BUSINESS: JPMorgan Alerian MLP Index Excahnge Traded Note (ETN) due 5/24/2024 are issued by J.P. Morgan Chase & Co and are part of the Series E Medium-Term Notes. INVESTMENT OBJECTIVE: The JPMorgan Alerian MLP Index ETN due 5/24/2024 is designed to provide investors a convenient way to gain exposure to midstream energy Master Limited Partnerships (MLPs) which 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.
INDEX DESCRIPTION: The Alerian MLP 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 measures the composite performance of energy-oriented Master Limited Partnerships, or MLPs, The Index components are selected by Alerian Capital Management, LLC, a registered investment advisor that exclusively manages portfolios focused on midstream energy MLPs.
RETURNS AND MATURITY: For each note, unless earlier repurchased, you will receive at maturity a cash payment equal to (a) the product of (i) the Principal Amount and (ii) the Index Ratio as of the last Index Business Day in the Final Measurement Period plus (b) the final Coupon Amount, minus (c) the Accrued Tracking Fee as of the last Index Business Day in the Final Measurement Period, plus (d) the Stub Reference Distribution Amount as of the last Index Business Day in the Final Measurement Period, if any. We refer to this cash payment as the Cash Settlement Amount. If the amount calculated above is less than zero, the payment at maturity will be zero. 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 repurchase based on the performance of the index. Maturity date is May 24, 2024
REDEMPTION AND FEES: The ETNs are senior, unsecured obligations of JPMorgan Chase & Co. As of any date of determination, an amount per note equal to the product of 0.2125% (equivalent to 0.85% per annum) multiplied by the Current Indicative Value as of the immediately preceding Index Business Day. For further information on this ETN click on the Link to the IPO Prospectus provided.
