Hussain | 0 | 0 | 0 | 0 | 0 | 0 |
* | The total value and number of accounts managed by a portfolio manager may include sub-accounts of asset allocation, multi-managed and other accounts. |
Aggregate Dollar Range of Securities in the Fund | |||||||||||||||
Fund | None |
$1-
$10,000 |
$10,001-
$50,000 |
$50,001-
$100,000 |
$100,001-
$500,000 |
$500,001-
$1,000,000 |
over
$1,000,000 |
||||||||
BetaBuilders Canada ETF | |||||||||||||||
Nicholas D’Eramo | X | ||||||||||||||
Michael Loeffler | X | ||||||||||||||
Oliver Furby | X | ||||||||||||||
Alex Hamilton | X | ||||||||||||||
BetaBuilders Developed Asia ex-Japan ETF | |||||||||||||||
Nicholas D’Eramo | X | ||||||||||||||
Michael Loeffler | X | ||||||||||||||
Oliver Furby | X | ||||||||||||||
Alex Hamilton | X | ||||||||||||||
BetaBuilders Europe ETF | |||||||||||||||
Nicholas D’Eramo | X | ||||||||||||||
Michael Loeffler | X | ||||||||||||||
Oliver Furby | X | ||||||||||||||
Alex Hamilton | X | ||||||||||||||
BetaBuilders Japan ETF | |||||||||||||||
Nicholas D’Eramo | X | ||||||||||||||
Michael Loeffler | X | ||||||||||||||
Oliver Furby | X | ||||||||||||||
Alex Hamilton | X | ||||||||||||||
BetaBuilders U.S. Equity ETF | |||||||||||||||
Nicholas D’Eramo | X | ||||||||||||||
Michael Loeffler | X | ||||||||||||||
Oliver Furby | X | ||||||||||||||
Alex Hamilton | X | ||||||||||||||
Emerging Markets Equity ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Kartik Aiyar | X | ||||||||||||||
Europe Equity ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Kartik Aiyar | X | ||||||||||||||
Wei (Victor) Li | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Global Equity ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Kartik Aiyar | X | ||||||||||||||
Wei (Victor) Li | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
International Equity ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Wei (Victor) Li | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Kartik Aiyar | X | ||||||||||||||
U.S. Equity ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Yegang (Steven) Wu | X | ||||||||||||||
Aggregate Dollar Range of Securities in the Fund | |||||||||||||||
Fund | None |
$1-
$10,000 |
$10,001-
$50,000 |
$50,001-
$100,000 |
$100,001-
$500,000 |
$500,001-
$1,000,000 |
over
$1,000,000 |
||||||||
U.S. Mid Cap Equity ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Yegang (Steven) Wu | X | ||||||||||||||
U.S. Small Cap Equity ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Yegang (Steven) Wu | X | ||||||||||||||
U.S. Dividend ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Yegang (Steven) Wu | X | ||||||||||||||
Aijaz Hussain | X | ||||||||||||||
U.S. Minimum Volatility ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Yegang (Steven) Wu | X | ||||||||||||||
Aijaz Hussain | X | ||||||||||||||
U.S. Momentum Factor ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Yegang (Steven) Wu | X | ||||||||||||||
Aijaz Hussain | X | ||||||||||||||
U.S. Quality Factor ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Yegang (Steven) Wu | X | ||||||||||||||
Aijaz Hussain | X | ||||||||||||||
U.S. Value Factor ETF | |||||||||||||||
Yazann Romahi | X | ||||||||||||||
Jonathan Msika | X | ||||||||||||||
Joe Staines | X | ||||||||||||||
Yegang (Steven) Wu | X | ||||||||||||||
Aijaz Hussain | X |
Name of Fund | Benchmark | |
BetaBuilders Canada ETF | Morningstar ® Canada Target Market Exposure IndexSM | |
BetaBuilders Developed Asia ex-Japan ETF | Morningstar ® Developed Asia Pacific ex-Japan Target Market Exposure IndexSM | |
BetaBuilders Europe ETF | Morningstar ® Developed Europe Target Market Exposure IndexSM | |
BetaBuilders Japan ETF | Morningstar ® Japan Target Market Exposure IndexSM | |
BetaBuilders U.S. Equity ETF | Morningstar ® US Target Market Exposure IndexSM | |
Emerging Markets Equity ETF | JP Morgan Diversified Factor Emerging Markets Equity Index | |
FTSE Emerging Index | ||
Europe Equity ETF | JP Morgan Diversified Factor Europe Equity Index | |
FTSE Developed Europe Index |
Name of Fund | Benchmark | |
Global Equity ETF | JP Morgan Diversified Factor Global Developed Equity Index | |
FTSE Developed Index | ||
International Equity ETF | JP Morgan Diversified Factor International Equity Index | |
FTSE Developed ex North America Index | ||
U.S. Equity ETF | JP Morgan Diversified Factor US Equity Index | |
Russell 1000 Index | ||
U.S. Mid Cap Equity ETF | JP Morgan Diversified Factor US Mid Cap Equity Index | |
Russell Midcap Index | ||
U.S. Small Cap Equity ETF | JP Morgan Diversified Factor US Small Cap Equity Index | |
Russell 2000 Index | ||
U.S. Dividend ETF | JP Morgan US Dividend Index | |
Russell 1000 Index | ||
U.S. Minimum Volatility ETF | JP Morgan US Minimum Volatility Index | |
Russell 1000 Index | ||
U.S. Momentum Factor ETF | JP Morgan US Momentum Factor Index | |
Russell 1000 Index | ||
U.S. Quality Factor ETF | JP Morgan US Quality Factor Index | |
Russell 1000 Index | ||
U.S. Value Factor ETF | JP Morgan US Value Factor Index | |
Russell 1000 Index |
Fiscal Year Ended | ||||||
Fund | October 31, 2017 | October 31, 2018 | October 31, 2019 | |||
BetaBuilders Canada ETF1 | N/A | $10,707 | $108,976 | |||
BetaBuilders Developed Asia ex-Japan ETF1 | N/A | 5,887 | 62,478 | |||
BetaBuilders Europe ETF2 | N/A | 16,765 | 118,331 | |||
BetaBuilders Japan ETF2 | N/A | 24,006 | 123,554 | |||
BetaBuilders U.S. Equity ETF3 | N/A | N/A | 13,225 | |||
Emerging Markets Equity ETF | $ 23,404 | 20,697 | 26,188 | |||
Europe Equity ETF | 19,316 | 20,329 | 20,337 | |||
Global Equity ETF | 20,175 | 20,545 | 23,074 | |||
International Equity ETF | 122,043 | 25,194 | 48,795 | |||
U.S. Equity ETF | 38,319 | 32,633 | 37,195 | |||
U.S. Mid Cap Equity ETF | 13,987 | 22,496 | 24,020 | |||
U.S. Small Cap Equity ETF4 | 9,881 | 21,998 | 23,405 | |||
U.S. Dividend ETF5 | N/A | 18,953 | 20,799 | |||
U.S. Minimum Volatility ETF5 | N/A | 18,952 | 21,367 | |||
U.S. Momentum Factor ETF5 | N/A | 18,981 | 21,126 | |||
U.S. Quality Factor ETF5 | N/A | 18,973 | 21,562 | |||
U.S. Value Factor ETF5 | N/A | 18,965 | 21,363 |
1 | The Fund commenced operations on 8/7/2018. |
2 | The Fund commenced operations on 6/15/2018. |
3 | The Fund commenced operations on 3/12/2019. |
4 | The Fund commenced operations on 11/15/2016. |
5 | The Fund commenced operations on 11/8/2017. |
BetaBuilders
Canada ETF |
BetaBuilders
Developed Asia ex-Japan ETF |
BetaBuilders
Europe ETF |
BetaBuilders
Japan ETF |
Diversified
Return
Emerging Markets Equity ETF |
|||||
Gross Income from Securities Lending Activities1 | $6,374,172 | $460,103 | $3,081,509 | $1,183,125 | $10,671 | ||||
Fees and/or Compensation for Securities Lending Activities | |||||||||
Revenue Split2 | 366,993 | 30,704 | 119,432 | 34,877 | 433 | ||||
Cash Collateral Management Fees3 | 111,184 | 6,671 | 71,255 | 39,894 | 622 | ||||
Administrative Fees | — | — | — | — | — | ||||
Indemnification Fees | — | — | — | — | — | ||||
Rebates to Borrowers | 1,672,213 | 67,828 | 1,520,742 | 696,355 | 4,370 | ||||
Others Fees | — | — | — | — | — | ||||
Aggregate Fees/Compensation for Securities Lending Activities | 2,150,390 | 105,204 | 1,711,430 | 771,127 | 5,425 | ||||
Net Income from the Securities Lending Activities | 4,223,782 | 354,900 | 1,370,079 | 411,998 | 5,246 |
Diversified
Return
Europe Equity ETF |
Diversified
Return
Global Equity ETF |
Diversified
Return
International Equity ETF |
Diversified
Return
U.S. Equity ETF |
Diversified
Return
U.S. Mid Cap Equity ETF |
|||||
Gross Income from Securities Lending Activities1 | $10,907 | $93,856 | $762,334 | $764,488 | $197,799 | ||||
Fees and/or Compensation for Securities Lending Activities | |||||||||
Revenue Split2 | 583 | 3,523 | 36,511 | 6,039 | 1,529 | ||||
Cash Collateral Management Fees3 | 311 | 3,100 | 17,349 | 26,642 | 8,045 | ||||
Administrative Fees | — | — | — | — | — | ||||
Indemnification Fees | — | — | — | — | — | ||||
Rebates to Borrowers | 3,244 | 46,267 | 300,423 | 656,053 | 168,148 | ||||
Others Fees | — | — | — | — | — | ||||
Aggregate Fees/Compensation for Securities Lending Activities | 4,139 | 52,890 | 354,283 | 688,735 | 177,722 | ||||
Net Income from the Securities Lending Activities | 6,768 | 40,966 | 408,051 | 75,753 | 20,077 |
Diversified
Return
U.S. Small Cap Equity ETF |
U.S.
Dividend ETF |
U.S.
Minimum
Volatility ETF |
U.S.
Momentum
Factor ETF |
U.S.
Quality
Factor ETF |
|||||
Gross Income from Securities Lending Activities1 | $436,306 | $6,851 | $4,611 | $5,513 | $7,830 | ||||
Fees and/or Compensation for Securities Lending Activities | |||||||||
Revenue Split2 | 11,524 | 69 | 39 | 73 | 206 |
Diversified
Return
U.S. Small Cap Equity ETF |
U.S.
Dividend ETF |
U.S.
Minimum
Volatility ETF |
U.S.
Momentum
Factor ETF |
U.S.
Quality
Factor ETF |
|||||
Cash Collateral Management Fees3 | $ 14,635 | $ 489 | $ 341 | $ 382 | $ 484 | ||||
Administrative Fees | — | — | — | — | — | ||||
Indemnification Fees | — | — | — | — | — | ||||
Rebates to Borrowers | 273,878 | 5,322 | 3,645 | 4,047 | 4,566 | ||||
Others Fees | — | — | — | — | — | ||||
Aggregate Fees/Compensation for Securities Lending Activities | 300,037 | 5,880 | 4,025 | 4,502 | 5,256 | ||||
Net Income from the Securities Lending Activities | 136,269 | 971 | 585 | 1,011 | 2,574 |
U.S.
Value
Factor ETF |
|
Gross Income from Securities Lending Activities1 | $5,554 |
Fees and/or Compensation for Securities Lending Activities | |
Revenue Split2 | 108 |
Cash Collateral Management Fees3 | 338 |
Administrative Fees | — |
Indemnification Fees | — |
Rebates to Borrowers | 3,742 |
Others Fees | — |
Aggregate Fees/Compensation for Securities Lending Activities | 4,188 |
Net Income from the Securities Lending Activities | 1,367 |
1 | Gross income includes income from the reinvestment of cash collateral, premium income (i.e. rebates paid by borrowers to the Fund), management fees from a pooled cash collateral reinvestment vehicle that are deducted from the vehicle's assets before income is distributed, and any other income. |
2 | Revenue split represents the share of revenue generated by securities lending program and paid to Citibank N.A. |
3 | Cash collateral is reinvested in certain JPMorgan money market funds that are advised by JPMIM (“money market funds”). Cash collateral management fees include the fees and expenses deducted from the money market funds. The contractual management fees are derived using the Total Annual Fund Operating Expenses after Fee Waivers and/or Expense Reimbursements from the money market funds’ most recently available prospectus. Actual fees incurred by the JPMorgan money market funds may differ due to other expenses, fee waivers and expense reimbursements. |
Fiscal Year Ended | ||||||
Fund | October 31, 2017 | October 31, 2018 | October 31, 2019 | |||
BetaBuilders Canada ETF1 | ||||||
Total Brokerage Commissions | N/A | $ 2,374 | $133,247 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
BetaBuilders Developed Asia ex-Japan ETF1 | ||||||
Total Brokerage Commissions | N/A | 54,683 | 88,611 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
BetaBuilders Europe ETF2 | ||||||
Total Brokerage Commissions | N/A | 7,856 | 76,313 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
BetaBuilders Japan ETF2 | ||||||
Total Brokerage Commissions | N/A | 28,169 | 99,557 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
BetaBuilders U.S. Equity ETF3 | ||||||
Total Brokerage Commissions | N/A | N/A | 232 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | N/A | — |
Fiscal Year Ended | ||||||
Fund | October 31, 2017 | October 31, 2018 | October 31, 2019 | |||
Emerging Markets Equity ETF | ||||||
Total Brokerage Commissions | 16,828 | $103,821 | $169,584 | |||
Brokerage Commissions to Affiliated Broker/Dealers | — | — | — | |||
Europe
Equity ETF
|
||||||
Total Brokerage Commissions | 2,041 | 11,820 | 2,063 | |||
Brokerage Commissions to Affiliated Broker/Dealers | — | — | — | |||
Global Equity ETF | ||||||
Total Brokerage Commissions | 3,305 | 26,710 | 15,246 | |||
Brokerage Commissions to Affiliated Broker/Dealers | — | — | — | |||
International Equity ETF | ||||||
Total Brokerage Commissions | 78,378 | 231,913 | 135,708 | |||
Brokerage Commissions to Affiliated Broker/Dealers | — | — | — | |||
U.S. Equity ETF | ||||||
Total Brokerage Commissions | 7,367 | 35,754 | 41,388 | |||
Brokerage Commissions to Affiliated Broker/Dealers | — | — | — | |||
U.S.
Mid Cap Equity ETF
|
||||||
Total Brokerage Commissions | 3,131 | 10,748 | 12,503 | |||
Brokerage Commissions to Affiliated Broker/Dealers | — | — | — | |||
U.S. Small Cap Equity ETF4 | ||||||
Total Brokerage Commissions | 3,013 | 13,137 | 28,786 | |||
Brokerage Commissions to Affiliated Broker/Dealers | — | — | — | |||
U.S. Dividend ETF5 | ||||||
Total Brokerage Commissions | N/A | 2,979 | 2,828 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
U.S. Minimum Volatility ETF5 | ||||||
Total Brokerage Commissions | N/A | 974 | 1,949 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
U.S. Momentum Factor ETF5 | ||||||
Total Brokerage Commissions | N/A | 2,418 | 2,995 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
U.S. Quality Factor ETF5 | ||||||
Total Brokerage Commissions | N/A | 1,440 | 2,251 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
U.S. Value Factor ETF5 | ||||||
Total Brokerage Commissions | N/A | 2,507 | 3,396 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — |
1 | The Fund commenced operations on 8/7/2018. |
2 | The Fund commenced operations on 6/15/2018. |
3 | The Fund commenced operations on 3/12/2019. |
4 | The Fund commenced operations on 11/15/2016. |
5 | The Fund commenced operations on 11/8/2017. |
Fund | Name of Broker-Dealer |
Value
of Securities
Owned |
||
BetaBuilders Europe ETF | ABN AMRO Inc. | $ 3,197,071 | ||
Barclays Inc. | 14,553,204 | |||
Credit Suisse First Boston LLC | 12,503,089 | |||
Deutsche Bank AG | 6,244,109 | |||
HSBC Securities Inc. | 64,721,681 | |||
Royal Bank of Scotland Group | 5,266,147 | |||
UBS Financial Services Inc. | 18,888,578 | |||
BetaBuilders U.S. Equity ETF | Bank of America Corporation | 460,576 | ||
Citigroup Global Markets Inc. | 285,572 | |||
Goldman Sachs and Company | 120,986 | |||
JPMorgan Chase & Co.* | 702,425 | |||
Morgan Stanley | 101,724 | |||
Europe Equity ETF | ABN AMRO Inc. | 13,570 | ||
International Equity ETF | HSBC Securities Inc. | 3,914,183 | ||
U.S. Equity ETF | Bank of America Corporation | 816,647 | ||
Morgan Stanley | 478,966 | |||
U.S. Value Factor ETF | Bank of America Corporation | 132,929 | ||
Citigroup Global Markets Inc. | 638,835 | |||
Goldman Sachs and Company | 470,503 | |||
Morgan Stanley | 412,332 |
* | Investment in an affiliate. This security is included in an index in which the Fund, as an index fund, invests. |
FUND | CREATION* | REDEMPTION* | ||
BetaBuilders Canada ETF | 100,000 | 100,000 | ||
BetaBuilders Developed Asia ex-Japan ETF | 200,000 | 200,000 | ||
BetaBuilders Europe ETF | 200,000 | 200,000 | ||
BetaBuilders Japan ETF | 400,000 | 400,000 | ||
BetaBuilders U.S. Equity ETF | 50,000 | 50,000 | ||
Emerging Markets Equity ETF | 100,000 | 100,000 | ||
Europe Equity ETF | 100,000 | 100,000 | ||
Global Equity ETF | 100,000 | 100,000 | ||
International Equity ETF | 100,000 | 100,000 | ||
U.S. Equity ETF | 100,000 | 100,000 | ||
U.S. Mid Cap Equity ETF | 100,000 | 100,000 | ||
U.S. Small Cap Equity ETF | 50,000 | 50,000 | ||
U.S. Dividend ETF | 50,000 | 50,000 | ||
U.S. Minimum Volatility ETF | 50,000 | 50,000 | ||
U.S. Momentum Factor ETF | 50,000 | 50,000 | ||
U.S. Quality Factor ETF | 50,000 | 50,000 | ||
U.S. Value Factor ETF | 50,000 | 50,000 |
* | May be revised at any time without notice. |
FUND |
TRANSACTION
FEE*, ** |
|
BetaBuilders Canada ETF | $ 1,800 | |
BetaBuilders Developed Asia ex-Japan ETF | 4,250 | |
BetaBuilders Europe ETF | 10,000 | |
BetaBuilders Japan ETF | 3,400 | |
BetaBuilders U.S. Equity ETF | 1,700 | |
Emerging Markets Equity ETF | 19,700 | |
Europe Equity ETF | 6,500 | |
Global Equity ETF | 8,500 | |
International Equity ETF | 7,500 | |
U.S. Equity ETF | 1,300 | |
U.S. Mid Cap Equity ETF | 1,300 | |
U.S. Small Cap Equity ETF | 2,200 | |
U.S. Dividend ETF | 800 | |
U.S. Minimum Volatility ETF | 800 | |
U.S. Momentum Factor ETF | 900 | |
U.S. Quality Factor ETF | 900 | |
U.S. Value Factor ETF | 1,000 |
* | From time to time, a Fund may waive all or a portion of its applicable transaction fee(s). |
** | In addition to the transaction fees listed above, a Fund may charge an additional variable fee for creations and redemptions in cash of up to 3% of the amount of a creation transaction (up to 5% for Emerging Markets Equity ETF) and of up to 2% of the amount of a redemption transaction to offset brokerage and other impact expenses associated with the cash transaction. |
Capital
Loss Carryforward
Character |
||||
Fund | Short-Term | Long-Term | ||
BetaBuilders Canada ETF | $19,539,163 | $ — | ||
BetaBuilders Developed Asia ex-Japan ETF | — | 224,560 | ||
BetaBuilders Europe ETF | 3,010,441 | 813,934 | ||
BetaBuilders Japan ETF | 9,152,650 | — | ||
BetaBuilders U.S. Equity ETF | 24,168 | — | ||
Emerging Markets Equity ETF | 13,649,613 | 3,541,834 | ||
Europe Equity ETF | 545,128 | 345,082 |
Capital
Loss Carryforward
Character |
||||
Fund | Short-Term | Long-Term | ||
Global Equity ETF | $ 3,204,966 | $ 3,303,138 | ||
International Equity ETF | 27,029,344 | 36,788,498 | ||
U.S. Equity ETF | 8,505,408 | 588,680 | ||
U.S. Mid Cap Equity ETF | 2,657,584 | — | ||
U.S. Small Cap Equity ETF | 1,432,885 | 192,118 | ||
U.S. Dividend ETF | 281,701 | 70,607 | ||
U.S. Minimum Volatility ETF | 124,150 | 160,903 | ||
U.S. Momentum Factor ETF | 947,749 | 457,724 | ||
U.S. Quality Factor ETF | 281,172 | — | ||
U.S. Value Factor ETF | 293,810 | 25,005 |
Name of Fund | Name and Address of Shareholder |
Percentage
Held |
|||
JPMORGAN BETABUILDERS CANADA ETF | |||||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
59.00% | ||||
J.P.
MORGAN SECURITIES LLC*
277 PARK AVENUE NEW YORK, NY 10172 |
38.59 | ||||
JPMORGAN BETABUILDERS DEVELOPED ASIA EX-JAPAN ETF | |||||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
54.25 | ||||
J.P.
MORGAN SECURITIES LLC*
277 PARK AVENUE NEW YORK, NY 10172 |
42.63 | ||||
JPMORGAN BETABUILDERS EUROPE ETF | |||||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
50.39 | ||||
J.P.
MORGAN SECURITIES LLC*
277 PARK AVENUE NEW YORK, NY 10172 |
46.90 | ||||
JPMORGAN BETABUILDERS JAPAN ETF | |||||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
43.79 | ||||
J.P.
MORGAN SECURITIES LLC*
277 PARK AVENUE NEW YORK, NY 10172 |
39.80 | ||||
JPMORGAN BETABUILDERS U.S. EQUITY ETF | |||||
J.P.
MORGAN SECURITIES LLC*
277 PARK AVENUE NEW YORK, NY 10172 |
65.38 | ||||
THE
GOLDMAN SACHS TRUST COMPANY, NATIONAL ASSOCIATION
200 WEST STREET NEW YORK, NEW YORK 10282 |
6.36 | ||||
JPMORGAN DIVERSIFIED RETURN EMERGING MARKETS EQUITY ETF | |||||
ASSETMARK
TRUST COMPANY
3200 N CENTRAL AVE PHOENIX, AZ 85012 |
9.28 |
Name of Fund | Name and Address of Shareholder |
Percentage
Held |
|||
HENGEHOLD
CAPITAL MANAGEMENT LLC
6116 HARRISON AVE CINCINNATI, OH 45247-7833 |
6.30% | ||||
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
6.16 | ||||
THE
BANK OF NEW YORK MELLON
240 GREENWICH STREET NEW YORK, NY 10286 |
5.60 | ||||
JPMORGAN DIVERSIFIED RETURN EUROPE EQUITY ETF | |||||
J.P.
MORGAN SECURITIES LLC*
277 PARK AVENUE NEW YORK, NY 10172 |
38.35 | ||||
MCDONALD
PARTNERS LLC
1301 EAST 9TH STREET, SUITE 3700 CLEVELAND, OH 44114 |
9.56 | ||||
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
7.32 | ||||
LPL
FINANCIAL LLC
4707 EXECUTIVE DRIVE SAN DIEGO, CA 92121-3091 |
6.56 | ||||
BOFA
SECURITIES, INC.
ONE BRYANT PARK NEW YORK, NY 10036 |
5.96 | ||||
JPMORGAN DIVERSIFIED RETURN GLOBAL EQUITY ETF | |||||
MORGAN
STANLEY SMITH BARNEY LLC
1585 BROADWAY NEW YORK, NY 10036 |
9.96 | ||||
USADVISORS
WEALTH MANAGEMENT LLC
15750 VENTURE LANE EDAN PRAIRIE, MN 55344 |
8.91 | ||||
J.P.
MORGAN SECURITIES LLC*
277 PARK AVENUE NEW YORK, NY 10172 |
5.54 | ||||
JPMORGAN DIVERSIFIED RETURN INTERNATIONAL EQUITY ETF | |||||
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
9.57 | ||||
MORGAN
STANLEY SMITH BARNEY
1585 BROADWAY NEW YORK, NY 10036 |
6.49 |
Name of Fund | Name and Address of Shareholder |
Percentage
Held |
|||
AMERIPRISE
FINANCIAL SERVICES, INC.
70400 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 |
6.33% | ||||
JPMORGAN DIVERSIFIED RETURN U.S. EQUITY ETF | |||||
MODERA
WEALTH MANAGEMENT, LLC
56 JEFFERSON AVENUE WESTWOOD, NJ 07675 |
7.77 | ||||
SVA
WEALTH MANAGEMENT, LLC
PO BOX 44966 MADISON, WI 53744-4966 |
5.96 | ||||
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
5.76 | ||||
UBS
FINANCIAL SERVICES INC.
1285 AVENUE OF THE AMERICAS NEW YORK, NY 10019 |
5.62 | ||||
MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED
ONE BRYANT PARK NEW YORK, NY 10036 |
5.51 | ||||
JPMORGAN DIVERSIFIED RETURN U.S. MID CAP EQUITY ETF | |||||
ARGI
INVESTMENT SERVICES, LLC
1914 STANLEY GAULT PKWY LOUISVILLE, KY 40223-4158 |
20.36 | ||||
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
9.25 | ||||
ASSETMARK
TRUST CO
1655 GRANT STREET, 10TH FLOOR CONCORD, CA 94520 |
7.28 | ||||
MID
ATLANTIC FINANCIAL MANAGEMENT, INC.
1251 WATERFRONT PLACE, SUITE 510 PITTSBURGH, PA 15222 |
6.66 | ||||
CHANGE
PATH LLC
11460TOMAHAWK CREEK PKWY, SUITE 200 LEAWOOD, KS 66211 |
5.13 | ||||
JPMORGAN DIVERSIFIED RETURN U.S. SMALL CAP EQUITY ETF | |||||
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
10.58 | ||||
ASSETMARK
TRUST CO
1655 GRANT STREET, 10TH FLOOR CONCORD, CA 94520 |
9.82 |
Name of Fund | Name and Address of Shareholder |
Percentage
Held |
|||
MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED
ONE BRYANT PARK NEW YORK, NY 10036 |
8.06% | ||||
THE
BANK OF NEW YORK MELLON
240 GREENWICH STREET NEW YORK, NY 10286 |
5.34 | ||||
CHANGE
PATH LLC
11460TOMAHAWK CREEK PKWY, SUITE 200 LEAWOOD, KS 66211 |
5.31 | ||||
JPMORGAN U.S. DIVIDEND ETF | |||||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
64.53 | ||||
AVALON
CAPITAL MANAGEMENT
495 SEAPORT COURT, SUITE 106 REDWOOD CITY, CA 94063 |
6.93 | ||||
RPG
FAMILY WEALTH ADVISORY LLC
25 BURLINGTON MALL ROAD, SUITE 307 BURLINGTON, MA 01803 |
6.41 | ||||
JPMORGAN U.S. MINIMUM VOLATILITY ETF | |||||
THE
RETIREMENT PLANNING GROUP, INC.
4811 W. 136TH STREET LEAWOOD, KS 66224 |
25.50 | ||||
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
22.41 | ||||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
21.74 | ||||
MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED
ONE BRYANT PARK NEW YORK, NY 10036 |
6.02 | ||||
JPMORGAN U.S. MOMENTUM FACTOR ETF | |||||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
43.68 | ||||
RONALD
BLUE TRUST
1125 SANCTUARY PARKWAY, SUITE 500 ALPHARETTA, GA 30009 |
31.46 | ||||
THE
BANK OF NEW YORK MELLON
240 GREENWICH STREET NEW YORK, NY 10286 |
15.81 |
Name of Fund | Name and Address of Shareholder |
Percentage
Held |
|||
JPMORGAN U.S. QUALITY FACTOR ETF | |||||
3D
ASSET MANAGEMENT, INC.
100 CONSTITUTION PLAZA, 7TH FLOOR HARTFORD, CT 06103 |
21.55% | ||||
PARK
AVENUE SECURITIES LLC
10 HUDSON YARDS NEW YORK, NY 10001 |
11.78 | ||||
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
9.11 | ||||
THE
RETIREMENT PLANNING GROUP, INC.
4811 W. 136TH STREET LEAWOOD, KS 66224 |
8.84 | ||||
SPECTRUM
INVESTMENT ADVISORS INC
6329 WEST MEQUON ROAD MEQUON, WI 53092 |
7.26 | ||||
FINANCIAL
INSIGHTS INC
7307 SW BEVELAND ROAD, SUITE 200 TIGARD, OR 97223 |
6.37 | ||||
JPMORGAN U.S. VALUE FACTOR ETF | |||||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
31.96 | ||||
RAYMOND
JAMES FINANCIAL SERVICES, INC.
880 CARILLON PARKWAY ST. PETERSBURG, FL 33716 |
15.30 | ||||
PALLADIUM
PARTNERS, LLC
ROCKEFELLER CENTER 1270 6TH AVE # 220 NEW YORK, NY 10020 |
14.61 | ||||
THE
BANK OF NEW YORK MELLON
240 GREENWICH STREET NEW YORK, NY 10286 |
14.29 | ||||
MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED
ONE BRYANT PARK NEW YORK, NY 10036 |
7.69 |
* | The shareholder of record is a subsidiary or affiliate of JPMorgan Chase & Co. (a “JPMorgan Affiliate”). Certain of this ownership represents seed money held by J.P. Morgan Investment Management Inc., a subsidiary of JPMorgan Chase & Co. The shares may also be held for the benefit of underlying accounts for which JPMorgan Affiliates may have voting or investment power. To the extent that JPMorgan Affiliates own 25% or more of a class of a Fund, JPMorgan Chase & Co. may be deemed to be a “controlling person” of such shares under the 1940 Act. |
Fund Name | Ticker |
Listing
Exchange |
JPMorgan Diversified Alternatives ETF (the “Diversified Alternatives ETF”) | JPHF | NYSE Arca |
JPMorgan Event Driven ETF (the “Event Driven ETF”) | JPED | NYSE Arca |
JPMorgan Long/Short ETF (the “Long/Short ETF”) | JPLS | NYSE Arca |
JPMorgan Managed Futures Strategy ETF (the “Managed Futures Strategy ETF”) | JPMF | NYSE Arca |
|
1 |
|
1 |
|
1 |
|
1 |
|
2 |
|
3 |
|
3 |
|
6 |
|
7 |
|
7 |
|
7 |
|
7 |
|
8 |
|
8 |
|
8 |
|
9 |
|
9 |
|
9 |
|
10 |
|
11 |
|
11 |
|
11 |
|
11 |
|
12 |
|
12 |
|
12 |
|
12 |
|
13 |
|
13 |
|
13 |
|
13 |
|
13 |
|
13 |
|
14 |
|
15 |
|
15 |
|
15 |
|
15 |
|
16 |
FUND NAME | FUND CODE |
Diversified Alternatives ETF | 1 |
Event Driven ETF | 2 |
Long/Short ETF | 3 |
Managed Futures Strategy ETF | 4 |
Instrument | Fund Code |
Part
II
Section Reference |
Bank Obligations1: Bankers’ acceptances, certificates of deposit and time deposits. Bankers’ acceptances are bills of exchange or time drafts drawn on and accepted by a commercial bank. Maturities are generally six months or less. Certificates of deposit are negotiable certificates issued by a bank for a specified period of time and earning a specified return. Time deposits are non-negotiable receipts issued by a bank in exchange for the deposit of funds. | 1-4 | Bank Obligations |
Borrowings: A Fund may borrow for temporary purposes and/or for investment purposes. Such a practice will result in leveraging of a Fund’s assets and may cause a Fund to liquidate portfolio positions when it would not be advantageous to do so. A Fund must maintain continuous asset coverage of 300% of the amount borrowed, with the exception for borrowings not in excess of 5% of the Fund’s total assets made for temporary administrative purposes. | 1-4 | Miscellaneous Investment Strategies and Risks |
Instrument | Fund Code |
Part
II
Section Reference |
Call and Put Options: A call option gives the buyer the right to buy, and obligates the seller of the option to sell, a security at a specified price at a future date. A put option gives the buyer the right to sell, and obligates the seller of the option to buy, a security at a specified price at a future date. | 1-4 | Options and Futures Transactions |
Commercial Paper1: Secured and unsecured short-term promissory notes issued by corporations and other entities. Maturities generally vary from a few days to nine months | 1-4 | Commercial Paper |
Commodity-Linked Derivatives: Instruments whose value derives from the price of a commodity, including commodity futures and commodity options. | 1, 4 | Miscellaneous Investment Strategies and Risks |
Common Stock: Shares of ownership of a company. | 1-3 | Equity Securities, Warrants and Rights |
Common Stock Warrants and Rights: Securities, typically issued with preferred stock or bonds, that give the holder the right to buy a proportionate amount of common stock at a specified price. | 1-3 | Equity Securities, Warrants and Rights |
Convertible Securities: Bonds or preferred stock that can convert to common stock. | 1-3 | Convertible Securities |
Corporate Debt Securities: May include bonds and other debt securities of domestic and foreign issuers, including obligations of industrial, utility, banking and other corporate issuers. | 1-4 | Debt Instruments |
Credit Default Swaps (“CDSs”): A swap agreement between two parties pursuant to which one party pays the other a fixed periodic coupon for the specified life of the agreement. The other party makes no payment unless a credit event, relating to a predetermined reference asset, occurs. If such an event occurs, the party will then make a payment to the first party, and the swap will terminate. | 1-2, 4 | Swaps and Related Swap Products |
Emerging Market Securities: Instruments issued by issuers or governments in countries with emerging economies or securities markets which may be undergoing significant evolution and rapid developments. | 1-4 | Foreign Investments (including Foreign Currencies) |
Exchange-Traded Funds (“ETFs”): Ownership interest in unit investment trusts, depositary receipts, and other pooled investment vehicles that hold a portfolio of securities or stocks designed to track the price performance and dividend yield of a particular broad-based, sector or international index. ETFs include a wide range of investments. | 1-2 | Investment Company Securities and Exchange-Traded Funds |
Foreign Currency Transactions: Strategies used to hedge against currency risks, for other risk management purposes or to increase income or gain to a Fund. These strategies utilize forward foreign currency transactions (including non-deliverable forwards (“NDFs”)). | 1-4 | Foreign Investments (including Foreign Currencies) |
Foreign Investments: Equity and debt securities (e.g., bonds and commercial paper) of foreign entities and obligations of foreign branches of U.S. banks and foreign banks. Foreign securities may also include American Depositary Receipts (“ADRs”), Global Depositary Receipts (“GDRs”), European Depositary Receipts (“EDRs”) and American Depositary Securities (“ADSs”). | 1-4 | Foreign Investments (including Foreign Currencies) |
Futures Transactions: A Fund may purchase and sell futures contracts on securities and indexes of securities. | 1-4 | Futures Transactions |
Instrument | Fund Code |
Part
II
Section Reference |
High Yield/High Risk Securities/Junk Bonds: Securities that are generally rated below investment grade by the primary rating agencies or are unrated but are deemed by a Fund’s adviser to be of comparable quality. | 1-2, 4 | Debt Instruments |
Inflation-Linked Debt Securities: Includes fixed and floating rate debt securities of varying maturities issued by the U.S. government as well as securities issued by other entities such as corporations, foreign governments and foreign issuers. | 1 | Debt Instruments |
Investment Company Securities: Shares of other investment companies, including money market funds for which the Adviser and/or its affiliates serve as investment adviser or administrator. The Adviser will waive certain fees when investing in funds for which it serves as investment adviser, to the extent required by law or by contract. | 1-4 | Investment Company Securities and Exchange-Traded Funds |
Master Limited Partnerships (“MLPs”): Limited partnerships that are publicly traded on a securities exchange. | 1-3 | Master Limited Partnerships |
Mortgage-Backed Securities: Debt obligations secured by real estate loans and pools of loans. | 1 | Mortgage-Related Securities |
New Financial Products: New options and futures contracts and other financial products continue to be developed and a Fund may invest in such options, contracts and products. | 3-4 | New Financial Products |
Obligations of Supranational Agencies: Obligations which are chartered to promote economic development and are supported by various governments and governmental agencies. | 1 | Foreign Investments (including Foreign Currencies) |
Options and Futures Transactions: A Fund may purchase and sell (a) exchange traded and over the counter put and call options on securities, indexes of securities and futures contracts on securities and indexes of securities, commodities, interest rate futures contracts and interest rate swaps and (b) futures contracts on securities and indexes of securities and commodities. | 1-4 | Options and Futures Transactions |
Preferred Stock: A class of stock that generally pays a dividend at a specified rate and has preference over common stock in the payment of dividends and in liquidation. | 1-4 | Equity Securities, Warrants and Rights |
Private Placements, Restricted Securities and Other Unregistered Securities: Securities not registered under the Securities Act of 1933, such as privately placed commercial paper and Rule 144A securities. | 2-3 | Miscellaneous Investment Strategies and Risks |
Real Estate Investment Trusts (“REITs”): Pooled investment vehicles which invest primarily in income producing real estate or real estate related loans or interest. | 1-4 | Real Estate Investment Trusts |
Repurchase Agreements1: The purchase of a security and the simultaneous commitment to return the security to the seller at an agreed upon price on an agreed upon date. This is treated as a loan. | 1-4 | Repurchase Agreements |
Reverse Repurchase Agreements1: The sale of a security and the simultaneous commitment to buy the security back at an agreed upon price on an agreed upon date. This is treated as a borrowing by a Fund. | 1-4 | Reverse Repurchase Agreements |
Securities Issued in Connection with Reorganizations and Corporate Restructurings: In connection with reorganizing or restructuring of an issuer, an issuer may issue common stock or other securities to holders of its debt securities. | 1-4 | Miscellaneous Investment Strategies and Risks |
Instrument | Fund Code |
Part
II
Section Reference |
Securities Lending: The lending of up to 33 1⁄3% of a Fund’s total assets. In return a Fund will receive cash as collateral. | 2-3 | Securities Lending |
Short Selling: A Fund sells a security it does not own in anticipation of a decline in the market value of the security. To complete the transaction, a Fund must borrow the security to make delivery to the buyer. A Fund is obligated to replace the security borrowed by purchasing it subsequently at the market price at the time of replacement. A Fund may enter into physical short transactions or obtain the short exposure through synthetic derivative transactions. | 1-4 | Short Selling |
Short-Term Funding Agreements: Agreements issued by banks and highly rated U.S. insurance companies such as Guaranteed Investment Contracts (“GICs”) and Bank Investment Contracts (“BICs”). | 1-2 | Short-Term Funding Agreements |
Sovereign Obligations: Investments in debt obligations issued or guaranteed by a foreign sovereign government or its agencies, authorities or political subdivisions. | 1-4 | Foreign Investments (including Foreign Currencies) |
Swaps and Related Swap Products: Swaps involve an exchange of obligations by two parties. Caps and floors entitle a purchaser to a principal amount from the seller of the cap or floor to the extent that a specified index exceeds or falls below a predetermined interest rate or amount. A Fund may enter into these transactions to manage its exposure to changing interest rates and other factors. | 1-4 | Swaps and Related Swap Products |
Temporary Defensive Positions: To respond to unusual circumstances a Fund may invest in cash and cash equivalents for temporary defensive purposes. | 1-4 | Miscellaneous Investment Strategies and Risks |
U.S. Government Agency Securities: Securities issued or guaranteed by agencies and instrumentalities of the U.S. government. These include all types of securities issued by the Government National Mortgage Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), including funding notes, subordinated benchmark notes, CMOs and REMICs. | 1 | Mortgage-Related Securities |
U.S. Government Obligations: May include direct obligations of the U.S. Treasury, including Treasury bills, notes and bonds, all of which are backed as to principal and interest payments by the full faith and credit of the United States, and separately traded principal and interest component parts of such obligations that are transferable through the Federal book-entry system known as Separate Trading of Registered Interest and Principal of Securities (STRIPS) and Coupons Under Book Entry Safekeeping (CUBES). | 1-4 | U.S. Government Obligations |
When-Issued Securities, Delayed Delivery Securities and Forward Commitments: Purchase or contract to purchase securities at a fixed price for delivery at a future date. | 3-4 | When-Issued Securities, Delayed Delivery Securities and Forward Commitments |
1 | With respect to the Long/Short ETF, bank obligations, commercial paper, repurchase agreements, reverse repurchase agreements and any other short-term obligations will have maturities of three months or less. |
Fiscal Year Ended October 31, | ||||
Fund | 2018 | 2019 | ||
Diversified Alternatives ETF | 145% | 123% | ||
Event Driven ETF1 | 141% | 206% | ||
Long/Short ETF2 | 99% | 114% | ||
Managed Futures Strategy ETF3 | - 4 | - 4 |
1 | The Fund commenced operations on 11/29/2017. |
2 | The Fund commenced operations on 1/23/2018. |
3 | The Fund commenced operations on 12/5/2017. |
4 | Because amounts relating to derivatives and securities whose maturities or expiration dates at the time of acquisition were one year or less are excluded from the portfolio turnover calculation and these are the only types of instruments held by the Managed Futures Strategy ETF, the Fund does not report a portfolio turnover number. |
Name of Trustee |
Dollar
Range
of Equity Securities in Diversified Alternatives ETF |
Dollar
Range
of Equity Securities in Event Driven ETF |
Dollar
Range
of Equity Securities in Long/Short ETF |
Dollar
Range
of Equity Securities in Managed Futures Strategy ETF |
Aggregate
Dollar Range
of Equity Securities in all Registered Investment Companies Overseen by the Trustee in Family of Investment Companies1 |
|||||
Independent Trustees | ||||||||||
Gary L. French | None | None | None | None | $50,001–$100,000 | |||||
Robert J. Grassi | $1–$10,000 | None | None | None |
Over
$100,000 |
|||||
Thomas P. Lemke | None | None | None | None |
Over
$100,000 |
|||||
Lawrence R. Maffia | None | None | None | None |
Over
$100,000 |
|||||
Emily A. Youssouf | None | None | None | None | $10,001–$50,000 |
Name of Trustee |
Dollar
Range
of Equity Securities in Diversified Alternatives ETF |
Dollar
Range
of Equity Securities in Event Driven ETF |
Dollar
Range
of Equity Securities in Long/Short ETF |
Dollar
Range
of Equity Securities in Managed Futures Strategy ETF |
Aggregate
Dollar Range
of Equity Securities in all Registered Investment Companies Overseen by the Trustee in Family of Investment Companies1 |
|||||
Interested Trustee | ||||||||||
Robert Deutsch | None | None | None | None |
Over
$100,000 |
1 | A Family of Investment Companies means any two or more registered investment companies that share the same investment adviser or principal underwriter and hold themselves out to investors as related companies for purposes of investment and investor services. The Family of Investment Companies for which the Board of Trustees currently serves includes one registered investment company, 39 Funds and one Trust. |
Name of Trustee | Diversified Alternatives ETF | Event Driven ETF | Long/Short ETF | Managed Futures Strategy ETF |
Total
Compensation Paid From Fund Complex1 |
|||||
Independent Trustees | ||||||||||
Gary L. French | $ 866 | $ 149 | $ 139 | $ 279 | $127,500 | |||||
Robert J. Grassi | 815 | 140 | 131 | 263 | 120,000 | |||||
Thomas P. Lemke | 869 | 150 | 140 | 280 | 128,000 | |||||
Lawrence Maffia | 815 | 140 | 131 | 263 | 120,000 | |||||
Emily Youssouf | 856 | 148 | 138 | 276 | 126,000 | |||||
Interested Trustee | ||||||||||
Robert Deutsch2 | None | None | None | None | None |
1 | A Fund Complex means two or more registered investment companies that (i) hold themselves out to investors as related companies for purposes of investment and investor services or (ii) have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other registered investment companies. The J.P. Morgan Funds Complex for which the Board of Trustees currently serves includes 39 Funds and one Trust. |
2 | Mr. Deutsch received no compensation directly from the Trust. |
Fiscal Year Ended | ||||||||||||
October 31, 2017 | October 31, 2018 | October 31, 2019 | ||||||||||
Fund | Paid | Waived | Paid | Waived | Paid | Waived | ||||||
Diversified Alternatives ETF1 | $201,625 | $(388,959) | $887,592 | $(372,723) | $804,313 | $(277,080) | ||||||
Event Driven ETF2 | N/A | N/A | — | (182,942) | 23,351 | (180,125) |
Fiscal Year Ended | ||||||||||||
October 31, 2017 | October 31, 2018 | October 31, 2019 | ||||||||||
Fund | Paid | Waived | Paid | Waived | Paid | Waived | ||||||
Long/Short ETF3 | N/A | N/A | $ — | $(111,098) | $ — | $(147,220) | ||||||
Managed Futures Strategy ETF1,4 | N/A | N/A | — | (257,119) | 20,321 | (253,656) |
1 | Includes fees and waivers resulting from investments in Subsidiaries. |
2 | The Fund commenced operations on 11/29/2017. |
3 | The Fund commenced operations on 1/23/2018. |
4 | The Fund commenced operations on 12/5/2017. |
Fiscal Year Ended | ||||||||||||
October 31, 2017 | October 31, 2018 | October 31, 2019 | ||||||||||
Fund | Paid | Waived | Paid | Waived | Paid | Waived | ||||||
Diversified Alternatives ETF1 | $ — | $(85,517) | $18,752 | $(162,994) | $42,652 | $(100,363) | ||||||
Event Driven ETF2 | N/A | N/A | — | (20,734) | — | (20,783) | ||||||
Long/Short ETF3 | N/A | N/A | — | (15,739) | — | (18,806) | ||||||
Managed Futures Strategy ETF1,4 | N/A | N/A | — | (44,485) | — | (42,929) |
1 | Includes fees and waivers resulting from investments in Subsidiaries. |
2 | The Fund commenced operations on 11/29/2017. |
3 | The Fund commenced operations on 1/23/2018. |
4 | The Fund commenced operations on 12/5/2017. |
Fund | Non-Performance Based Fee Advisory Accounts | |||||||||||
Registered
Investment Companies |
Other
Pooled
Investment Vehicles |
Other Accounts | ||||||||||
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
|||||||
Diversified Alternatives ETF | ||||||||||||
Yazann Romahi | 17 | $3,684,977 | 7 | $2,001,049 | 2 | $ 271,509 | ||||||
Wei (Victor) Li | 8 | 2,230,355 | 6 | 1,585,809 | 0 | 0 | ||||||
Alistair Lowe | 5 | 377,312 | 0 | 0 | 1 | 252,535 | ||||||
Event Driven ETF | ||||||||||||
Yazann Romahi | 17 | 3,744,640 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Wei (Victor) Li | 8 | 2,290,019 | 6 | 1,585,809 | 0 | 0 | ||||||
Alistair Lowe | 5 | 436,976 | 0 | 0 | 1 | 252,535 | ||||||
Jonathan Msika | 11 | 1,971,062 | 2 | 32,903 | 0 | 0 | ||||||
Joe Staines | 14 | 3,368,397 | 3 | 111,266 | 8 | 2,130,837 | ||||||
Long/Short ETF | ||||||||||||
Yazann Romahi | 17 | 3,745,765 | 7 | 2,001,049 | 2 | 271,509 | ||||||
Wei (Victor) Li | 8 | 2,291,144 | 6 | 1,585,809 | 0 | 0 | ||||||
Alistair Lowe | 5 | 438,101 | 0 | 0 | 1 | 252,535 | ||||||
Jonathan Msika | 11 | 1,972,187 | 2 | 32,903 | 0 | 0 | ||||||
Yegang (Steven) Wu | 9 | 1,515,977 | 3 | 46,460 | 7 | 1,878,302 | ||||||
Fund | Non-Performance Based Fee Advisory Accounts | |||||||||||
Registered
Investment Companies |
Other
Pooled
Investment Vehicles |
Other Accounts | ||||||||||
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
|||||||
Managed Futures Strategy ETF | ||||||||||||
Yazann Romahi | 17 | $3,719,483 | 7 | $2,001,049 | 2 | $ 271,509 | ||||||
Wei (Victor) Li | 8 | 2,264,862 | 6 | 1,585,809 | 0 | 0 | ||||||
Alistair Lowe | 5 | 411,819 | 0 | 0 | 1 | 252,535 | ||||||
Joe Staines | 14 | 3,343,241 | 3 | 111,266 | 8 | 2,130,837 |
Fund | Performance Based Fee Advisory Accounts | ||||||||||||
Registered
Investment Companies |
Other
Pooled
Investment Vehicles |
Other Accounts | |||||||||||
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
Number
of
Accounts |
Total
Assets
($ thousands) |
||||||||
Diversified Alternatives ETF | |||||||||||||
Yazann Romahi | 0 | $0 | 0 | $0 | 1 | $460,648 | |||||||
Wei (Victor) Li | 0 | 0 | 0 | 0 | 1 | 460,648 | |||||||
Alistair Lowe | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Event Driven ETF | |||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | |||||||
Wei (Victor) Li | 0 | 0 | 0 | 0 | 1 | 460,648 | |||||||
Alistair Lowe | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Long/Short ETF | |||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | |||||||
Wei (Victor) Li | 0 | 0 | 0 | 0 | 1 | 460,648 | |||||||
Alistair Lowe | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Jonathan Msika | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Yegang (Steven) Wu | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Managed Futures Strategy ETF | |||||||||||||
Yazann Romahi | 0 | 0 | 0 | 0 | 1 | 460,648 | |||||||
Wei (Victor) Li | 0 | 0 | 0 | 0 | 1 | 460,648 | |||||||
Alistair Lowe | 0 | 0 | 0 | 0 | 0 | 0 | |||||||
Joe Staines | 0 | 0 | 0 | 0 | 0 | 0 |
* | The total value and number of accounts managed by a portfolio manager may include sub-accounts of asset allocation, multi-managed and other accounts. |
Aggregate Dollar Range of Securities in the Fund | ||||||||||||||
Fund | None | $1-$10,000 |
$10,001-
$50,000 |
$50,001-
$100,000 |
$100,001-
$500,000 |
$500,001-
$1,000,000 |
Over
$1,000,000 |
|||||||
Diversified Alternatives ETF | ||||||||||||||
Yazann Romahi | X | |||||||||||||
Wei (Victor) Li | X | |||||||||||||
Alistair Lowe | X | |||||||||||||
Event Driven ETF | ||||||||||||||
Yazann Romahi | X | |||||||||||||
Wei (Victor) Li | X | |||||||||||||
Alistair Lowe | X |
Aggregate Dollar Range of Securities in the Fund | ||||||||||||||
Fund | None | $1-$10,000 |
$10,001-
$50,000 |
$50,001-
$100,000 |
$100,001-
$500,000 |
$500,001-
$1,000,000 |
Over
$1,000,000 |
|||||||
Jonathan Msika | X | |||||||||||||
Joe Staines | X | |||||||||||||
Long/Short ETF | ||||||||||||||
Yazann Romahi | X | |||||||||||||
Wei (Victor) Li | X | |||||||||||||
Alistair Lowe | X | |||||||||||||
Jonathan Msika | X | |||||||||||||
Yegang (Steven) Wu | X | |||||||||||||
Managed Futures Strategy ETF | ||||||||||||||
Yazann Romahi | X | |||||||||||||
Wei (Victor) Li | X | |||||||||||||
Alistair Lowe | X | |||||||||||||
Joe Staines | X |
Name of Fund | Benchmark | |
Diversified Alternatives ETF | ICE BofAML 3-Month US Treasury Bill Index | |
Event Driven ETF | ICE BofAML 3-Month US Treasury Bill Index | |
Long/Short ETF | ICE BofAML 3-Month US Treasury Bill Index | |
Managed Futures Strategy ETF | ICE BofAML 3-Month US Treasury Bill Index |
Fiscal Year Ended | ||||||
Fund | October 31, 2017 | October 31, 2018 | October 31, 2019 | |||
Diversified Alternatives ETF1 | $21,436 | $44,783 | $43,932 | |||
Event Driven ETF2 | N/A | 18,609 | 20,680 | |||
Long/Short ETF3 | N/A | 15,949 | 20,616 | |||
Managed Futures Strategy ETF1,4 | N/A | 37,233 | 41,270 |
1 | Includes fees and waivers resulting from investments in Subsidiaries. |
2 | The Fund commenced operations on 11/29/2017. |
3 | The Fund commenced operations on 1/23/2018. |
4 | The Fund commenced operations on 12/5/2017. |
Event Driven ETF | Long/Short ETF | ||
Gross Income from Securities Lending Activities1 | $7,738 | $1,846 | |
Fees and/or Compensation for Securities Lending Activities |
Event Driven ETF | Long/Short ETF | ||
Revenue Split2 | $ 443 | $ 103 | |
Cash Collateral Management Fees3 | 310 | 90 | |
Administrative Fees | — | — | |
Indemnification Fees | — | — | |
Rebates to Borrowers | 1,817 | 450 | |
Others Fees | — | — | |
Aggregate Fees/Compensation for Securities Lending Activities | 2,571 | 643 | |
Net Income from the Securities Lending Activities | 5,168 | 1,203 |
1 | Gross income includes income from the reinvestment of cash collateral, premium income (i.e. rebates paid by borrowers to the Fund), management fees from a pooled cash collateral reinvestment vehicle that are deducted from the vehicle's assets before income is distributed, and any other income. |
2 | Revenue split represents the share of revenue generated by securities lending program and paid to Citibank N.A. |
3 | Cash collateral is reinvested in certain JPMorgan money market funds that are advised by JPMIM (“money market funds”). Cash collateral management fees include the fees and expenses deducted from the money market funds. The contractual management fees are derived using the Total Annual Fund Operating Expenses after Fee Waivers and/or Expense Reimbursements from the money market funds’ most recently available prospectus. Actual fees incurred by the JPMorgan money market funds may differ due to other expenses, fee waivers and expense reimbursements. |
Fiscal Year Ended | ||||||
Fund | October 31, 2017 | October 31, 2018 | October 31, 2019 | |||
Diversified
Alternatives ETF
|
||||||
Total Brokerage Commissions | $11,487 | $254,347 | $325,128 | |||
Brokerage Commissions to Affiliated Broker/Dealers | — | — | — | |||
Event Driven ETF1 | ||||||
Total Brokerage Commissions | N/A | 21,160 | 41,740 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
Long/Short ETF2 | ||||||
Total Brokerage Commissions | N/A | 42,311 | 57,736 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — | |||
Managed Futures Strategy ETF3 | ||||||
Total Brokerage Commissions | N/A | 26,205 | 24,701 | |||
Brokerage Commissions to Affiliated Broker/Dealers | N/A | — | — |
1 | The Fund commenced operations on 11/29/2017. |
2 | The Fund commenced operations on 1/23/2018. |
3 | The Fund commenced operations on 12/5/2017. |
FUND | CREATION* | REDEMPTION* | ||
Diversified Alternatives ETF | 50,000 | 50,000 | ||
Event Driven ETF | 50,000 | 50,000 | ||
Long/Short ETF | 50,000 | 50,000 | ||
Managed Futures Strategy ETF | 50,000 | 50,000 |
* | May be revised at any time without notice. |
FUND | TRANSACTION FEE*,** | |
Diversified Alternatives ETF | $500 | |
Event Driven ETF | 500 | |
Long/Short ETF | 500 | |
Managed Futures Strategy ETF | 300 |
* | From time to time, the Fund may waive all or a portion of its applicable transaction fee(s). |
** | In addition to the transaction fees listed above, the Fund may charge an additional variable fee for creations and redemptions in cash of up to 3% of the amount of a creation transaction and of up to 2% of the amount of a redemption transaction to offset brokerage and other impact expenses associated with the cash transaction. |
Capital
Loss Carryforward
Character |
||||
Fund | Short-Term | Long-Term | ||
Diversified Alternatives ETF | $5,006,942 | $ 22,682 | ||
Event Driven ETF | — | 219,195 | ||
Long/Short ETF | 1,671,917 | 307,878 |
Capital
Loss Carryforward
Character |
||||
Fund | Short-Term | Long-Term | ||
Managed Futures Strategy ETF | $ 430,324 | $ — |
Name of Fund | Name and Address of Shareholder |
Percentage
Held |
JPMORGAN DIVERSIFIED ALTERNATIVES ETF | ||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
13.51% | |
MG
TRUST COMPANY, LLC
700 17TH STREET, SUITE 300 DENVER, COLORADO 80202 |
10.18 | |
FIFTH
THIRD BANK
38 FOUNTAIN SQUARE PLAZA CINCINNATI, OH 45263 |
8.46 | |
CLS
INVESTMENTS, LLC
17605 WRIGHT ST OMAHA, NE 68130 |
7.93 | |
VALIC
FINANCIAL ADVISORS, INC.
2929 ALLEND PARKWAY L7-20 HOUSTON, TX 77019 |
7.74 | |
HIGHTOWER
ADVISORS, LLC
200 W MADISON, 25TH FLOOR, SUITE 2500 CHICAGO, IL 60606 |
5.96 | |
SANTANDER
SECURITIES LLC
2 MORRISSEY BOULEVARD DORCHESTER, MA 02125 |
5.32 | |
JPMORGAN EVENT DRIVEN ETF | ||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
86.82 | |
HELEN
STEPHENS GROUP, LLC
4200 S. HULEN ST., SUITE 422 FORT WORTH, TX 76109 |
8.74 | |
JPMORGAN LONG/SHORT ETF | ||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
80.52 |
Name of Fund | Name and Address of Shareholder |
Percentage
Held |
STERNECK
CAPITAL MANAGEMENT LLC
4510 BELLEVIEW AVENUE, SUITE 204 KANSAS CITY, MO 64111 |
10.32% | |
JPMORGAN MANAGED FUTURES STRATEGY ETF | ||
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION*
277 PARK AVENUE NEW YORK, NY 10172 |
53.03 | |
CHARLES
SCHWAB & CO., INC.
211 MAIN ST SAN FRANCISCO, CA 94105 |
19.46 | |
AMBASSADOR
ADVISORS, LLC
1755 OREGON PIKE LANCASTER, PA17601 |
5.91 | |
STERNECK
CAPITAL MANAGEMENT LLC
4510 BELLEVIEW AVENUE, SUITE 204 KANSAS CITY, MO 64111 |
5.73 |
* | The shareholder of record is JPMorgan Chase Bank, National Association, but most of this holding this represents seed money held by J.P. Morgan Investment Management Inc. The shares may also be held for the benefit of underlying accounts for which JPMorgan Chase Bank, National Association or its affiliates (“JPMorgan Affiliates”) may have voting or investment power. To the extent that JPMorgan Affiliates own 25% or more of a class of a Fund, JPMorgan Chase & Co. may be deemed to be a “controlling person” of such shares under the 1940 Act. |
|
1 |
|
1 |
|
2 |
|
3 |
|
3 |
|
4 |
|
5 |
|
5 |
|
8 |
|
9 |
|
9 |
|
10 |
|
18 |
|
18 |
|
20 |
|
23 |
|
27 |
|
37 |
|
40 |
|
45 |
|
46 |
|
46 |
|
47 |
|
47 |
|
48 |
|
49 |
|
49 |
|
49 |
|
52 |
|
53 |
|
53 |
|
53 |
|
54 |
|
55 |
|
55 |
|
55 |
|
55 |
|
56 |
|
62 |
|
64 |
|
64 |
|
65 |
|
66 |
|
68 |
|
68 |
|
68 |
|
69 |
|
69 |
|
69 |
|
71 |
|
71 |
|
73 |
|
73 |
|
77 |
|
78 |
|
78 |
|
79 |
|
80 |
|
80 |
|
81 |
|
81 |
|
81 |
|
81 |
|
83 |
|
85 |
|
85 |
|
87 |
|
87 |
|
89 |
|
89 |
|
89 |
|
90 |
|
90 |
|
95 |
|
95 |
|
96 |
|
96 |
|
96 |
|
99 |
|
100 |
|
100 |
|
100 |
|
101 |
|
102 |
|
102 |
|
103 |
|
103 |
|
104 |
|
104 |
|
104 |
|
104 |
|
106 |
|
106 |
|
107 |
|
108 |
|
111 |
|
A-1 |
|
B-1 |
|
C-1 |
1. | bridges; |
2. | highways; |
3. | roads; |
4. | schools; |
5. | waterworks and sewer systems; and |
6. | other utilities. |
1. | refunding outstanding obligations; |
2. | obtaining funds for general operating expenses; and |
3. | obtaining funds to lend to other public institutions and facilities. |
1. | water, sewage and solid waste facilities; |
2. | qualified residential rental projects; |
3. | certain local electric, gas and other heating or cooling facilities; |
4. | qualified hazardous waste facilities; |
5. | high-speed intercity rail facilities; |
6. | governmentally-owned airports, docks and wharves and mass transportation facilities; |
7. | qualified mortgages; |
8. | student loan and redevelopment bonds; and |
9. | bonds used for certain organizations exempt from Federal income taxation. |
1. | privately operated housing facilities; |
2. | sports facilities; |
3. | industrial parks; |
4. | convention or trade show facilities; |
5. | airport, mass transit, port or parking facilities; |
6. | air or water pollution control facilities; |
7. | sewage or solid waste disposal facilities; and |
8. | facilities for water supply. |
1. | Short-term tax-exempt General Obligations Notes; |
2. | Tax Anticipation Notes; |
3. | Bond Anticipation Notes; |
4. | Revenue Anticipation Notes; |
5. | Project Notes; and |
6. | Other forms of short-term tax-exempt loans. |
1. | general money market conditions; |
2. | coupon rate; |
3. | the financial condition of the issuer; |
4. | general conditions of the municipal bond market; |
5. | the size of a particular offering; |
6. | the maturity of the obligations; and |
7. | the rating of the issue. |
• | the interest on the bonds may become taxable, possibly retroactively from the date of issuance; |
• | the value of the bonds may be reduced; |
• | you and other Shareholders may be subject to unanticipated tax liabilities; |
• | a Fund may be required to sell the bonds at the reduced value; |
• | it may be an event of default under the applicable mortgage; |
• | the holder may be permitted to accelerate payment of the bond; and |
• | the issuer may be required to redeem the bond. |
• | limited financial resources; |
• | infrequent or limited trading; and |
• | more abrupt or erratic price movements than larger company securities. |
(a) | derive at least 90% of its gross income for each taxable year from (i) dividends, interest, payments with respect to certain securities loans, and gain from the sale or other disposition of stock, securities, or foreign currencies, or other income (including, but not limited to, gain from options, swaps, futures, or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies and (ii) net income derived from interests in “qualified publicly traded partnerships” (“QPTPs,” defined below); |
(b) | diversify its holdings so that, at the end of each quarter of the Fund’s taxable year, (i) at least 50% of the market value of the Fund’s total assets is represented by cash and cash items, U.S. government securities, securities of other regulated investment companies, and other securities, limited in respect of any one issuer to an amount not greater than 5% of the value of the Fund’s total assets and not more than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the Fund’s total assets is invested (x) in the securities (other than cash or cash items, or securities issued by the U.S. government or other regulated investment |
companies) of any one issuer or of two or more issuers that the Fund controls and that are engaged in the same, similar, or related trades or businesses, or (y) in the securities of one or more QPTPs. In the case of a Fund’s investments in loan participations, the Fund shall treat both the financial intermediary and the issuer of the underlying loan as an issuer for the purposes of meeting this diversification requirement; and | |
(c) | distribute with respect to each taxable year at least 90% of the sum of its investment company taxable income (as that term is defined in the Code, without regard to the deduction for dividends paid — generally, taxable ordinary income and any excess of net short-term capital gain over net long-term capital loss) and net tax-exempt interest income, for such taxable year. |
Name
(Year of Birth; Positions
with the Funds since) |
Principal
Occupation
During Past 5 Years |
Number
of Funds
in Fund Complex Overseen by Trustee(1) |
Other
Directorships Held
During the Past 5 Years |
|||
Independent Trustees | ||||||
Gary
L. French
(1951); Trustee of the Trust since 2014 |
Real Estate Investor (2011–present); Consultant to the Mutual Fund Industry (2011-present); Senior Consultant for The Regulatory Fundamentals Group LLC (2011–2017). | 39 |
Independent
Trustee, The China Fund, Inc. (2013–
2019); Exchange Traded Concepts Trust II (2012– 2014); Exchange Traded Concepts Trust I (2011– 2014). |
|||
Robert
J. Grassi
(1957); Trustee of the Trust since 2014 |
Sole
Proprietor, Academy Hills Advisors LLC (2012– present); Pension Director, Corning Incorporated (2002–
2012). |
39 | None. | |||
Thomas
P. Lemke
(1954); Trustee of the Trust since 2014 |
Retired; Executive Vice President and General Counsel, Legg Mason (2005–2013). | 39 |
SEI family
of funds (Independent Trustee of Advisors’ Inner Circle Fund III (20 portfolios) (from February 2014 to present); Independent Trustee of Winton Diversified Opportunities Fund (from December 2014 to 2018); Independent Trustee of Gallery Trust
(from August 2015 to present); Independent Trustee of Schroder Series Trust (from February 2017 to present); Independent Trustee of Schroder Global Series Trust (from February 2017 to present); Independent Trustee of O’Connor EQUUS (May
2014–
April 2016); Independent Trustee of Winton Series Trust (December 2014– March 2017); Independent Trustee of AXA Premier VIP Trust (2014–June 2017); Independent Director of The Victory Funds (or their predecessor funds) (35 portfolios) (2014– March 2015); Symmetry Panoramic Trust (16 portfolios) (2018-present). |
Name
(Year of Birth; Positions
with the Funds since) |
Principal
Occupation
During Past 5 Years |
Number
of Funds
in Fund Complex Overseen by Trustee(1) |
Other
Directorships Held
During the Past 5 Years |
|||
Lawrence
R. Maffia
(1950); Trustee of the Trust since 2014 |
Retired; Director and President, ICI Mutual Insurance Company (2006– 2013). | 39 | Director, ICI Mutual Insurance Company (1999–2013). | |||
Emily
A. Youssouf
(1951); Trustee of the Trust since 2014 |
Clinical
Professor, NYU Schack Institute of Real Estate (2009–
present); Board Member and Member of the Audit Committee (2013– present), Chair of Finance Committee (2019– present), Member of Related Parties Committee (2013–2018) and Member of the Enterprise Risk Committee (2015– 2018), PennyMac Financial Services, Inc.; Board Member (2005–2018), Chair of Capital Committee (2006–2016), Chair of Audit Committee (2005–2018), Member of Finance Committee (2005–2018) and Chair of IT Committee (2016–2018), NYC Health and Hospitals Corporation. |
39 | Trustee, NYC School Construction Authority (2009–present); Board Member, NYS Job Development Authority (2008–present); Trustee and Chair of the Audit Committee of the TransitCenter Foundation (2015–2019). | |||
Interested Trustee | ||||||
Robert
F. Deutsch(2)
(1957); Chairman and Trustee of the Trust since 2014 |
Retired; Head of the Global ETF Business for JPMorgan Asset Management (2013– 2017); Head of the Global Liquidity Business for JPMorgan Asset Management (2003–2013). | 39 | Board of Directors of the JUST Capital Foundation (2017–present). |
(1) | A Fund Complex means two or more registered investment companies that hold themselves out to investors as related companies for purposes of investment and investor services or have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other registered investment companies. Thirty three series of the Trust have commenced operations, but six additional series have been created and are expected to commence operations in the future. |
(2) | Mr. Deutsch is an interested trustee because he was an employee of the Adviser until August 2017. |
Name of Committee | Members | Committee Chair | ||
Audit and Valuation Committee |
Mr.
French
Mr. Lemke Mr. Grassi Mr. Maffia Ms. Youssouf |
Mr. French | ||
Governance and Nominating Committee |
Ms.
Youssouf
Mr. French Mr. Grassi Mr. Lemke Mr. Maffia |
Ms. Youssouf |
Name
(Year of Birth),
Positions Held with the Trusts (Since) |
Principal Occupations During Past 5 Years | |
Joanna
Gallegos (1975),
President and Principal Executive Officer (2017) |
Managing Director, Global Head of ETF Strategy. Previously, Head of J.P. Morgan Asset Management’s U.S. Exchange Traded Funds business July 2017 to December 2019 and Head of J.P. Morgan Asset Management’s ETF Product Development team from August 2013 to July 2017. | |
Lauren
Paino (1973),
Treasurer and Principal Financial Officer (2016)* |
Executive Director, J.P. Morgan Investment Management Inc. (formerly JPMorgan Funds Management, Inc.) since August 2013. |
Name
(Year of Birth),
Positions Held with the Trusts (Since) |
Principal Occupations During Past 5 Years | |
Brian
S. Shlissel (1964),
Vice President (2016) |
Managing Director and Chief Administrative Officer for J.P. Morgan pooled vehicles, J.P. Morgan Investment Management Inc. (formerly JPMorgan Funds Management, Inc.) (from 2014 to present); Managing Director and Head of Mutual Fund Services, Allianz Global Investors; President and Chief Executive Officer, Allianz Global Investors Mutual Funds and PIMCO Closed-End Funds (from 1999 to 2014). | |
Paul
Shield (1960),
Vice President and Assistant Treasurer (2016) |
Managing Director and head of Business Management for JPMorgan Asset Management’s Exchange Traded Fund platform since 2013. | |
Elizabeth
A. Davin (1964),
Secretary (2018)** |
Executive Director and Assistant General Counsel, JPMorgan Chase. Ms. Davin has been with JPMorgan Chase (formerly Bank One Corporation) since 2004. | |
Stephen
M. Ungerman (1953),
Chief Compliance Officer (2014) |
Managing Director, JPMorgan Chase & Co.; Mr. Ungerman has been with JPMorgan Chase & Co. since 2000. | |
Jessica
K. Ditullio (1962),
Assistant Secretary (2014)** |
Executive Director and Assistant General Counsel. Ms. Ditullio has been with JPMorgan Chase (formerly Bank One Corporation) since 1990. | |
Anthony
Geron (1971),
Assistant Secretary (2019)* |
Vice President and Assistant General Counsel, JPMorgan Chase since September 2018; Lead Director and Counsel, AXA Equitable Life Insurance Company from 2015 to 2018 and Senior Director and Counsel, AXA Equitable Life Insurance Company from 2014 to 2015; Associate, Willkie Farr & Gallagher (law firm) from 2007 to 2014. | |
Carmine
Lekstutis (1980),
Assistant Secretary (2014)* |
Executive Director and Assistant General Counsel, JPMorgan Chase since February 2015; formerly Vice President and Assistant General Counsel, JPMorgan Chase from 2011 to February 2015. | |
Keri
E. Riemer (1976),
Assistant Secretary (2019)* |
Executive Director and Assistant General Counsel, JPMorgan Chase since February 2019; Counsel, Seward & Kissel LLP (2016-2019); Associate, Seward & Kissel LLP (2011-2016). | |
Gregory
S. Samuels (1980),
Assistant Secretary (2014)* |
Executive Director and Assistant General Counsel, JPMorgan Chase since February 2014; formerly Vice President and Assistant General Counsel, JPMorgan Chase from 2010. | |
Zachary
E. Vonnegut-Gabovitch (1986),
Assistant Secretary (2017)* |
Vice President and Assistant General Counsel, JPMorgan Chase since September 2016; Associate, Morgan, Lewis & Bockius (law firm) from 2012 to 2016. | |
Frederick
J. Cavaliere (1978),
Assistant Treasurer (2015)* |
Executive Director, J.P. Morgan Investment Management Inc. since February 2016; formerly, Vice President, J.P. Morgan Investment Management Inc. (formerly JPMorgan Funds Management, Inc.) since September 2010 to February 2016. Mr. Cavaliere has been with JPMorgan since May 2006. | |
Timothy
J. Clemens (1975),
Assistant Treasurer (2018) |
Executive Director, J.P. Morgan Investment Management Inc. (formerly JPMorgan Funds Management, Inc.) since February 2016; Vice President, JPMorgan Funds Management, Inc. from October 2013 to January 2016. | |
Michael
M. D’Ambrosio (1969),
Assistant Treasurer (2014) |
Managing Director, J.P. Morgan Investment Management Inc. (formerly JPMorgan Funds Management, Inc.) since May 2014; formerly Executive Director, J.P. Morgan Investment Management Inc. (formerly JPMorgan Funds Management, Inc.) from 2012 to May 2014. | |
Shannon
Gaines (1977),
Assistant Treasurer (2019)** |
Vice President, J.P. Morgan Investment Management Inc. (formerly JPMorgan Funds Management, Inc.) since January 2014. |
Name
(Year of Birth),
Positions Held with the Trusts (Since) |
Principal Occupations During Past 5 Years | |
Jason
Ronca (1978),
Assistant Treasurer (2014)*** |
Executive Director, Assistant Treasurer and ETF Platform Manager for J.P. Morgan Asset Management since February 2017; formerly Vice President, Assistant Treasurer and ETF Platform Manager for J.P. Morgan Asset Management from May 2014 to February 2017. ETF Product Manager for Corporate Investment Bank responsible for setting the strategy and control agenda for the ETF servicing business from 2010 to May 2014; Prior to 2010, a Vice President in Fund Accounting within J.P. Morgan Investor Services, supporting a series of U.S. registered mutual funds. |
* | The contact address for the officer is 4 New York Plaza, New York, NY 10004. |
** | The contact address for the officer is 1111 Polaris Parkway, Columbus, OH 43240. |
*** | The contact address for the officer is 50 Rowes Wharf, Floor 03, Boston, MA 02110. |
1 | JPMorgan Funds Management, Inc., the former Administrator, was merged with and into JPMIM effective April 1, 2016. |
Tier One | First $75 billion | 0.0025% |
Tier Two | Next $25 billion | 0.0020% |
Tier Three | Over $100 billion | 0.0015% |
Other Fees: | ||
Annual Base Fee (in addition to asset based fee) | $20,000 per Fund |
• | $15 or $45 per proxy (depending on the country where the issuer is located) for its service which helps facilitate the voting of proxies throughout the world. For securities in the U.S. market, this fee is waived if the Adviser votes the proxies directly; |
• | $2,000 per year for account maintenance for each custody collateral control account; |
• | $2.25 or $15 for income or redemption processing (depending on whether the security is held book entry or physically); and |
• | $2.50 to $53.50 for each cash payment or receipt transaction. |
Tier One | Up to $50 billion | 0.0030% |
Tier Two | Next $75 billion | 0.0025% |
Tier Three | Over $125 billion | 0.0015% |
Other Fees: | ||
Minimum | $22,500 per Fund per year |
• | Corporate governance procedures differ among the countries. Because of time constraints and local customs, it is not always possible for the Adviser to receive and review all proxy materials in connection with each item submitted for a vote. Many proxy statements are in foreign languages. Proxy materials are generally mailed by the issuer to the sub-custodian which holds the securities for the client in the country where the portfolio company is organized, and there may not be sufficient time for such materials to be transmitted to the Adviser in time for a vote to be cast. In some countries, proxy statements are not mailed at all, and in some locations, the deadline for voting is two to four days after the initial announcement that a vote is to be solicited and it may not always be possible to obtain sufficient information to make an informed decision in good time to vote. |
• | Certain markets require that shares being tendered for voting purposes are temporarily immobilized from trading until after the shareholder meeting has taken place. Elsewhere, notably emerging markets, it may not always be possible to obtain sufficient information to make an informed decision in good time to vote. Some markets require a local representative to be hired in order to attend the meeting and vote in person on our behalf, which can result in considerable cost. The Adviser also considers the cost of voting in light of the expected benefit of the vote. In certain instances, it may sometimes be in the Fund’s best interests to intentionally refrain from voting in certain overseas markets from time to time. |
• | Where proxy issues concern corporate governance, takeover defense measures, compensation plans, capital structure changes and so forth, the Adviser pays particular attention to management’s arguments for promoting the prospective change. The Adviser’s sole criterion in determining its voting stance is whether such changes will be to the economic benefit of the beneficial owners of the shares. |
• | The Adviser is in favor of a unitary board structure of the type found in the United Kingdom as opposed to tiered board structures. Thus, the Adviser will generally vote to encourage the gradual phasing out of tiered board structures, in favor of unitary boards. However, since tiered boards are still very prevalent in markets outside of the United Kingdom, local market practice will always be taken into account. |
• | The Adviser will use its voting powers to encourage appropriate levels of board independence, taking into account local market practice. |
• | The Adviser will usually vote against discharging the board from responsibility in cases of pending litigation, or if there is evidence of wrongdoing for which the board must be held accountable. |
• | The Adviser will vote in favor of increases in capital which enhance a company’s long-term prospects. The Adviser will also vote in favor of the partial suspension of preemptive rights if they are for purely technical reasons (e.g., rights offers which may not be legally offered to shareholders in certain jurisdictions). However, the Adviser will vote against increases in capital which would allow the company to adopt “poison pill” takeover defense tactics, or where the increase in authorized capital would dilute shareholder value in the long term. |
• | The Adviser will vote in favor of proposals which will enhance a company’s long-term prospects. The Adviser will vote against an increase in bank borrowing powers which would result in the company reaching an unacceptable level of financial leverage, where such borrowing is expressly intended as part of a takeover defense, or where there is a material reduction in shareholder value. |
• | The Adviser will generally vote against anti-takeover devices. |
• | Where social or environmental issues are the subject of a proxy vote, the Adviser will consider the issue on a case-by-case basis, keeping in mind at all times the best economic interests of its clients. |
• | The Adviser considers votes on director nominees on a case-by-case basis. Votes generally will be withheld from directors who: (a) attend less than 75% of board and committee meetings without a valid excuse; (b) adopt or renew a poison pill without shareholder approval; (c) are affiliated directors who serve on audit, compensation or nominating committees or are affiliated directors |
and the full board serves on such committees or the company does not have such committees; (d) ignore a shareholder proposal that is approved by a majority of either the shares outstanding or the votes cast based on a review over a consecutive two year time frame; (e) are insiders and affiliated outsiders on boards that are not at least majority independent; or (f) are CEOs of publicly-traded companies who serve on more than three public boards or serve on more than four public company boards. In addition, votes are generally withheld for directors who serve on committees in certain cases. For example, the Adviser generally withholds votes from audit committee members in circumstances in which there is evidence that there exists material weaknesses in the company’s internal controls. Votes generally are also withheld from directors when there is a demonstrated history of poor performance or inadequate risk oversight or when the board adopts changes to the company’s governing documents without shareholder approval if the changes materially diminish shareholder rights. | |
• | The Adviser votes proposals to classify boards on a case-by-case basis, but normally will vote in favor of such proposal if the issuer’s governing documents contain each of eight enumerated safeguards (for example, a majority of the board is composed of independent directors and the nominating committee is composed solely of such directors). |
• | The Adviser also considers management poison pill proposals on a case-by-case basis, looking for shareholder-friendly provisions before voting in favor. |
• | The Adviser votes against proposals for a super-majority vote to approve a merger. |
• | The Adviser considers proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan on a case-by-case basis, taking into account such factors as the extent of dilution and whether the transaction will result in a change in control. |
• | The Adviser considers vote proposals with respect to compensation plans on a case-by-case basis. The analysis of compensation plans focuses primarily on the transfer of shareholder wealth (the dollar cost of pay plans to shareholders) and includes an analysis of the structure of the plan and pay practices of other companies in the relevant industry and peer companies. Other matters included in the analysis are the amount of the company’s outstanding stock to be reserved for the award of stock options, whether the exercise price of an option is less than the stock’s fair market value at the date of the grant of the options, and whether the plan provides for the exchange of outstanding options for new ones at lower exercise prices. |
• | The Adviser also considers on a case-by-case basis proposals to change an issuer’s state of incorporation, mergers and acquisitions and other corporate restructuring proposals and certain social issue proposals. |
• | The Adviser generally votes for management proposals which seek shareholder approval to make the state of incorporation the exclusive forum for disputes if the company is a Delaware corporation; otherwise, the Adviser votes on a case by case basis. |
• | The Adviser generally encourages a level of reporting on environmental matters that is not unduly costly or burdensome and which does not place the company at a competitive disadvantage, but which provides meaningful information to enable shareholders to evaluate the impact of the company’s environmental policies and practices on its financial performance. In general, the Adviser supports management disclosure practices that are overall consistent with the goals and objective expressed above. Proposals with respect to companies that have been involved in controversies, fines or litigation are expected to be subject to heightened review and consideration. |
• | In evaluating how to vote environmental proposals, key considerations may include, but are not limited to, issuer considerations such as asset profile of company, including whether it is exposed to potentially secularly potentially declining demand for the company’s products or services due to environmental considerations; cash deployments; cost structure of the company, including its position on the cost curve, expected impact of future carbon tax and exposure to high fixed operating costs; corporate behavior of the company; demonstrated capabilities of the company, its strategic planning process, and past performance; current level of disclosure of the company and consistency of disclosure across its industry; and whether the company incorporates environmental or social issues in a risk assessment or risk reporting framework. The Adviser may also consider whether peers have received similar proposals and if so, were the responses transparent and insightful; would adoption of the proposal inform and educate shareholders; and have companies that adopted the proposal provided insightful and meaningful information that would allow |
shareholders to evaluate the long-term risks and performance of the company; does the proposal require disclosure that is already addressed by existing and proposed mandated regulatory requirements or formal guidance at the local, state, or national level or the company’s existing disclosure practices; and does the proposal create the potential for unintended consequences such as a competitive disadvantage. | |
• | With regard to social issues, among other factors, the Adviser considers the company’s labor practices, supply chain, how the company supports and monitors those issues, what types of disclosure the company and its peers currently provide, and whether the proposal would result in a competitive disadvantage for the company. |
• | The Adviser reviews Say on Pay proposals on a case by case basis with additional review of proposals where the issuer’s previous year’s proposal received a low level of support. |
(a) | trading on the Exchange is broadly restricted by the applicable rules and regulations of the SEC; |
(b) | the Exchange is closed for other than customary weekend and holiday closing; |
(c) | the SEC has by order permitted such suspension; or |
(d) | the SEC has declared a market emergency. |
|
7 |
|
8 |
|
8 |
|
8 |
|
9 |
|
11 |
|
12 |
|
13 |
|
16 |
|
16 |
|
16 |
|
17 |
|
17 |
|
17 |
|
17 |
|
17 |
|
17 |
|
17 |
|
18 |
|
18 |
|
19 |
|
19 |
|
19 |
|
20 |
|
20 |
|
20 |
|
20 |
|
21 |
|
22 |
|
22 |
|
22 |
|
22 |
|
22 |
|
24 |
|
24 |
|
24 |
|
24 |
|
24 |
|
25 |
|
25 |
|
25 |
|
25 |
|
25 |
|
26 |
© 2018 ISS | Institutional Shareholder Services | 2 of 73 |
|
26 |
|
26 |
|
27 |
|
27 |
|
27 |
|
28 |
|
28 |
|
28 |
|
29 |
|
29 |
|
29 |
|
29 |
|
30 |
|
31 |
|
31 |
|
31 |
|
31 |
|
32 |
|
32 |
|
32 |
|
32 |
|
33 |
|
33 |
|
33 |
|
33 |
|
33 |
|
34 |
|
34 |
|
34 |
|
34 |
|
34 |
|
34 |
|
35 |
|
35 |
|
35 |
|
36 |
|
36 |
|
36 |
|
37 |
|
38 |
|
38 |
|
39 |
|
39 |
|
39 |
|
41 |
© 2018 ISS | Institutional Shareholder Services | 3 of 73 |
|
41 |
|
41 |
|
42 |
|
42 |
|
43 |
|
44 |
|
44 |
|
44 |
|
45 |
|
46 |
|
46 |
|
46 |
|
46 |
|
47 |
|
47 |
|
48 |
|
48 |
|
48 |
|
48 |
|
48 |
|
48 |
|
48 |
|
49 |
|
49 |
|
49 |
|
50 |
|
50 |
|
50 |
|
51 |
|
51 |
|
51 |
|
51 |
|
51 |
|
52 |
|
52 |
|
52 |
|
52 |
|
53 |
|
53 |
|
53 |
|
54 |
|
54 |
|
54 |
|
55 |
|
55 |
© 2018 ISS | Institutional Shareholder Services | 4 of 73 |
|
55 |
|
55 |
|
56 |
|
57 |
|
57 |
|
57 |
|
57 |
|
57 |
|
57 |
|
57 |
|
58 |
|
58 |
|
58 |
|
58 |
|
58 |
|
59 |
|
59 |
|
59 |
|
59 |
|
59 |
|
60 |
|
60 |
|
61 |
|
61 |
|
61 |
|
62 |
|
62 |
|
62 |
|
62 |
|
63 |
|
63 |
|
63 |
|
64 |
|
64 |
|
64 |
|
64 |
|
65 |
|
65 |
|
65 |
|
65 |
|
66 |
|
66 |
|
66 |
|
66 |
|
66 |
© 2018 ISS | Institutional Shareholder Services | 5 of 73 |
|
66 |
|
67 |
|
67 |
|
67 |
|
68 |
|
68 |
|
68 |
|
68 |
|
69 |
|
69 |
|
69 |
|
69 |
|
69 |
|
69 |
|
70 |
|
70 |
|
70 |
|
70 |
|
70 |
|
70 |
|
71 |
|
71 |
|
71 |
|
71 |
|
72 |
|
72 |
|
72 |
|
72 |
|
72 |
|
72 |
|
72 |
|
72 |
© 2018 ISS | Institutional Shareholder Services | 6 of 73 |
〉 | U.S. Domestic Issuers – which have a majority of outstanding shares held in the U.S. and meet other criteria, as determined by the SEC, and are subject to the same disclosure and listing standards as U.S. incorporated companies – are generally covered under standard U.S. policy guidelines. |
〉 | Foreign Private Issuers (FPIs) – which do not meet the Domestic Issuer criteria and are exempt from most disclosure requirements (e.g., they do not file DEF14A reports) and listing standards (e.g., for required levels of board and committee independence) – are covered under a combination of policy guidelines: |
〉 | FPI Guidelines (see the Americas Regional Proxy Voting Guidelines), which apply certain minimum independence and disclosure standards in the evaluation of key proxy ballot items, such as the election of directors and approval of financial reports; and |
〉 | For other issues, guidelines for the market that is responsible for, or most relevant to, the item on the ballot. |
© 2018 ISS | Institutional Shareholder Services | 7 of 73 |
〉 | Independent directors comprise 50 percent or less of the board; |
〉 | The non-independent director serves on the audit, compensation, or nominating committee; |
〉 | The company lacks an audit, compensation, or nominating committee so that the full board functions as that committee; or |
〉 | The company lacks a formal nominating committee, even if the board attests that the independent directors fulfill the functions of such a committee. |
© 2018 ISS | Institutional Shareholder Services | 8 of 73 |
1. | Executive Director |
1.1. | Current employee or current officer1 of the company or one of its affiliates2. |
2. | Non-Independent Non-Executive Director |
Board Identification |
2.1. | Director identified as not independent by the board. |
2.2. | Beneficial owner of more than 50 percent of the company’s voting power (this may be aggregated if voting power is distributed among more than one member of a group). |
2.3. | Former CEO of the company.3, 4 |
2.4. | Former CEO of an acquired company within the past five years.4 |
2.5. | Former interim officer if the service was longer than 18 months. If the service was between 12 and 18 months an assessment of the interim officer’s employment agreement will be made.5 |
2.6. | Former officer1 of the company, an affiliate2, or an acquired firm within the past five years. |
2.7. | Officer1 of a former parent or predecessor firm at the time the company was sold or split off from the parent/predecessor within the past five years. |
2.8. | Officer1, former officer, or general or limited partner of a joint venture or partnership with the company. |
2.9. | Immediate family member6 of a current or former officer1 of the company or its affiliates2 within the last five years. |
2.10. | Immediate family member6 of a current employee of company or its affiliates2 where additional factors raise concern (which may include, but are not limited to, the following: a director related to numerous employees; the company or its affiliates employ relatives of numerous board members; or a non- Section 16 officer in a key strategic role). |
2.11. | Currently provides (or an immediate family member6 provides) professional services7 to the company, to an affiliate2 of the company or an individual officer of the company or one of its affiliates in excess of $10,000 per year. |
2.12. | Is (or an immediate family member6 is) a partner in, or a controlling shareholder or an employee of, an organization which provides professional services7 to the company, to an affiliate2 of the company, or an individual officer of the company or one of its affiliates in excess of $10,000 per year. |
2.13. | Has (or an immediate family member6 has) any material transactional relationship8 with the company or its affiliates2 (excluding investments in the company through a private placement). |
2.14. | Is (or an immediate family member6 is) a partner in, or a controlling shareholder or an executive officer of, an organization which has any material transactional relationship8 with the company or its affiliates2 (excluding investments in the company through a private placement). |
2.15. | Is (or an immediate family member6 is) a trustee, director, or employee of a charitable or non-profit organization that receives material grants or endowments8 from the company or its affiliates2. |
2.16. | Party to a voting agreement9 to vote in line with management on proposals being brought to shareholder vote. |
2.17. | Has (or an immediate family member6 has) an interlocking relationship as defined by the SEC involving members of the board of directors or its Compensation Committee.10 |
2.18. | Founder11 of the company but not currently an employee. |
2.19. | Any material12 relationship with the company. |
3. | Independent Director |
3.1. | No material12 connection to the company other than a board seat. |
© 2018 ISS | Institutional Shareholder Services | 9 of 73 |
© 2018 ISS | Institutional Shareholder Services | 10 of 73 |
〉 | Medical issues/illness; |
〉 | Family emergencies; and |
〉 | Missing only one meeting (when the total of all meetings is three or fewer). |
〉 | Sit on more than five public company boards; or |
〉 | Are CEOs of public companies who sit on the boards of more than two public companies besides their own — withhold only at their outside boards3. |
〉 | A firm commitment, as stated in the proxy statement, to appoint at least one female to the board in the near term; |
〉 | The presence of a female on the board at the preceding annual meeting; or |
〉 | Other relevant factors as applicable. |
© 2018 ISS | Institutional Shareholder Services | 11 of 73 |
〉 | The board failed to act on a shareholder proposal that received the support of a majority of the shares cast in the previous year or failed to act on a management proposal seeking to ratify an existing charter/bylaw provision that received opposition of a majority of the shares cast in the previous year. Factors that will be considered are: |
〉 | Disclosed outreach efforts by the board to shareholders in the wake of the vote; |
〉 | Rationale provided in the proxy statement for the level of implementation; |
〉 | The subject matter of the proposal; |
〉 | The level of support for and opposition to the resolution in past meetings; |
〉 | Actions taken by the board in response to the majority vote and its engagement with shareholders; |
〉 | The continuation of the underlying issue as a voting item on the ballot (as either shareholder or management proposals); and |
〉 | Other factors as appropriate. |
〉 | The board failed to act on takeover offers where the majority of shares are tendered; |
〉 | At the previous board election, any director received more than 50 percent withhold/against votes of the shares cast and the company has failed to address the issue(s) that caused the high withhold/against vote. |
〉 | The company’s previous say-on-pay received the support of less than 70 percent of votes cast. Factors that will be considered are: |
〉 | The company’s response, including: |
〉 | Disclosure of engagement efforts with major institutional investors, including the frequency and timing of engagements and the company participants (including whether independent directors participated); |
〉 | Disclosure of the specific concerns voiced by dissenting shareholders that led to the say-on-pay opposition; |
〉 | Disclosure of specific and meaningful actions taken to address shareholders’ concerns; |
〉 | Other recent compensation actions taken by the company; |
〉 | Whether the issues raised are recurring or isolated; |
〉 | The company’s ownership structure; and |
〉 | Whether the support level was less than 50 percent, which would warrant the highest degree of responsiveness. |
〉 | The board implements an advisory vote on executive compensation on a less frequent basis than the frequency that received the plurality of votes cast. |
© 2018 ISS | Institutional Shareholder Services | 12 of 73 |
〉 | The company has a poison pill that was not approved by shareholders5. However, vote case-by-case on nominees if the board adopts an initial pill with a term of one year or less, depending on the disclosed rationale for the adoption, and other factors as relevant (such as a commitment to put any renewal to a shareholder vote). |
〉 | The board makes a material adverse modification to an existing pill, including, but not limited to, extension, renewal, or lowering the trigger, without shareholder approval. |
〉 | A classified board structure; |
〉 | A supermajority vote requirement; |
〉 | Either a plurality vote standard in uncontested director elections, or a majority vote standard in contested elections; |
〉 | The inability of shareholders to call special meetings; |
〉 | The inability of shareholders to act by written consent; |
〉 | A multi-class capital structure; and/or |
〉 | A non-shareholder-approved poison pill. |
〉 | The board’s rationale for adopting the bylaw/charter amendment without shareholder ratification; |
© 2018 ISS | Institutional Shareholder Services | 13 of 73 |
〉 | Disclosure by the company of any significant engagement with shareholders regarding the amendment; |
〉 | The level of impairment of shareholders’ rights caused by the board’s unilateral amendment to the bylaws/ charter; |
〉 | The board’s track record with regard to unilateral board action on bylaw/charter amendments or other entrenchment provisions; |
〉 | The company’s ownership structure; |
〉 | The company’s existing governance provisions; |
〉 | The timing of the board’s amendment to the bylaws/charter in connection with a significant business development; and |
〉 | Other factors, as deemed appropriate, that may be relevant to determine the impact of the amendment on shareholders. |
〉 | Classified the board; |
〉 | Adopted supermajority vote requirements to amend the bylaws or charter; or |
〉 | Eliminated shareholders’ ability to amend bylaws. |
〉 | The level of impairment of shareholders’ rights; |
〉 | The disclosed rationale; |
〉 | The ability to change the governance structure (e.g., limitations on shareholders’ right to amend the bylaws or charter, or supermajority vote requirements to amend the bylaws or charter); |
〉 | The ability of shareholders to hold directors accountable through annual director elections, or whether the company has a classified board structure; |
〉 | Any reasonable sunset provision; and |
〉 | Other relevant factors. |
〉 | The presence of a shareholder proposal addressing the same issue on the same ballot; |
〉 | The board’s rationale for seeking ratification; |
〉 | Disclosure of actions to be taken by the board should the ratification proposal fail; |
〉 | Disclosure of shareholder engagement regarding the board’s ratification request; |
〉 | The level of impairment to shareholders’ rights caused by the existing provision; |
〉 | The history of management and shareholder proposals on the provision at the company’s past meetings; |
〉 | Whether the current provision was adopted in response to the shareholder proposal; |
〉 | The company’s ownership structure; and |
〉 | Previous use of ratification proposals to exclude shareholder proposals. |
© 2018 ISS | Institutional Shareholder Services | 14 of 73 |
〉 | The company’s governing documents impose undue restrictions on shareholders’ ability to amend the bylaws. Such restrictions include but are not limited to: outright prohibition on the submission of binding shareholder proposals or share ownership requirements or time holding requirements in excess of SEC Rule 14a-8. Vote against on an ongoing basis. |
〉 | The non-audit fees paid to the auditor are excessive; |
〉 | The company receives an adverse opinion on the company’s financial statements from its auditor; or |
〉 | There is persuasive evidence that the Audit Committee entered into an inappropriate indemnification agreement with its auditor that limits the ability of the company, or its shareholders, to pursue legitimate legal recourse against the audit firm. |
〉 | Poor accounting practices are identified that rise to a level of serious concern, such as: fraud; misapplication of GAAP; and material weaknesses identified in Section 404 disclosures. Examine the severity, breadth, chronological sequence, and duration, as well as the company’s efforts at remediation or corrective actions, in determining whether withhold/against votes are warranted. |
〉 | There is an unmitigated misalignment between CEO pay and company performance (pay for performance); |
〉 | The company maintains significant problematic pay practices; or |
〉 | The board exhibits a significant level of poor communication and responsiveness to shareholders. |
〉 | The company fails to include a Say on Pay ballot item when required under SEC provisions, or under the company’s declared frequency of say on pay; or |
〉 | The company fails to include a Frequency of Say on Pay ballot item when required under SEC provisions. |
© 2018 ISS | Institutional Shareholder Services | 15 of 73 |
〉 | The presence of an anti-pledging policy, disclosed in the proxy statement, that prohibits future pledging activity; |
〉 | The magnitude of aggregate pledged shares in terms of total common shares outstanding, market value, and trading volume; |
〉 | Disclosure of progress or lack thereof in reducing the magnitude of aggregate pledged shares over time; |
〉 | Disclosure in the proxy statement that shares subject to stock ownership and holding requirements do not include pledged company stock; and |
〉 | Any other relevant factors. |
〉 | Material failures of governance, stewardship, risk oversight6, or fiduciary responsibilities at the company; |
〉 | Failure to replace management as appropriate; or |
〉 | Egregious actions related to a director’s service on other boards that raise substantial doubt about his or her ability to effectively oversee management and serve the best interests of shareholders at any company. |
〉 | Long-term financial performance of the company relative to its industry; |
〉 | Management’s track record; |
〉 | Background to the contested election; |
〉 | Nominee qualifications and any compensatory arrangements; |
〉 | Strategic plan of dissident slate and quality of the critique against management; |
〉 | Likelihood that the proposed goals and objectives can be achieved (both slates); and |
〉 | Stock ownership positions. |
© 2018 ISS | Institutional Shareholder Services | 16 of 73 |
〉 | The reasonableness/scope of the request; and |
〉 | The company’s existing disclosure on its current CEO succession planning process. |
〉 | The company has proxy access7, thereby allowing shareholders to nominate directors to the company’s ballot; and |
© 2018 ISS | Institutional Shareholder Services | 17 of 73 |
〉 | The company has adopted a majority vote standard, with a carve-out for plurality voting in situations where there are more nominees than seats, and a director resignation policy to address failed elections. |
〉 | Eliminate entirely directors’ and officers’ liability for monetary damages for violating the duty of care. |
〉 | Expand coverage beyond just legal expenses to liability for acts that are more serious violations of fiduciary obligation than mere carelessness. |
〉 | Expand the scope of indemnification to provide for mandatory indemnification of company officials in connection with acts that previously the company was permitted to provide indemnification for, at the discretion of the company’s board (i.e., “permissive indemnification”), but that previously the company was not required to indemnify. |
〉 | If the director was found to have acted in good faith and in a manner that s/he reasonably believed was in the best interests of the company; and |
〉 | If only the director’s legal expenses would be covered. |
〉 | The company’s board committee structure, existing subject matter expertise, and board nomination provisions relative to that of its peers; |
〉 | The company’s existing board and management oversight mechanisms regarding the issue for which board oversight is sought; |
〉 | The company’s disclosure and performance relating to the issue for which board oversight is sought and any significant related controversies; and |
〉 | The scope and structure of the proposal. |
© 2018 ISS | Institutional Shareholder Services | 18 of 73 |
〉 | Existing oversight mechanisms (including current committee structure) regarding the issue for which board oversight is sought; |
〉 | Level of disclosure regarding the issue for which board oversight is sought; |
〉 | Company performance related to the issue for which board oversight is sought; |
〉 | Board committee structure compared to that of other companies in its industry sector; and |
〉 | The scope and structure of the proposal. |
〉 | The scope of the proposal; |
〉 | The company’s current board leadership structure; |
〉 | The company’s governance structure and practices; |
〉 | Company performance; and |
〉 | Any other relevant factors that may be applicable. |
© 2018 ISS | Institutional Shareholder Services | 19 of 73 |
〉 | Ownership threshold: maximum requirement not more than three percent (3%) of the voting power; |
〉 | Ownership duration: maximum requirement not longer than three (3) years of continuous ownership for each member of the nominating group; |
〉 | Aggregation: minimal or no limits on the number of shareholders permitted to form a nominating group; |
〉 | Cap: cap on nominees of generally twenty-five percent (25%) of the board. |
© 2018 ISS | Institutional Shareholder Services | 20 of 73 |
〉 | Established a communication structure that goes beyond the exchange requirements to facilitate the exchange of information between shareholders and members of the board; |
〉 | Effectively disclosed information with respect to this structure to its shareholders; |
〉 | Company has not ignored majority-supported shareholder proposals or a majority withhold vote on a director nominee; and |
〉 | The company has an independent chairman or a lead director, according to ISS’ definition. This individual must be made available for periodic consultation and direct communication with major shareholders. |
© 2018 ISS | Institutional Shareholder Services | 21 of 73 |
〉 | The terms of the auditor agreement—the degree to which these agreements impact shareholders’ rights; |
〉 | The motivation and rationale for establishing the agreements; |
〉 | The quality of the company’s disclosure; and |
〉 | The company’s historical practices in the audit area. |
〉 | An auditor has a financial interest in or association with the company, and is therefore not independent; |
〉 | There is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor indicative of the company’s financial position; |
〉 | Poor accounting practices are identified that rise to a serious level of concern, such as fraud or misapplication of GAAP; or |
〉 | Fees for non-audit services (“Other” fees) are excessive. |
〉 | Non-audit (“other”) fees > audit fees + audit-related fees + tax compliance/preparation fees |
〉 | The tenure of the audit firm; |
© 2018 ISS | Institutional Shareholder Services | 22 of 73 |
〉 | The length of rotation specified in the proposal; |
〉 | Any significant audit-related issues at the company; |
〉 | The number of Audit Committee meetings held each year; |
〉 | The number of financial experts serving on the committee; and |
〉 | Whether the company has a periodic renewal process where the auditor is evaluated for both audit quality and competitive price. |
© 2018 ISS | Institutional Shareholder Services | 23 of 73 |
〉 | Any impediments to shareholders’ ability to amend the bylaws (i.e. supermajority voting requirements); |
〉 | The company’s ownership structure and historical voting turnout; |
〉 | Whether the board could amend bylaws adopted by shareholders; and |
〉 | Whether shareholders would retain the ability to ratify any board-initiated amendments. |
© 2018 ISS | Institutional Shareholder Services | 24 of 73 |
〉 | The company’s stated rationale for adopting such a provision; |
〉 | Disclosure of past harm from shareholder lawsuits in which plaintiffs were unsuccessful or shareholder lawsuits outside the jurisdiction of incorporation; |
〉 | The breadth of application of the bylaw, including the types of lawsuits to which it would apply and the definition of key terms; and |
© 2018 ISS | Institutional Shareholder Services | 25 of 73 |
〉 | Governance features such as shareholders’ ability to repeal the provision at a later date (including the vote standard applied when shareholders attempt to amend the bylaws) and their ability to hold directors accountable through annual director elections and a majority vote standard in uncontested elections. |
〉 | The ownership threshold (NOL protective amendments generally prohibit stock ownership transfers that would result in a new 5-percent holder or increase the stock ownership percentage of an existing 5-percent holder); |
〉 | The value of the NOLs; |
〉 | Shareholder protection mechanisms (sunset provision or commitment to cause expiration of the protective amendment upon exhaustion or expiration of the NOL); |
〉 | The company’s existing governance structure including: board independence, existing takeover defenses, track record of responsiveness to shareholders, and any other problematic governance concerns; and |
〉 | Any other factors that may be applicable. |
〉 | Shareholders have approved the adoption of the plan; or |
〉 | The board, in its exercise of its fiduciary responsibilities, determines that it is in the best interest of shareholders under the circumstances to adopt a pill without the delay in adoption that would result from seeking stockholder approval (i.e., the “fiduciary out” provision). A poison pill adopted under this fiduciary out will be put to a shareholder ratification vote within 12 months of adoption or expire. If the pill is not approved by a majority of the votes cast on this issue, the plan will immediately terminate. |
© 2018 ISS | Institutional Shareholder Services | 26 of 73 |
〉 | No lower than a 20 percent trigger, flip-in or flip-over; |
〉 | A term of no more than three years; |
〉 | No dead-hand, slow-hand, no-hand, or similar feature that limits the ability of a future board to redeem the pill; |
〉 | Shareholder redemption feature (qualifying offer clause); if the board refuses to redeem the pill 90 days after a qualifying offer is announced, 10 percent of the shares may call a special meeting or seek a written consent to vote on rescinding the pill. |
〉 | The ownership threshold to transfer (NOL pills generally have a trigger slightly below 5 percent); |
〉 | The value of the NOLs; |
〉 | Shareholder protection mechanisms (sunset provision, or commitment to cause expiration of the pill upon exhaustion or expiration of NOLs); |
〉 | The company’s existing governance structure including: board independence, existing takeover defenses, track record of responsiveness to shareholders, and any other problematic governance concerns; and |
〉 | Any other factors that may be applicable. |
〉 | The scope and structure of the proposal; |
〉 | The company’s stated confidential voting policy (or other relevant policies) and whether it ensures a “level playing field” by providing shareholder proponents with equal access to vote information prior to the annual meeting; |
〉 | The company’s vote standard for management and shareholder proposals and whether it ensures consistency and fairness in the proxy voting process and maintains the integrity of vote results; |
© 2018 ISS | Institutional Shareholder Services | 27 of 73 |
〉 | Whether the company’s disclosure regarding its vote counting method and other relevant voting policies with respect to management and shareholder proposals are consistent and clear; |
〉 | Any recent controversies or concerns related to the company’s proxy voting mechanics; |
〉 | Any unintended consequences resulting from implementation of the proposal; and |
〉 | Any other factors that may be relevant. |
〉 | The presence of a shareholder proposal addressing the same issue on the same ballot; |
〉 | The board’s rationale for seeking ratification; |
〉 | Disclosure of actions to be taken by the board should the ratification proposal fail; |
〉 | Disclosure of shareholder engagement regarding the board’s ratification request; |
〉 | The level of impairment to shareholders’ rights caused by the existing provision; |
〉 | The history of management and shareholder proposals on the provision at the company’s past meetings; |
〉 | Whether the current provision was adopted in response to the shareholder proposal; |
〉 | The company’s ownership structure; and |
〉 | Previous use of ratification proposals to exclude shareholder proposals. |
〉 | The election of fewer than 50 percent of the directors to be elected is contested in the election; |
〉 | One or more of the dissident’s candidates is elected; |
〉 | Shareholders are not permitted to cumulate their votes for directors; and |
〉 | The election occurred, and the expenses were incurred, after the adoption of this bylaw. |
〉 | Reasons for reincorporation; |
〉 | Comparison of company’s governance practices and provisions prior to and following the reincorporation; and |
〉 | Comparison of corporation laws of original state and destination state. |
© 2018 ISS | Institutional Shareholder Services | 28 of 73 |
〉 | Shareholders’ current right to act by written consent; |
〉 | The consent threshold; |
〉 | The inclusion of exclusionary or prohibitive language; |
〉 | Investor ownership structure; and |
〉 | Shareholder support of, and management’s response to, previous shareholder proposals. |
〉 | An unfettered8 right for shareholders to call special meetings at a 10 percent threshold; |
〉 | A majority vote standard in uncontested director elections; |
〉 | No non-shareholder-approved pill; and |
〉 | An annually elected board. |
〉 | Shareholders’ current right to call special meetings; |
〉 | Minimum ownership threshold necessary to call special meetings (10 percent preferred); |
〉 | The inclusion of exclusionary or prohibitive language; |
〉 | Investor ownership structure; and |
〉 | Shareholder support of, and management’s response to, previous shareholder proposals. |
© 2018 ISS | Institutional Shareholder Services | 29 of 73 |
〉 | Ownership structure; |
〉 | Quorum requirements; and |
〉 | Vote requirements. |
© 2018 ISS | Institutional Shareholder Services | 30 of 73 |
〉 | Past Board Performance: |
〉 | The company’s use of authorized shares during the last three years; |
〉 | The Current Request: |
〉 | Disclosure in the proxy statement of the specific purposes of the proposed increase; |
〉 | Disclosure in the proxy statement of specific and severe risks to shareholders of not approving the request; and |
〉 | The dilutive impact of the request as determined relative to an allowable increase calculated by ISS (typically 100 percent of existing authorized shares) that reflects the company’s need for shares and total shareholder returns. |
A. | Most companies: 100 percent of existing authorized shares. |
B. | Companies with less than 50 percent of existing authorized shares either outstanding or reserved for issuance: 50 percent of existing authorized shares. |
C. | Companies with one- and three-year total shareholder returns (TSRs) in the bottom 10 percent of the U.S. market as of the end of the calendar quarter that is closest to their most recent fiscal year end: 50 percent of existing authorized shares. |
D. | Companies at which both conditions (B and C) above are both present: 25 percent of existing authorized shares. |
© 2018 ISS | Institutional Shareholder Services | 31 of 73 |
〉 | The company discloses a compelling rationale for the dual-class capital structure, such as: |
〉 | The company’s auditor has concluded that there is substantial doubt about the company’s ability to continue as a going concern; or |
〉 | The new class of shares will be transitory; |
〉 | The new class is intended for financing purposes with minimal or no dilution to current shareholders in both the short term and long term; and |
〉 | The new class is not designed to preserve or increase the voting power of an insider or significant shareholder. |
〉 | The size of the company; |
〉 | The shareholder base; and |
〉 | The liquidity of the stock. |
〉 | Past Board Performance: |
〉 | The company’s use of authorized preferred shares during the last three years; |
〉 | The Current Request: |
〉 | Disclosure in the proxy statement of the specific purposes for the proposed increase; |
〉 | Disclosure in the proxy statement of specific and severe risks to shareholders of not approving the request; |
〉 | In cases where the company has existing authorized preferred stock, the dilutive impact of the request as determined by an allowable increase calculated by ISS (typically 100 percent of existing authorized shares) that reflects the company’s need for shares and total shareholder returns; and |
〉 | Whether the shares requested are blank check preferred shares that can be used for antitakeover purposes. |
© 2018 ISS | Institutional Shareholder Services | 32 of 73 |
〉 | More simplified capital structure; |
〉 | Enhanced liquidity; |
〉 | Fairness of conversion terms; |
〉 | Impact on voting power and dividends; |
〉 | Reasons for the reclassification; |
〉 | Conflicts of interest; and |
〉 | Other alternatives considered. |
〉 | The number of authorized shares will be proportionately reduced; or |
〉 | The effective increase in authorized shares is equal to or less than the allowable increase calculated in accordance with ISS’ Common Stock Authorization policy. |
〉 | Stock exchange notification to the company of a potential delisting; |
〉 | Disclosure of substantial doubt about the company’s ability to continue as a going concern without additional financing; |
〉 | The company’s rationale; or |
〉 | Other factors as applicable. |
〉 | Adverse governance changes; |
〉 | Excessive increases in authorized capital stock; |
〉 | Unfair method of distribution; |
〉 | Diminution of voting rights; |
〉 | Adverse conversion features; |
〉 | Negative impact on stock option plans; and |
© 2018 ISS | Institutional Shareholder Services | 33 of 73 |
〉 | Alternatives such as spin-off. |
〉 | Purchase price; |
〉 | Fairness opinion; |
〉 | Financial and strategic benefits; |
〉 | How the deal was negotiated; |
〉 | Conflicts of interest; |
〉 | Other alternatives for the business; |
〉 | Non-completion risk. |
〉 | Impact on the balance sheet/working capital; |
〉 | Potential elimination of diseconomies; |
〉 | Anticipated financial and operating benefits; |
〉 | Anticipated use of funds; |
〉 | Value received for the asset; |
〉 | Fairness opinion; |
〉 | How the deal was negotiated; |
〉 | Conflicts of interest. |
© 2018 ISS | Institutional Shareholder Services | 34 of 73 |
〉 | Dilution to existing shareholders’ positions; |
〉 | Terms of the offer - discount/premium in purchase price to investor, including any fairness opinion; termination penalties; exit strategy; |
〉 | Financial issues - company’s financial situation; degree of need for capital; use of proceeds; effect of the financing on the company’s cost of capital; |
〉 | Management’s efforts to pursue other alternatives; |
〉 | Control issues - change in management; change in control, guaranteed board and committee seats; standstill provisions; voting agreements; veto power over certain corporate actions; and |
〉 | Conflict of interest - arm’s length transaction, managerial incentives. |
〉 | The reasons for the change; |
〉 | Any financial or tax benefits; |
〉 | Regulatory benefits; |
〉 | Increases in capital structure; and |
〉 | Changes to the articles of incorporation or bylaws of the company. |
〉 | Increases in common or preferred stock in excess of the allowable maximum (see discussion under “Capital”); or |
〉 | Adverse changes in shareholder rights. |
〉 | Offer price/premium; |
〉 | Fairness opinion; |
〉 | How the deal was negotiated; |
〉 | Conflicts of interest; |
〉 | Other alternatives/offers considered; and |
〉 | Non-completion risk. |
© 2018 ISS | Institutional Shareholder Services | 35 of 73 |
〉 | Whether the company has attained benefits from being publicly-traded (examination of trading volume, liquidity, and market research of the stock); |
〉 | Balanced interests of continuing vs. cashed-out shareholders, taking into account the following: |
〉 | Are all shareholders able to participate in the transaction? |
〉 | Will there be a liquid market for remaining shareholders following the transaction? |
〉 | Does the company have strong corporate governance? |
〉 | Will insiders reap the gains of control following the proposed transaction? |
〉 | Does the state of incorporation have laws requiring continued reporting that may benefit shareholders? |
〉 | Percentage of assets/business contributed; |
〉 | Percentage ownership; |
〉 | Financial and strategic benefits; |
〉 | Governance structure; |
〉 | Conflicts of interest; |
〉 | Other alternatives; and |
〉 | Non-completion risk. |
〉 | Management’s efforts to pursue other alternatives; |
〉 | Appraisal value of assets; and |
〉 | The compensation plan for executives managing the liquidation. |
〉 | Valuation - Is the value to be received by the target shareholders (or paid by the acquirer) reasonable? While the fairness opinion may provide an initial starting point for assessing valuation reasonableness, emphasis is placed on the offer premium, market reaction, and strategic rationale. |
〉 | Market reaction - How has the market responded to the proposed deal? A negative market reaction should cause closer scrutiny of a deal. |
〉 | Strategic rationale - Does the deal make sense strategically? From where is the value derived? Cost and revenue synergies should not be overly aggressive or optimistic, but reasonably achievable. Management should also have a favorable track record of successful integration of historical acquisitions. |
〉 | Negotiations and process - Were the terms of the transaction negotiated at arm’s-length? Was the process fair and equitable? A fair process helps to ensure the best price for shareholders. Significant negotiation “wins” can also signify the deal makers’ competency. The comprehensiveness of the sales process (e.g., full auction, partial auction, no auction) can also affect shareholder value. |
© 2018 ISS | Institutional Shareholder Services | 36 of 73 |
〉 | Conflicts of interest - Are insiders benefiting from the transaction disproportionately and inappropriately as compared to non-insider shareholders? As the result of potential conflicts, the directors and officers of the company may be more likely to vote to approve a merger than if they did not hold these interests. Consider whether these interests may have influenced these directors and officers to support or recommend the merger. The CIC figure presented in the “ISS Transaction Summary” section of this report is an aggregate figure that can in certain cases be a misleading indicator of the true value transfer from shareholders to insiders. Where such figure appears to be excessive, analyze the underlying assumptions to determine whether a potential conflict exists. |
〉 | Governance - Will the combined company have a better or worse governance profile than the current governance profiles of the respective parties to the transaction? If the governance profile is to change for the worse, the burden is on the company to prove that other issues (such as valuation) outweigh any deterioration in governance. |
〉 | Dilution to existing shareholders’ position: The amount and timing of shareholder ownership dilution should be weighed against the needs and proposed shareholder benefits of the capital infusion. Although newly issued common stock, absent preemptive rights, is typically dilutive to existing shareholders, share price appreciation is often the necessary event to trigger the exercise of “out of the money” warrants and convertible debt. In these instances from a value standpoint, the negative impact of dilution is mitigated by the increase in the company’s stock price that must occur to trigger the dilutive event. |
〉 | Terms of the offer (discount/premium in purchase price to investor, including any fairness opinion, conversion features, termination penalties, exit strategy): |
〉 | The terms of the offer should be weighed against the alternatives of the company and in light of company’s financial condition. Ideally, the conversion price for convertible debt and the exercise price for warrants should be at a premium to the then prevailing stock price at the time of private placement. |
〉 | When evaluating the magnitude of a private placement discount or premium, consider factors that influence the discount or premium, such as, liquidity, due diligence costs, control and monitoring costs, capital scarcity, information asymmetry, and anticipation of future performance. |
〉 | Financial issues: |
〉 | The company’s financial condition; |
〉 | Degree of need for capital; |
〉 | Use of proceeds; |
〉 | Effect of the financing on the company’s cost of capital; |
〉 | Current and proposed cash burn rate; |
〉 | Going concern viability and the state of the capital and credit markets. |
〉 | Management’s efforts to pursue alternatives and whether the company engaged in a process to evaluate alternatives: A fair, unconstrained process helps to ensure the best price for shareholders. Financing alternatives can include joint ventures, partnership, merger, or sale of part or all of the company. |
〉 | Control issues: |
〉 | Change in management; |
〉 | Change in control; |
〉 | Guaranteed board and committee seats; |
〉 | Standstill provisions; |
© 2018 ISS | Institutional Shareholder Services | 37 of 73 |
〉 | Voting agreements; |
〉 | Veto power over certain corporate actions; and |
〉 | Minority versus majority ownership and corresponding minority discount or majority control premium. |
〉 | Conflicts of interest: |
〉 | Conflicts of interest should be viewed from the perspective of the company and the investor. |
〉 | Were the terms of the transaction negotiated at arm’s length? Are managerial incentives aligned with shareholder interests? |
〉 | Market reaction: |
〉 | The market’s response to the proposed deal. A negative market reaction is a cause for concern. Market reaction may be addressed by analyzing the one day impact on the unaffected stock price. |
〉 | Estimated value and financial prospects of the reorganized company; |
〉 | Percentage ownership of current shareholders in the reorganized company; |
〉 | Whether shareholders are adequately represented in the reorganization process (particularly through the existence of an Official Equity Committee); |
〉 | The cause(s) of the bankruptcy filing, and the extent to which the plan of reorganization addresses the cause(s); |
〉 | Existence of a superior alternative to the plan of reorganization; and |
〉 | Governance of the reorganized company. |
〉 | Valuation - Is the value being paid by the SPAC reasonable? SPACs generally lack an independent fairness opinion and the financials on the target may be limited. Compare the conversion price with the intrinsic value of the target company provided in the fairness opinion. Also, evaluate the proportionate value of the combined entity attributable to the SPAC IPO shareholders versus the pre-merger value of SPAC. Additionally, a private company discount may be applied to the target, if it is a private entity. |
〉 | Market reaction - How has the market responded to the proposed deal? A negative market reaction may be a cause for concern. Market reaction may be addressed by analyzing the one-day impact on the unaffected stock price. |
〉 | Deal timing - A main driver for most transactions is that the SPAC charter typically requires the deal to be complete within 18 to 24 months, or the SPAC is to be liquidated. Evaluate the valuation, market reaction, and potential conflicts of interest for deals that are announced close to the liquidation date. |
〉 | Negotiations and process - What was the process undertaken to identify potential target companies within specified industry or location specified in charter? Consider the background of the sponsors. |
〉 | Conflicts of interest - How are sponsors benefiting from the transaction compared to IPO shareholders? Potential conflicts could arise if a fairness opinion is issued by the insiders to qualify the deal rather than a third party or if management is encouraged to pay a higher price for the target because of an 80 percent rule (the charter requires that the fair market value of the target is at least equal to 80 perecnt of net assets of the |
© 2018 ISS | Institutional Shareholder Services | 38 of 73 |
SPAC). Also, there may be sense of urgency by the management team of the SPAC to close the deal since its charter typically requires a transaction to be completed within the 18-24 month timeframe. |
〉 | Voting agreements - Are the sponsors entering into enter into any voting agreements/tender offers with shareholders who are likely to vote against the proposed merger or exercise conversion rights? |
〉 | Governance - What is the impact of having the SPAC CEO or founder on key committees following the proposed merger? |
〉 | Length of request: Typically, extension requests range from two to six months, depending on the progression of the SPAC’s acquistion process. |
〉 | Pending transaction(s) or progression of the acquisition process: Sometimes an intial business combination was already put to a shareholder vote, but, for varying reasons, the transaction could not be consummated by the termination date and the SPAC is requesting an extension. Other times, the SPAC has entered into a definitive transaction agreement, but needs additional time to consummate or hold the shareholder meeting. |
〉 | Added incentive for non-redeeming shareholders: Sometimes the SPAC sponsor (or other insiders) will contribute, typically as a loan to the company, additional funds that will be added to the redemption value of each public share as long as such shares are not redeemed in connection with the extension request. The purpose of the “equity kicker” is to incentivize shareholders to hold their shares through the end of the requested extension or until the time the transaction is put to a shareholder vote, rather than electing redeemption at the extension proposal meeting. |
〉 | Prior extension requests: Some SPACs request additional time beyond the extension period sought in prior extension requests. |
〉 | Tax and regulatory advantages; |
〉 | Planned use of the sale proceeds; |
〉 | Valuation of spinoff; |
〉 | Fairness opinion; |
〉 | Benefits to the parent company; |
〉 | Conflicts of interest; |
〉 | Managerial incentives; |
〉 | Corporate governance changes; |
〉 | Changes in the capital structure. |
〉 | Hiring a financial advisor to explore strategic alternatives; |
〉 | Selling the company; or |
〉 | Liquidating the company and distributing the proceeds to shareholders. |
© 2018 ISS | Institutional Shareholder Services | 39 of 73 |
〉 | Prolonged poor performance with no turnaround in sight; |
〉 | Signs of entrenched board and management (such as the adoption of takeover defenses); |
〉 | Strategic plan in place for improving value; |
〉 | Likelihood of receiving reasonable value in a sale or dissolution; and |
〉 | The company actively exploring its strategic options, including retaining a financial advisor. |
© 2018 ISS | Institutional Shareholder Services | 40 of 73 |
1. | Maintain appropriate pay-for-performance alignment, with emphasis on long-term shareholder value: This principle encompasses overall executive pay practices, which must be designed to attract, retain, and appropriately motivate the key employees who drive shareholder value creation over the long term. It will take into consideration, among other factors, the link between pay and performance; the mix between fixed and variable pay; performance goals; and equity-based plan costs; |
2. | Avoid arrangements that risk “pay for failure”: This principle addresses the appropriateness of long or indefinite contracts, excessive severance packages, and guaranteed compensation; |
3. | Maintain an independent and effective compensation committee: This principle promotes oversight of executive pay programs by directors with appropriate skills, knowledge, experience, and a sound process for compensation decision-making (e.g., including access to independent expertise and advice when needed); |
4. | Provide shareholders with clear, comprehensive compensation disclosures: This principle underscores the importance of informative and timely disclosures that enable shareholders to evaluate executive pay practices fully and fairly; |
5. | Avoid inappropriate pay to non-executive directors: This principle recognizes the interests of shareholders in ensuring that compensation to outside directors is reasonable and does not compromise their independence and ability to make appropriate judgments in overseeing managers’ pay and performance. At the market level, it may incorporate a variety of generally accepted best practices. |
〉 | There is an unmitigated misalignment between CEO pay and company performance (pay for performance); |
〉 | The company maintains significant problematic pay practices; |
〉 | The board exhibits a significant level of poor communication and responsiveness to shareholders. |
〉 | There is no SOP on the ballot, and an against vote on an SOP would otherwise be warranted due to pay-for- performance misalignment, problematic pay practices, or the lack of adequate responsiveness on compensation issues raised previously, or a combination thereof; |
〉 | The board fails to respond adequately to a previous SOP proposal that received less than 70 percent support of votes cast; |
〉 | The company has recently practiced or approved problematic pay practices, such as option repricing or option backdating; or |
〉 | The situation is egregious. |
© 2018 ISS | Institutional Shareholder Services | 41 of 73 |
1. | Peer Group10 Alignment: |
〉 | The degree of alignment between the company’s annualized TSR rank and the CEO’s annualized total pay rank within a peer group, each measured over a three-year period. |
〉 | The rankings of CEO total pay and company financial performance within a peer group, each measured over a three-year period. |
〉 | The multiple of the CEO’s total pay relative to the peer group median in the most recent fiscal year. |
2. | Absolute Alignment11 – the absolute alignment between the trend in CEO pay and company TSR over the prior five fiscal years – i.e., the difference between the trend in annual pay changes and the trend in annualized TSR during the period. |
〉 | The ratio of performance- to time-based incentive awards; |
〉 | The overall ratio of performance-based compensation; |
〉 | The completeness of disclosure and rigor of performance goals; |
〉 | The company’s peer group benchmarking practices; |
〉 | Actual results of financial/operational metrics, both absolute and relative to peers; |
〉 | Special circumstances related to, for example, a new CEO in the prior FY or anomalous equity grant practices (e.g., bi-annual awards); |
〉 | Realizable pay12 compared to grant pay; and |
〉 | Any other factors deemed relevant. |
〉 | Problematic practices related to non-performance-based compensation elements; |
〉 | Incentives that may motivate excessive risk-taking or present a windfall risk; and |
〉 | Pay decisions that circumvent pay-for-performance, such as options backdating or waiving performance requirements. |
© 2018 ISS | Institutional Shareholder Services | 42 of 73 |
〉 | Repricing or replacing of underwater stock options/SARS without prior shareholder approval (including cash buyouts and voluntary surrender of underwater options); |
〉 | Extraordinary perquisites or tax gross-ups; |
〉 | New or materially amended agreements that provide for: |
〉 | Excessive termination or CIC severance payments (generally exceeding 3 times base salary and average/ target/most recent bonus); |
〉 | CIC severance payments without involuntary job loss or substantial diminution of duties (“single” or “modified single” triggers) or in connection with a problematic Good Reason definition; |
〉 | CIC excise tax gross-up entitlements (including “modified” gross-ups); |
〉 | Multi-year guaranteed awards that are not at risk due to rigorous performance conditions; |
〉 | Liberal CIC definition combined with any single-trigger CIC benefits; |
〉 | Insufficient executive compensation disclosure by externally-managed issuers (EMIs) such that a reasonable assessment of pay programs and practices applicable to the EMI’s executives is not possible; |
〉 | Any other provision or practice deemed to be egregious and present a significant risk to investors. |
〉 | Reason and motive for the options backdating issue, such as inadvertent vs. deliberate grant date changes; |
〉 | Duration of options backdating; |
〉 | Size of restatement due to options backdating; |
〉 | Corrective actions taken by the board or compensation committee, such as canceling or re-pricing backdated options, the recouping of option gains on backdated grants; and |
〉 | Adoption of a grant policy that prohibits backdating, and creates a fixed grant schedule or window period for equity grants in the future. |
〉 | Failure to respond to majority-supported shareholder proposals on executive pay topics; or |
〉 | Failure to adequately respond to the company’s previous say-on-pay proposal that received the support of less than 70 percent of votes cast, taking into account: |
〉 | The company’s response, including: |
〉 | Disclosure of engagement efforts with major institutional investors, including the frequency and timing of engagements and the company participants (including whether independent directors participated); |
〉 | Disclosure of the specific concerns voiced by dissenting shareholders that led to the say-on-pay opposition; |
〉 | Disclosure of specific and meaningful actions taken to address shareholders’ concerns; |
© 2018 ISS | Institutional Shareholder Services | 43 of 73 |
〉 | Other recent compensation actions taken by the company; |
〉 | Whether the issues raised are recurring or isolated; |
〉 | The company’s ownership structure; and |
〉 | Whether the support level was less than 50 percent, which would warrant the highest degree of responsiveness. |
〉 | Single- or modified-single-trigger cash severance; |
〉 | Single-trigger acceleration of unvested equity awards; |
〉 | Full acceleration of equity awards granted shortly before the change in control; |
〉 | Acceleration of performance awards above the target level of performance without compelling rationale; |
〉 | Excessive cash severance (generally >3x base salary and bonus); |
〉 | Excise tax gross-ups triggered and payable; |
〉 | Excessive golden parachute payments (on an absolute basis or as a percentage of transaction equity value); or |
〉 | Recent amendments that incorporate any problematic features (such as those above) or recent actions (such as extraordinary equity grants) that may make packages so attractive as to influence merger agreements that may not be in the best interests of shareholders; or |
〉 | The company’s assertion that a proposed transaction is conditioned on shareholder approval of the golden parachute advisory vote. |
© 2018 ISS | Institutional Shareholder Services | 44 of 73 |
〉 | Plan Cost: The total estimated cost of the company’s equity plans relative to industry/market cap peers, measured by the company’s estimated Shareholder Value Transfer (SVT) in relation to peers and considering both: |
〉 | SVT based on new shares requested plus shares remaining for future grants, plus outstanding unvested/ unexercised grants; and |
〉 | SVT based only on new shares requested plus shares remaining for future grants. |
〉 | Plan Features: |
〉 | Quality of disclosure around vesting upon a change in control (CIC); |
〉 | Discretionary vesting authority; |
〉 | Liberal share recycling on various award types; |
〉 | Lack of minimum vesting period for grants made under the plan; |
〉 | Dividends payable prior to award vesting. |
〉 | Grant Practices: |
〉 | The company’s three-year burn rate relative to its industry/market cap peers; |
〉 | Vesting requirements in CEO’s recent equity grants (3-year look-back); |
〉 | The estimated duration of the plan (based on the sum of shares remaining available and the new shares requested, divided by the average annual shares granted in the prior three years); |
〉 | The proportion of the CEO’s most recent equity grants/awards subject to performance conditions; |
〉 | Whether the company maintains a sufficient claw-back policy; |
〉 | Whether the company maintains sufficient post-exercise/vesting share-holding requirements. |
〉 | Awards may vest in connection with a liberal change-of-control definition; |
〉 | The plan would permit repricing or cash buyout of underwater options without shareholder approval (either by expressly permitting it – for NYSE and Nasdaq listed companies – or by not prohibiting it when the company has a history of repricing – for non-listed companies); |
〉 | The plan is a vehicle for problematic pay practices or a significant pay-for-performance disconnect under certain circumstances; |
〉 | The plan is excessively dilutive to shareholders’ holdings; or |
〉 | Any other plan features are determined to have a significant negative impact on shareholder interests. |
© 2018 ISS | Institutional Shareholder Services | 45 of 73 |
〉 | Amend the terms of outstanding options or SARs to reduce the exercise price of such outstanding options or SARs; |
〉 | Cancel outstanding options or SARs in exchange for options or SARs with an exercise price that is less than the exercise price of the original options or SARs; |
〉 | The cancellation of underwater options in exchange for stock awards; or |
〉 | Cash buyouts of underwater options. |
© 2018 ISS | Institutional Shareholder Services | 46 of 73 |
〉 | Severity of the pay-for-performance misalignment; |
〉 | Whether problematic equity grant practices are driving the misalignment; and/or |
〉 | Whether equity plan awards have been heavily concentrated to the CEO and/or the other NEOs. |
〉 | Addresses administrative features only; or |
〉 | Seeks approval for Section 162(m) purposes only, and the plan administering committee consists entirely of independent directors, per ISS’ Classification of Directors. Note that if the company is presenting the plan to shareholders for the first time for any reason (including after the company’s initial public offering), or if the proposal is bundled with other material plan amendments, then the recommendation will be case-by-case (see below). |
〉 | Seeks approval for Section 162(m) purposes only, and the plan administering committee does not consist entirely of independent directors, per ISS’ Classification of Directors. |
〉 | If the proposal requests additional shares and/or the amendments include a term extension or addition of full value awards as an award type, the recommendation will be based on the Equity Plan Scorecard evaluation as well as an analysis of the overall impact of the amendments. |
〉 | If the plan is being presented to shareholders for the first time (including after the company’s IPO), whether or not additional shares are being requested, the recommendation will be based on the Equity Plan Scorecard evaluation as well as an analysis of the overall impact of any amendments. |
〉 | If there is no request for additional shares and the amendments do not include a term extension or addition of full value awards as an award type, then the recommendation will be based entirely on an analysis of the overall impact of the amendments, and the EPSC evaluation will be shown only for informational purposes. |
© 2018 ISS | Institutional Shareholder Services | 47 of 73 |
〉 | Purchase price is at least 85 percent of fair market value; |
〉 | Offering period is 27 months or less; and |
〉 | The number of shares allocated to the plan is 10 percent or less of the outstanding shares. |
〉 | Purchase price is less than 85 percent of fair market value; or |
〉 | Offering period is greater than 27 months; or |
〉 | The number of shares allocated to the plan is more than 10 percent of the outstanding shares. |
© 2018 ISS | Institutional Shareholder Services | 48 of 73 |
〉 | Broad-based participation (i.e., all employees of the company with the exclusion of individuals with 5 percent or more of beneficial ownership of the company); |
〉 | Limits on employee contribution, which may be a fixed dollar amount or expressed as a percent of base salary; |
〉 | Company matching contribution up to 25 percent of employee’s contribution, which is effectively a discount of 20 percent from market value; and |
〉 | No discount on the stock price on the date of purchase when there is a company matching contribution. |
〉 | Historic trading patterns--the stock price should not be so volatile that the options are likely to be back “in-the-money” over the near term; |
〉 | Rationale for the re-pricing--was the stock price decline beyond management’s control?; |
〉 | Is this a value-for-value exchange?; |
〉 | Are surrendered stock options added back to the plan reserve?; |
〉 | Timing—repricing should occur at least one year out from any precipitous drop in company’s stock price; |
〉 | Option vesting—does the new option vest immediately or is there a black-out period?; |
〉 | Term of the option--the term should remain the same as that of the replaced option; |
〉 | Exercise price—should be set at fair market or a premium to market; |
〉 | Participants—executive officers and directors must be excluded. |
© 2018 ISS | Institutional Shareholder Services | 49 of 73 |
〉 | Executive officers and non-employee directors are excluded from participating; |
〉 | Stock options are purchased by third-party financial institutions at a discount to their fair value using option pricing models such as Black-Scholes or a Binomial Option Valuation or other appropriate financial models; and |
〉 | There is a two-year minimum holding period for sale proceeds (cash or stock) for all participants. |
〉 | Eligibility; |
〉 | Vesting; |
〉 | Bid-price; |
〉 | Term of options; |
〉 | Cost of the program and impact of the TSOs on company’s total option expense; and |
〉 | Option repricing policy. |
〉 | If the equity plan under which non-employee director grants are made is on the ballot, whether or not it warrants support; and |
〉 | An assessment of the following qualitative factors: |
〉 | The relative magnitude of director compensation as compared to companies of a similar profile; |
〉 | The presence of problematic pay practices relating to director compensation; |
© 2018 ISS | Institutional Shareholder Services | 50 of 73 |
〉 | Director stock ownership guidelines and holding requirements; |
〉 | Equity award vesting schedules; |
〉 | The mix of cash and equity-based compensation; |
〉 | Meaningful limits on director compensation; |
〉 | The availability of retirement benefits or perquisites; and |
〉 | The quality of disclosure surrounding director compensation. |
〉 | The total estimated cost of the company’s equity plans relative to industry/market cap peers, measured by the company’s estimated Shareholder Value Transfer (SVT) based on new shares requested plus shares remaining for future grants, plus outstanding unvested/unexercised grants; |
〉 | The company’s three-year burn rate relative to its industry/market cap peers (in certain circumstances); and |
〉 | The presence of any egregious plan features (such as an option repricing provision or liberal CIC vesting risk). |
〉 | The relative magnitude of director compensation as compared to companies of a similar profile; |
〉 | The presence of problematic pay practices relating to director compensation; |
〉 | Director stock ownership guidelines and holding requirements; |
〉 | Equity award vesting schedules; |
〉 | The mix of cash and equity-based compensation; |
〉 | Meaningful limits on director compensation; |
〉 | The availability of retirement benefits or perquisites; and |
〉 | The quality of disclosure surrounding director compensation. |
〉 | The company’s past practices regarding equity and cash compensation; |
〉 | Whether the company has a holding period or stock ownership requirements in place, such as a meaningful retention ratio (at least 50 percent for full tenure); and |
〉 | Whether the company has a rigorous claw-back policy in place. |
© 2018 ISS | Institutional Shareholder Services | 51 of 73 |
〉 | The percentage/ratio of net shares required to be retained; |
〉 | The time period required to retain the shares; |
〉 | Whether the company has equity retention, holding period, and/or stock ownership requirements in place and the robustness of such requirements; |
〉 | Whether the company has any other policies aimed at mitigating risk taking by executives; |
〉 | Executives’ actual stock ownership and the degree to which it meets or exceeds the proponent’s suggested holding period/retention ratio or the company’s existing requirements; and |
〉 | Problematic pay practices, current and past, which may demonstrate a short-term versus long-term focus. |
© 2018 ISS | Institutional Shareholder Services | 52 of 73 |
〉 | The company’s current level of disclosure of its executive compensation setting process, including how the company considers pay disparity; |
〉 | If any problematic pay practices or pay-for-performance concerns have been identified at the company; and |
〉 | The level of shareholder support for the company’s pay programs. |
〉 | First, vote for shareholder proposals advocating the use of performance-based equity awards, such as performance contingent options or restricted stock, indexed options or premium-priced options, unless the proposal is overly restrictive or if the company has demonstrated that it is using a “substantial” portion of performance-based awards for its top executives. Standard stock options and performance-accelerated awards do not meet the criteria to be considered as performance-based awards. Further, premium-priced options should have a meaningful premium to be considered performance-based awards. |
〉 | Second, assess the rigor of the company’s performance-based equity program. If the bar set for the performance- based program is too low based on the company’s historical or peer group comparison, generally vote for the proposal. Furthermore, if target performance results in an above target payout, vote for the shareholder proposal due to program’s poor design. If the company does not disclose the performance metric of the performance- based equity program, vote for the shareholder proposal regardless of the outcome of the first step to the test. |
〉 | Set compensation targets for the plan’s annual and long-term incentive pay components at or below the peer group median; |
〉 | Deliver a majority of the plan’s target long-term compensation through performance-vested, not simply time- vested, equity awards; |
〉 | Provide the strategic rationale and relative weightings of the financial and non-financial performance metrics or criteria used in the annual and performance-vested long-term incentive components of the plan; |
〉 | Establish performance targets for each plan financial metric relative to the performance of the company’s peer companies; |
〉 | Limit payment under the annual and performance-vested long-term incentive components of the plan to when the company’s performance on its selected financial performance metrics exceeds peer group median performance. |
© 2018 ISS | Institutional Shareholder Services | 53 of 73 |
〉 | What aspects of the company’s annual and long-term equity incentive programs are performance driven? |
〉 | If the annual and long-term equity incentive programs are performance driven, are the performance criteria and hurdle rates disclosed to shareholders or are they benchmarked against a disclosed peer group? |
〉 | Can shareholders assess the correlation between pay and performance based on the current disclosure? |
〉 | What type of industry and stage of business cycle does the company belong to? |
〉 | Adoption, amendment, or termination of a 10b5-1 Plan must be disclosed within two business days in a Form 8-K; |
〉 | Amendment or early termination of a 10b5-1 Plan is allowed only under extraordinary circumstances, as determined by the board; |
〉 | Ninety days must elapse between adoption or amendment of a 10b5-1 Plan and initial trading under the plan; |
〉 | Reports on Form 4 must identify transactions made pursuant to a 10b5-1 Plan; |
〉 | An executive may not trade in company stock outside the 10b5-1 Plan; |
〉 | Trades under a 10b5-1 Plan must be handled by a broker who does not handle other securities transactions for the executive. |
〉 | If the company has adopted a formal recoupment policy; |
〉 | The rigor of the recoupment policy focusing on how and under what circumstances the company may recoup incentive or stock compensation; |
〉 | Whether the company has chronic restatement history or material financial problems; |
〉 | Whether the company’s policy substantially addresses the concerns raised by the proponent; |
〉 | Disclosure of recoupment of incentive or stock compensation from senior executives or lack thereof; or |
〉 | Any other relevant factors. |
© 2018 ISS | Institutional Shareholder Services | 54 of 73 |
〉 | The triggering mechanism should be beyond the control of management; |
〉 | The amount should not exceed three times base amount (defined as the average annual taxable W-2 compensation during the five years prior to the year in which the change of control occurs); |
〉 | Change-in-control payments should be double-triggered, i.e., (1) after a change in control has taken place, and (2) termination of the executive as a result of the change in control. Change in control is defined as a change in the company ownership structure. |
〉 | The frequency and timing of the company’s share buybacks; |
〉 | The use of per-share metrics in incentive plans; |
〉 | The effect of recent buybacks on incentive metric results and payouts; and |
〉 | Whether there is any indication of metric result manipulation. |
© 2018 ISS | Institutional Shareholder Services | 55 of 73 |
〉 | The company’s current treatment of equity upon employment termination and/or in change-in-control situations (i.e., vesting is double triggered and/or pro rata, does it allow for the assumption of equity by acquiring company, the treatment of performance shares, etc.); |
〉 | Current employment agreements, including potential poor pay practices such as gross-ups embedded in those agreements. |
© 2018 ISS | Institutional Shareholder Services | 56 of 73 |
© 2018 ISS | Institutional Shareholder Services | 57 of 73 |
〉 | If the issues presented in the proposal are more appropriately or effectively dealt with through legislation or government regulation; |
〉 | If the company has already responded in an appropriate and sufficient manner to the issue(s) raised in the proposal; |
〉 | Whether the proposal’s request is unduly burdensome (scope or timeframe) or overly prescriptive; |
〉 | The company’s approach compared with any industry standard practices for addressing the issue(s) raised by the proposal; |
〉 | Whether there are significant controversies, fines, penalties, or litigation associated with the company’s environmental or social practices; |
〉 | If the proposal requests increased disclosure or greater transparency, whether reasonable and sufficient information is currently available to shareholders from the company or from other publicly available sources; and |
〉 | If the proposal requests increased disclosure or greater transparency, whether implementation would reveal proprietary or confidential information that could place the company at a competitive disadvantage. |
〉 | The company has already published a set of animal welfare standards and monitors compliance; |
〉 | The company’s standards are comparable to industry peers; and |
〉 | There are no recent significant fines, litigation, or controversies related to the company’s and/or its suppliers’ treatment of animals. |
© 2018 ISS | Institutional Shareholder Services | 58 of 73 |
〉 | The company is conducting animal testing programs that are unnecessary or not required by regulation; |
〉 | The company is conducting animal testing when suitable alternatives are commonly accepted and used by industry peers; or |
〉 | There are recent, significant fines or litigation related to the company’s treatment of animals. |
〉 | The potential impact of such labeling on the company’s business; |
〉 | The quality of the company’s disclosure on GE product labeling, related voluntary initiatives, and how this disclosure compares with industry peer disclosure; and |
〉 | Company’s current disclosure on the feasibility of GE product labeling. |
〉 | Whether the company has adequately disclosed mechanisms in place to prevent abuses; |
〉 | Whether the company has adequately disclosed the financial risks of the products/practices in question; |
〉 | Whether the company has been subject to violations of related laws or serious controversies; and |
〉 | Peer companies’ policies/practices in this area. |
© 2018 ISS | Institutional Shareholder Services | 59 of 73 |
〉 | The potential for reputational, market, and regulatory risk exposure; |
〉 | Existing disclosure of relevant policies; |
〉 | Deviation from established industry norms; |
〉 | Relevant company initiatives to provide research and/or products to disadvantaged consumers; |
〉 | Whether the proposal focuses on specific products or geographic regions; |
〉 | The potential burden and scope of the requested report; |
〉 | Recent significant controversies, litigation, or fines at the company. |
〉 | The company already discloses similar information through existing reports such as a supplier code of conduct and/or a sustainability report; |
〉 | The company has formally committed to the implementation of a toxic/hazardous materials and/or product safety and supply chain reporting and monitoring program based on industry norms or similar standards within a specified time frame; and |
〉 | The company has not been recently involved in relevant significant controversies, fines, or litigation. |
〉 | The company’s current level of disclosure regarding its product safety policies, initiatives, and oversight mechanisms; |
〉 | Current regulations in the markets in which the company operates; and |
〉 | Recent significant controversies, litigation, or fines stemming from toxic/hazardous materials at the company. |
© 2018 ISS | Institutional Shareholder Services | 60 of 73 |
〉 | Recent related fines, controversies, or significant litigation; |
〉 | Whether the company complies with relevant laws and regulations on the marketing of tobacco; |
〉 | Whether the company’s advertising restrictions deviate from those of industry peers; |
〉 | Whether the company entered into the Master Settlement Agreement, which restricts marketing of tobacco to youth; and |
〉 | Whether restrictions on marketing to youth extend to foreign countries. |
〉 | Whether the company complies with all laws and regulations; |
〉 | The degree that voluntary restrictions beyond those mandated by law might hurt the company’s competitiveness; and |
〉 | The risk of any health-related liabilities. |
〉 | Whether the company already provides current, publicly-available information on the impact that climate change may have on the company as well as associated company policies and procedures to address related risks and/or opportunities; |
〉 | The company’s level of disclosure compared to industry peers; and |
〉 | Whether there are significant controversies, fines, penalties, or litigation associated with the company’s climate change-related performance. |
〉 | The company already discloses current, publicly-available information on the impacts that GHG emissions may have on the company as well as associated company policies and procedures to address related risks and/or opportunities; |
〉 | The company’s level of disclosure is comparable to that of industry peers; and |
〉 | There are no significant, controversies, fines, penalties, or litigation associated with the company’s GHG emissions. |
© 2018 ISS | Institutional Shareholder Services | 61 of 73 |
〉 | Whether the company provides disclosure of year-over-year GHG emissions performance data; |
〉 | Whether company disclosure lags behind industry peers; |
〉 | The company’s actual GHG emissions performance; |
〉 | The company’s current GHG emission policies, oversight mechanisms, and related initiatives; and |
〉 | Whether the company has been the subject of recent, significant violations, fines, litigation, or controversy related to GHG emissions. |
〉 | The company complies with applicable energy efficiency regulations and laws, and discloses its participation in energy efficiency policies and programs, including disclosure of benchmark data, targets, and performance measures; or |
〉 | The proponent requests adoption of specific energy efficiency goals within specific timelines. |
〉 | The scope and structure of the proposal; |
〉 | The company’s current level of disclosure on renewable energy use and GHG emissions; and |
〉 | The company’s disclosure of policies, practices, and oversight implemented to manage GHG emissions and mitigate climate change risks. |
〉 | The gender and racial minority representation of the company’s board is reasonably inclusive in relation to companies of similar size and business; and |
〉 | The board already reports on its nominating procedures and gender and racial minority initiatives on the board and within the company. |
© 2018 ISS | Institutional Shareholder Services | 62 of 73 |
〉 | The degree of existing gender and racial minority diversity on the company’s board and among its executive officers; |
〉 | The level of gender and racial minority representation that exists at the company’s industry peers; |
〉 | The company’s established process for addressing gender and racial minority board representation; |
〉 | Whether the proposal includes an overly prescriptive request to amend nominating committee charter language; |
〉 | The independence of the company’s nominating committee; |
〉 | Whether the company uses an outside search firm to identify potential director nominees; and |
〉 | Whether the company has had recent controversies, fines, or litigation regarding equal employment practices. |
〉 | The company publicly discloses equal opportunity policies and initiatives in a comprehensive manner; |
〉 | The company already publicly discloses comprehensive workforce diversity data; and |
〉 | The company has no recent significant EEO-related violations or litigation. |
〉 | The company’s current policies and disclosure related to both its diversity and inclusion policies and practices and its compensation philosophy and fair and equitable compensation practices; |
〉 | Whether the company has been the subject of recent controversy, litigation, or regulatory actions related to gender pay gap issues; and |
〉 | Whether the company’s reporting regarding gender pay gap policies or initiatives is lagging its peers. |
© 2018 ISS | Institutional Shareholder Services | 63 of 73 |
〉 | The company’s current level of disclosure of its workplace health and safety performance data, health and safety management policies, initiatives, and oversight mechanisms; |
〉 | The nature of the company’s business, specifically regarding company and employee exposure to health and safety risks; |
〉 | Recent significant controversies, fines, or violations related to workplace health and safety; and |
〉 | The company’s workplace health and safety performance relative to industry peers. |
〉 | The company’s compliance with applicable regulations and guidelines; |
〉 | The company’s current level of disclosure regarding its security and safety policies, procedures, and compliance monitoring; and |
〉 | The existence of recent, significant violations, fines, or controversy regarding the safety and security of the company’s operations and/or facilities. |
〉 | Current disclosure of applicable policies and risk assessment report(s) and risk management procedures; |
〉 | The impact of regulatory non-compliance, litigation, remediation, or reputational loss that may be associated with failure to manage the company’s operations in question, including the management of relevant community and stakeholder relations; |
〉 | The nature, purpose, and scope of the company’s operations in the specific region(s); |
〉 | The degree to which company policies and procedures are consistent with industry norms; and |
〉 | The scope of the resolution. |
〉 | The company’s current level of disclosure of relevant policies and oversight mechanisms; |
〉 | The company’s current level of such disclosure relative to its industry peers; |
〉 | Potential relevant local, state, or national regulatory developments; and |
〉 | Controversies, fines, or litigation related to the company’s hydraulic fracturing operations. |
© 2018 ISS | Institutional Shareholder Services | 64 of 73 |
〉 | Operations in the specified regions are not permitted by current laws or regulations; |
〉 | The company does not currently have operations or plans to develop operations in these protected regions; or |
〉 | The company’s disclosure of its operations and environmental policies in these regions is comparable to industry peers. |
〉 | The nature of the company’s business; |
〉 | The current level of disclosure of the company’s existing related programs; |
〉 | The timetable and methods of program implementation prescribed by the proposal; |
〉 | The company’s ability to address the issues raised in the proposal; and |
〉 | How the company’s recycling programs compare to similar programs of its industry peers. |
〉 | The company already discloses similar information through existing reports or policies such as an environment, health, and safety (EHS) report; a comprehensive code of corporate conduct; and/or a diversity report; or |
〉 | The company has formally committed to the implementation of a reporting program based on Global Reporting Initiative (GRI) guidelines or a similar standard within a specified time frame. |
〉 | The company’s current disclosure of relevant policies, initiatives, oversight mechanisms, and water usage metrics; |
〉 | Whether or not the company’s existing water-related policies and practices are consistent with relevant internationally recognized standards and national/local regulations; |
〉 | The potential financial impact or risk to the company associated with water-related concerns or issues; and |
〉 | Recent, significant company controversies, fines, or litigation regarding water use by the company and its suppliers. |
© 2018 ISS | Institutional Shareholder Services | 65 of 73 |
〉 | The level of disclosure of company policies and procedures relating to data security, privacy, freedom of speech, information access and management, and Internet censorship; |
〉 | Engagement in dialogue with governments or relevant groups with respect to data security, privacy, or the free flow of information on the Internet; |
〉 | The scope of business involvement and of investment in countries whose governments censor or monitor the Internet and other telecommunications; |
〉 | Applicable market-specific laws or regulations that may be imposed on the company; and |
〉 | Controversies, fines, or litigation related to data security, privacy, freedom of speech, or Internet censorship. |
〉 | The scope and prescriptive nature of the proposal; |
〉 | Whether the company has significant and/or persistent controversies or regulatory violations regarding social and/or environmental issues; |
〉 | Whether the company has management systems and oversight mechanisms in place regarding its social and environmental performance; |
〉 | The degree to which industry peers have incorporated similar non-financial performance criteria in their executive compensation practices; and |
〉 | The company’s current level of disclosure regarding its environmental and social performance. |
〉 | The degree to which existing relevant policies and practices are disclosed; |
〉 | Whether or not existing relevant policies are consistent with internationally recognized standards; |
〉 | Whether company facilities and those of its suppliers are monitored and how; |
〉 | Company participation in fair labor organizations or other internationally recognized human rights initiatives; |
© 2018 ISS | Institutional Shareholder Services | 66 of 73 |
〉 | Scope and nature of business conducted in markets known to have higher risk of workplace labor/human rights abuse; |
〉 | Recent, significant company controversies, fines, or litigation regarding human rights at the company or its suppliers; |
〉 | The scope of the request; and |
〉 | Deviation from industry sector peer company standards and practices. |
〉 | The degree to which existing relevant policies and practices are disclosed, including information on the implementation of these policies and any related oversight mechanisms; |
〉 | The company’s industry and whether the company or its suppliers operate in countries or areas where there is a history of human rights concerns; |
〉 | Recent significant controversies, fines, or litigation regarding human rights involving the company or its suppliers, and whether the company has taken remedial steps; and |
〉 | Whether the proposal is unduly burdensome or overly prescriptive. |
〉 | The nature, purpose, and scope of the operations and business involved that could be affected by social or political disruption; |
〉 | Current disclosure of applicable risk assessment(s) and risk management procedures; |
〉 | Compliance with U.S. sanctions and laws; |
〉 | Consideration of other international policies, standards, and laws; and |
〉 | Whether the company has been recently involved in recent, significant controversies, fines, or litigation related to its operations in “high-risk” markets. |
〉 | Controversies surrounding operations in the relevant market(s); |
〉 | The value of the requested report to shareholders; |
〉 | The company’s current level of disclosure of relevant information on outsourcing and plant closure procedures; and |
〉 | The company’s existing human rights standards relative to industry peers. |
© 2018 ISS | Institutional Shareholder Services | 67 of 73 |
〉 | The company’s current disclosure of relevant lobbying policies, and management and board oversight; |
〉 | The company’s disclosure regarding trade associations or other groups that it supports, or is a member of, that engage in lobbying activities; and |
〉 | Recent significant controversies, fines, or litigation regarding the company’s lobbying-related activities. |
〉 | The company’s policies, and management and board oversight related to its direct political contributions and payments to trade associations or other groups that may be used for political purposes; |
〉 | The company’s disclosure regarding its support of, and participation in, trade associations or other groups that may make political contributions; and |
〉 | Recent significant controversies, fines, or litigation related to the company’s political contributions or political activities. |
〉 | There are no recent, significant controversies, fines, or litigation regarding the company’s political contributions or trade association spending; and |
〉 | The company has procedures in place to ensure that employee contributions to company-sponsored political action committees (PACs) are strictly voluntary and prohibit coercion. |
© 2018 ISS | Institutional Shareholder Services | 68 of 73 |
〉 | Past performance as a closed-end fund; |
〉 | Market in which the fund invests; |
〉 | Measures taken by the board to address the discount; and |
〉 | Past shareholder activism, board activity, and votes on related proposals. |
〉 | Past performance relative to its peers; |
〉 | Market in which the fund invests; |
〉 | Measures taken by the board to address the issues; |
〉 | Past shareholder activism, board activity, and votes on related proposals; |
〉 | Strategy of the incumbents versus the dissidents; |
〉 | Independence of directors; |
〉 | Experience and skills of director candidates; |
〉 | Governance profile of the company; |
〉 | Evidence of management entrenchment. |
〉 | Proposed and current fee schedules; |
〉 | Fund category/investment objective; |
〉 | Performance benchmarks; |
〉 | Share price performance as compared with peers; |
〉 | Resulting fees relative to peers; |
〉 | Assignments (where the advisor undergoes a change of control). |
© 2018 ISS | Institutional Shareholder Services | 69 of 73 |
〉 | Stated specific financing purpose; |
〉 | Possible dilution for common shares; |
〉 | Whether the shares can be used for antitakeover purposes. |
〉 | Potential competitiveness; |
〉 | Regulatory developments; |
〉 | Current and potential returns; and |
〉 | Current and potential risk. |
〉 | The fund’s target investments; |
〉 | The reasons given by the fund for the change; and |
〉 | The projected impact of the change on the portfolio. |
〉 | Political/economic changes in the target market; |
〉 | Consolidation in the target market; and |
〉 | Current asset composition. |
〉 | Potential competitiveness; |
〉 | Current and potential returns; |
〉 | Risk of concentration; |
© 2018 ISS | Institutional Shareholder Services | 70 of 73 |
〉 | Consolidation in target industry. |
〉 | The proposal to allow share issuances below NAV has an expiration date no more than one year from the date shareholders approve the underlying proposal, as required under the Investment Company Act of 1940; |
〉 | The sale is deemed to be in the best interests of shareholders by (1) a majority of the company’s independent directors and (2) a majority of the company’s directors who have no financial interest in the issuance; and |
〉 | The company has demonstrated responsible past use of share issuances by either: |
〉 | Outperforming peers in its 8-digit GICS group as measured by one- and three-year median TSRs; or |
〉 | Providing disclosure that its past share issuances were priced at levels that resulted in only small or moderate discounts to NAV and economic dilution to existing non-participating shareholders. |
〉 | Strategies employed to salvage the company; |
〉 | The fund’s past performance; |
〉 | The terms of the liquidation. |
〉 | The degree of change implied by the proposal; |
〉 | The efficiencies that could result; |
〉 | The state of incorporation; |
〉 | Regulatory standards and implications. |
〉 | Removal of shareholder approval requirement to reorganize or terminate the trust or any of its series; |
〉 | Removal of shareholder approval requirement for amendments to the new declaration of trust; |
〉 | Removal of shareholder approval requirement to amend the fund’s management contract, allowing the contract to be modified by the investment manager and the trust management, as permitted by the 1940 Act; |
〉 | Allow the trustees to impose other fees in addition to sales charges on investment in a fund, such as deferred sales charges and redemption fees that may be imposed upon redemption of a fund’s shares; |
〉 | Removal of shareholder approval requirement to engage in and terminate subadvisory arrangements; |
〉 | Removal of shareholder approval requirement to change the domicile of the fund. |
〉 | Regulations of both states; |
© 2018 ISS | Institutional Shareholder Services | 71 of 73 |
〉 | Required fundamental policies of both states; |
〉 | The increased flexibility available. |
〉 | Fees charged to comparably sized funds with similar objectives; |
〉 | The proposed distributor’s reputation and past performance; |
〉 | The competitiveness of the fund in the industry; |
〉 | The terms of the agreement. |
〉 | Resulting fee structure; |
〉 | Performance of both funds; |
〉 | Continuity of management personnel; |
〉 | Changes in corporate governance and their impact on shareholder rights. |
〉 | Performance of the fund’s Net Asset Value (NAV); |
〉 | The fund’s history of shareholder relations; |
〉 | The performance of other funds under the advisor’s management. |
© 2018 ISS | Institutional Shareholder Services | 72 of 73 |
© 2018 ISS | Institutional Shareholder Services | 73 of 73 |
A-1 | A short-term obligation rated ‘A-1’ is rated in the highest category by S&P. The obligor’s capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong. |
A-2 | A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory. |
A-3 | A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. |
B | A short-term obligation rated ‘B’ is regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation. |
C | A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. |
D | A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when payments on an obligation are not made on the due date, unless S&P Global Ratings believes that such payments will be made with any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to ‘D’ if it subject to a distressed exchange offer. |
• | Preliminary ratings may be assigned to obligations, most commonly structured and project finance issues, pending receipt of final documentation and legal opinions. |
• | Preliminary ratings may be assigned to obligations that will likely be issued upon the obligor’s emergence from bankruptcy or similar reorganization, based on late-stage reorganization plans, documentation and discussions with the obligor. Preliminary ratings may also be assigned to the obligors. These ratings consider the anticipated general credit quality of the reorganized or post-bankruptcy issuer as well as attributes of the anticipated obligation(s). |
• | Preliminary ratings may be assigned to entities that are being formed or that are in the process of being independently established when, in S&P’s opinion, documentation is close to final. Preliminary ratings may also be assigned to these entities’ obligations. |
• | Preliminary ratings may be assigned when a previously unrated entity is undergoing a well-formulated restructuring, recapitalization, significant financing or other transformative event, generally at the point that investor or lender commitments are invited. The preliminary rating may be assigned to the entity and to its proposed obligation(s). These preliminary ratings consider the anticipated general credit quality of the obligor, as well as attributes of the anticipated obligation(s), assuming successful completion of the transformative event. Should the transformative event not occur, S&P would likely withdraw these preliminary ratings. |
• | A preliminary recovery rating may be assigned to an obligation that has a preliminary issue credit rating. |
F1 | HIGHEST SHORT-TERM CREDIT QUALITY. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature. |
F2 | GOOD SHORT-TERM CREDIT QUALITY. Good intrinsic capacity for timely payment of financial commitments. |
F3 | FAIR SHORT-TERM CREDIT QUALITY. The intrinsic capacity for timely payment of financial commitments is adequate. |
B | SPECULATIVE SHORT-TERM CREDIT QUALITY. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions. |
C | HIGH SHORT-TERM DEFAULT RISK. Default is a real possibility. |
RD | RESTRICTED DEFAULT. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Typically applicable to entity ratings only. |
D | DEFAULT. Indicates a broad-based default event for an entity, or the default of a short-term obligation. |
• | The ratings do not predict a specific percentage of default likelihood or failure likelihood over any given time period. |
• | The ratings do not opine on the market value of any issuer’s securities or stock, or the likelihood that this value may change. |
• | The ratings do not opine on the liquidity of the issuer’s securities or stock. |
• | The ratings do not opine on the possible loss severity on an obligation should an issuer (or an obligation with respect to structured finance transactions) default, except in the following two cases: |
• | Ratings assigned to individual obligations of issuers in corporate finance, banks, non-bank financial institutions, insurance and covered bonds. |
• | In limited circumstances for U.S. public finance obligations where Chapter 9 of the Bankruptcy Code provides reliably superior prospects for ultimate recovery to local government obligations that benefit from a statutory lien on revenues or during the pendency of a bankruptcy proceeding under the Code if there is sufficient visibility on potential recovery prospects. |
• | The ratings do not opine on the suitability of an issuer as a counterparty to trade credit. |
• | The ratings do not opine on any quality related to an issuer’s business, operational or financial profile other than the agency‘s opinion on its relative vulnerability to default or in the case of bank Viability Ratings on its relative vulnerability to failure. For the avoidance of doubt, not all defaults will be considered a default for rating purposes. Typically, a default relates to a liability payable to an unaffiliated, outside investor. |
• | The ratings do not opine on any quality related to a transaction’s profile other than the agency’s opinion on the relative vulnerability to default of an issuer and/or of each rated tranche or security. |
• | The ratings do not predict a specific percentage of extraordinary support likelihood over any given period. |
• | In the case of bank Support Ratings and Support Rating Floors, the ratings do not opine on any quality related to an issuer’s business, operational or financial profile other than the agency’s opinion on its relative likelihood of receiving external extraordinary support. |
• | The ratings do not opine on the suitability of any security for investment or any other purposes. |
P-1 | Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations. |
P-2 | Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations. |
P-3 | Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations. |
NP | Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories. |
R-1 (high) | Highest credit quality. The capacity for the payment of short-term financial obligations as they fall due is exceptionally high. Unlikely to be adversely affected by future events. |
R-1 (middle) | Superior credit quality. The capacity for the payment of short-term financial obligations as they fall due is very high. Differs from R-1 (high) by a relatively modest degree. Unlikely to be significantly vulnerable to future events. |
R-1 (low) | Good credit quality. The capacity for the payment of short-term financial obligations as they fall due is substantial. Overall strength is not as favorable as higher rating categories. May be vulnerable to future events, but qualifying negative factors are considered manageable. |
R-2 (high) | Upper end of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events. |
R-2 (middle) | Adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events or may be exposed to other factors that could reduce credit quality. |
R-2 (low) | Lower end of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events. A number of challenges are present that could affect the issuer’s ability to meet such obligations. |
R-3 | Lowest end of adequate credit quality. There is a capacity for the payment of short-term financial obligations as they fall due. May be vulnerable to future events and the certainty of meeting such obligations could be impacted by a variety of developments. |
R-4 | Speculative credit quality. The capacity for the payment of short-term financial obligations as they fall due is uncertain. |
R-5 | Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet short-term financial obligations as they fall due. |
D | When the issuer has filed under any applicable bankruptcy, insolvency or winding up statute or there is a failure to satisfy and obligation after the exhaustion of grace periods, a downgrade to D may occur. DBRS may also use SD (Selective Default) in cases where only some securities are impacted, such as the case of a “distressed exchange.” |
• | Likelihood of payment — capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; |
• | Nature of and provisions of the obligation, and the promise we impute; and |
• | Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights. |
AAA | An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity to meet its financial commitments on the obligation is extremely strong. |
AA | An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitments on the obligation is very strong. |
A | An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong. |
BBB | An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken the obligor’s capacity to meet its financial commitments on the obligation. |
BB | An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitments on the obligation. |
B | An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitments on the obligation. |
CCC | An obligation rated ‘CCC’ is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitments on the obligation. |
CC | An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is used when a default has not yet occurred but S&P expects default to be a virtual certainty, regardless of the anticipated time to default. |
C | An obligation rated ‘C; is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared with obligations that are rated higher. |
D | An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when payments on an obligation are not made on the due date, unless S&P Global Ratings believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The ‘D” rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to ‘D’ if it is subject to a distressed exchange offer. |
AAA | HIGHEST CREDIT QUALITY. ‘AAA’ ratings denote the lowest expectation of default risk. They are assigned only in case of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. |
AA | VERY HIGH CREDIT QUALITY. ‘AA’ ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. |
A | HIGH CREDIT QUALITY. ‘A’ ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business economic conditions than is the case for higher ratings. |
BBB | GOOD CREDIT QUALITY. ‘BBB’ ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity. |
BB | SPECULATIVE. ‘BB’ ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists that supports the servicing of financial commitments. |
B | HIGHLY SPECULATIVE. ‘B’ ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment. |
CCC | SUBSTANTIAL CREDIT RISK. Default is a real possibility. |
CC | VERY HIGH LEVELS OF CREDIT RISK. Default of some kind appears probable. |
C | NEAR DEFAULT. A default or default-like process has begun, or the issuer is in standstill, or for a closed funding vehicle, payment capacity is irrevocably impaired. Conditions that are indicative of a ‘C’ category rating for an issuer include: |
•
the issuer has entered into a grace or cure period following non-payment of a material financial obligation;
• the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or • the formal announcement by the issuer or their agent of a distressed debt exchange; • a closed financing vehicle where payment capacity is irrevocably impaired such that it is not expected to pay interest and/or principal in full during the life of the transaction, but where no payment default is imminent. |
|
RD | RESTRICTED DEFAULT. ‘RD’ ratings indicate an issuer that in Fitch’s opinion has experienced: |
•
an uncured payment default or distressed debt exchange on a bond, loan or other material financial obligation, but
• has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and • has not otherwise ceased operating. This would include: • the selective payment default on a specific class or currency of debt; • the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation; • the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; • ordinary execution of a distressed debt exchange on one or more material financial obligations. |
|
D | DEFAULT. ‘D’ ratings indicate an issuer that in Fitch Ratings’ opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased business. |
Aaa | Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk. |
Aa | Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. |
A | Obligations rated A are considered upper-medium grade and are subject to low credit risk. |
Baa | Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics. |
Ba | Obligations rated Ba are judged to be speculative and are subject to substantial credit risk. |
B | Obligations rated B are considered speculative and are subject to high credit risk. |
Caa | Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk. |
Ca | Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. |
C | Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest. |
AAA | Highest credit quality. The capacity for the payment of financial obligations is exceptionally high and unlikely to be adversely affected by future events. |
AA | Superior credit quality. The capacity for the payment of financial obligations is considered high. Credit quality differs from AAA only to a small degree. Unlikely to be significantly vulnerable to future events. |
A | Good credit quality. The capacity for the payment of financial obligations is substantial, but of lesser credit quality than AA. May be vulnerable to future events, but qualifying negative factors are considered manageable. |
BBB | Adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. May be vulnerable to future events. |
BB | Speculative, non-investment grade credit quality. The capacity for the payment of financial obligations is uncertain. Vulnerable to future events. |
B | Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet financial obligations. |
CCC/CC/C | Very highly speculative credit quality. In danger of defaulting on financial obligations. There is little difference between these three categories, although CC and C ratings are normally applied to obligations that are seen as highly likely to default, or subordinated to obligations rated in the CCC to B range. Obligations in respect of which default has not technically taken place but is considered inevitable may be rated in the C category. |
D | When the issuer has filed under any applicable bankruptcy, insolvency or winding up statute or there is a failure to satisfy an obligation after the exhaustion of grace periods, a downgrade to D may occur. DBRS may also use SD (Selective Default) in cases where only some securities are impacted, such as the case of a “distressed exchange.” |
AAA | An insurer rated ‘AAA’ has extremely strong financial security characteristics. ‘AAA’ is the highest insurer financial strength rating assigned by S&P. |
AA | An insurer rated ‘AA’ has very strong financial security characteristics, differing only slightly from those rated higher. |
A | An insurer rated ‘A’ has strong financial security characteristics, but is somewhat more likely to be affected by adverse business conditions than are insurers with higher ratings. |
BBB | An insurer rated ‘BBB’ has good financial security characteristics, but is more likely to be affected by adverse business conditions than are higher-rated insurers. |
BB | An insurer rated ‘BB’ has marginal financial security characteristics. Positive attributes exist, but adverse business conditions could lead to insufficient ability to meet financial commitments. |
B | An insurer rated ‘B’ has weak financial security characteristics. Adverse business conditions will likely impair its ability to meet financial commitments. |
CCC | An insurer rated ‘CCC’ has very weak financial security characteristics, and is dependent on favorable business conditions to meet financial commitments. |
CC | An insurer rated ‘CC’ has extremely weak financial security characteristics and is likely not to meet some of its financial commitments. |
R | An insurer rated ‘R’ is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. The rating does not apply to insurers subject only to nonfinancial actions such as market conduct violations. |
SD or D |
An
insurer rated ‘SD’ (selective default) or ‘D” is in default on one or more of its insurance policy obligations but is not under regulatory supervision that would involve a rating of ‘R’.
The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of similar action if payments on a policy obligation are at risk. A ‘D’ rating is assigned when S&P Global Ratings believes that the default will be a general default and that the obligor will fail to pay substantially all of its obligations in full in accordance with the policy terms. An ‘SD’ rating is assigned when S&P Global Ratings believes that the insurer has selectively defaulted on a specific class of policies but it will continue to meet its payment obligations on other classes of obligations. An ‘SD’ includes the completion of a distressed exchange offer. Claim denials due to lack of coverage or other legally permitted defenses are not considered defaults. |
AAA | EXCEPTIONALLY STRONG. ‘AAA’ IFS Ratings denote the lowest expectation of ceased or interrupted payments. They are assigned only in the case of exceptionally strong capacity to meet policyholder and contract obligations. This capacity is highly unlikely to be adversely affected by foreseeable events. |
AA | VERY STRONG. ‘AA’ IFS Ratings denote a very low expectation of ceased or interrupted payments. They indicate very strong capacity to meet policyholder and contract obligations. This capacity is not significantly vulnerable to foreseeable events. |
A | STRONG. ‘A’ IFS Ratings denote a low expectation of ceased or interrupted payments. They indicate strong capacity to meet policyholder and contract obligations. This capacity may, nonetheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. |
BBB | GOOD. ‘BBB’ IFS Ratings indicate that there is currently a low expectation of ceased or interrupted payments. The capacity to meet policyholder and contract obligations on a timely basis is considered adequate, but adverse changes in circumstances and economic conditions are more likely to impact this capacity. |
BB | MODERATELY WEAK. ‘BB’ IFS Ratings indicate that there is an elevated vulnerability to ceased or interrupted payments, particularly as the result of adverse economic or market changes over time. However, business or financial alternatives may be available to allow for policyholder and contract obligations to be met in a timely manner. |
B | WEAK. ‘B’ IFS Ratings indicate two possible conditions. If obligations are still being met on a timely basis, there is significant risk that ceased or interrupted payments could occur in the future, but a limited margin of safety remains. Capacity for continued timely payments is contingent upon a sustained, favorable business and economic environment, and favorable market conditions. Alternatively, a ‘B’ IFS Rating is assigned to obligations that have experienced ceased or interrupted payments, but with the potential for extremely high recoveries. Such obligations would possess a recovery assessment of ‘RR1’ (Outstanding). |
CCC | VERY WEAK. ‘CCC’ IFS Ratings indicate two possible conditions. If obligations are still being met on a timely basis, there is a real possibility that ceased or interrupted payments could occur in the future. Capacity for continued timely payments is solely reliant upon a sustained, favorable business and economic environment, and favorable market conditions. Alternatively, a ‘CCC’ IFS Rating is assigned to obligations that have experienced ceased or interrupted payments, and with the potential for average to superior recoveries. Such obligations would possess a recovery assessment of ‘RR2’ (Superior), ‘RR3’ (Good), and ‘RR4’ (Average). |
CC | EXTREMELY WEAK. ‘CC’ IFS Ratings indicate two possible conditions. If obligations are still being met on a timely basis, it is probable that ceased or interrupted payments will occur in the future. Alternatively, a ‘CC’ IFS Rating is assigned to obligations that have experienced ceased or interrupted payments, with the potential for average to below-average recoveries. Such obligations would possess a recovery assessment of ‘RR4’ (Average) or ‘RR5’ (Below Average). |
C | DISTRESSED. ‘C’ IFS Ratings indicate two possible conditions. If obligations are still being met on a timely basis, ceased or interrupted payments are imminent. Alternatively, a ‘C’ IFS Rating is assigned to obligations that have experienced ceased or interrupted payments, and with the potential for below average to poor recoveries. Such obligations would possess a recovery assessment of ‘RR5’ (Below Average) or ‘RR6’ (Poor). |
F1 | Insurers are viewed as having a strong capacity to meet their near-term obligations. When an insurer rated in this rating category is designated with a (+) sign, it is viewed as having a very strong capacity to meet near-term obligations. |
F2 | Insurers are viewed as having a good capacity to meet their near-term obligations. |
F3 | Insurers are viewed as having an adequate capacity to meet their near-term obligations. |
B | Insurers are viewed as having a weak capacity to meet their near-term obligations. |
C | Insurers are viewed as having a very weak capacity to meet their near-term obligations. |
RR1 | OUTSTANDING RECOVERY PROSPECTS GIVEN DEFAULT. ‘RR1’ rated securities have characteristics consistent with securities historically recovering 91%–100% of current principal and related interest. |
RR2 | SUPERIOR RECOVERY PROSPECTS GIVEN DEFAULT. ‘RR2’ rated securities have characteristics consistent with securities historically recovering 71%–90% of current principal and related interest. |
RR3 | GOOD RECOVERY PROSPECTS GIVEN DEFAULT. ‘RR3’ rated securities have characteristics consistent with securities historically recovering 51%–70% of current principal and related interest. |
RR4 | AVERAGE RECOVERY PROSPECTS GIVEN DEFAULT. ‘RR4’ rated securities have characteristics consistent with securities historically recovering 31%–50% of current principal and related interest. |
RR5 |
BELOW
AVERAGE RECOVERY PROSPECTS GIVEN DEFAULT. ‘RR5’ rated securities have characteristics consistent with securities historically recovering 11%–
30% of current principal and related interest. |
RR6 | POOR RECOVERY PROSPECTS GIVEN DEFAULT. ‘RR6’ rated securities have characteristics consistent with securities historically recovering 0%–10% of current principal and related interest. |
• | The ratings do not predict a specific percentage of recovery should a default occur. |
• | The ratings do not opine on the market value of any issuer’s securities or stock, or the likelihood that this value may change. |
• | The ratings do not opine on the liquidity of the issuer’s securities or stock. |
• | The ratings do not opine on any quality related to an issuer or transaction’s profile other than the agency’s opinion on the relative loss severity of the rated obligation should the obligation default. |
• | Recovery Ratings, in particular, reflect a fundamental analysis of the underlying relationship between financial claims on an entity or transaction and potential sources to meet those claims. The size of such sources and claims is subject to a wide variety of dynamic factors outside the agency’s analysis that will influence actual recovery rates. |
• | Out-of-court settlements are not contemplated by Fitch’s Recovery Ratings, other than in broad concession payments for some classes of junior-ranking bonds in some specific scenarios. In reality, out-of-court settlements will be influenced heavily by creditor composition and local political and economic imperatives, and Fitch does not attempt to factor these into its Recovery Ratings. |
• | Creditor composition is outside the scope of Recovery Ratings. Concentration of creditors at a certain level of the capital structure, common ownership of claims at different levels in a capital structure or even differing entry prices of investors within a creditor class can have a profound effect on actual recovery rates. |
• | Information flows for companies close to default can become erratic, which may reduce Fitch’s visibility on its Recovery Ratings. |
• | Enterprise valuations play a key role in the allocation of recoveries across credit classes. Recovery Ratings assume cash-flow multiples or advance rates, which are driven by subjective forecasts of Fitch analysts of post-restructuring cash flow, achievable exit multiples and appropriate advance rates. All these parameters are subject to volatility before and during the restructuring process. |
• | Recovery rates are strongly influenced by legal decisions. Potential legal decisions are not factored into Fitch’s Recovery Ratings. |
Aaa | Insurance companies rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk. |
Aa | Insurance companies rated Aa are judged to be of high quality and are subject to very low credit risk. |
A | Insurance companies rated A are judged to be of upper-medium grade and are subject to low credit risk. |
Baa | Insurance companies rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics. |
Ba | Insurance companies rated Ba are judged to be speculative and are subject to substantial credit risk. |
B | Insurance companies rated B are considered speculative and are subject to high credit risk. |
Caa | Insurance companies rated Caa are judged to be speculative of poor standing and are subject to very high credit risk. |
Ca | Insurance companies rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. |
C | Insurance companies rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest. |
P-1 | Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations. |
P-2 | Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations. |
P-3 | Issuers (or supporting institutions) rated Prim-3 have an acceptable ability to repay short-term obligations. |
P-4 | Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories. |
• | Amortization schedule — the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and |
• | Source of payment — the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note. |
SP-1 | Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation. |
SP-2 | Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes. |
SP-3 | Speculative capacity to pay principal and interest. |
D | ‘D’ is assigned upon failure to pay the note when due, completion of a distressed exchange offer, or the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example, due to automatic stay provisions. |
MIG 1 | This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support or demonstrated broad-based access to the market for refinancing. |
MIG 2 | This designation denotes strong credit quality. Margins of protection are ample although not so large as in the preceding group. |
MIG 3 | This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established. |
SG | This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection. |
VMIG 1 | This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
VMIG 2 | This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
VMIG 3 | This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal protections that ensure the timely payment of purchase price upon demand. |
SG | This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand. |
Pfd-1 | Preferred shares rated Pfd-1 are of superior credit quality, and are supported by entities with strong earnings and balance sheet characteristics. Pfd-1 securities generally correspond with companies whose senior bonds are rated in the AAA or AA categories. As is the case with all rating categories, the relationship between senior debt ratings and preferred share ratings should be understood as one where the senior debt rating effectively sets a ceiling for the preferred shares issued by the entity. However, there are cases where the preferred share rating could be lower than the normal relationship with the issuer’s senior debt rating. |
Pfd-2 | Preferred shares rated Pfd-2 are of satisfactory credit quality. Protection of dividends and principal is still substantial, but earnings, the balance sheet and coverage ratios are not as strong as Pfd-1 rated companies. Generally, Pfd-2 ratings correspond with companies whose senior bonds are rated in the “A” category. |
Pfd-3 | Preferred shares rated Pfd-3 are of adequate credit quality. While protection of dividends and principal is still considered acceptable, the issuing entity is more susceptible to adverse changes in financial and economic conditions, and there may be other adverse conditions present which detract from debt protection. Pfd-3 ratings generally correspond with companies whose senior bonds are rated in the higher end of the BBB category. |
Pfd-4 | Preferred shares rated Pfd-4 are speculative, where the degree of protection afforded to dividends and principal is uncertain, particularly during periods of economic adversity. Companies with preferred shares rated Pfd-4 generally coincide with entities that have senior bond ratings ranging from the lower end of the BBB category through the BB category. |
Pfd-5 | Preferred shares rated Pfd-5 are highly speculative and the ability of the entity to maintain timely dividend and principal payments in the future is highly uncertain. Entities with a Pfd-5 rating generally have senior bond ratings of B or lower. Preferred shares rated Pfd-5 often have characteristics that, if not remedied, may lead to default. |
D | When the issuer has filed under any applicable bankruptcy, insolvency or winding up statute or there is failure to satisfy an obligation after the exhaustion of grace periods, a downgrade to D may occur. DBRS may also use SD (Selective Default) in cases where only some securities are impacted, such as in the case of a “distressed exchange.” |
Item 28. | Exhibits |
(a)(1) | Certificate of Trust dated February 25, 2010. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on October 21, 2013 (Accession Number 0001193125-13-405484). |
(a)(2) | Amended and Restated Declaration of Trust dated February 19, 2014. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on February 25, 2014 (Accession Number 0001193125-14-067429). |
(a)(3) | Amended Schedule A to the Amended and Restated Declaration of Trust as of January 23, 2020. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on February 3, 2020 (Accession Number 0001193125-20-022964). |
(a)(4) | Memorandum of Association and Articles of Association of Diversified Alternatives Fund CS Ltd. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on March 15, 2017 (Accession Number 0001193125-17-083544). |
(a)(5) | Memorandum of Association and Articles of Association of Managed Futures Fund CS Ltd. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on December 4, 2017 (Accession Number 0001193125-17-360066). |
(b) | Amended and Restated By-Laws dated March 6, 2019. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on June 26, 2019 (Accession Number 0001193125-19-182457). |
(c) | Instruments Defining Rights of Security Holders. Incorporated by reference to Exhibits (a) and (b). |
(d)(1) | Management Agreement dated November 1, 2019. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on November 22, 2019 (Accession Number 0001193125-19-298434). |
(d)(2) | Amended Schedule A to the Management Agreement as of November 12, 2019. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on November 22, 2019 (Accession Number 0001193125-19-298434). |
(d)(3) | Management Agreement for Diversified Alternatives Fund CS Ltd. as of November 1, 2019. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on February 3, 2020 (Accession Number 0001193125-20-022964). |
(d)(4) | Management Agreement for Managed Futures Fund CS Ltd. as of November 1, 2019. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on February 3, 2020 (Accession Number 0001193125-20-022964). |
(d)(5) | Management Agreement dated March 11, 2019 for JPMorgan BetaBuilders 1-5 Year U.S. Aggregate Bond ETF and JPMorgan BetaBuilders U.S. Equity ETF. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on June 26, 2019 (Accession Number 0001193125-19-182457). |
(e)(1) | Distribution Agreement dated October 1, 2017. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on November 3, 2017 (Accession Number 0001193125-17-332834). |
(e)(2) | Amended Schedule A to the Distribution Agreement as of December 18, 2019. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on February 3, 2020 (Accession Number 0001193125-20-022964). |
(f) | Not applicable. |
(g)(1)(a) | Amended and Restated Global Custody and Fund Accounting Agreement dated October 1, 2017, between J.P. Morgan Exchange-Traded Fund Trust and JPMorgan Chase Bank, N.A. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on November 3, 2017 (Accession Number 0001193125-17-332834). |
(g)(1)(b) | Amendment to the Amended and Restated Global Custody and Fund Accounting Agreement as of December 18, 2019, including Amended Schedule A. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on February 3, 2020 (Accession Number 0001193125-20-022964). |
(g)(2)(a) | Third Party Securities Lending Rider, dated June 18, 2018 to the Amended and Restated Global Custody and Fund Accounting Agreement, dated October 1, 2017 among J.P. Morgan Exchange-Traded Fund Trust, JPMorgan Chase Bank, N.A. and Citibank, N.A. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on January 22, 2019 (Accession Number 0001193125-19-013831). |
(g)(2)(b) | Amendment to Third Party Securities Lending Rider as of December 18, 2019. Filed herewith. |
(h)(1)(a) | Agency Services Agreement dated May 8, 2014. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on May 14, 2014 (Accession Number 0001193125-14-198331). |
(h)(1)(b) | Amendment to the Agency Services Agreement as of December 18, 2019, including Amended Exhibit A. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on February 3, 2020 (Accession Number 0001193125-20-022964). |
(h)(2) | Sublicense Agreement. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on June 27, 2018 (Accession Number 0001193125-18-205847). |
(h)(3)(a) | Global Securities Lending Agency Agreement, dated June 18, 2018, between J.P. Morgan Exchange-Traded Fund Trust and Citibank, N.A. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on January 22, 2019 (Accession Number 0001193125-19-013831). |
(h)(3)(b) | Amendment to the Global Securities Lending Agency Agreement as of October 4, 2018. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on January 22, 2019 (Accession Number 0001193125-19-013831). |
(h)(3)(c) | Amendment to the Global Securities Lending Agency Agreement as of December 11, 2018. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on January 22, 2019 (Accession Number 0001193125-19-013831). |
(h)(3)(d) | Amendment to the Global Securities Lending Agency Agreement as of November 14, 2019. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on November 22, 2019 (Accession Number 0001193125-19-298434). |
(h)(3)(e) | Amendment to the Global Securities Lending Agency Agreement as of December 18, 2019. Filed herewith. |
(i) | Opinion and consent of counsel. Filed herewith. |
(j) | Consent of independent registered accounting firm. Filed herewith. |
(k) | Not applicable. |
(l) | Not applicable. |
(m) | Not applicable. |
(n) | Not applicable. |
(o) | Reserved. |
(p)(1) | Code of Ethics of the Trust. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on May 14, 2014 (Accession Number 0001193125-14-198331). |
(p)(2) | Code of Ethics of J.P. Morgan Asset Management, Inc., including JPMIM, effective February 1, 2005; Revised December 13, 2019. Filed herewith. |
(p)(3) | Code of Ethics of the Distributor dated February 1, 2005, as amended. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on November 3, 2017 (Accession Number 0001193125-17-332834). |
(99)(a) | Power of Attorney for the Trustees. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on September 16, 2019 (Accession Number 0001193125-19-245861). |
(99)(b) | Power of Attorney for Lauren A. Paino. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on September 16, 2019 (Accession Number 0001193125-19-245861). |
(99)(c) | Power of Attorney for Joanna Gallegos. Incorporated herein by reference to the Registrant’s Registration Statement as filed with the Securities and Exchange Commission on September 16, 2019 (Accession Number 0001193125-19-245861). |
Item 29. | Persons Controlled by or Under Common Control with the Fund |
Item 30. | Indemnification |
Item 31. | Business and Other Connections of the Investment Adviser |
Item 32. | Principal Underwriters |
Name with Registrant | Positions and Office with JPMorgan Distribution Services, Inc. | Positions and Offices with the Funds | ||
Brian Bergere | Director, Managing Director & President | None | ||
Andrea Lisher | Director & Managing Director | None | ||
Joseph F. Sanzone | Director & Managing Director | None | ||
Wendy Barta | Director & Executive Director | None | ||
Omar F. Altahawi | Managing Director & Treasurer | None | ||
Gary C. Krivo | Managing Director & Chief Risk Officer | None | ||
Michael R. Machulski | Director & Managing Director | None | ||
Brian S. Shlissel | Managing Director | Vice President | ||
James A. Hoffman | Executive Director | None | ||
Carmine Lekstutis | Executive Director & Chief Legal Officer | Assistant Secretary | ||
Jessica K. Ditullio | Executive Director & Assistant Secretary | Assistant Secretary | ||
Kevin Kloza | Executive Director and Chief Compliance Officer | None | ||
Andrea Lang | Vice President & Anti-Money Laundering Compliance Officer | None |
Name with Registrant | Positions and Office with JPMorgan Distribution Services, Inc. | Positions and Offices with the Funds | ||
Frank J. Drozek | Executive Director & Assistant Treasurer | None | ||
Christopher J. Mohr | Executive Director & Assistant Treasurer | None | ||
Joanna Corey | Executive Director & Assistant Secretary | None | ||
Marcela Castro | Executive Director & Assistant Secretary | None | ||
Afiya M. Jordan | Vice President & Secretary | None | ||
Amee Kantesaria | Vice President & Assistant Secretary | None | ||
Amy Hsu | Vice President & Assistant Secretary | None | ||
Andris Alexander | Vice President & Assistant Secretary | None | ||
Theodore Weisman | Vice President & Assistant Secretary | None |
Item 33. | Location of Accounts and Records |
Item 34. | Management Services |
Item 35. | Undertakings |
J.P. Morgan Exchange-Traded Fund Trust | |
By: |
Joanna
Gallegos*
|
Name: Joanna Gallegos | |
Title: President and Principal Executive Officer |
Gary
L. French*
|
Gary L. French |
Trustee |
Thomas
P. Lemke*
|
Thomas P. Lemke |
Trustee |
Emily
Youssouf*
|
Emily Youssouf |
Trustee |
Lauren
A. Paino*
|
Lauren A. Paino |
Treasurer and Principal Financial Officer |
*By: |
/s/
Elizabeth A. Davin
|
Elizabeth A. Davin | |
Attorney-in-fact |
Robert
J. Grassi*
|
Robert J. Grassi |
Trustee |
Lawrence
Maffia*
|
Lawrence Maffia |
Trustee |
Robert
Deutsch*
|
Robert Deutsch |
Trustee |
Joanna
Gallegos*
|
Joanna Gallegos |
President and Principal Executive Officer |
Exhibit No. | Description |
(g)(2)(b) | Amendment to Third Party Securities Lending Rider as of December 18, 2019. |
(h)(3)(e) | Amendment to the Global Securities Lending Agency Agreement as of December 18, 2019. |
(i) | Opinion and consent of counsel. |
(j) | Consent of independent registered accounting firm. |
(p)(2) | Code of Ethics of J.P. Morgan Asset Management, Inc., including JPMIM, effective February 1, 2005; Revised December 13, 2019. |
AMENDMENT TO
THIRD PARTY SECURITIES LENDING RIDER
This Amendment (Amendment) to the Third Party Securities Lending Rider, dated June 18, 2018 as amended October 4, 2018, December 11, 2018 and November 14, 2019 among J.P. Morgan Exchange-Traded Fund Trust on behalf of its series listed on Schedule A thereto severally and not jointly (each, a Lender), JPMorgan Chase Bank, N.A. (J.P. Morgan), and Citibank, N.A. (Agent), as amended (the Rider) is made and entered into as of December 18, 2019.
WITNESSETH:
WHEREAS, the parties entered into the Rider pursuant to which J.P. Morgan was appointed to provide certain Services described therein;
WHEREAS, the parties desire to amend Schedule A to the Rider as set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, defined terms used in this Amendment shall have the meaning ascribed to such terms in the Rider.
2. Amendments. The Rider shall be amended as follows:
(A) Schedule A to the Rider is hereby deleted in its entirety and replaced with Schedule A attached hereto.
(B) Save as modified by this Amendment, the Rider is confirmed and shall remain in full force and effect.
3. Representations. Each party represents to the other parties that all representations contained in the Rider are true and accurate as of the date of this Amendment, and that such representations are deemed to be given or repeated by each party, as the case may be, on the date of this Amendment.
4. Entire Agreement. This Amendment and the Rider and any documents referred to in each of them, constitutes the whole agreement between the parties relating to their subject matter and supersedes and extinguishes any other drafts, agreements, undertakings, representations, warranties and arrangements of any nature, whether in writing or oral, relating to such subject matter. If any of the provisions of this Amendment are inconsistent with or in conflict with any of the provisions of the Rider then, to the extent of any such inconsistency or conflict, the provisions of this Amendment shall prevail as between the parties. Each reference to the Rider shall hereafter be construed as a reference to the Rider as amended as of October 4, 2018, December 11, 2018 and November 14, 2019 and further amended by this Amendment. Except as provided in this Amendment, the provisions of the Rider remain in full force and effect. No amendment or modification to this Amendment shall be valid unless made in writing and executed by each Party hereto.
5. Counterparts. This Amendment may be executed in any number of counterparts which together shall constitute one agreement. Each party hereto may enter into this Amendment by executing a counterpart and this Amendment shall not take effect until it has been executed by all parties.
6. Law and Jurisdiction. This Amendment shall be governed by, and construed in accordance with the laws of the State of New York.
1
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.
JPMorgan Chase Bank, N.A. | J.P. Morgan Exchange-Traded Fund Trust | |||||||
on behalf of its series listed on Schedule A hereto severally and not jointly |
||||||||
By: |
/s/ Joseph Ruggerio |
By: |
/s/ Joanna Gallegos |
|||||
Name: | Joseph Ruggerio | Name: | Joanna Gallegos | |||||
Title: | Executive Director | Title: | President | |||||
Date: | 2-14-20 | Date: | 1/30/2020 |
Citibank, N.A.
By: |
/s/ John Bilello |
|
Name: | John Bilello | |
Title: | Managing Director | |
Agency Securities Lending Citi |
||
Date: | 2/7/20 |
2
SCHEDULE A
List of Lenders & Accounts
Fund Name |
Custody Account Number |
|
JPMORGAN DIVERSIFIED RETURN GLOBAL EQUITY ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN EMERGING MARKETS EQUITY ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN INTERNATIONAL EQUITY ETF | [Redacted] | |
JPMORGAN DISCIPLINED HIGH YIELD ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN EUROPE EQUITY ETF | [Redacted] | |
JPMORGAN EVENT DRIVEN ETF | [Redacted] | |
JPMORGAN ULTRA-SHORT INCOME ETF | [Redacted] | |
JPMORGAN LONG/SHORT ETF | [Redacted] | |
JPMORGAN USD EMERGING MARKETS SOVEREIGN BOND ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN U.S. EQUITY ETF | [Redacted] | |
JPMORGAN U.S. DIVIDEND ETF | [Redacted] | |
JPMORGAN U.S. MINIMUM VOLATILITY ETF | [Redacted] | |
JPMORGAN U.S. MOMENTUM FACTOR ETF | [Redacted] | |
JPMORGAN U.S. QUALITY FACTOR ETF | [Redacted] | |
JPMORGAN U.S. VALUE FACTOR ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN U.S. MID CAP EQUITY ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN U.S. SMALL CAP EQUITY ETF | [Redacted] | |
JPMORGAN BETABUILDERS EUROPE ETF | [Redacted] | |
JPMORGAN BETABUILDERS DEVELOPED ASIA ex-JAPAN ETF | [Redacted] | |
JPMORGAN BETABUILDERS JAPAN ETF | [Redacted] | |
JPMORGAN BETABUILDERS CANADA ETF | [Redacted] | |
JPMORGAN BETABUILDERS MSCI US REIT ETF | [Redacted] | |
JPMORGAN ULTRA-SHORT MUNICIPAL ETF | [Redacted] | |
JPMORGAN MUNICIPAL ETF | [Redacted] | |
JPMORGAN CORPORATE BOND RESEARCH ENHANCED ETF | [Redacted] | |
JPMORGAN U.S. AGGREGATE BOND ETF | [Redacted] | |
JPMORGAN CORE PLUS BOND ETF | [Redacted] | |
JPMORGAN BETABUILDERS U.S. EQUITY ETF | [Redacted] | |
JPMORGAN BETABUILDERS 1-5 YEAR U.S. AGGREGATE BOND ETF | [Redacted] | |
JPMORGAN INFLATION MANAGED BOND ETF | [Redacted] | |
JPMORGAN INCOME BUILDER BLEND ETF | [Redacted] | |
JPMORGAN BETABUILDERS INTERNATIONAL EQUITY ETF | [Redacted] | |
JPMORGAN BETABUILDERS U.S. MID CAP EQUITY ETF | [Redacted] |
3
AMENDMENT
TO THE AGENCY AGREEMENT
THIS AMENDMENT dated as of the 18th day of December 2019 (the Amendment) hereby amends the Global Securities Lending Agency Agreement dated as of June 18, 2018 as amended October 4, 2018, December 11, 2018 and November 14, 2019 (the Agency Agreement), between J.P. Morgan Exchange-Traded Fund Trust, a Delaware Statutory Trust on behalf of each series portfolio listed on Exhibit A to the Agency Agreement severally and not jointly, (each series portfolio, a Lender) and Citibank, N.A. (Agent) (collectively, the Parties). All capitalized terms used but not defined herein shall have the meaning given to them in the Agency Agreement.
WHEREAS, Lender wishes to further amend the Agency Agreement to add additional borrowers; and,
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the Parties hereby agree as follows:
1. |
Exhibit A |
2. |
Exhibit A to the Agency Agreement is hereby deleted in its entirety and amended with the Exhibit A attached hereto to add JPMorgan BetaBuilders U.S. Mid Cap Equity ETF as a Lender under the Agency Agreement. |
3. |
Miscellaneous |
(a) |
This Amendment supplements and further amends the Agency Agreement. The provisions set forth in this Amendment supersede all prior negotiations, understandings and agreements bearing upon the subject matter covered herein, including any conflicting provisions of the Agency Agreement or any provisions of the Agency Agreement that directly cover or indirectly bear upon matters covered under this Amendment. |
(b) |
Each reference to the Agency Agreement in that document and in every other agreement, contract or instrument to which the Parties are bound, shall hereafter be construed as a reference to the Agency Agreement as amended as of October 4, 2018, December 11, 2018 and November 14, 2019 and further amended by this Amendment. Except as provided in this Amendment, the provisions of the Agency Agreement remain in full force and effect. No amendment or modification to this Amendment shall be valid unless made in writing and executed by each Party hereto. |
(c) |
Paragraph headings in this Amendment are included for convenience only and are not to be used to construe or interpret this Amendment. |
(d) |
This Amendment may be executed in counterparts, each of which shall be an original but all of which, taken together, shall constitute one and the same agreement. |
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed all as of the day and year first above written.
Citibank, N.A., as Agent | J.P. Morgan Exchange-Traded Fund Trust, a Delaware Statutory Trust on behalf of each series portfolio listed on Exhibit A to the Agency Agreement severally and not jointly, as Lender | |||||||
By: |
/s/ John Bilello |
By: |
/s/ Joanna Gallegos |
|||||
Name: | John Bilello | Name: | Joanna Gallegos | |||||
Title: | Managing Director | Title: | President | |||||
Agency Securities Lending Citi |
Date: | 1/30/20 | ||||||
Date: | 2/2/20 |
Exhibit A
to the Global Securities Lending Agency Agreement,
Between CITIBANK, N.A., As the Agent
and the Lender
LIST OF DESIGNATED ACCOUNTS
Fund Name |
Custody Account Number |
|
JPMORGAN DIVERSIFIED RETURN GLOBAL EQUITY ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN EMERGING MARKETS EQUITY ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN INTERNATIONAL EQUITY ETF | [Redacted] | |
JPMORGAN DISCIPLINED HIGH YIELD ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN EUROPE EQUITY ETF | [Redacted] | |
JPMORGAN EVENT DRIVEN ETF | [Redacted] | |
JPMORGAN ULTRA-SHORT INCOME ETF | [Redacted] | |
JPMORGAN LONG/SHORT ETF | [Redacted] | |
JPMORGAN USD EMERGING MARKETS SOVEREIGN BOND ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN U.S. EQUITY ETF | [Redacted] | |
JPMORGAN U.S. DIVIDEND ETF | [Redacted] | |
JPMORGAN U.S. MINIMUM VOLATILITY ETF | [Redacted] | |
JPMORGAN U.S. MOMENTUM FACTOR ETF | [Redacted] | |
JPMORGAN U.S. QUALITY FACTOR ETF | [Redacted] | |
JPMORGAN U.S. VALUE FACTOR ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN U.S. MID CAP EQUITY ETF | [Redacted] | |
JPMORGAN DIVERSIFIED RETURN U.S. SMALL CAP EQUITY ETF | [Redacted] | |
JPMORGAN BETABUILDERS EUROPE ETF | [Redacted] | |
JPMORGAN BETABUILDERS DEVELOPED ASIA ex-JAPAN ETF | [Redacted] | |
JPMORGAN BETABUILDERS JAPAN ETF | [Redacted] | |
JPMORGAN BETABUILDERS CANADA ETF | [Redacted] | |
JPMORGAN BETABUILDERS MSCI US REIT ETF | [Redacted] | |
JPMORGAN ULTRA-SHORT MUNICIPAL ETF | [Redacted] | |
JPMORGAN MUNICIPAL ETF | [Redacted] | |
JPMORGAN CORPORATE BOND RESEARCH ENHANCED ETF | [Redacted] | |
JPMORGAN U.S. AGGREGATE BOND ETF | [Redacted] | |
JPMORGAN CORE PLUS BOND ETF | [Redacted] | |
JPMORGAN BETABUILDERS U.S. EQUITY ETF | [Redacted] | |
JPMORGAN BETABUILDERS 1-5 YEAR U.S. AGGREGATE BOND ETF | [Redacted] | |
JPMORGAN INFLATION MANAGED BOND ETF | [Redacted] | |
JPMORGAN INCOME BUILDER BLEND ETF | [Redacted] | |
JPMORGAN BETABUILDERS INTERNATIONAL EQUITY ETF | [Redacted] | |
JPMORGAN BETABUILDERS U.S. MID CAP EQUITY ETF | [Redacted] |
Each Lender agrees to give irrevocable instructions to its custodian (JPMorgan Chase Bank, N.A.) substantially in the form of those set out in Annex 1 to this Exhibit A or as may be otherwise agreed with Agent.
[Balance of Page Intentionally Left Blank]
CITIBANK, N.A., Agent | J.P. MORGAN EXCHANGE-TRADED FUND TRUST on behalf of each of its series listed on Exhibit A severally and not jointly, Lender | |||||||||||
By: |
/s/ John Bilello |
By: |
/s/ Joanna Gallegos |
|||||||||
Name: | John Bilello | Name: | Joanna Gallegos | |||||||||
Title: |
Managing Director Agency Securities Lending Citi |
Title: | President |
Dated as of: 2/2/20
|
Three Bryant Park 1095 Avenue of the Americas New York, NY 10036-6797 +1 212 698 3500 Main +1 212 698 3599 Fax www.dechert.com |
February 27, 2020
J.P. Morgan Exchange-Traded Fund Trust
270 Park Avenue
New York, New York 10017
Re: |
J.P. Morgan Exchange-Traded Fund Trust |
File Nos. 333-191837 and 811-22903
Dear Ladies and Gentlemen:
We have acted as counsel for J.P. Morgan Exchange-Traded Fund Trust, a Delaware statutory trust (the Trust), and its separate series JPMorgan BetaBuilders Canada ETF, JPMorgan BetaBuilders Developed Asia ex-Japan ETF, JPMorgan BetaBuilders Europe ETF, JPMorgan BetaBuilders Japan ETF, JPMorgan BetaBuilders U.S. Equity ETF, JPMorgan Diversified Alternatives ETF, JPMorgan Diversified Return Emerging Markets Equity ETF, JPMorgan Diversified Return Europe Equity ETF, JPMorgan Diversified Return Global Equity ETF, JPMorgan Diversified Return International Equity ETF, JPMorgan Diversified Return U.S. Equity ETF, JPMorgan Diversified Return U.S. Mid Cap Equity ETF, JPMorgan Diversified Return U.S. Small Cap Equity ETF, JPMorgan Event Driven ETF, JPMorgan Long/Short ETF, JPMorgan Managed Futures Strategy ETF, JPMorgan U.S. Dividend ETF, JPMorgan U.S. Minimum Volatility ETF, JPMorgan U.S. Momentum Factor ETF, JPMorgan U.S. Quality Factor ETF and JPMorgan U.S. Value Factor ETF (the Funds), in connection with Post-Effective Amendment No. 250 to the Trusts Registration Statement on Form N-1A (the Registration Statement) filed with the Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the Securities Act) and Amendment No. 252 pursuant to the Investment Company Act of 1940, as amended.
We have examined and relied upon originals, copies or electronic mail transmissions of, among other things, the following: the Registration Statement; the Certificate of Trust of the Trust as filed with the Secretary of State of the State of Delaware; the Declaration of Trust of the Trust dated as of February 19, 2014, as amended to date; the By-Laws of the Trust dated as of February 19, 2014, as amended to date; certain resolutions adopted by the Board of Trustees of the Trust; and the Written Consent of the Initial Trustee of the Trust dated October 21, 2013. We have also examined such documents and questions of law as we have deemed necessary or appropriate for the purposes of the opinions expressed herein.
In rendering this opinion we have assumed, without independent verification, (i) the due authority of all individuals signing in representative capacities and the genuineness of signatures; (ii) the authenticity, completeness and continued effectiveness of all documents or copies furnished to us; (iii) that any resolutions provided have been duly adopted by the Trusts Board of Trustees; (iv) that the facts contained in the instruments and certificates or statements of public officials, officers and representatives of the Trust on which we have relied for the purposes of this opinion are true and correct; and (v) that no amendments, agreements, resolutions or actions have been approved, executed or adopted which would limit, supersede or modify the items described above.
Based upon the foregoing, we are of the opinion that the Trusts shares registered under the Securities Act, when issued and sold in accordance with the terms of purchase described in the Registration Statement, will be validly issued, fully paid and non-assessable.
The opinions expressed herein are given as of the date hereof and we undertake no obligation and hereby disclaim any obligation to advise you of any change after the date of this opinion pertaining to any matter referred to herein. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Registration Statement, unless and until we revoke such consent. In giving such consent, however, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act or the rules and regulations thereunder.
We are members of the Bar of the State of New York and do not hold ourselves out as being conversant with the laws of any jurisdiction other than those of the United States of America and the State of New York. We note that we are not licensed to practice law in the State of Delaware, and to the extent that any opinion herein involves the laws of the State of Delaware, such opinion should be understood to be based solely upon our review of the documents referred to above and the published statutes of the State of Delaware.
Very truly yours,
/s/Dechert LLP
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of J.P. Morgan Exchange-Traded Fund Trust of our reports dated December 20, 2019, relating to the financial statements and financial highlights for the funds constituting J.P. Morgan Exchange-Traded Fund Trust listed in Appendix A (the Funds), which appear in the Funds Annual Report on Form N-CSR for the year ended October 31, 2019. We also consent to the references to us under the headings Financial Statements, Independent Registered Public Accounting Firm and Financial Highlights in such Registration Statement.
/s/ PricewaterhouseCoopers LLP |
New York, New York |
February 24, 2020 |
Appendix A
JPMorgan BetaBuilders Canada ETF
JPMorgan BetaBuilders Developed Asia ex-Japan ETF
JPMorgan BetaBuilders Europe ETF
JPMorgan BetaBuilders Japan ETF
JPMorgan BetaBuilders U.S. Equity ETF
JPMorgan Diversified Alternatives ETF
JPMorgan Diversified Return Emerging Markets Equity ETF
JPMorgan Diversified Return Europe Equity ETF
JPMorgan Diversified Return Global Equity ETF
JPMorgan Diversified Return International Equity ETF
JPMorgan Diversified Return U.S. Equity ETF
JPMorgan Diversified Return U.S. Mid Cap Equity ETF
JPMorgan Diversified Return U.S. Small Cap Equity ETF
JPMorgan Event Driven ETF
JPMorgan Long/Short ETF
JPMorgan Managed Futures Strategy ETF
JPMorgan U.S. Dividend ETF
JPMorgan U.S. Minimum Volatility ETF
JPMorgan U.S. Momentum Factor ETF
JPMorgan U.S. Quality Factor ETF
JPMorgan U.S. Value Factor ETF
Code of Ethics for JPMAM
Last Revision Date: December 13, 2019
Last Review Date: December 13, 2019
Effective Date: 02/01/2005
TABLE OF CONTENTS
1. | Summary | 3 | ||||||
2. | Amendments to Previous Version Distributed January 30, 2019 | 4 | ||||||
3. | Scope | 4 | ||||||
4. | Reporting Requirements | 4 | ||||||
4.1. | Holdings Reports | 4 | ||||||
4.2. | Transaction Reports | 5 | ||||||
4.3 | Exceptions from Transaction Reporting Requirements | 6 | ||||||
5. | Personal Trading Requirements | 6 | ||||||
5.1 | Approved Broker Requirement | 6 | ||||||
5.2 | Blackout Provisions | 6 | ||||||
5.3 | Minimum Investment Holding Period and Market Timing Prohibition | 6 | ||||||
5.4 | Trade Reversals and Disciplinary Action | 7 | ||||||
6. | Books and Records to be maintained by Investment Advisers | 7 | ||||||
7. | Privacy | 7 | ||||||
8. | Anti-Corruption | 8 | ||||||
9. | Conflicts of Interest | 8 | ||||||
9.1 | Trading in Securities of Clients | 8 | ||||||
9.2 | Trading in Securities of Suppliers | 8 | ||||||
9.3 | Pre-clearance Procedures for Value-Added Investors | 8 | ||||||
9.4 | Gifts & Entertainment | 9 | ||||||
9.5 | Political Contributions and Activities | 10 | ||||||
9.6 | Charitable Contributions | 11 | ||||||
9.7 | Outside Business Activities | 11 | ||||||
10. | Training | 11 | ||||||
11. | Escalation Guidelines | 12 | ||||||
11.1 | Violation Prior to Material Violation | 12 | ||||||
11.2 | Material Violations | 12 | ||||||
12. | Defined Terms | 12 |
|
||
2 |
1. |
Summary |
This Code of Ethics for JPMorgan Asset Management (JPMAM) (the Code) has been adopted by the registered investment advisers of JPMAM in accordance with Rule 204A-1 under the Investment Advisers Act of 1940 (the Advisers Act). Rule 204A-1 requires an investment adviser registered under Section 203 of the Advisers Act to establish, maintain and enforce a written Code of Ethics.
This Code establishes our standards for ethical conduct which are premised on fundamental principles of openness, integrity, honesty and trust. In addition to the Code, J.P. Morgan Chase has a firmwide Code of Conduct that applies to all employees globally, including all JPMAM employees. In the event that a difference exists between any of the standards identified in the JPMC Code of Conduct and the Code, the more restrictive provision shall apply.
JPMAM hereby adopts the message from Jamie Dimon that was included in the JPMC Code of Conduct because it embodies JPMAMs ethical standards:
JPMorgan Chase is the respected company it is today because of our commitment to being accountable, straightforward and honest in all of our business dealings. Our people, our products and services, and our enduring dedication to integrity have made us one of the largest and most respected financial institutions in the world. It is paramount for us all not only as a company, but also as culture carriers to uphold that mission each and every day.
Our Code of Conduct reflects this shared obligation. We operate with the highest level of integrity and ethical conduct, at all times. We do the right thing even when its not the easy thing. We have zero tolerance for unethical behavior. And, we abide by the letter of the laws and regulations everywhere we do business.
It also is important for each of us to speak up when we see something that doesnt look or feel right. We all share this responsibility, which is key to preserving and building on this proud heritage. If you know of a possible violation of the Code or other improper behavior, report it.
The Code of Conduct is a valuable resource as we continue to meet our obligations to all of our constituents customers, the Board, shareholders, regulators and ourselves.
As a company, were only as good as our people, and our people are the best. Remember, our integrity begins with you.
Additionally, it is the duty of all Supervised Persons to act in the best interests of their clients, place the interests of JPMAM Clients before their own personal interests at all times and to avoid any actual or potential conflicts of interest. Supervised Persons are the officers, directors (or other persons occupying a similar status or performing similar functions or employees of JPMAM) or any other person who provides investment advice on JPMAMs behalf and is subject to JPMAMs supervision or control.
Supervised Persons must comply with applicable Federal Securities Laws and promptly report any known or suspected violations of the Code promptly to the Compliance Department or Code of Conduct Reporting Hotline, which shall report any such violation promptly to the Chief Compliance Officer (CCO) of the applicable legal entity, or through the various reporting channels as provided in the How To Report A Violation page of the Code of Conduct intranet site. Your reporting obligations do not prevent you from reporting to the government or regulators conduct that you believe to be in violation of law and it does not require you to notify JPMAM prior to reporting to the government or regulators. JPMAM strictly prohibits intimidation or retaliation against anyone who makes a good faith report about a known or suspected violation of the Code or any law or regulation.
|
||
3 |
Compliance with the Code, and other applicable policies and procedures, is a condition of employment. The rules, procedures, reporting and recordkeeping requirements set forth in the Code are hereby adopted and certified as reasonably necessary to prevent Supervised Persons from violating the provisions of the Code and applicable Federal Securities Rules.
The Compliance Department provides a link to this Code and any amendments to all Supervised Persons in their Access Persons Report and requires their attestation of compliance with this Code at least annually. These records are maintained by the Compliance Department as part of its Books and Records as required by the Advisers Act.
Annually, the CCO of each registered investment adviser must review that the Code adequately reflects the advisers fiduciary obligations and those of its Supervised Persons.
2. |
Amendments to Previous Version Distributed January 30, 2019 |
|
Updated Summary to include Jamie Dimons 2019 message; |
|
Updated Section 9.4 on gifts and entertainment to more closely align with the Gifts and Entertainment Policy AM Global; and |
|
Updated Section 12 to include name change of JF Asset Management Limited to JPMorgan (Asia Pacific) Ltd. |
3. |
Scope |
This Code applies to all Supervised Persons of JPMAM.
4. |
Reporting Requirements |
4.1. |
Holdings Reports |
Access Persons must submit holdings reports to the Compliance Department documenting current securities holdings:
a) |
Content of Holdings Reports |
Each holdings report must contain, at a minimum:
1) |
Account Details |
The name of any broker, dealer or bank with which the Access Person maintains a Covered Account in which any Reportable Securities are held for the Access Persons direct or indirect benefit as well as all pertinent Covered Account details (e.g., account title, account number.).
2) |
Account Statements |
The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each Reportable Security in which the Access Person has any direct or indirect beneficial ownership.
|
||
4 |
3) |
Submission Date |
The date the Access Person submits the report to the Compliance Department.
b) |
Submission of Holdings Reports |
Access Persons must submit both an Initial and Annual holdings report:
1) |
Initial Report |
Must be submitted no later than 10 days after the person becomes an Access Person and the information must be current as of a date no more than 45 days prior to the date the person becomes an Access Person.
2) |
Annual Report |
Must be submitted at least once each 12-month period thereafter on or before January 30, and the information must be current as of a date no more than 45 days prior to the date the report was submitted, unless notified by Compliance that this is no longer required due to electronic position reporting received from Approved Brokers.
4.2. |
Transaction Reports |
Access Persons must submit to the Compliance Department securities transactions reports on a quarterly basis, in the form designated by the Compliance Department. Securities transaction reports must meet the following requirements:
a) |
Content of Transaction Reports |
Each transaction report must contain, at a minimum, the following information about each transaction involving a Reportable Security in which the Access Person had, or as a result of the transaction acquired, any direct or indirect beneficial ownership:
1) |
The date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each Reportable Security involved; |
2) |
The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition); |
3) |
The price of the security at which the transaction was effected; |
4) |
The name of the broker, dealer or bank with or through which the transaction was effected; and |
5) |
The date the Access Person submits the report to the Compliance Department. |
b) |
Timing of Transaction Reports |
Each Access Person must submit a transaction report no later than 30 days after the end of each calendar quarter, which report must cover, at a minimum, all transactions during the quarter.
|
||
5 |
4.3 |
Exceptions from Transaction Reporting Requirements |
An Access Person need not submit:
a) |
Any report with respect to securities held in accounts over which the Access Person had no direct or indirect influence or control; |
b) |
A transaction report with respect to transactions effected pursuant to an Automatic Investment Plan; |
c) |
Transaction Reports are not required for accounts maintained at Approved or Preferred Brokers or for accounts which are approved for statement tracking |
d) |
Any report with respect to transactions in Reportable Funds. |
5. |
Personal Trading Requirements |
Supervised Persons must obtain approval from the Compliance Department before directly or indirectly acquiring Beneficial Ownership in any Reportable Security, including initial public offerings and limited offerings. Given the potential access to Proprietary and Client information that Supervised Persons may have, JPMAM and its Supervised Persons must avoid even the appearance of impropriety with respect to personal trading, which must be oriented toward investment rather than short-term or speculative trading. JPMAMs policies are designed to help prevent and detect violations of securities laws and industry conduct standards and to minimize actual or perceived conflicts of interest that could arise due to personal investing activities.
5.1 |
Approved Broker Requirement |
All self-directed Associated Accounts must be maintained with a JPMC Approved Broker. (Click on the attached link above for list of approved brokers)
5.2 |
Blackout Provisions |
The personal trading and investment activities of Supervised Persons are subject to particular scrutiny due to the fiduciary nature of the business. Specifically, JPMAM must avoid even the appearance that its Supervised Persons conduct personal transactions in a manner that conflicts with the firms investment activities on behalf of Clients. Accordingly, certain Supervised Persons are restricted from conducting personal investment transactions during certain periods (called Blackout Periods), and may be instructed to reverse previously completed personal investment transactions. Additionally, the Compliance Department may restrict the personal trading activity of any Supervised Person if it is determined that such activity has the appearance of a conflict of interest.
These Blackout Periods apply varying levels of restrictions appropriate for different categories of Supervised Persons based upon their level of access to non-public Client or Proprietary information.
5.3 |
Minimum Investment Holding Period and Market Timing Prohibition |
Supervised Persons are subject to a minimum holding period, generally 60 days, for all transactions in Reportable Securities. For Reportable Funds, only named Portfolio Managers of such funds are subject to a minimum holding period.
Supervised Persons are not permitted to conduct transactions for the purpose of market timing in any Reportable Security or Reportable Fund. Market timing is defined as an investment strategy using frequent purchases, redemptions, and/or exchanges in an attempt to profit from short-term market movements.
|
||
6 |
5.4 |
Trade Reversals and Disciplinary Action |
Transactions by Supervised Persons are subject to reversal due to a conflict (or appearance of a conflict) with the firms fiduciary responsibility or a violation of the firm policy. Such a reversal may be required even for a pre-cleared transaction that results in an inadvertent conflict or a breach of blackout period requirements.
Disciplinary actions resulting from a violation of the Code will be administered in accordance with related JPMAM guidelines governing disciplinary action and escalation. All violations and disciplinary actions will be reported promptly by the Compliance Department to the employees group head and senior management. Violations will be reported quarterly to the affected Funds Board of Directors.
Violations by Supervised Persons of the Code, the JPMC Code of Conduct or any laws or regulations that relate to JPMAMs operation of its business or any failure to cooperate with an internal investigation may result in disciplinary action, up to and including immediate dismissal, including termination of regulatory registration where applicable.
6. |
Books and Records to be maintained by Investment Advisers |
The Compliance Department is responsible for maintaining books and records, including:
a) |
A copy of this Code and any other code of ethics adopted by JPMAM pursuant to Rule 204A-1 that is in effect or has been in effect at any time within the past five years; |
b) |
A record of any violation of the Code, and any Compliance action taken as a result of that violation; |
c) |
A record of all written acknowledgments of the violation for each person who is currently, or within the past five years was a Supervised Person of JPMAM; |
d) |
A record of each report made by Access Persons required under the Reporting Requirements; |
e) |
A record of the names of persons who are currently, or within the past five years were Access Persons; |
f) |
A record of any decision, and the reasons supporting the decision, to approve the acquisition or sale of securities by Supervised Persons under section 6. Pre-approval records of certain investments will be maintained for at least five years after the end of the fiscal year in which the approval is granted; and |
g) |
Any other such record as may be required under the Code. |
7. |
Privacy |
Supervised Persons have a responsibility to protect the confidentiality of information related to Clients. This responsibility may be imposed by law, may arise out of agreements with Clients, or may be based on policies or practices adopted by the firm. Certain jurisdictions have regulations relating specifically to the privacy of individuals and/or business and institutional customers. Various business units and geographic areas within JPMC have internal policies regarding customer privacy.
The restriction on disclosing confidential information is not intended to prevent Supervised Persons from reporting to the government or a regulator any conduct Supervised Persons believe to be in violation of the law, or from responding truthfully to questions or requests from the government, a regulator or in a court of law.
|
||
7 |
8. |
Anti-Corruption |
It is the policy of JPMC to comply with the anti-corruption laws that apply to the firms Operations (and investments where the firm is deemed to have control), which laws include the United States Foreign Corrupt Practices Act (FCPA), the United Kingdom Bribery Act of 2010 (UKBA), as well as anti-corruption laws and regulations of other countries in which the firm conducts business. We must never compromise our reputation by engaging in, or appearing to engage in, bribery or any form of corruption. Bribery and corruption are crimes with potentially severe penalties to JPMC and its employees and directors. The firm has zero tolerance for such activity.
9. |
Conflicts of Interest |
The following is a summary of commonly identified employee conflicts of interest:
9.1 |
Trading in Securities of Clients |
Supervised Persons shall not transact in any securities of a Client with which the Supervised Person has or recently had significant dealings or responsibility on behalf of JPMAM if such investment could be perceived as effected based on confidential information, including material non-public information.
9.2 |
Trading in Securities of Suppliers |
Supervised Persons in possession of information regarding, or directly involved in negotiating, a contract material to a supplier of JPMAM may not invest in the securities of such supplier. If you own the securities of a company with which we are dealing and you are asked to represent JPMorgan Chase in such dealings you must:
a) |
Disclose this fact to your department head and the Compliance Department; and |
b) |
Obtain prior approval from the Compliance Department before selling such securities. |
9.3 |
Pre-clearance Procedures for Value-Added Investors |
Prior to any telephone calls, video, and in-person meetings between a Portfolio Manager, or employee arranging the meeting, and a Value-Added Investor who is meeting to discuss his/her personal investment (or prospective investment) in the JPMAM Private Investment Fund managed by the Portfolio Manager, the Portfolio Manager must obtain pre-clearance from Compliance. In order to obtain pre-clearance approval, the following information must be provided to Compliance prior to the meeting:
a) |
Date and place of meeting; |
b) |
Name of Value-Added Investor, their employer, and job title; |
c) |
Name of private fund the Value-Added Investor is invested in (or may invest in); |
d) |
Names of all J.P. Morgan employees in attendance at the meeting and job titles; |
e) |
Purpose of the meeting. |
Compliance will review the pre-clearance request and respond via email and will ensure that appropriate controls are instituted.
|
||
8 |
9.4 |
Gifts & Entertainment |
Supervised Persons must avoid circumstances that may cause, or create the appearance of, a conflict of interest between JPMAM and its clients or other business/commercial contacts. Supervised Persons may not give or receive anything of value, directly or indirectly, to influence improper action or obtain an improper advantage. Furthermore, the giving and receiving of gifts, including entertainment and hospitality, to or from persons who do or seek to do business with JPMAM have the potential to create actual conflicts or the appearance of conflicts, and may negatively impact JPMAM.
Gifts and entertainment can take many forms, including but not limited to: goods or services for which employees are not required to pay the retail or usual and customary cost; meals or refreshments; tickets to entertainment or sporting events; the use of a residence, vacation home or other accommodation; travel expenses; or charitable contributions or organization sponsorships. In addition to gifts and entertainment, JPMAM Supervised Persons may not make, direct or solicit any other person to make, any political contribution or provide anything else of value to anyone for the purpose of influencing or inducing the awarding or retention of investment advisory services business.
Gifts
Supervised Persons are only permitted to give gifts valued up to 100 USD to a client or business counterparty on occasions when gifts are customary, such as life events and major holidays. AM employees must pre-clear giving any gifts to a client or business counterparty that exceeds 100 USD.
When giving gifts to clients or business counterparties, AM employees are strongly encouraged to give items with a JPMorgan Chase logo or books from the JPMorgan Chase Reading list whenever appropriate. Gifting books from the JPMorgan Chase Reading List are limited to one book per campaign. Repetitive gifting to a client or business counterparty of Firm logo items in a calendar year is not permitted.
Supervised Persons have a 100 USD annual maximum limit for gifts provided to clients or business counterparties.
Entertainment
Entertainment includes business-related activities at which a host and guest are both present (e.g., meals, refreshments, golf games, sporting events, or other leisure and entertainment). Entertainment is considered a prohibited gift unless both the employee and business contact are present and the employees participation is related to his or her position and duties within JPMAM. Spouses, family members and personal acquaintances should not participate in entertainment activities unless such participation is customary under the circumstances.
Supervised Persons may act as a host for business entertainment to clients and prospects if such entertainment is: (1) business related; (2) is not prohibited by law; and (3) in an amount that is reasonable and customary. Frequent and/or lavish business entertainment is prohibited.
Supervised Persons are limited to accepting $250 in meals and entertainment from a client or counterparty per calendar year, with limited exceptions. Once the $250 limit
|
||
9 |
is reached, employees are required to pay for their own expenses. In addition, Supervised Persons are prohibited from accepting invitations to ticketed events; limited exceptions may be granted with pre-approval from senior management and Compliance.
All gifts and entertainment provided to U.S. Government Officials must be pre-cleared by Compliance to ensure that they comply with jurisdictional restrictions.
Supervised Persons must receive written pre-clearance from Compliance before providing any other type of Entertainment to an ERISA Plan Sponsor or Union Official aside from meals that conform to the AWM Expense Procedure (e.g., golf, sporting events, cultural or social events, concerts, leisure activities, etc.)
Supervised Persons are required to log all entertainment subject to reporting into Reliances Gift and Entertainment Module for approval. Violations are subject to Compliance Violation Framework.
Sponsorships and Events
Both the sponsorship of distributor events and JPMAM hosting educational events for financial advisors who sell our funds are subject to the criteria below and many require the review by Compliance and regional governance committees or designees to meet criteria below.
Events
|
Events are 30 people or more to build relationships, train/educate attendees on products or services, etc. |
|
Requires an Event Coordinator |
|
Requires 80% training content in an event |
|
Requires client correspondence from distributor home office when per person benefits exceeds $1000 |
|
Preclearance thresholds for Compliance vs. recordkeeping |
Sponsorship
|
Requires a Sponsorship Coordinator |
|
Risk based approach to pre-clearing Sponsorships regionally |
9.5 |
Political Contributions and Activities |
In accordance with Advisers Act Rule 206(4)-5, Supervised Persons are prohibited from making political contributions for the purpose of obtaining or retaining advisory contracts with government entities.
To ensure compliance with this federal pay-to-play rule and various state and local laws, JPMAM Supervised Persons must receive pre-clearance before they or any members of their household make or solicit political contributions or engage in political activities in connection with any election in the United States or the Republic of Colombia.
|
||
10 |
Contributions to JPMC Political Action Committees are excluded from pre-clearance and reporting requirements. New hires must also disclose their history of making and soliciting political contributions.
An employee cannot be reimbursed or otherwise compensated by JPMC for any political contribution. JPMC policies prohibit contributions of corporate funds to candidates, political party committees and political action committees. Supervised Persons are strictly prohibited from using JPMC resources to conduct personal political activities.
Violations of these requirements are subject to the Compliance Violation Framework.
9.6 |
Charitable Contributions |
Charitable contributions made on behalf of JPMC must adhere to the requirements of the AM Expense Procedures and be precleared with Compliance.
9.7 |
Outside Business Activities |
A Supervised Persons outside activities must not reflect adversely on the firm or give rise to a real or apparent conflict of interest with the Supervised Persons duties to the firm or its Clients. Supervised Persons must be aware of potential conflicts of interest and be aware that they may be asked to discontinue any outside activity if a potential conflict arises. Supervised Persons may not, directly or indirectly:
a) |
Accept a business opportunity from someone doing business or seeking to do business with JPMAM that is made available to the Supervised Person because of the individuals position with the firm; |
b) |
Take for oneself a business opportunity belonging to the firm; |
c) |
Engage in a business opportunity that competes with any of the firms businesses. |
More specific guidelines are set forth under the JPMC Code of Conduct. Procedures for pre-clearance of Outside Activities and Second Jobs are available on the JPMC Code of Conduct intranet site. Employees are reminded of their responsibility to obtain preclearance of their Outside Business Activities periodically in their Access Persons Report. If any material change in relevant circumstances occurs, Supervised Persons must seek clearance for a previously approved activity. A material change may arise from a change in your job or association with JPMAM or in your role with respect to that activity or organization. JPMAM employees are required to be continually alert to any real or apparent conflicts of interest with respect to investment management activities and promptly disclose any such conflicts to their manager and Compliance. Employees must also notify Compliance when any approved outside activity terminates.
Regardless of whether an activity is specifically addressed under JPMAM policies or the JPMC Code of Conduct, Supervised Persons should disclose any personal interest that might present a conflict of interest or harm the reputation of the firm.
10. |
Training |
Compliance provides in-person and/or online training to Supervised Persons on an ongoing basis. Compliance determines the training topics that will be covered during training sessions based on the work responsibilities of Supervised Persons, applicable regulatory requirements and risk assessments. Compliance may, from time to time, distribute Compliance Bulletins reinforcing or clarifying prior guidance, communicating new regulatory developments or the adoption or amendment of policies, procedures or controls.
|
||
11 |
11. |
Escalation Guidelines |
JPMCs Compliance Violation Framework is an internal Compliance document and is used to notify Group Heads, Managers and/or Human Resources (HR) of employee violations of Compliance Policies along with the assigned severity of the applicable violations.
11.1 |
Violation Prior to Material Violation |
While the Group Head is notified of all violations, he/she is required to have a meeting with the employee when the Supervised Persons next violation would be considered material, in order to stress the importance of the requirement and inform the employee about the ramifications for not following the policy. The employee is also required to acknowledge, in writing (form to be provided by Compliance) that he/she is aware of the ramifications for noncompliance and he/she will be compliant going forward. The written acknowledgement is signed by both the employee and Group Head, and returned to Compliance for record keeping.
11.2 |
Material Violations |
All material violations require the Group Head (MD level) and Compliance to have a meeting with the employee and document in writing that the employee acknowledges the material nature of the violation and that he/she will be compliant going forward. The written acknowledgement, signed by the employee and Group Head, will be stored in Compliances Violations records. Additionally, HR is notified of all material violations and follows their established guidelines for disciplining the employee and recording that event in the employees personnel file.
There will be a mandated suspension of personal trading privileges for six months for all material violations of the personal trading or Access Persons requirements. Compliance and the Group Head may allow transactions for hardship reasons, but require documentation for pre-clearance.
An employees receipt of a material violation is considered when determining the employees annual compensation and eligibility for promotion.
12. |
Defined Terms |
Access Persons |
Access Persons of JPMAM include:
1) Employees of any of the Registered Investment Advisers within JPMAM.
2) Certain persons of other affiliated entities that have access to Proprietary information of AM and persons that have been identified by Compliance as having access to AM Proprietary information;
3) All persons of entities affiliated with JPMAM that have been authorized by the Office of the Corporate Secretary to act in an official capacity on behalf of the JPMAM Registered Investment Advisers, sometimes referred to as dual-hatted employees; or
4) Certain consultants, agents, and temporary workers who are involved in the investment management process or have access to Proprietary information regarding Client recommendations or transactions on a pre-trade or same-day basis. |
|
||
12 |
Connected Person |
Individuals who, based on their relationship with a Supervised Person, are subject to provisions of this Policy including, but not limited to:
The Supervised Persons spouse, domestic partner or minor children (even if financially independent)
Anyone to whom the Supervised Person provides significant financial support or for which the Supervised Person, or anyone listed above, has or shares the power, directly or indirectly, to make investment decisions |
|
Covered Account | Is an account in the name of or for the direct or indirect benefit of a Supervised Person or a Supervised Persons spouse, domestic partner, minor children and any other person for whom the Supervised Person provides significant financial support, as well as to any other account over which the Supervised Person or any of these other persons exercise investment discretion, regardless of beneficial interest. Excluded from Associated Accounts are any 401(k) and deferred compensation plan accounts for which the Supervised Person has no investment discretion. | |
Automatic Investment Plan | Is a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan. | |
Beneficial ownership | Is interpreted to mean any interest held directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, or any pecuniary interest in equity securities held or shared directly or indirectly, subject to the terms and conditions set forth under Rule 16a-1(a)(2) of the Securities Exchange Act of 1934. A Supervised Person who has questions regarding the definition of this term should consult the Compliance Department. Please note: Any report required under section 5. Reporting Requirements may contain a statement that the report will not be construed as an admission that the person making the report has any direct or indirect beneficial ownership in the security to which the report relates. | |
Client | Is any entity (e.g. person, corporation or Fund) for which JPMAM provides a service or has a fiduciary responsibility. | |
Federal Securities Laws | Are the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company Act of 1940 (1940 Act), the Advisers Act, Title V of the Gramm-Leach-Bliley Act (1999), any rules adopted by the Securities and Exchange Commission (SEC) under any of these statutes, the Bank Secrecy Act as it applies to funds and investment advisers, and any rules adopted there under by the SEC or the Department of the Treasury. | |
Fund | Is an investment company registered under the Investment Company Act of 1940. | |
Initial Public Offering | Is an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934. | |
JPMAM |
Is the abbreviation for JPMorgan Asset Management, a marketing name for the Asset Management subsidiaries of JPMorgan Chase & Co. Within the context of this document, JPMAM refers to the following U.S. registered investment advisers of JPMorgan Asset Management:
J.P. Morgan Alternative Asset Management, Inc.
JPMorgan Asset Management (UK) Ltd.
J.P. Morgan Investment Management Inc. |
|
||
13 |
Security Capital Research & Management Inc.
Bear Stearns Asset Management Inc.
JPMorgan Funds Limited
JPMorgan Asset Management (Asia Pacific) Ltd. |
||
Limited Offering | Is an offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) or pursuant to Rules 504, 505 or 506 there under. | |
Proprietary |
Within the context of this Code of Ethics is:
1) any research conducted by AM or its affiliates
2) any non-public information pertaining to AM or its affiliates
3) all JPM managed and sub-advised mutual funds |
|
Reportable Fund | Is any JPMorgan Proprietary Fund, including sub-advised funds | |
Reportable Security |
Is a security as defined under section 202(a)(18) of the Advisers Act held for the direct or indirect benefit of an Access Person, including any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a security, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing. Excluded from this definition are:
1) Direct obligations of the Government of the United States;
2) Bankers acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;
3) Shares issued by money market funds; and
4) Shares issued by open-end funds other than Reportable Funds |
|
Supervised Persons |
1) Any partner, officer, director or employees of JPMAM (or other person occupying a similar status or performing similar functions).
2) All employees of entities affiliated with JPMAM that have been authorized by the Office of the Corporate Secretary to act in an official capacity on behalf of a legal entity within JPMAM, sometimes referred to as dual hatted employees;
3) Certain consultants, as well as any other persons who provide advice on behalf of JPMAM and are subject to JPMAMs supervision and control;
4) All Access Persons |
|
ValueAdded Investor | Is an executive level officer (i.e., president, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer or Partner) or director of a company, who, due to the nature of his/her position, may obtain material, non-public information. |
|
||
14 |