JPMIM will
continue to have ultimate responsibility, subject to oversight of the Board, to
oversee the sub-advisers and recommend their hiring, termination
and replacement.
Active China
ETF has selected JPMAM (AP) to manage all of Active China ETF’s assets.
Shareholders will be notified of any changes in sub-advisers. Shareholders
of Active China ETF have the right to terminate a sub-advisory agreement for
Active China ETF at any time by a vote of the majority of the
outstanding voting securities of Active China ETF. The Exemptive Order also
permits Active China ETF to disclose to shareholders the management fees only in
the aggregate.
Under each
Management Agreement, JPMIM is responsible for substantially all expenses of
each Fund, (including expenses of the Trust relating to each Fund),
except for the management fees, payments under the Funds' 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 each Fund’s business.
Additionally, each Fund is responsible for its non-operating expenses, including
brokerage commissions and fees and expenses associated with each
Fund’s securities lending program, if applicable. For the avoidance of doubt,
the Adviser’s payment of such expenses may be accomplished through a
Fund’s payment of such expenses and a corresponding reduction in the fee payable
to the Adviser, provided, however, that if the amount of expenses
paid by a Fund exceeds the fee payable to the Adviser, the Adviser will
reimburse that Fund for such amount.
B. Administration
Fee —
JPMIM provides administration services to the Funds. Pursuant to each Management
Agreement, JPMIM is compensated as described
in Note 3.A.
JPMorgan Chase
Bank, N.A. (“JPMCB”), a wholly-owned subsidiary of JPMorgan, serves as the
Funds' sub-administrator (the “Sub-administrator”). For its services
as Sub-administrator, JPMCB receives a portion of the management fees payable to
JPMIM.
C. Custodian,
Accounting and Transfer Agent Fees—
JPMCB provides custody, accounting and transfer agency services to the Funds.
For performing
these services, JPMIM pays JPMCB transaction and asset-based fees that vary
according to the number of transactions and positions, plus out-of-pocket
expenses.
Additionally,
Authorized Participants generally pay transaction fees associated with the
creation and redemption of Fund shares. These fees are paid to JPMIM to
offset certain custodian charges that are covered by each Management
Agreement.
Interest
income earned on cash balances at the custodian, if any, is included in Interest
income from affiliates on the Statements of Operations.
Interest
expense paid to the custodian related to cash overdrafts, if any, is included in
Interest expense to affiliates on the Statements of Operations.
D. Distribution
Services —
The Distributor or its agent distributes Creation Units for each Fund on an
agency basis. The Distributor does not maintain a
secondary market in shares of each Fund. JPMDS receives no fees for their
distribution services under the distribution agreement with the Trust (the
“Distribution Agreement”). Although the Trust does not pay any fees under the
Distribution Agreement, JPMIM pays JPMDS for certain distribution
related services.
E. Waivers
and Reimbursements —
The Funds may invest in one or more money market funds advised by the Adviser
(affiliated money market funds). The
fees for the affiliated money market funds, except for investments of securities
lending cash collateral, are covered under each Management Agreement as
described in Note 3.A.
F. Other
—
Certain officers of the Trust are affiliated with the Adviser, the Administrator
and JPMDS. Such officers receive no compensation from the Funds for
serving in their respective roles.
The Board
designated and appointed a Chief Compliance Officer to the Funds pursuant to
Rule 38a-1 under the 1940 Act. The fees associated with the office of
the Chief Compliance Officer are paid for by JPMIM as described in Note
3.A.
The Securities
and Exchange Commission (“SEC”) has granted an exemptive order permitting the
Funds to engage in principal transactions with J.P. Morgan
Securities LLC, an affiliated broker, involving taxable money market
instruments, subject to certain conditions.
4. Investment
Transactions
During the
year ended October 31, 2023, purchases and sales of investments (excluding
short-term investments) were as follows:
|
|
Purchases
(excluding
U.S.
Government) |
Sales
(excluding
U.S.
Government) |
|
|
|
|
ActiveBuilders
Emerging Markets Equity ETF |
|
|
|
|
|
|
Hedged
Equity Laddered Overlay ETF |
|
|
|
|
|
|
