JPMorgan SmartSpending℠ Funds
Retirement income doesn't need to be fixed
Which is why JPMorgan SmartSpendingSM Funds can help investors manage income in retirement and provide spending flexibility as needs change.1
Make the most out of spending in retirement
SmartSpendingSM is designed to help retirees spend down a portion of their investment through retirement. This approach may reduce the likelihood of withdrawing too much or too little prior to maturity.1
The annual sample spend-down amount
Click on the links below to see the sample spend-down amount for a specific vintage:
What is the Annual Sample Spend-Down Amount?
Portfolio Value Illustration
Assuming annual withdrawals based on sample spend-down amounts
Source: JPMorgan Asset Management. Simulated values over 35 years shown in nominal terms, assuming investors consistently follow suggested withdrawal rates and reinvest distributions. The manager seeks to achieve the stated objectives. There can be no guarantee the objectives will be met. Sample spend-down amounts are not intended to be fixed rates and will vary from year to year. For illustrative purposes only.
1 Assuming investors consistently follow suggested withdrawal rates and reinvest distributions. The manager seeks to achieve the stated objectives. There can be no guarantee the objectives will be met.
This investment is not a complete retirement program and may not provide sufficient retirement income.
RISKS ASSOCIATED WITH INVESTING IN THE FUND – SMARTSPENDING FUND
Currently the fund only contains JPMorgan seed capital.
Sample Spend Down Amount Risk. The JPMorgan SmartSpending 2050 Fund is designed for investors in retirement who intend to spend down their holdings in the Fund. However, the Fund is not a complete retirement program, there is no guarantee that the Fund will provide sufficient retirement income and the sample spend down amount for any given year may be zero in order to preserve capital. You should not rely solely on the sample spend down amount in determining your retirement income needs.
The sample spend down amount is not expected to be level from year to year and instead will likely vary each year based upon changes in the underlying considerations noted above. The long term risk and return target of the Fund in any given year, including any income and gain from investments earned by the Fund, is not designed to be equal to or greater than the sample spend down amount for such year. This means that if you choose to follow the sample spend down amount, you will likely be redeeming shares and your investment in the Fund will be reduced. The sample spend down amount assumes the reinvestment of distributions in additional shares of the Fund. As a result, if distributions are not reinvested, following the sample spend down amount without adjusting for distributions not reinvested will increase the likelihood that a shareholder will (i) have insufficient shares for redemption in future years and (ii) exhaust his or her assets in the Fund prior to the maturity date. The sample spend down amount is not designed to comply with any required minimum distribution rules applicable to tax-deferred retirement accounts nor does it take into account any tax consequences to shareholders (including, for example, any early withdrawal penalties that may be imposed on shareholders in tax-deferred retirement accounts). Shareholders investing through a tax-deferred retirement account subject to a required minimum distribution will need to include the amount redeemed from the Fund, as appropriate, in the computation of any annual required minimum distribution. Many of the assumptions and factors upon which the sample spend down amount will be based are the result of estimates and judgment calls by the Adviser. If those assumptions and factors are inaccurate or incomplete, the sample spend down amount may not accurately reflect the amount that a shareholder could redeem during the year while still allowing for redemptions in future years. Shareholders should not consider the Fund as a complete solution for his or her investment or retirement income needs or as a guarantee of income.
Maturity Date Risk. While assets invested in the Fund are expected to decline over time and equal zero on the maturity date, the Fund may be liquidated prior to the maturity date. For example, as assets decline and approach zero, there may be a point before the maturity date where the Adviser can no longer manage the Fund in line with its investment goal and the Fund may be liquidated at the discretion of the Board of Trustees. In addition, as assets in the Fund decline, the expenses of the Fund may increase.
Past performance does not guarantee future results. Total returns assume reinvestment of any income. Total return assumes reinvestment of dividends and capital gains distributions and reflects the deduction of any sales charges. Performance may reflect the waiver of a portion of the Fund's advisory or administrative fees for certain periods since the inception date. If fees had not been waived, performance would have been less favorable.
The simulated results are for illustrative purposes only. The simulation model is an analytical tool that helps provide insight on balancing income needs in the current year against longevity needs (i.e. the need for income in the future) based upon amounts invested in the portfolio. The model tests hypothetical allocations and level of potential total return that may support shareholders systematically redeeming, or spending down, a portion of their investments. Modeling is not customized for each individual, but rather a hypothetical exercise for a representative portfolio that takes into account both sample spend down amount and the related long-term risk and return target. In the modeling process, we incorporate various factors, such as assumptions regarding future market performance, remaining time to the maturity date and data on the spending behavior of retirees in the market, to produce a preliminary sample spend down amount and associated long-term risk and return target for the representative portfolios.
The beginning hypothetical portfolio value is assumed to be $100,000. The 10,000 simulations are run over 35 year horizon using J.P. Morgan Asset Management’s (JPMAM) proprietary Long-Term Capital Markets Assumptions (10–15 years). The main result of the model is to illustrate the set of optimized asset allocations and sample spend down amounts, given the simulated range of hypothetical remaining portfolio values. These values are presented in simulated portfolio value and hypothetical withdrawal rate charts – the chart marks the range of the 5th, 25th, 50th, 75th and 95th percentile distribution of outcomes.
To achieve its strategy, the Fund may invest in other mutual funds and exchange-traded funds as well as individual securities, so the Fund’s investment performance is directly related to the performance of the underlying investments. The investment objective of an underlying fund may differ from, and an underlying fund may have different risks than, the Fund. There is no assurance that the underlying funds will achieve their investment objectives. International investing involves increased risk and volatility due to possibilities of currency exchange rate volatility, political, social or economic instability, foreign taxation and differences in auditing and other financial standards. The Fund may invest a portion of its securities in small-cap stocks. Small-capitalization funds typically carry more risk than stock funds investing in well-established “blue-chip” companies since smaller companies generally have a higher risk of failure. Historically, smaller companies’ stock has experienced a greater degree of market volatility than the average stock. The Fund may invest in securities that are below investment grade (i.e., “high yield” or “junk bonds”) that are generally rated in the fifth or lower rating categories of Standard & Poor’s and Moody’s Investors Service. Although these securities tend to provide higher yields than higher-rated securities, there is a greater risk that the Fund’s share price will decline.
The underlying funds may use derivatives, which are instruments that have a value based on another instrument, exchange rate or index. In addition, the Fund may invest directly in derivatives. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic and market conditions and could result in losses that significantly exceed the Fund’s or the underlying Funds’ original investments. Many derivatives will give rise to a form of leverage. As a result, the Fund or an underlying fund may be more volatile than if the Fund or the underlying Fund had not been leveraged because the leverage tends to exaggerate the effect of any increase or decrease in the value of the Fund’s or the underlying Fund’s portfolio securities. Derivatives are also subject to the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index. The use of derivatives for hedging or risk management purposes or to increase income or gain may not be successful, resulting in losses, and the cost of such strategies may reduce the Fund’s or the underlying funds’ returns. Derivatives also expose the Fund or the underlying funds to the credit risk of the derivative counterparty.
Real estate investing may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographical sector. Real estate investing may be subject to risks including, but not limited to, declines in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrower.
There may be additional fees or expenses associated with investing in a Fund of Funds strategy.
CONFLICTS OF INTEREST: Refer to the Conflicts of Interest section of the Fund's Prospectus.
Asset allocation/diversification does not guarantee investment returns and does not eliminate the risk of loss.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE