• Structured Investments
• Exchange Traded Notes

Email Print

Exchange Traded Notes

Access Agreement

J.P. Morgan is an award-winning global provider of innovative investment solutions. The firm offers a broad range of investment options, including Exchange Traded Notes ("ETNs").  In April 2009, we launched the JPMorgan Alerian MLP Index ETNs leveraging our trading expertise in MLPs to provide investors convenient access to this emerging asset class.

• View detailed product information
• JPMorgan Alerian MLP Index ETNs
• Overview of Master Limited Partnerships
• The Alerian MLP Index
• Benefits of investing in the JPMorgan Alerian MLP Index ETNs
• Main risks in the ETNs
• View the JPMorgan Alerian MLP Index ETNs advertisement

View detailed product information

• AMJ Factsheet
• Pricing Supplement

JPMorgan Alerian MLP Index ETNs
JPMorgan Alerian MLP Index Exchange Traded Notes ("ETNs") provide investors a convenient way to gain exposure to midstream energy MLPs.  The ETNs pay a variable quarterly coupon linked to the cash distributions paid on the MLPs in the index, less accrued tracking fees¹.  The ETN coupons are reported on Form 1099s and therefore eliminate the administrative burden associated with K-1 forms. Investors can trade the ETNs on the NYSE, Arca exchange or receive a cash payment at the scheduled maturity or upon early repurchase², based on the performance of the index. The ETNs are senior, unsecured obligations of JPMorgan Chase & Co.

ETN Details

1. The "Accrued Tracking Fee" for a given coupon period, as more fully described in the relevant pricing supplement, represents an amount equal to the Tracking Fee of 0.85% per annum accrued for that coupon period multiplied by the Current Indicative Value on the Index Business Day prior to the date of determination, plus the aggregate amounts, if any, by which the previous Accrued Tracking Fees have exceeded the cash distributions, if any, made by the underlying MLPs.
2. Investors may request on a weekly basis that the Issuer repurchase a minimum of 50,000 notes prior to the maturity date, subject to the procedures described in the relevant pricing supplement.  Early repurchases will be subject to a Repurchase Fee of 0.125% as further described in the relevant pricing supplement.
3. The intraday indicative value of the ETNs (the "IIV") is meant to approximate the intrinsic economic value of an ETN.  The IIV calculation will be provided for reference purposes only.  It is not intended as a price or quotation. The IIV will be based on the intraday indicative values of the Index, and may not be equal to the payment at maturity or upon early repurchase.  Please see the relevant pricing supplement for details.
4. The coupon is calculated based on the cash distributions, if any, paid on the underlying MLPs, less the Accrued Tracking Fee.  The coupons are variable and may be zero.  Please see the relevant pricing supplement for details.

Overview of Master Limited Partnerships
Master Limited Partnerships ("MLPs") are limited partnerships that are publicly traded on a U.S. securities exchange.  The majority of MLPs currently operate in the energy infrastructure industry, owning assets such as pipelines that transport crude oil, natural gas and other refined petroleum products.  MLPs typically generate fee-based revenues, which tend not to be directly tied to changes in commodity prices. 

Major benefits of investing in MLPs include a relatively low correlation to a wide range of asset classes including equities and commodities as well as attractive historical yields compared to other income-oriented investments.

The Alerian MLP Index
The Alerian MLP Index (“Index”) is a market-cap weighted, float-adjusted index created to provide a comprehensive benchmark for investors to track the performance of the energy MLP sector.  The Index components are selected by Alerian Capital Management, LLC (“Alerian”).   Alerian is a registered investment advisor that exclusively manages portfolios focused on midstream energy MLPs.

Benefits of investing in the JPMorgan Alerian MLP Index ETN

• Exposure to a portfolio of energy MLPs through a single investment.
• Quarterly coupons based on the cash distributions, if any, paid on the MLPs in the Index, less fees.
• No K-1 forms will be received by investors as a result of their investment in the ETNs.  The coupons are reported as ordinary income on Form 1099.
• The ETNs trade on the NYSE, Arca.

Main risks in the ETNs

• The ETNs may result in a loss.
• The ETNs are exposed to the credit risk of JPMorgan Chase & Co.
• The ETNs may not have an active trading market and may not continue to be listed over their term.
• The payment at maturity or upon early repurchase of the ETNs will be based on the VWAP Level of the Index and not on the closing level of the Index. The VWAP Level of the Index will most likely differ from the closing level of the Index or the IIV.
• The coupon payments on the ETNs will be variable and may be zero. The Accrued Tracking Fee reduces the potential coupons and/or the payment at maturity or upon early repurchase.
• The Issuer's obligation to repurchase the ETNs is on a weekly basis, and is subject to substantial minimum size restrictions.
• You will not know how much you will receive upon early repurchase at the time that you elect we repurchase your ETNs.

The risks identified above are not exhaustive.  You should also review carefully the related "Risk Factors" section of the relevant product supplement and the "Selected Risk Considerations" in the relevant pricing supplement.

ETN Disclaimer: SEC Legend: JPMorgan Chase & Co. has filed a registration statement (including a prospectus) with the SEC for any offerings to which these materials relate. Before you invest, you should read the prospectus in that registration statement and the other documents relating to this offering that JPMorgan Chase & Co. has filed with the SEC for more complete information about JPMorgan Chase & Co. and this offering. You may get these documents without cost by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, JPMorgan Chase & Co., any agent or any dealer participating in this offering will arrange to send you the prospectus and each prospectus supplement as well as any product supplement, pricing supplement and term sheet if you so request by calling toll-free 866-535-9248.

ETNs may be sold throughout the day on the exchange through any brokerage account.  There are restrictions on the minimum number of ETNs you may require us to repurchase directly as specified in the relevant pricing supplement and product supplement.  Commissions may apply and there are tax consequences in the event of sale, early repurchase or maturity of ETNs.  Sales in the secondary market may result in significant losses.  There are tax consequences in the event of sale, redemption or maturity of the ETNs.

Buying and selling ETNs may result in brokerage commissions.  If you wish to continue to purchase ETNs, you must contact your broker.

Investments in financial instruments such as ETNs require investors to assess several characteristics and risk factors that may not be present in other types of transactions.  In reaching a determination as to the appropriateness of any proposed transaction, clients should undertake a thorough independent review of the legal, regulatory, credit, tax, accounting and economic consequences of such transaction in relation to their particular circumstances.  We and/or our affiliated companies may make a market or deal as principal in the securities mentioned in this document or in options, futures, or other derivatives based thereon.

Neither the SEC nor any state securities commission has approved or disapproved of the ETNs or passed upon the adequacy of any Offering Documents on the ETN Website.  Any representation to the contrary is a criminal offense.

IRS Circular 230 Disclosure:  We and our affiliates do not provide tax advice.  Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with the Issuer of any of the matters address herein or for the purpose of avoiding U.S. tax-related penalties.  The tax consequences of ETNs are uncertain.

Investment suitability must be determined individually for each investor, and the financial instruments described herein may not be suitable for all investors.  This information is not intended to provide and should not be relied upon as providing accounting, legal, regulatory or tax advice.  Investors should consult with their own advisors as to these matters.

By accessing this website you hereby certify that you have read and that you agree to be bound by the access agreement, including the embedded terms and conditions contained in the Access Agreement.