■ ■

■ ■
•
•
•

Passive vs. Active (% of total ETFs by product count)

 Recessions Weight of Largest 10 Stocks in S&P 500 = 34.9% (95.1%ile) Weight of Largest 11-50th Stocks in S&P 500 = 23.7% (0.4%ile)
40 45
Weight of Largest 10 (%)

35 40

30 35

25 30

20 25

15 20
'64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12 '15 '18 '21 '24
↑

↓
• •
• •
• •
•
•
●●●● ●●● ●●●●●
•

80
Flush toilet
70

Telephone Air travel

60
ICE
automobile
50
Home air conditioning

40 Vacuum cleaner

Microcomputer (PC)
30

Electric power Household refrigerator Internet

20
Social media
Microwave
Radio Tablet
10
Cellular phone
Smartphone
0
1840 1860 1880 1900 1920 1940 1960 1980 2000 2020
 $4.9 $5.1

$4.2

$2.2
$2.1

2016 2017 2018 2019 2020 2021 2022 2023

12.8% 33.4% 36.0% 15.4%

Nonproprietary ETF Proprietary ETFs

Proprietary mutual funds Nonproprietary mutual funds
Separate accounts
•

•
•

•
•

•
4
 Enhanced tax efficiency through redemption baskets GTE U.S. 46

The use of a redemption basket in lieu of a standard basket for primary market activity may lead to greater tax efficiency

Standard basket Redemption basket

In-kind

OR

Cash in
lieu
Principles of ETF Investing

Securities with unrealized gains

Securities with unrealized losses

Standard basket Redemption basket

 In-kind, pro-rata slice of the portfolio  Issuer can in-kind out securities with unrealized gains
 Cash component of the basket is minimized  Securities with losses can be sold for cash to
crystallize losses and offset realized gains in the
portfolio

Source: J.P. Morgan Asset Management. For illustrative purposes only.

Guide to ETFs – U.S. Data as of October 31, 2024.
•
•
•

•
▬
▬
All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not include fees or expenses.
The Bloomberg 1-3 Month U.S. Treasury Bill Index includes all publicly issued zero-coupon US Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and
have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed rate and non convertible.
The Bloomberg Municipal Index: consists of a broad selection of investment-grade general obligation and revenue bonds of maturities ranging from one year to 30 years. It is an unmanaged index representative of the tax-
exempt bond market.
The Bloomberg U.S. Long Government/Credit Index tracks US dollar denominated, fixed-rate Treasuries, government-related and corporate securities with maturities equal or greater than 10 years.
The Bloomberg US Mortgage Backed Securities Index is an unmanaged index that measures the performance of investment grade fixed-rate mortgage backed pass-through securities of GNMA, FNMA and FHLMC.
The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar denominated, fixed-rate taxable bond market. The index includes Treasuries, government-
related and corporate securities, fixed rate agency MBS, ABS and CMBS (agency and non-agency).
The Bloomberg US TIPS Index consists of Inflation-Protection securities issued by the U.S. Treasury.
The Bloomberg US High Yield Index covers the universe of fixed rate, non-investment grade debt. Eurobonds and debt issues from countries designated as emerging markets (sovereign rating of Baa1/BBB+/BBB+ and
below using the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries are included.
The Bloomberg US ABS Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index only includes ABS securities.
The Bloomberg 1-3 Yr Gov/Credit Index measures investment grade, US dollar-denominated, fixed-rate nominal Treasuries, government-related and corporate securities with 1-3 year maturities.
The Bloomberg Global Aggregate ex USD Index is a measure of investment grade debt from 24 local currency markets. This multi-currency benchmark includes treasury, government-related, corporate and securitized
fixed-rate bonds from both developed and emerging markets issuers. Bonds issued in USD are excluded.
The Credit Suisse Leveraged Loan Index tracks the investable market of the U.S. dollar denominated leveraged loan market. It consists of issues rated “5B” or lower, meaning that the highest rated issues included in this
index are Moody’s/S&P ratings of Baa1/BB+ or Ba1/BBB+. All loans are funded term loans with a tenor of at least one year and are made by issuers domiciled in developed countries.
The J.P. Morgan Emerging Markets Bond Index Global Diversified (EMBI Global Diversified) tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign
entities: Brady bonds, loans, Eurobonds. The index limits the exposure of some of the larger countries.
Guide to ETFs provides comprehensive data and commentary on global markets without reference to products. Designed as a tool to help clients understand the markets and support investment decision-
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Unless otherwise stated, all data are as of October 31, 2024 or most recently available.

Guide to ETFs
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