j.p. morgan investment management inc. - chase.com .j.p. morgan investment management inc. form adv

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  • Form ADV Part 2A

    Firm Brochure

    J.P. Morgan Investment Management Inc.

    383 Madison Avenue, New York, NY 10179 (800) 343-1113 www.jpmorgan.com

    March 31, 2019

    This brochure provides information about the qualifications and business practices of J.P. Morgan Investment Management Inc. ("JPMIM" or the "Adviser"). If you have any questions about the contents of this brochure, please contact us at (800) 343-1113. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (the "SEC") or by any state securities authority.

    Additional information about JPMIM, including a copy of the Adviser's Form ADV Part 1A, is also available on the SECs website at www.adviserinfo.sec.gov.

    JPMIM is registered as an investment adviser with the SEC. Such registration does not imply a certain level of skill or training.

    PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMODITY FUTURES TRADING COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR BROCHURE.

    http://www.adviserinfo.sec.govhttp://www.jpmorgan.com
  • J.P. Morgan Investment Management Inc. Form ADV | March 31, 2019

    ITEM 2Material Changes

    This brochure ("Brochure") dated March 31, 2019, contains the following material changes since the annual update dated March 30, 2018.

    Item 8.A - A discussion of the Advisers methods of analysis used for Thematic strategies managed by the Beta Strategies Team

    Item 8.B - A description of additional investment risks relating to LIBOR Discontinuance or Unavailability, Mezzanine Loans, and Illiquidity and Restrictions on Transfer and Withdrawal

    Item 11.B - A description of an additional conflict of interest related to JPMC's proprietary investment activities

    Item 11.B -Adescription of an additional conflict of interest related to the advising of multiple accounts.

    Item 12.B - Revised disclosure related to the allocation of aggregated trades for Wrap accounts.

    For ease of reference, capitalized terms that are defined when first used in the Brochure are also set forth in the Key Terms section.

    1

  • J.P. Morgan Investment Management Inc. Form ADV | March 31, 2019

    ITEM 3Table of Contents

    ITEM 1 - Cover Page

    ITEM 2 - Material Changes 1

    ITEM 3 - Table of Contents 2

    ITEM 4 - Advisory Business 5

    A. General Description of Advisory Firm 5

    B. Description of Advisory Services 5

    C. Availability of Customized Services for Individual Clients 7

    D. Wrap Fee Programs 7

    E. Assets Under Management 11

    ITEM 5 - Fees and Compensation 11

    A. Advisory Fees and Compensation 11

    B. Payment of Fees 12

    C. Additional Fees and Expenses 13

    D. Prepayment of Fees 16

    E. Additional Compensation and Conflicts of Interest 17

    ITEM 6 - Performance-Based Fees and Side-by-Side Management 18

    A. Performance-Based Fees 18

    B. Side-by-Side Management and Potential Conflicts of Interest 18

    ITEM 7 - Type of Clients 19

    ITEM 8 - Methods of Analysis, Investment Strategies and Risk of Loss 20

    A. Methods of Analysis and Investment Strategies 20

    B. Material, Significant, or Unusual Risks Relating to Investment Strategies 28

    C. Risks Associated with Particular Types of Securities 41

    2

  • J.P. Morgan Investment Management Inc. Form ADV | March 31, 2019

    ITEM 9 - Disciplinary Information 42

    A. Criminal or Civil Proceedings 42

    B. Administrative Proceedings Before Regulatory Authorities 42

    C. Self-Regulatory Organization Proceedings 42

    ITEM 10 - Other Financial Industry Activities and Affiliations 42

    A. Broker-Dealer Registration Status 42 B. Futures Commission Merchant, Commodity Pool Operator, or Commodity Trading Advisor

    Registration Status 42

    C. Related Persons 43

    D. Material Conflicts of Interest Relating to Other Investment Advisers 47

    ITEM 11 - Code of Ethics, Participation or Interest in Client Transactions and Personal Trading 48

    A. Code of Ethics and Personal Trading 48

    B. Securities in which the Adviser or a Related Person Has a Material Financial Interest 49

    ITEM 12 - Brokerage Practices 63

    A. Factors Considered in Selecting or Recommending Broker-Dealers for Client Transactions 63

    B. Order Aggregation 67

    ITEM 13 - Review of Accounts 69

    A. Frequency and Nature of Review of Client Accounts or Financial Plans 69

    B. Factors Prompting Review of Client Accounts Other than a Periodic Review 70

    C. Content and Frequency of Account Reports to Clients 70

    ITEM 14 - Client Referrals and Other Compensation 70

    A. Economic Benefits Received from Third-Parties for Providing Services to Clients 70

    B. Compensation to Non-Supervised Persons for Client Referrals 71

    ITEM 15 - Custody 71

    ITEM 16 - Investment Discretion 72

    3

  • J.P. Morgan Investment Management Inc. Form ADV | March 31, 2019

    ITEM 17 - Voting Client Securities 72

    A. Policies and Procedures Relating to Voting Client Securities 72

    B. No Authority to Vote Client Securities and Client Receipt of Proxies 74

    ITEM 18 - Financial Information 74

    A. Balance Sheet 74

    B. Financial Conditions Likely to Impair Ability to Meet Contractual Commitments to Clients 74

    C. Bankruptcy Filings 74

    APPENDIX A - Separate Account Fee Schedules 75

    Key Terms 100

    4

  • J.P. Morgan Investment Management Inc. Form ADV | March 31, 2019

    ITEM 4 Advisory Business

    A. General Description of Advisory Firm

    This Brochure relates to the investment advisory services offered by J.P. Morgan Investment Management Inc. ("JPMIM" or the "Adviser"). JPMIM, a Delaware corporation, is registered with the Securities and Exchange Commission ("SEC") as an investment adviser pursuant to the Investment Advisers Act of 1940, as amended (the Advisers Act). JPMIM, together with Bear Stearns Asset Management Inc., Highbridge Capital Management, LLC, J.P. Morgan Alternative Asset Management, Inc., JF International Management Inc., JPMorgan Asset Management (UK) Limited, JPMorgan Funds Limited, Security Capital Research & Management Inc., each an SEC registered investment adviser, various affiliated foreign investment advisers and the asset management division of JPMorgan Chase Bank, N.A. comprise the Asset Management ("AM") business of J.P. Morgan Asset & Wealth Management ("JPMAWM"). J.P. Morgan Asset Management ("JPMAM") is the marketing name for the AM businesses of JPMorgan Chase & Co. and its affiliates worldwide ("JPMC"). JPMC is a publicly traded global financial services firm.

    JPMorgan Asset Management Holdings Inc., which is a subsidiary of JPMC, owns all the common stock of JPMIM. JPMIM was incorporated in Delaware on February 7, 1984.

    B. Description of Advisory Services

    JPMIM and its "Affiliates" (as defined in Key Terms) in JPMAM provide a broad range of investment strategies to meet the diverse requirements of their clients' investment needs. JPMIMs advisory services are offered on both a discretionary and non-discretionary basis through a variety of investment vehicles and arrangements, depending on the strategy. These include separately managed accounts (including direct advisory services or indirect advisory services through wrap fee programs) and pooled investment vehicles such as mutual funds or private investment funds.

    Below is a brief description of the investment strategies and solutions offered by JPMIM. Major asset classes supported by JPMIM include: global equities, global fixed income, currency & commodities, global liquidity, index-oriented or beta, and alternatives including absolute return & opportunistic fixed income, real estate, infrastructure, transportation and private equity. JPMIM also offers asset allocation strategies and multi-asset solutions, including fund of funds strategies and Environmental, Social and Governance ("ESG") solutions.

    Global Equities ("Equity" or "Equities") Investment Strategies.

    The following are some of the Advisers significant Equity strategies:

    U.S. Equity, including Core, Value, Growth, Small Cap and Behavioral Finance

    International Equity, including Global Real Estate Investment Trusts ("REITs"), International Behavioral Finance, Research Driven Process and Global Specialist

    Emerging Markets Equity, including Core, Growth, Income, Balanced, Small Cap and Mid Cap

    Asia Pacific ("APAC") Equity, including APAC Regional, the Association of Southeast Asian Nations ("ASEAN"), Greater China, India and Japan

    Global Fixed Income, Currency & Commodities ("GFICC") Investment Strategies.

    The following are some of the Advisers significant Fixed Income strategies:

    5

  • J.P. Morgan Investment Management Inc. Form ADV | March 31, 2019

    U.S. Broad Markets, including Core, Core Plus, Short Duration, Government, Mortgages, Inflation Linked and Intermediate

    Global Broad Markets, including Global Credit, Global Aggregate and Global Rates

    High Yield, including Broad, U.S., Global, Upper Tier, Distressed Debt and Loans

    Emerging Market Debt, including Sovereign, Local Currency, Corporate Debt and Blended

    Municipals

    Specialty, includin

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