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      <p>Advancing the possibilities of ETFs </p>

      An evolution is happening in investing with the explosive growth of Exchange-Traded Funds (ETFs). Explore below to learn the basics of this new investment vehicle.
      1. J.P. Morgan Asset Management Mexico

      Introduction to ETFs

      • What is an ETF?

      • How does an ETF work?

      • What are the different types of ETFs?

      • How do ETFs trade?

      What is an ETF?

      An Exchange-Traded Fund (ETF) is an investment wrapper which combines the benefits of a fund and a stock.

      A fund offers:

      • Diversified exposure
      • Economies of scale
      • Professional management

      A stock offers:

      • Liquidity
      • Transparency
      • Trading flexibility
      stock-etf-bond
      Source: J.P. Morgan Asset Management. Shown for illustrative purposes only.

      How does an ETF work?

      The structure of the ETF wrapper provides greater opportunity for improved economics.

      • In-kind creations/redemptions, where securities are exchanged for ETF shares, contribute to the cost-effectiveness of ETFs
      • Market-makers help mitigate outsized premiums/discounts of the ETF market-price to the ETF net asset value
      Chart 4-reworked
      For Illustrative Use Only. Investors must buy and sell units on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units and may receive less than the current net asset value when selling them.

      Type of ETFs

      different-types-of-etfs
      *Source: J.P. Morgan Asset Management. Shown for illustrative purposes only.

      How do ETFs trade:

      ETFs offer more liquidity than meets the eye.

      how-do-etfs-trade
      Sources: 1. Morningstar (54 ETFs), January 3, 2024. 2. Russell 1000 Value Index, January 3, 2024.

      What are active ETFs?

      When looking at active ETFs, it is first important to note that terms such as “ETF”, “passive” and “index” are not synonymous. ETF simply means Exchange-Traded Fund, which means an ETF is traded at an exchange regardless of the investment strategy used.

      A variety of “engines” or strategies can therefore be placed in the ETF structure to leverage its benefits.

      “Active” refers to specific investment decisions, which are designed to achieve specific outcomes, such as outperforming an index (Alpha), generating income, or achieving control in terms of duration, yield or credit quality.

      An active ETF provides access to these specific outcomes, all while maintaining the attributes of the ETF structure.

      The ETF is just a wrapper and the content itself is independent of the vehicle

      01-Landing Page infographic - The ETF is just a wrapper and the content itself is independent of the vehicle
      Source: J.P. Morgan Asset Management. For illustration purposes only. The ETF aims to replicate the performance of an index however its market price can be different from its net asset value and from the net asset value of the index.

      Active ETFs overview

      Why invest in active ETFs?

      Demand for active ETFs

      Active ETF assets have grown sharply in recent years. At the end of 2017 the global assets under management were only at $58bn US dollar, growing to $565bn US dollar end of 2023.1

      1 Bloomberg; Data as of 29 December 2023, US & UCITS only.

      Getting to know an active ETF

      Getting started

      Useful information to consider when investing in active ETFs

      A leader in ETF investing

      At J.P. Morgan, we’re combining the built-in benefits of ETFs with our best-in-class research insights, portfolio expertise and trading capabilities.

      Expertise

      Bringing decades of portfolio management expertise to a variety of ETFs with over $120 billion in AUM globally1.

      Innovation

      Offering a growing suite of ETFs, with a focus on active solutions, that span all major asset classes and regions.

      Success

      A long history of solving investor needs across changing markets.

      1 J.P. Morgan Asset Management, as of March 31, 2024.