JP Morgan LittleBook Q4 2014

4Q | 2014
2013
As
AsofofSeptember
September30,
30,2013
2014
Guide to the Markets
Global Market Insights Strategy Team

Americas
Europe
Asia
Dr. David P. Kelly, CFA

New York
Stephanie H. Flanders
London
Tai Hui
Hong Kong
Andrew D. Goldberg
New York
Maria Paola Toschi

Milan
Geoff Lewis
Hong Kong
Anastasia V. Amoroso, CFA

Houston
Vincent Juvyns
Luxembourg
Yoshinori Shigemi
Tokyo
James C.
C Liu,
Liu CFA
Chicago
Manuel Arroyo Ozores,

Ozores CFA
Madrid
Grace Tam
Tam, CFA
Hong Kong
Julio C. Callegari
So Paulo
Tilmann Galler, CFA

Frankfurt
Ian Hui
Hong Kong
David M. Lebovitz
New Yorkk
David Stubbs, PhD

London
d
Ben Luk
Hong Kong
Gabriela D. Santos
New York
Lucia Gutierrez
Madrid
Ainsley E. Woolridge
New York
Kerry Craig, CFA

London
Hannah J. Anderson
New York
Alexander W. Dryden
London
Nandini Ramakrishnan
London
Past performance is no guarantee of comparable future results. For China and Australia distribution, please note this
communication is for intended recipients only and is for wholesale clients only in Australia. For details, please refer to the full
disclaimer at the end. Unless otherwise stated, all data is as of September 30, 2014 or most recently available.
Page Reference
Equities
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
S&P 500 Index at Inflection Points

Returns and Valuations by Style
Returns and Valuations by Sector
Stock Valuation Measures: S&P 500 Index
Corporate Profits and Leverage
Sources of Earnings per Share Growth
Sources of Total Return
Equity Performance in Bull Markets
Interest Rates and Equities
p y g Corporate
p
Cash
Deploying
Annual Returns and Intra-year Declines
Equity Correlations and Volatility
Stock Market Since 1900
Economy
17.
18.
19.
20.
21.
22.
23.
24.
25
25.
26.
27.
28.
29.
30.
Fixed Income Sector Returns

Interest Rates and Inflation
Fixed Income Yields and Returns
Sources of Bond Returns
The Fed and Interest Rates
36.
37.
38.
39.
40.
41.
Owners of Treasury Securities

Credit Conditions
High Yield Bonds
Municipal Finance
Global Fixed Income
Emerging Market Debt
International
Page 17
Economic Growth and the Composition of GDP

Consumer Finances
Cyclical Sectors
Residential Real Estate
Commercial Real Estate
Long-term Drivers of Economic Growth
Federal Finances
Employment
Labor Market Perspectives
Employment and Income by Educational Attainment
Consumer Price Index
Trade and the U.S. Dollar
Energy and the Economy
Consumer Confidence and the Stock Market
Fixed Income
31.
32.
33.
34.
35.
Page 4
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
Global Equity Markets

Global Economic Growth
Manufacturing Momentum
g Debt Stresses
Sovereign
Global Monetary Policy
Europe: Cyclical Headwinds and Tailwinds
Europe: Unemployment, Inflation and Credit Markets
Europe: Revenues, Margins and Earnings
Japan: Economic Snapshot
International Equity Earnings and Valuations
Exports, Demographics and Development
Emerging Market Currencies
Emerging Market Diversity
China: Economic and Credit Growth
Global Equity Valuations Developed Markets
Global Equity Valuations Emerging Markets
Asset Class
Page
g 31
58.
59.
60.
61.
62.
63.
64
64.
65.
66.
67.
Page 42
Asset Class Returns

Correlations and Volatility
Alternative Asset Class Returns
Fund Flows
Yield Alternatives: Domestic and Global
Global Commodities
Historical Returns by Holding Period
Diversification and the Average Investor
Cash Accounts
Corporate DB Plans and Endowments
Page 58
S&P 500 Index at Inflection Points

S&P 500 Index
Characteristic
Equities
2,000
Mar-2000
Oct-2007
Sep-2014
1,527
25.6x
1 1%
1.1%
6.2%
1,565
15.2x
1 8%
1.8%
4.7%
1,972
15.3x
1
1.9%
9%
2.5%
Index level
P/E ratio (fwd.)
Dividend yield
10-yr. Treasury
1,800
1,600
Sep. 30, 2014

P/E (fwd.) = 15.3x
1,972
Mar. 24, 2000

P/E (fwd.) = 25.6x
Oct. 9, 2007
P/E (fwd.) = 15.2x
1,527
1,565
1,400
+106%
+101%
+192%
1,200
-57%
-49%
1,000
800
Dec 31
Dec.
31, 1996
P/E (fwd.) = 16.0x
Mar. 9, 2009
P/E (fwd.) = 10.3x
Oct. 9, 2002
P/E (fwd.) = 14.1x
741
677
777
600
'97
'98
'99
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Source: Standard & Poors, First Call, Compustat, FactSet, J.P. Morgan Asset Management.
Dividend yield is calculated as the annualized dividend rate divided by price
price, as provided by Compustat.
Compustat Forward Price to Earnings Ratio is a bottom-up calculation based
on the most recent S&P 500 Index price, divided by consensus estimates for earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates.
Returns are cumulative and based on S&P 500 Index price movement only, and do not include the reinvestment of dividends. Past performance is not indicative of future
returns.
Guide to the Markets U.S.
Data are as of 9/30/14.
Returns and Valuations by Style
-2.6%
-1.7%
-0.7%
-8.6%
-7.4%
-6.1%
8.1%
8.3%
7.9%
8.2%
6.9%
5.7%
-4.7%
-4.4%
-4.0%
Value
Larg
ge
1.5%
Growth
Mid
1.1%
Blend
Small
Larg
ge
-0.2%
Value
Larg
ge
Growth
Mid
Blend
Current P/E vs. 20-year avg. P/E
Small
Value
Mid
Year to Date
Small
Equities
3Q 2014
14.8
Blend
15.3
14.0
16.5
18.1
16.2
18.1
14.2
16.1
21.0
20.0
16.5
17.8
14.4
Growth
21.9
19.6
17.3
21.5
Current P/E as % of 20-year avg. P/E
Mid
M
58.8%
60.5%
60.2%
35.4%
43.6%
51.4%
Value
Blend
Growth
94.4%
86.0%
110 0%
110.0%
91 5%
91.5%
102.9%
91.4%
237.6% 228.0% 231.0%
Large
62.3%
Growth
105.9%
305.6% 287.3% 270.4%
Mid
46.8%
Blend
116 2%
116.2%
234.8% 246.3% 257.4%
Small
Large
35.4%
Value
Large
Growth
E.g.: Large Cap Blend stocks are 5.6%

cheaper than their historical average.
Mid
M
Blend
Since Market Low (March 2009)
Small
Value
Small
Since Market Peak (October 2007)
111.9%
Source: Russell Investment Group,

p, Standard & Poors,, FactSet,, J.P. Morgan
g Asset Management.
g
All calculations are cumulative total return, including dividends reinvested for the stated period. Since Market Peak represents period 10/9/07 9/30/14, illustrating
market returns since the S&P 500 Index high on 10/9/07. Since Market Low represents period 3/9/09 9/30/14, illustrating market returns since the S&P 500 Index
low on 3/9/09. Returns are cumulative returns, not annualized. For all time periods, total return is based on Russell-style indexes with the
exception of the large blend category, which is reflected by the S&P 500 Index. Past performance is not indicative of future returns. P/E ratios reflect
latest available data and are as of August for Russell Indexes and as of September for Standard & Poors.

ex
In
d
50
0
10.3%
11.9%
10.2%
9.7%
5.7%
12.9%
11.7%
18.2%
6.2%
9.5%
10.3%
7.1%
2.4%
2.4%
2.3%
3.0%
0.1%
6.0%
3.5%
4.2%
3.3%
100.0%
100.0%
100.0%
YTD
7.4
14.1
16.6
2.9
3.2
0.9
7.2
7.5
13.9
8.9
8.3
3Q14
2.3
4.8
5.5
-1.1
-8.6
0.3
2.0
3.1
-4.0
0.2
1.1
-25.1
69.7
103.5
42.8
30.9
98.4
96.3
27.8
36.0
35.9
46.8
309.1
255.6
228.1
292.3
139.7
359.3
175.2
144.1
138.0
223.7
228.0
Beta to S&P 500
1.44
1.11
0.69
1.20
1.01
1.13
0.57
0.63
0.50
1.28
1.00
Correl to Treas.
Treas Yields
0 33
0.33
0 09
0.09
-0.08
0 08
0 29
0.29
0 23
0.23
0 18
0.18
-0.15
0 15
-0.35
0 35
-0.43
0 43
0 16
0.16
0 11
0.11
Forward P/E Ratio
13.0x
15.4x
16.5x
15.5x
13.2x
17.3x
17.7x
13.5x
15.7x
16.3x
15.3x
Since Market Peak

(October 2007)
Since Market Low

(March 2009)
15-yr avg.
12.7x
21.0x
17.5x
17.1x
13.7x
18.7x
18.5x
17.2x
14.0x
16.0x
16.3x
Trailing P/E Ratio
16.5x
19.3x
24.3x
17.2x
14.6x
20.7x
20.2x
10.7x
18.9x
20.2x
18.4x
20-yr avg.
16.4x
26.1x
24.0x
20.3x
17.2x
19.2x
21.2x
19.9x
14.9x
19.5x
19.5x
Dividend Yield
1.7%
1.5%
1.6%
2.1%
2.3%
1.5%
2.7%
4.8%
3.7%
2.0%
2.0%
2.1%
0.7%
1.4%
1.7%
1.7%
0.9%
2.1%
4.2%
4.3%
2.1%
1.7%
20-yr avg.
Return (%)
13.9%
13.6%
13.5%
19.7%
28.4%
9.4%
Weight
S&
P
at
er
ia
ls
M
Ut
il
iti
es
es
Te
le
co
m
Co
n
s.
St
ap
l
Di
sc
r.
s.
Co
n
er
gy
En
du
st
ria
ls
In
ar
e
He
al
th
og
ol
Te
ch
n
16.3%
5.1%
29.2%
P/E
S&P Weight
Russell Growth Weight
Russell Value Weight
Diiv
Equities
Fi
na
nc
ia
ls
Returns and Valuations by Sector
Source: Standard & Poors, Russell Investment Group, FactSet, J.P. Morgan Asset Management.
All calculations are cumulative total return, not annualized, including dividends for the stated period. Since Market Peak represents period 10/9/07 9/30/14.
Since Market Low represents period 3/9/09 9/30/14. Correlation to Treasury Yields are trailing 2-year monthly correlations between S&P 500 sector price
returns and 10-year Treasury yield movements. Forward P/E Ratio is a bottom-up calculation based on the most recent S&P 500 Index price, divided by
consensus estimates for earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates. Trailing P/E ratios are bottom-up values
defined as month-end price divided by the last 12 months of available reported earnings. Historical data can change as new information becomes available.
Note that P/E ratios for the S&P 500 may differ from estimates elsewhere in this book due to the use of a bottom-up
bottom up calculation of constituent earnings (as
described) rather than a top-down calculation. This methodology is used to allow proper comparison of sector level data to broad index level data. Dividend
yields are bottom-up values defined as the annualized value of the most recent cash dividend as a percent of month-end price. Beta calculations are based
on 10 years of monthly price returns for the S&P 500 and its sub-indices. Betas are calculated on a monthly frequency over the past 10-years. Past
performance is not indicative of future returns.

Stock Valuation Measures: S&P 500 Index
Equities
U.S. Equity: Valuation Measures

Valuation
Measure
P/E
Description
Price to Earnings
CAPE
Latest
Historical Averages
1-year
5-year
ago
avg.
10-year
avg.
25-year
avg.*
15.3x
14.2x
13.4x
13.8x
15.6x
Shiller's P/E
26.3
25.0
22.1
22.9
25.2
Div. Yield
REY
Dividend Yield
Real Earnings Yield
1.9%
2.0%
2.0%
2.0%
2.1%
3.8%
3.7%
4.2%
3.2%
2.2%
P/B
P/CF
Price to Book
Price to Cash Flow
2.7
2.6
2.3
2.4
2.9
10.7
10.6
9.2
9.7
11.3
EY Spread
EY Minus Baa Yield
1.8%
1.5%
2.1%
1.2%
-0.7%
S&P 500 Index: Forward P/E Ratio
S&P 500 Earnings Yield vs. Baa Bond Yield
26x
14%
S&P 500 Earnings Yield

(Inverse of fwd. P/E): 6.6%
24x
12%
22x
20x
10%
18x
Current: 15.3x
16x
Average: 15.6x
14x
8%
6%
12x
4%
10x
8x
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
2%
Moodys Baa Yield: 4.8%

'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Source: Standard & Poors, FactSet, Robert Shiller Data, FRB, J.P. Morgan Asset Management. Price to Earnings is price divided by consensus analyst estimates of earnings
per share for the next 12 months. Shillers P/E uses trailing 10-years of inflation adjusted earnings as reported by companies. Dividend Yield is calculated as the trailing 12month average dividend divided by price. Price/Earnings to Growth Ratio is calculated as NTM P/E divided by NTM earnings growth. Price to Book Ratio is the price divided by
book value per share. Price to Cash Flow is price divided by NTM cash flow. EY Minus Baa Yield is the forward earnings yield (consensus analyst estimates of EPS over the
next 12 months divided by price) minus the Moodys Baa seasoned corporate bond yield. *P/CF is a 20-year avg. due to cash flow data availability.
Corporate Profits and Leverage

Profit Margins
S&P 500 Earnings Per Share
Operating basis, quarterly
Equities
2Q14*: $29.45
$27
3Q14*:
10.1%
12%
2Q07: $24.06
S&P 500 Operating

p
g EPS % of Sales per
p Share
10%
8%
2Q14:
8.7%
6%
$23
4%
$19
After Tax Adj

After-Tax,
Adj. Corp.
Corp Profits
Profits, % of GDP
2%
0%
'60
$15
'65
'70
'75
'80
'85
'90
'95
'00
'05
'10
Total Leverage
S&P 500, ratio of total debt to total equity, quarterly
240%
$11
220%
200%
$7
180%
Average: 169%
160%
140%
$3
3Q14:
101%
120%
100%
-$1
80%
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
'96
'98
'00
'02
'04
'06
'08
Source: BEA, Standard & Poors, Compustat, J.P. Morgan Asset Management.
EPS levels are based on operating earnings per share. *Most recently available data is 2Q14 as 3Q14 is a Standard & Poors preliminary estimates.
Past performance is not indicative of future returns.
'10
'12
'14
Sources of Earnings per Share Growth

S&P 500 Year-Over-Year EPS Growth
Growth broken into revenue, changes in profit margin & changes in share count
Equities
50%
Share of EPS Growth

Margin
Revenue
Share count
40%
2Q14*
2Q14
5.6%
5.7%
0.4%
30%
20%
10%
0%
-10%
-20%
30%
-30%
-40%
-50%
2Q94
2Q96
2Q98
2Q00
2Q02
2Q04
2Q06
2Q08
2Q10
Source: Standard & Poors, Compustat, J.P. Morgan Asset Management.

EPS levels are based on operating earnings per share. *Most recently available data is 1Q14 as 2Q14 are Standard & Poors preliminary estimates.
Past performance is not indicative of future returns. 4Q2008, 1Q2010 and 2Q2010 reflect -101%, 92% and 51% growth in operating earnings, and
are adjusted on the chart.
2Q12
2Q14*
Sources of Total Return

S&P 500 Year-Over-Year Total Return
Total return broken into multiples, earnings and dividends, quarterly
Equities
50%
40%
30%
20%
10%
0%
-10%
-20%
Share of Total Return

Multiples
Earnings
Dividends
-30%
30%
-40%
3Q14
Q
7.7%
9.6%
2.4%
-50%
3Q94
3Q96
3Q98
3Q00
3Q02
Source: Standard & Poors, IBES, J.P. Morgan Asset Management.

Earnings contribution is the measured change in forward earnings per share estimates.
Data are as of 9/3014.
10
3Q04
3Q06
3Q08
3Q10
3Q12
3Q14
Equities
Equity Performance in Bull Markets

S&P 500 Performance and Average Valuation
S&P 500 Levels Near Market Highs
Price returns to peak after crossing average real earnings yield
% of days during bull markets the S&P 500 is at and near record highs
300%
90%
Returns to peak price after average valuation

Returns before markets pass average valuation
Average valuation is
defined as the average real
earnings yield of the S&P
500 from 1963 until today
83%
2002-2007
80%
240%
1991-2000
84%
78%
2009-Today
70%
0%*
60%
83%
180%
50%
41%
40%
49%
36%
120%
33%
0%
30%
30%
4%
60%
20%
16%
13% 11%
15%
10%
29%
49%
73%
'66
'70
'74
121%
59%
180%
101%
192%
'02
'09
0%
0%
11
16%
'82
'87
'90
Start of Bull Market
New High
Within 1%
Within 5%
Percent of days during a Bull Market
spentt att record
d highs,
hi h or within
ithi a 1% or 5% range off th
the record
d hi
high
h
Source: Standard & Poors, J.P. Morgan Asset Management.

Valuations are based on real earnings yield for the S&P 500 which is defined as (trailing four quarters of reported earnings/price) - year over year
core CPI inflation. Period after average valuation defined by 15-day moving average passing below average real earnings yield. *As depicted on
the left hand chart, the return to peak price for the current bull market is 0% as the S&P 500 has yet to cross its long run average real earnings
yield. The S&P 500 would need to appreciate over 17% to reach its long-term average real earnings yield of 2.4%.
Data as of 9/30/2014
Interest Rates and Equities

Correlations Between Weekly Stock Returns and Interest Rate Movements
Weekly S&P 500 returns, 10-year Treasury yield, rolling 2-year correlation, May 1963 Sep. 2014
Equities
0.8
When yields are
below 5%, rising
rates are
generally
associated with
rising stock
prices
0.6
Positive
relationship
between yield
movements
and stock
returns
Correlation Coefficient
0.4
Graph Key
Last 12 Months
1963 12 Months Ago
0.2
-0.2
Negative
relationship
between yield
movements and
stock returns
-0.4
-0.6
-0.8
0%
2%
4%
6%
8%
10%
10-Year Treasury Yield

Source: Standard & Poors, U.S. Treasury, FactSet, J.P. Morgan Asset Management.
Returns are based on price index only and do not include dividends. Markers represent monthly 2-year correlations only.
12
12%
14%
16%
Deploying Corporate Cash

Corporate Cash as a % of Current Assets
Corporate Growth
Equities
S&P 500 companies cash and cash equivalents, quarterly
$bn, nonfarm nonfinancial capex, quarterly value of deals completed
32%
$1,700
30%
$1 600
$1,600
$1 400
$1,400
28%
$1,500
$1,200
$1,400
$1,000
$1,300
$800
$1,200
$600
18%
$1,100
$400
16%
$1,000
$200
26%
Capital Expenditures
M&A Activity
$1,600
24%
22%
20%
14%
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Dividend Payout
y
Ratio
S&P 500 companies, LTM
$900
$0
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Cash Returned to Shareholders
$bn, S&P 500 companies, rolling 4-quarter averages

$160
60%
$36
Dividends per Share
$140
$33
50%
$120
$30
$100
$27
40%
$80
$24
$18
20%
13
$60
$21
30%
'00 '01 '02 '03 '04
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Share Buybacks
$15
$40
$20
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Source: Standard & Poors, FRB, Bloomberg, FactSet, J.P. Morgan Securities, J.P. Morgan Asset Management. (Top left) Standard & Poors,
FactSet, J.P. Morgan Asset Management. (Top right) M&A activity is the quarterly value of officially agreed transactions and capital
expenditures are for nonfarm nonfinancial corporate business. (Bottom left) Standard & Poors, FactSet, J.P. Morgan Asset Management.
(Bottom right) Standard & Poors, Compustat, FactSet, J.P. Morgan Asset Management. Guide to the Markets U.S. Data are as of 9/30/14.
Annual Returns and Intra-year Declines

S&P 500 Intra-year Declines vs. Calendar Year Returns
Despite average intra-year drops of 14.2%, annual returns positive in 26 of 34 years*
YTD 2014
Equities
40%
34
31
30%
27
26
26
20%
15
20
17
15
26
23
20
14
12
10%
30
27
26
7
4
%
-2
-10%
-8
-7
-10
-8
-9
-8
-7
-6
-6
-5
-9
0
-3
-8
11
-11
13
-13
-20%
-17 -18 -17
13
13
-12
-19
-20
-10
-8
-13
13
-7
-8
-6
-6
-10
-10
-14
-16
-17
-19
-23
-30%
-28
-30
-34
-34
-40%
40%
-38
38
-50%
-49
-60%
'80
'82
'84
'86
'88
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
Source: Standard & Poors, FactSet, J.P. Morgan Asset Management.

Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops from a peak to a trough during
the year. For illustrative purposes only. *Returns shown are calendar year returns from 1980 to 2013 excluding 2014 which is year-to-date.
14
'10
'12
'14
Equity Correlations and Volatility

Large Cap Stocks
Sovereign Debt
Crisis
Correlations Among Stocks
Equities
70%
Great Depression /
World War II
60%
50%
Lehman
Bankruptcy
1987 Crash
Cuban Missile Crisis
40%
OPEC Oil
Crisis
Tech Bust & 9/11
30%
20%
Average: 26.9%
10%
Jul. 2014: 26.4%
0%
'26
'32
'38
'44
'50
'56
'62
'68
Daily Volatility of DJIA

DJIA vol. shown
in 3-month
moving average
2.5%
'80
'86
Volatility Measure 08 Peak

DJIA (Left)
3.30%
VIX (Right)
80.9
3.5%
3.0%
'74
'92
Average
0.71%
20.0
'98
'04
'10
Latest
0.42%
16.3
90
75
60
2 0%
2.0%
45
1.5%
30
1.0%
15
0.5%
0.0%
0
'30
15
'35
'40
'45
'50
'55
'60
'65
'70
'75
'80
'85
'90
'95
'00
'05
Source: (Top) Empirical Research Partners LLC, Standard & Poors, J.P. Morgan Asset Management. Capitalization weighted correlation of top
750 stocks by market capitalization, daily returns, 1926 Jul. 1, 2014. (Bottom) CBOE, Dow Jones, J.P. Morgan Asset Management. DJIA
volatility are represented as three-month moving averages of the daily absolute percentage change in the Dow Jones Industrial Average.
Charts shown for illustrative purposes only. Guide to the Markets U.S. Data are as of 9/30/14.
'10
Stock Market Since 1900

S&P Composite Index
Equities
Log Scale
2000 present
1,000
300
1966 1974
100
40
1937 1948
1900 1924
10
'00
'10
'20
'30
'40
'50
Source: Robert Shiller, FactSet, J.P. Morgan Asset Management.

Data shown in log scale to best illustrate long-term index patterns.
Past performance is not indicative of future returns. Chart is for illustrative purposes only.
16
'60
'70
'80
'90
'00
'10
Economic Growth and the Composition of GDP

Real GDP
Components of GDP
Year-over-year % chg
2Q14 nominal GDP, trillions USD
10%
Real GDP
Econom
my
8%
2Q14
YoY % chg:
2.6%
QoQ % chg:
4.6%
$18
$
$16
$14
6%
Average:
3.0%
3.2% Housing
13.2% Investment Ex-housing
18.3% Govt Spending
$12
4%
$10
2%
$8
0%
$6
Expansion
Average:
2.2%
-2%
68.5% Consumption
$4
$2
-4%
$0
- 3.2% Net Exports

-6%
'65
'70
'75
'80
'85
'90
'95
'00
'05
'10
-$2
Source: BEA, FactSet, J.P. Morgan Asset Management.

Values may not sum to 100% due to rounding
rounding. Quarter over quarter percent changes are at an annualized rate
rate. Average represents the annualized growth rate for the
full period. Expansion average refers to the period starting in the second quarter of 2009.
17
Consumer Finances
Consumer Balance Sheet
2Q14, Trillions of dollars outstanding, not seasonally adjusted
$100
Total Assets: $95.4tn
3Q-07 Peak: $72.3tn

1Q-09 Low: $62.6tn
$
Household Debt Service Ratio

Debt payments as % of disposable personal income, seasonally adjusted
14%
4Q07:
13 2%
13.2%
13%
$90
12%
Homes: 24%
Econom
my
$80
$70
$60
$50
11%
Other Tangible: 6%
10%
Deposits: 9%
9%
2Q14*:
9.9%
'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 14
Household Net Worth

j
Billions USD, not seasonallyy adjusted
Pension Funds: 21%

Other Non-revolving: 2%
Revolving (e.g.: credit cards): 6%
Auto Loans: 7%
Other Liabilities: 10%
Student Debt: 8%
$40
$30
$20
1Q80:
10.6%
Other Financial
Assets: 40%
2Q07:
$67,927
$80,000
$70,000
$60,000
$50,000
Total Liabilities: $13.9tn
$40,000
$30,000
$10
Mortgages: 67%
$0
$20,000
$10,000
'90
'92
'94
'96
'98
'00
'02
'04
Source: (Left) FRB, J.P. Morgan Asset Management. Data includes households and nonprofit organizations. (Right) BEA, FRB, J.P. Morgan Asset
Management. *2Q14 household debt service ratio and 3Q14 household net worth are J.P. Morgan Asset Management estimates. Values may not sum to
100% due to rounding.
18
3Q14*:
$82,112
$90,000
'06
'08
'10
'12
'14
Cyclical Sectors
Light Vehicle Sales
Manufacturing and Trade Inventories
Millions, seasonally adjusted annual rate
Days of sales, seasonally adjusted
24
47
22
46
45
20
Sep. 2014:
16.4
18
43
42
16
Econom
my
44
Jul. 2014:
39.2
41
Average: 15.3
14
40
12
39
10
38
37
8
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
'96
'98
'00
'02
'04
Housing Starts
Real Capital Goods Orders
2,400
$75
2,000
$70
Th
Thousands,
d seasonally
ll adjusted
dj t d annuall rate
t
'06
'08
'10
Aug. 2014:
63.0
$65
$60
Average: 1,350
1 350
$55
800
Average: 56.7
$50
Aug. 2014:
956
400
$45
$40
0
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
'14
14
'96
'98
'00
'02
'04
'06
'08
'10
'12
Source: (Top left) BEA, FactSet, J.P. Morgan Asset Management. (Top right) Census Bureau, FactSet, J.P. Morgan Asset Management. (Bottom left) Census Bureau,
FactSet, J.P. Morgan Asset Management. (Bottom right) Census Bureau, FactSet, J.P. Morgan Asset Management.
Capital goods orders deflated using the producer price index for capital goods with a base year of 2004.
19
'14
N d f
Non-defense
capital
it l goods
d orders
d ex. aircraft,
i ft $ bn,
b seasonally
ll adjusted
dj t d
1,600
1 200
1,200
'12
'14
Residential Real Estate

Housing Affordability Index
Home Prices
Avg. mortgage payment as a % of household income
Indexed to 100, seasonally adjusted
40%
125
Case Shiller 20-city
35%
FHFA Purchase Only
120
Average Existing Home
Aug. 2014:
13.5%
25%
115
Econom
my
30%
20%
Average: 20
20.4%
4%
110
15%
105
10%
'75
'77
'80
'83
'86
'89
'92
'95
'98
'01
'04
'07
'10
'12
Home Inventories
100
Milli
Millions,
annuall rate,
t seasonally
ll adjusted
dj t d
4.5
95
4.0
Aug. 2014:
2.4
90
3.5
85
30
3.0
2.5
80
2.0
75
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
1.5
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Sources: (Left) National Association of Realtors, Standard & Poors, FHFA, FactSet, J.P. Morgan Asset Management. (Top right) Census Bureau, J.P. Morgan Asset Management.
Monthly mortgage payment assumes the prevailing 30-year fixed-rate mortgage rates and average new home prices excluding a 20% down payment. (Bottom right) Census
Bureau, National Association of Realtors, J.P. Morgan Asset Management.
20
Commercial Real Estate

Cap. Rates, REIT Div. Yields & Treasury Yields
Commercial Vacancy Rates by Sector
Percent at year end
10%
Cap. Rates
25%
Sector
Office
Retail
Industrial
Apartment
Econom
my
20%
2013
16.7%
10.1%
9.5%
4.2%
Aug. 2014:
6.67%
8%
REIT Div. Yield
6%
Aug. 2014:
3.98%
4%

2%
15%
Aug. 2014:
2.35%
0%
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
Commercial Mortgage-Backed Security Issuance
$ bn, quarterly
10%
120
100
U.S. Issuance
Foreign Issuance
80
5%
60
40
20
0%
'90
90
'92
92
'94
94
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Source: Reis, Inc., PREA, FactSet, J.P. Morgan Asset Management.
Cap rate is the rate of return on a real estate investment property based on the expected return that the property will generate. It is calculated by
dividing annual income by the total value of the property. Cap rate is for U.S. core properties limited to deal transactions of $2.5 million or greater.
Vacancy rate data provided by Reis, Inc.
21

'11
'12
'13
'14
'14
Long-term Drivers of Economic Growth

Gross Investment and Depreciation
Growth in Employment and Real Output Per Worker*
Private nonresidential fixed investment, % of GDP

16%
Gross investment spending
Five year moving average of year-over-year % change

Depreciation
5%
Average growth
A
th
50 yr.
10 yr.
12%
4%
Econom
my
8%
5 yr.
Employment
1.5%
0.5%
0.9%
Real Output
Per Worker
1.5%
1.1%
1.3%
Sum
3.0%
1.6%
2.2%
4%
%
3%
Real Output Per Worker
0%
1990
1995
2000
2005
2010
Real Capital Stock Growth
2%
Nonresidential fixed assets, year-over-year % chg.

5%
2013
JPMAM
Est: 1.4%
4%
3%
1%
Employment Growth
0%
2%
1%
0%
1990
1995
2000
2005
2010
-1%
1964
1974
1984
1994
Source: BEA, BLS, FactSet, J.P. Morgan Asset Management.

*Labor Force includes the population age 16+ working or looking for work, Real Output Per Worker is calculated as real GDP growth minus civilian
employment growth. Averages are calculated as the annualized growth rate.
22
2004
2014
Federal Finances
The 2014 Federal Budget
Federal Budget Surplus/Deficit

% of GDP, 1990 2024, 2014 CBO Baseline
CBO Baseline forecast, trillions USD
-12%
$4.0
Forecast
-10%
Total Spending: $3.5tn

$3.5
Econom
my
$3.0
Other
$395bn (11%)
Net Int.: $231bn (7%)
$2.5
Non-defense
Non
defense Disc
Disc.::
$527bn (15%)
$2.0
Defense:
$606bn (17%)
$1.5
Social Security:
$845bn (24%)
$1.0
$0.5
2014:
-3.0%
-8%
Borrowing:
$537bn (15%)
-6%
-4%
-2%
Other: $237bn (7%)
0%
2%
Social Insurance:
$1,024bn (30%)
4%
'90
'95
'00
'05
'10
'15
'20
Federal Net Debt (Accumulated Deficits)

% of GDP, 1940 2024, 2014 CBO Baseline, end of fiscal yyear
Corp.: $274bn (8%)
120%
100%
Income:
$1,390bn ((40%))
Medicare & Medicaid:
$908bn (26%)
2024:
77.2%
80%
60%
2014:
74.4%
40%
Forecast
$0.0
Total Government Spending
Sources of Financing
20%
'40
'48
'56
'64
'72
'80
'88
'96
'04
S
Source:
U.S.
US T
Treasury, BEA,
BEA CBO
CBO, St.
St Louis
L i F
Fed,
d JJ.P.
P Morgan
M
A
Assett Management.
M
t
2014 Federal Budget is based on the CBOs August 2014 Baseline Scenario. Other spending includes, but is not limited to, health insurance subsidies, income
security, and federal civilian and military retirement.
Note: Years shown are fiscal years (Oct. 1 through Sep. 30). 2014 numbers are CBO estimates as of August 2014.
23
'12
'20
Employment
Civilian Unemployment Rate
Employment Total Private Payroll
Seasonally adjusted
Total job gain/loss (thousands)
12%
600
Econom
my
11%
400
Oct. 2009: 10.0%
10%
8.8mm
jobs lost
200
9%
0
8%
10.0 mm
jobs
gained
-200
7%
Aug. 2014: 6.1%

-400
6%
-600
50-yr. avg.: 6.1%
5%
-800
4%
3%
-1,000
,
'70
'80
'90
Source: BLS, FactSet, J.P. Morgan Asset Management.

24
'00
'10
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Labor Market Perspectives

Labor Force Participation Rate
Employed Part-time for Economic Reasons
% of labor force employed part-time for economic reasons
% of population aged 16+ working or looking for work
7%
Aug. 2014:
4 7%
4.7%
6%
68%
67%
5%
66%
4%
65%
Econom
my
3%
Aug. 2014:
62.8%
64%
2%
63%
1%
0%
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Net Job Creation Since Feb. 2010 Millions of Jobs

3 mm
2.9
62%
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Average Hourly Earnings Growth
Year-over-year
Year
over year % chg.
chg for production and nonsupervisory workers
5%
2.6
2 mm
1.9
4%
1.8
1 mm
Aug. 2014:
2.5%
3%
0.8
0 mm
-0.6
1%
-1 mm
Info. Fin & Mfg. Trade & Leisure,
Educ. &
Mining &
Bus. Svcs.
Trans.
Hospt. & Health Svcs. Construct.
Other Svcs.
S
Source:
BLS,
BLS F
FactSet,
tS t J.P.
J P Morgan
M
Asset
A
t Management.
M
t
25
2%
Gov't
0%
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Employment and Income by Educational Attainment

Average Annual Earnings by Highest Degree Earned
Unemployment Rate by Education Level
Full-time workers aged 18 and older, 2012, USD
18%
$90,000
Less than High School Degree

High School No College
Some College
College or Greater
16%
Econom
my
14%
$84 852
$84,852
$80,000
+28K
$70,000
Aug. 2014:
9.1%
12%
10%
$56,665
$60,000
Aug. 2014:
6.2%
$50,000
+26K
8%
$40,000
$30,627
6%
Aug. 2014:
5.4%
4%
$20 000
$20,000
Aug. 2014:
3.2%
2%
$10,000
$0
0%
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
Source: BLS, Census Bureau, FactSet, J.P. Morgan Asset Management.

Unemployment rates shown are for civilians aged 25 and older.
26
$30,000
'12
'14
High School Graduate
Bachelor's Degree
Advanced Degree
Consumer Price Index

CPI and Core CPI
% change vs. prior year, seasonally adjusted
50-yr. Avg. Aug. 2014
15%
Headline CPI:
4.2%
1.7%
Core CPI:
4.1%
1.7%
Econom
my
12%
9%
6%
3%
CPI
Components
Weight in
CPI
12-month
change (sa)
Food & Bev.
14.9%
2.6%
Housing
41.4%
2.6%
Apparel
3.4%
0.1%
Transportation
16.4%
-0.4%
Medical Care
7.6%
2.1%
Recreation
5.8%
0.0%
Educ. & Comm.
7.1%
1.5%
Other
3 4%
3.4%
1 6%
1.6%
100.0%
1.7%
Energy
9.0%
0.3%
Food
13.9%
2.7%
Core CPI
77.1%
1.7%
Headline CPI
Less:
0%
-3%
'65
'70
'75
'80
'85
'90
'95
'00
'05
'10
Source: BLS, FactSet, J.P. Morgan Asset Management.

CPI used is CPI-U and values shown are % change vs. one year ago and reflect August 2014 CPI data. CPI component weights are as of December 2013.
Core CPI is defined as CPI excluding food and energy prices.
27
Trade and the U.S. Dollar

Current Account Balance, % of GDP
U.S. Dollar Index

Monthly average of nominal trade-weighted exchange index: major currencies
-8%
115
4Q05:
-6.2%
110
105
Econom
my
-6%
100
95
-4%
2Q14:
-2.3%
90
Mar 2009:
Mar.
2009
84.0
85
-2%
Sept. 2014*:
79.8
80
75
0%
Mar. 2008:
70.4
70
65
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
'14
14
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
Source: BEA, Federal Reserve, FactSet, J.P. Morgan Asset Management. *September average of the U.S. Dollar Index is a J.P. Morgan Asset Management estimate.
28
'14
14
Energy and the Economy

U.S. Natural Gas Production*
Middle East Energy Production & Chokepoints
Trillions of cubic feet, USD
Percent of global petroleum production, 2013*

Kuwait
%
3.1%
Syria
0.1%
Suez Canal
2.2%
Econom
my
Gbl. Natural Gas Prices
30
Japan
Germany
U.S.
25
Iraq
3.4%
Libya
1.1%
35
EIA
Forecast
$17.25
$
$10.38
$3.88
Shale Gas
20
Iran
3.6%
15
Other**
10
Egypt
0.8%
Saudi Arabia
12.9%
Strait of
Hormuz
17 0%
17.0%
Sudan
0.3%
0
1990
2000
2005
2010
2015
2020
2025
Consumption
p
of Imports
p
of Liquid
q
Fuels
Net imports of liquid fuels as a percent of total US consumption

70%
UAE
3.6%
1995
EIA
Forecast
60%
50%
Bab el-Mandeb
3.4%
40%
30%
Major Producers
Major Consum ers
Percent of global total, 2013
Percent of global total, 2013
United States 14% China

Saudi Arabia 13% Canada
Russia
12% Iran
29
5%
5%
4%
United States 21% India

China
11% Russia
Japan
5% Saudi Arabia
20%
4%
4%
3%
10%
0%
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24
Source: (Left) EIA, J.P. Morgan Asset Management. (Top right) EIA, IMF, FactSet, J.P. Morgan Asset Management. (Bottom right) EIA, J.P.
Morgan Asset Management. Forecasts are from EIA Annual Energy Outlook and start in 2013. *Production numbers as of 2013, while chokepoints
are 2011 data. **Other includes conventional on and offshore natural gas drilling , tight gas, and coalbed methane. Natural gas prices are $/mmbtu
and are as of August 2014. Guide to the Markets U.S.
Consumer Confidence and the Stock Market

Consumer Sentiment Index University of Michigan
130
Impact on Consumer Sentiment from a
10% y-o-y rise
i iin gasoline
li prices
i
10% y-o-y rise in home prices
10% y-o-y rise in the S&P 500
1% y-o-y rise in the unemployment rate
120
Econom
my
110
Aug. 1972
100 Aug
-6.2%
-0.8
0 8 pts
t
+1.9
+2.8
-5.2
Jan. 2000
-2.0%
Jan. 2004
+4.4%
Jan. 2007
-4.2%
Mar. 1984
Mar
+13.5%
May 1977
+1.2%
Sep. 2014:
84.6
90
Average: 84.8
80
Mar. 2003
+32.8% Oct. 2005
+14.2%
70
Oct. 1990
+29.1%
60
Feb. 1975
+22.2%
50
May 1980
+19.2%
Nov. 2008
+22.3%
Sentiment Cycle Low and

subsequent 12-month S&P 500 Index
return
Aug. 2011
+15.4%
40
'72
'74
'76
'78
'80
'82
'84
'86
'88
'90
'92
'94
'96
'98
'00
'02
'04
Source: University of Michigan, FactSet, J.P. Morgan Asset Management.

Peak is defined as the highest index value before a series of lower lows, while a trough is defined as the lowest index value before a series
of higher highs. Subsequent 12-month S&P 500 returns are price returns only, which excludes dividends. Impact on consumer sentiment is
based on a multivariate monthly regression between 1/31/2000 5/31/2014. Guide to the Markets U.S.
30
'06
'08
'10
'12
'14
Fixed In
ncome
Fixed Income Sector Returns

2005
2006
2007
2008
2009
2010
2011
2012
2013
YTD
3Q14
EMD LCL.
EMD USD
EMD LCL.
EMD LCL.
Treas.
Gbl. HY
EMD LCL.
TIPS
Gbl. HY
Gbl. HY
EMD USD
Muni
EMD LCL.
EMD LCL.
23.0%
10.2%
15.2%
18.1%
13.7%
59.4%
15.7%
13.6%
19.6%
7.3%
8.0%
1.5%
148.3%
9.5%
Gbl. HY
EMD LCL.
Gbl. HY
TIPS
Gbl. Sov.
EMD USD
Gbl. HY
Muni
EMD USD
Gbl. Corp.
Muni
Treas.
Gbl. HY
Gbl. HY
13.2%
6.3%
13.7%
11.6%
9.4%
29.8%
14.8%
12.3%
17.4%
1.8%
7.2%
0.3%
143.6%
9.3%
Gbl. Sov.
Gbl. HY
EMD USD
Gbl. Sov.
MBS
Gbl. Corp.
EMD USD
Treas.
EMD LCL.
Asset Alloc.
MBS
MBS
EMD USD
EMD USD
12.1%
3.6%
9.9%
10.9%
8.3%
23.7%
12.2%
9.8%
16.8%
-1.3%
119.7%
8.2%
EMD USD
TIPS
Gbl. Corp.
Treas.
11 6%
11.6%
2 8%
2.8%
8 3%
8.3%
9 0%
9.0%
Gbl. Corp.
Treas.
Gbl. Sov.
10.0%
2.8%
7.3%
Barclays
Agg
5 2%
5.2%
EMD LCL.
Asset Alloc.
22 0%
22.0%
7 5%
7.5%
Asset Alloc.
Muni
Asset Alloc.
7.2%
1.5%
16.2%
Barclays
Agg
7.0%
Asset Alloc.
Asset Alloc. Asset Alloc.

75 4%
75.4%
5 8%
5.8%
EMD USD
Gbl. Corp.
Gbl. Corp.
3.8%
-0.6%
72.2%
5.6%
Gbl. Corp.
EMD USD
Asset Alloc.
7.0%
7.3%
8.3%
Barclays
Agg
-2.0%
Asset Alloc.
TIPS
Muni
TIPS
Asset Alloc.
TIPS
TIPS
6.9%
7.0%
-2.2%
3.7%
-1.2%
60.6%
4.8%
Barclays
Agg
6.5%
2.7%
6.9%
A
Asset
t All
Alloc.
MBS
MBS
MBS
TIPS
M i
Muni
TIPS
MBS
M i
Muni
T
Treas.
T
Treas.
TIPS
M i
Muni
M i
Muni
8.2%
2.6%
5.2%
6.9%
-2.4%
9.9%
6.3%
6.2%
5.7%
-2.7%
3.1%
-2.0%
57.5%
4.6%
Muni
EMD USD
EMD LCL.
Gbl. Sov.
Gbl. Sov.
Gbl. Sov.
Gbl. Corp.
Gbl. Corp.
MBS
MBS
4.7%
6.2%
-5.2%
6.1%
5.2%
-4.9%
2.9%
-2.3%
1 7%
1.7%
Barclays
Agg
4 3%
4.3%
Muni
Gbl. Corp.
4.1%
11.4%
-1.4%
1 4%
8.5%
4.7%
-1.5%
MBS
12 5%
12.5%
0.2%
Barclays
Agg
0 2%
0.2%
Asset Alloc.
Barclays
Agg
2.4%
TIPS
Gbl. Corp.
4.2%
Barclays
Agg
4 1%
4.1%
Muni
MBS
Asset Alloc.
Barclays
Agg
7 8%
7.8%
TIPS
Barclays
Agg
4 3%
4.3%
31
10-yrs. '04 - '13

Cum.
Ann.
2004
Barclays
Agg
5.9%
Barclays
Agg
4.2%
57.0%
4.6%
Barclays
Agg
4 5%
4.5%
Gbl. Corp.
Gbl. Corp.
MBS
Treas.
Gbl. Corp.
MBS
EMD USD
Gbl. HY
Gbl. HY
6 1%
6.1%
-11.2%
11 2%
5 9%
5.9%
5 9%
5.9%
4 0%
4.0%
2 6%
2.6%
-5.3%
5 3%
2 6%
2.6%
-3.3%
3 3%
Barclays
Agg
56 0%
56.0%
Treas.
Muni
EMD USD
Gbl. Sov.
MBS
Gbl. HY
Treas.
TIPS
Gbl. Sov.
Gbl. Sov.
Treas.
Treas.
-2.7%
3.1%
4.3%
-12.0%
4.3%
5.4%
3.1%
2.0%
-8.6%
0.3%
-5.3%
51.3%
4.2%
Treas.
Gbl. Sov.
TIPS
Gbl. HY
Gbl. HY
Treas.
Muni
EMD LCL.
Gbl. Sov.
EMD LCL.
EMD LCL.
EMD LCL.
Gbl. Sov.
Gbl. Sov.
3.5%
-8.8%
0.4%
3.2%
-26.9%
-3.6%
4.0%
-1.8%
1.8%
-9.0%
0.0%
-5.7%
50.2%
4.1%
Asset Alloc.
Source: Barclays Capital

Capital, FactSet
FactSet, JJ.P.
P Morgan Asset Management
Management. Past performance is not indicative of future returns
returns. Fixed income sectors shown above are provided by Barclays
Capital unless otherwise noted and are represented by Broad Market: Barclays Capital U.S. Aggregate Index; MBS: Fixed Rate MBS Index; Corporate: Gbl. Corporates; Municipals:
Muni Bond 10-Year Index; Emerging Debt USD: J.P. Morgan EMBIG Diversified Index; Emerging Debt LCL: J.P. Morgan EM Global Index; Gbl. High Yield: Global Corporate High Yield
Index; Treasuries: Barclays Capital; U.S. Treasury; TIPS: Barclays Capital TIPS; Gbl. Sovereigns: Global Treasury ex U.S.. The Asset Allocation portfolio
assumes the following weights: 20% in MBS, 20% in Gbl. Corporate,15% in Municipals, 5% in Emerging Debt USD, 5% in Emerging Debt LCL, 10% in
Gbl. High Yield, 15% in Treasuries, 5% in TIPS, 5% in Gbl. Sovereigns. Asset allocation portfolio assumes annual rebalancing.
Interest Rates and Inflation

Nominal and Real 10-year Treasury Yields
20%
Sep. 30,
S
30 1981
1981:
15.84%
Average
(1958 2014 YTD)
15%
Nominal Yields
Real Yields
Inflation
Fixed In
ncome
10%
6.32%
2.51%
3 81%
3.81%
9/30/14
2.52%
0.79%
1 73%
1.73%
Nominal 10-year
Treasury Yield
Sep. 30, 2014: 2.52%

5%
Real 10-year
Treasury Yield
0%
Sep. 30, 2014: 0.79%
Falling Rate Corp. Bonds S&P 500

1982-2013
9.7%
11.6%
Ann. Inflation
3.0%
3.0%
Ann. Real Return 6.5%
8.4%
Rising Rate Corp. Bonds S&P 500

1958-1981
3.0%
8.6%
Ann. Inflation
5.0%
5.0%
Ann. Real Return -2.0%
3.5%
-5%
5%
'60
32
'65
'70
'75
'80
'85
'90
'95
'00
'05
Source: Federal Reserve, BLS, J.P. Morgan Asset Management.

Real 10-year Treasury yields are calculated as the daily Treasury yield less year-over-year core CPI inflation for that month except for September 2014,
where real yields are calculated by subtracting out August 2014 year-over-year core inflation. All returns above reflect annualized total returns, which
include reinvestment of dividends. Corporate bond returns are based on a composite index of investment grade bond performance.
'10
Fixed Income Yields and Returns

Yield
Price Impact of a 1% Rise/Fall in Interest Rates*
Return
# of
issues
Correlation to
10-year
Avg.
Maturity
9/30/2014
6/30/2014
3Q14
YTD
2Y
2-Year
93
0 64
0.64
2 years
0 58%
0.58%
0 47%
0.47%
0 04%
0.04%
0 49%
0.49%
5y UST
5-Year
96
0.91
1.78%
1.62%
-0.19%
1.73%
TIPS
10-Year
17
1.00
10
2.52%
2.53%
0.75%
6.93%
10y UST
30-Year
20
0.92
30
3.21%
3.34%
3.33%
17.56%
30y UST
TIPS
35
0.58
10
0.55%
0.27%
-2.04%
3.67%
US Treasuries
Fixed In
ncome
Sector
Broad Market
2y UST
-2.0%
-4.7%
9.5%
22.7%
-17.4%
Floating Rate
-0.1%
7.7 years
2.36%
2.22%
0.17%
4.10%
Convertibles
-3.1%
427
0.81
7.2
2.88%
2.79%
0.18%
4.22%
ABS
-3.8%
Municipals
9,057
0.46
9.9
2.13%
2.25%
1.46%
7.24%
US HY
-4.1%
Corporates
5,111
0.46
10.5
3.10%
2.91%
-0.08%
5.60%
US Aggregate
-5.6%
High Yield
2,157
-0.24
6.5
6.13%
4.91%
-1.87%
3.49%
MBS
-5.7%
Floating Rate
49
-0.21
3.0
0.98%
1.01%
0.40%
1.53%
Munis
-5.9%
Convertibles
521
-0.30
--
1.16%
1.19%
-1.51%
7.56%
IG Corps
-6.7%
1,666
-0.04
4.2
2.18%
1.90%
-0.18%
2.15%
-30%
-1%
7.5%
-8.6%
0.85
ABS
5 0%
5.0%
-6.4%
8,908
MBS
+1%
1.0%
-10%
0.1%
3.5%
3.6%
4 0%
4.0%
5.6%
3.9%
5.5%
7.7%
10%
30%
Source: U.S. Treasury, Barclays Capital, FactSet, J.P. Morgan Asset Management.
Fixed income sectors shown above are provided by Barclays Capital and are represented by Broad Market: Barclays U.S. Aggregate; MBS: U.S. Aggregate Securitized - MBS
Index; Corporate: U.S. Corporates; Municipals: Muni Bond 10-year Index; High Yield: Corporate High Yield Index; TIPS: Treasury Inflation Protection Securities (TIPS). Floating Rate:
Barclays FRN (BBB); Convertibles: Barclays U.S. Convertibles Composite; ABS: Barclays ABS + CMBS. Treasury securities data for # of issues based on U.S. Treasury benchmarks
from Barclays Capital. Yield and return information based on bellwethers for Treasury securities. Sector yields reflect yield to worst, while Treasury yields are yield to maturity.
Correlations are based on 10-years of monthly returns for all sectors. Change in bond price is calculated using both duration and convexity according to the following formula: New
Price = (Price + (Price * -Duration * Change in Interest Rates))+(0.5 * Price * Convexity * (Change in Interest Rates)^2). *Calculation assumes 2-year Treasury interest rate falls
0.58% to 0.00%,as interest rates can only fall to 0.00%. Chart is for illustrative purposes only. Past performance is not indicative of future results.
33
Sources of Bond Returns

Treasury Base Rate Return Spread to Treasury Return Coupon Return
Total Return
2014 YTD A
2014 YTD A + B + C
2014 YTD B
5-yr.
0.5%
2014 YTD C
2014 YTD
1.2%
1.7%
5-yr.
2013
10-yr.
5.0%
2.0%
30-yr.
14.9%
2.6%
Fixed In
ncome
10-yr. Muni
4.0%
U.S. HY
-2.8%
EM (USD)
1.8%
U.S. MBS
1.0%
0.4%
U.S. Agg.
1.3%
0.4%
-1.0%
3.5%
U.S. HY
4 2%
4.2%
6 6%
6.6%
EM (USD)
3.2%
5.6%
IG Corp.
20% -10%
10% 0% 10% 20% -20%
-20%
-10%
0%
Source: Federal Reserve, Barclays, J.P. Morgan Asset Management.
2.8%
2.4%
1.0%
1.6%
10%
20%
-20%
-10%
10%
0%
10%
4.2%
U.S. MBS
4.1%
U.S. Agg.
1.5%
20% -10%
10% 0% 10% 20%
-20%
All returns reflect year to date returns. Treasury base, spread, and coupon returns based on Barclays and J.P. Morgan Asset Management
estimates. The sum of charts A and B equate to price return for each sector.
34
30-yr.
10-yr. Muni
5.1%
0.6%
10-yr.
7.2%
1.3%
IG Corp.
FRN (BBB)
17.6%
3.2%
2 9%
2.9%
-0.5%
6.9%
Indices used include Barclays US Treasury Bellwethers (10Y), Barclays US Aggregate, Barclays US Aggregate Credit Corporate Investment
Grade, Barclays US Aggregate Credit Corporate High Yield, Barclays Muni 10-year Index, Barclays US MBS Index, Barclays Floating Rate
Index, and Barclays Emerging Markets USD. Guide to the Markets U.S. Data are as of 9/30/14.
FRN (BBB)
The Fed and Interest Rates

Yield Curve Steepness
Feds Balance Sheet: Assets

$ trillions
10-yr. U.S. Treasury minus effective Fed Funds rate
$4.5
Sep. 2014:
2.4%
4%
$4.0
Oth
Other
$3.5
3%
U.S. Treasuries
$3.0
Agency MBS
$2.5
Average:
1.6%
2%
$2.0
1%
$1.5
$1.0
0%
Fixed In
ncome
$0.5
$0.0
-1%
'04
'05
'06
'07
'08
'10
'11
'12
'13
'14
'85
'90
'95
'00
'05
'10
Feds Balance Sheet: Liabilities
Federal Reserve Summary of Economic Projections
$4.5
Fed's September 2014 Forecasts*

Percent
$ trillions
t illi
Excess Reserves
$4.0
$3.5
Other Liabilities
$3.0
Required Reserves
2014
2015
2016
2017
Long
Run
$2.5
Change in real GDP, Q4 to Q4
2.2
2.8
2.8
2.4
2.2
$2.0
Unemployment Rate, Q4
6.0
5.5
5.3
5.1
5.4
PCE Inflation, Q4 to Q4
1.6
1.8
1.9
2.0
2.0
Federal Funds Rate, end of year
0.25
1.38
2.88
3.75
3.75
$1.5
$1.0
$0.5
$0.0
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
'11
11
'12
12
'13
13
'14
14
Source: Federal Reserve, FactSet, J.P. Morgan Asset Management.

Monetary base is defined as the total amount of a currency that is either circulated in the hands of the public or in the commercial bank deposits held
in the central bank's reserves. Other liabilities of the Federal Reserve primarily consist of currency outstanding. *Forecasts of 17 FOMC participants,
midpoints of central tendency except for federal funds rate which is a median estimate. Guide to the Markets U.S.
35
Owners of Treasury Securities

Treasuries Outstanding 2Q14
Net Purchases of Treasuries Year Ended 2Q14
Billions of dollars, end of period, not seasonally adjusted
Billions of dollars
Total Outstanding Treasury Securities: $12,544

1 200
1,200
Financial
institutions
6%
Other
1%
1,000
Fixed In
ncome
State and local

gov'ts
7%
800
Other*
Financial institutions
Pensions
Foreign private
Total net purchases: $690
Households
7%
Foreign official
32%
600
400
Mutual funds
9%
200
Foreign private
15%
Foreign official
Federal Reserve
19%
Mutual funds
-200
Households
-400
State and local govts*
Federal Reserve Balance

Sheet by Treasury Maturity
< 3 yrs:
15%
3-5 yrs:
29%
5-10 yrs:
31%
> 10 yrs:
25%
Federal Reserve
-600
S
Source:
Federal
F d lR
Reserve, JJ.P.
P M
Morgan A
Assett M
Management.
t
Treasuries outstanding include total issues of Treasury securities plus budget agency securities and federal mortgage borrowing. Other includes
Nonfinancial corporate business, Nonfinancial noncorporate business, Issuers of asset-backed securities and Holding companies. Net Purchases is the
average of the annual rates over the past four quarters. *Other had net inflows of $6.6 billion and State and local govts had net outflows of $4.9 billion.
36
Credit Conditions
Common Equity as a % of Total Assets
Delinquency Rates
All FDIC insured institutions, 1934 2013
All banks, seasonally adjusted
14%
2013:
11.1%
12%
12%
Residential Mortgages
Consumer Loans
Commercial and Industrial Loans
10%
8%
10%
Average: 7.7%
8%
7.4%
6%
4%
Fixed In
ncome
6%
2 3%
2.3%
2%
0.8%
0%
4%
'34
'41
'48
'55
'62
'69
'76
'83
'90
'97
'04
'92
'11
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
Loan Growth
Lending Standards for Approved Mortgage Loans
YoY growth
gro th in loans ooutstanding
tstanding at commercial banks,
banks seasonall
seasonally adj
adjusted
sted
A
Average
FICO score based
b d on origination
i i ti date
d t
30%
Aug. 2014:
743
760
Real Estate Loans
Sep. 2014:
12.1%
20%
'14
740
10%
720
0%
-10%
Sep. 2014:
2.5%
Commercial and Industrial Loans
680
-20%
-30%
37
700
660
'00
00
'01
01
'02
02
'03
03
'04
04
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
'11
11
'12
12
'13
13
'14
14
'00
00
'01
01
'02
02
'03
03
'04
04
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
'11
11
'12
12
'13
13
Source: (Top left) FDIC, J.P. Morgan Asset Management. (Top right) Federal Reserve, FactSet, J.P. Morgan Asset Management. (Bottom left): Federal Reserve, FactSet, J.P.
Morgan Asset Management. (Bottom Right) McDash, J.P. Morgan Securitized Product Research, J.P. Morgan Asset Management.
All data reflect most recently available releases.
'14
14
High Yield Bonds

High Yield Spreads and Defaults
20%
HY Spreads
HY Defaults Rates
HY Spreads
Average
5.9%
4.0%
Latest
4.9%
1.9%
HY D
Default
f lt R
Rates
t
15%
10%
5%
Fixed In
ncome
0%
'88
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Historical High Yield Recovery Rates

High
g yyield
e d bo
bonds,
ds, ce
cents
ts oon tthee do
dollar
a
Annual Flows into High Yield and Leveraged Loan Funds

Mutual funds & ETFs,, billions USD
70
$80
60
YTD 2014: -$10.0bn
Leveraged Loans
High Yield
$60
Average: 41.3
50
$40
40
30
$20
20
$0
10
-$20
0
'88
38
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Source: (Top chart): U.S. Treasury, J.P. Morgan, Strategic Insight, J.P. Morgan Asset Management. Default rates are defined as the par value percentage of the total market
trading at or below 50% of par value and include any Chapter 11 filing, prepackaged filing or missed interest payments. (Bottom left): J.P Morgan, Fitch, J.P. Morgan Asset
Management. (Bottom right): Strategic Insight, J.P. Morgan Asset Management. Spreads indicated are benchmark yield to worst less comparable maturity Treasury yields.
2014 recovery rate is a weighted average number as of September 2014. Yield to worst is defined as the lowest potential yield that can be received
on a bond without the issuer actually defaulting and reflects the possibility of the bond being called at an unfavorable time for the holder.
Flows include ETFs and are as of August 2014. Past performance is not indicative of comparable future results. Guide to the Markets U.S.
Municipal Finance
10-Year Muni Taxable Equivalent Yield
Taxable equivalent Muni and Treasury yields
State & Local Government Debt Service

% of current expenditures
12%
10%
2Q14: 8.1%
9%
Taxable Equivalent 10-Yr Muni Yield
8%
10%
7%
6%
5%
8%
4%
Fixed In
ncome
3%
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Municipal Bond Issuance*

o s US
USD,, revenue
e e ue aandd GO issues
ssues
Billions
6%
$500
4%
$400
$300
2%
$200
$100
Spread
0%
$0
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Source (Left chart): Barclays Capital, U.S. Treasury, FactSet, J.P. Morgan Asset Management. (Top right) BEA, J.P. Morgan Asset Management. (Bottom right) SIFMA, J.P.
Morgan Asset Management.
Taxable equivalent yields are calculated for the highest federal marginal tax bracket. 2014 tax rate includes the net investment income tax of 3.8%.
*Excludes maturities of 13 months or less and private placements. Interest payments include interest accrued on defined benefit liabilities.
2014 issuance data is as of June 2014. Guide to the Markets U.S.
39
Global Fixed Income

Yield
Aggregates
Correl to
Duration 9/30/2014 6/30/2014
10-year
Return
3Q14
YTD
Global Bond Market

USD, trillions
$100
U.S.
0.83
5.6 Yrs
2.36%
2.22%
0.17%
4.10%
$90
Gbl. ex. U.S.
0.38
6.9
1.46%
1.56%
-4.83%
0.40%
$80
Japan
0.53
8.1
0.52%
0.53%
-7.01% -2.11%
Germany
0.26
5.9
0.76%
0.94%
-5.31% -1.87%
EM: $14tn
12/31/89
U.S.
60.7%
Dev. ex U.S.
38.2%
EM
1.1%
3/31/14
37.6%
48.1%
14.2%
$70
Fixed In
ncome
$60
U.K.
0.17
9.0
2.36%
2.54%
-2.03%
4.19%
Developed ex
U.S.: $48tn
$50
Italy
0.08
6.4
1.67%
2.00%
-4.86%
2.69%
Spain
0.11
5.6
1.32%
1.68%
-4.71%
2.60%
Sector
$40
$30
EMD ($)
0.19
7.0
5.39%
5.10%
-0.59%
EMD (LCL)
0 07
0.07
48
4.8
6 74%
6.74%
6 42%
6.42%
-5.66%
5 66% -0.01%
0 01%
Euro Corp.
0.09
4.8
1.20%
1.48%
-6.04% -2.15%
Euro HY.
-0.40
3.9
4.58%
4.37%
-7.79% -2.85%
8.02%
$20
U S $3
U.S.:
$37tn
$10
$0
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Source: Barclays Capital, BIS, FactSet, J.P. Morgan Asset Management. Fixed income sectors shown above are provided by Barclays Capital and are represented by the global
aggregate for each country except where noted. EMD sectors are represented by the J.P. Morgan EMBIG Diversified Index (USD) and the J.P. Morgan GBI EM Global Diversified
Index (LCL). European Corporates are represented by the Barclays Euro Aggregate Corporate Index and the Barclays Pan-European High Yield index and returns are in USD. Sector
yields reflect yield to worst. Duration is modified duration. Correlations are based on 7-years of monthly returns for the all sectors. Past performance is not indicative of future results.
40
Emerging Market Debt

Index Breakdown USD Denominated EMD
100%
80%
Middle East &

Africa 9%
Spread to Treasuries of USD-denominated debt, percent
12%
Index
10%
Latin America
41%
60%
40%
Middle East &

Africa 21%
Emerging Markets Debt Spreads
Latin America
28%
8%
Europe 13%
6%
Europe 30%
20%
EMBIG
CEMBI
Average Spread
Spread (9/30/14)
3.8%
3.3%
3.3%
3.3%
4%
Asia 38%
2%
Asia 20%
Fixed In
ncome
0%
Sovereigns
(EMBIG)
0%
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
Emerging Market Debt Credit Rating
Annual Flows into EMD Mutual Funds & ETFs
BBB-
$30
EMBIG average
g monthlyy credit rating,
g inverse scale
BB+
BB
BBB+
B
B-
41
Corporates
(CEMBI)
'13
Billions USD
Aug. 2014: BBB-
$25
$20
$15
YTD 2014:
$1.4 bn
$10
$5
$0
-$5
'93
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
'03
'04
'05
'06
'07
'08
'09
'10
'11
Source: J.P. Morgan, Morgan Markets, FactSet, Strategic Insight, J.P. Morgan Asset Management.
Spreads measure the credit risk premium over comparable maturity U.S. Treasury bonds. The J.P. Morgan EMBI Global (EMBIG) Index is a
USD-denominated external debt index tracking bonds issued by sovereigns and quasi-sovereigns in developing nations. The J.P. Morgan Corporate
Emerging Bond Index Broad (CEMBI) is a USD-denominated external debt index tracking bonds issued by corporations in developing nations. Flow data
is as of August 2014. Past performance is not indicative of comparable future results. Index breakdown may not equate to 100% due to rounding.
'12
'13
'14
Global Equity Markets

3Q14
Country / Region
Local
YTD 2014
USD
Local
Weights in MSCI All Country World Index

% global market capitalization, float adjusted
USD
Europe exU.K.
16%
Regions / Broad Indexes

-
1.1
8.3
EAFE
1.0
-5.8
4.5
-1.0
Europe ex-U.K.
ex U.K.
0.1
-7.4
7.4
7.2
-1.6
1.6
Pacific ex-Japan
-0.9
-5.9
2.7
1.2
Emerging Markets
0.7
-3.4
5.5
2.7
Internatio
onal
MSCI: Selected Countries
42
United
States
50%
U.K. 8%
Canada 4%
%
U.S. (S&P 500)
Emerging
Markets
11%
Japan
7%
Global Equity Market Correlations
United Kingdom
-0.9
-6.0
1.0
-1.2
Rolling 1-year correlations, 30 countries
France
-0.6
-8.3
5.4
-3.4
0.80
Germany
-3.7
-11.2
-1.2
-9.4
0.70
Japan
5.9
-2.2
3.0
-1.4
China
1.7
1.5
1.2
1.0
0.40
India
5.1
2.3
24.5
24.7
0.30
Brazil
1.6
-8.6
5.1
1.2
Russia
-4.3
-15.1
-6.6
-19.5
0.90
0.60
0 50
0.50
0.20
0.10
0.00
'95
'97
'99
'01
'03
'05
'07
'09
Source: Standard & Poors, MSCI, FactSet, J.P. Morgan Asset Management.
All return values are MSCI Gross Index (official) data. Chart is for illustrative purposes only. Past performance is not indicative of future results. Please
see disclosure page for index definitions. Countries included in global correlations include Argentina, South Africa, Japan, UK, Canada, France,
Germany, Italy, Australia, Austria, Brazil, China, Colombia, Denmark, Finland, Hong Kong, India, Malaysia, Mexico, Netherlands, New Zealand, Peru,
Philippines, Portugal, Korea, Spain, Taiwan, Thailand, Turkey, United States. Guide to the Markets U.S.
Data as of 9/30/14.
Sep. 2014:
0.37
'11
'13
Global Economic Growth

Emerging Market Country Real GDP Growth
Historical
Year-over-year % chg. forecasts from JPMSI
10%
3Q13
4Q13
1Q14
JPMSI Forecast
2Q14
3Q14
4Q14
1Q15
2Q15
8%
6%
4%
2%
0%
-2%
-4%
Emerging Markets
China
India
Korea
Mexico
Developed
p Market Country
y Real GDP Growth
South Africa
Hi t i l
Historical
Year-over-year % chg. forecasts from JPMSI

10%
3Q13
4Q13
1Q14
Russia
Brazil
JPMSI Forecast
F
t
2Q14
3Q14
4Q14
1Q15
2Q15
International
8%
6%
4%
2%
0%
-2%
-4%
Developed
Countries
UK
U.K.
US
U.S.
Canada
Germany
France
Japan
Source: J.P. Morgan Global Economic Research, J.P. Morgan Asset Management.
Forecast and aggregate data come from J.P. Morgan Global Economic Research. Historical growth data collected from FactSet Economics.
43
Italy
Manufacturing Momentum
International
Sep'14
Aug'14
Jul'14
Jun'14
Global
48.9 49.7 50.1 51.4 50.8 51.0 50.2 50.4 50.4 50.6 51.5 51.6 51.9 52.9 52.9 53.0 53.2 52.4 51.9 52.2 52.6 52.4 52.5 52.2
U.S.
51.0 52.8 54.0 55.8 54.3 54.6 52.1 52.3 51.9 53.7 53.1 52.8 51.8 54.7 55.0 53.7 57.1 55.5 55.4 56.4 57.3 55.8 57.9 57.5
Canada
51.4 50.4 50.4 50.5 51.7 49.3 50.1 53.2 52.4 52.0 52.1 54.2 55.6 55.3 53.5 51.7 52.9 53.3 52.9 52.2 53.5 54.3 54.8 53.5
U.K.
47.7 48.0 50.6 51.0 48.1 50.2 50.6 52.2 52.8 55.0 57.4 56.4 56.1 57.9 57.0 56.5 56.4 55.6 57.2 56.8 57.2 54.7 52.2 51.6
Euro Area
45.4 46.2 46.1 47.9 47.9 46.8 46.7 48.3 48.8 50.3 51.4 51.1 51.3 51.6 52.7 54.0 53.2 53.0 53.4 52.2 51.8 51.8 50.7 50.3
Germ any
46.0 46.8 46.0 49.8 50.3 49.0 48.1 49.4 48.6 50.7 51.8 51.1 51.7 52.7 54.3 56.5 54.8 53.7 54.1 52.3 52.0 52.4 51.4 49.9
France
43.7 44.5 44.6 42.9 43.9 44.0 44.4 46.4 48.4 49.7 49.7 49.8 49.1 48.4 47.0 49.3 49.7 52.1 51.2 49.6 48.2 47.8 46.9 48.8
Italy
45.5 45.1 46.7 47.8 45.8 44.5 45.5 47.3 49.1 50.4 51.3 50.8 50.7 51.4 53.3 53.1 52.3 52.4 54.0 53.2 52.6 51.9 49.8 50.7
Spain
43.5 45.3 44.6 46.1 46.8 44.2 44.7 48.1 50.0 49.8 51.1 50.7 50.9 48.6 50.8 52.2 52.5 52.8 52.7 52.9 54.6 53.9 52.8 52.6
Greece
41.0 41.8 41.4 41.7 43.0 42.1 45.0 45.3 45.4 47.0 48.7 47.5 47.3 49.2 49.6 51.2 51.3 49.7 51.1 51.0 49.4 48.7 50.1 48.4
Ireland
52.1 52.4 51.4 50.3 51.5 48.6 48.0 49.7 50.3 51.0 52.0 52.7 54.9 52.4 53.5 52.8 52.9 55.5 56.1 55.0 55.3 55.4 57.3 55.7
Australia
42.8 44.3 44.3 40.2 45.6 44.4 36.7 43.8 49.6 42.0 46.4 51.7 53.2 47.7 47.6 46.7 48.6 47.9 44.8 49.2 48.9 50.7 47.3 46.5
Japan
46.9 46.5 45.0 47.7 48.5 50.4 51.1 51.5 52.3 50.7 52.2 52.5 54.2 55.1 55.2 56.6 55.5 53.9 49.4 49.9 51.5 50.5 52.2 51.7
China
49.5 50.5 51.5 52.3 50.4 51.6 50.4 49.2 48.2 47.7 50.1 50.2 50.9 50.8 50.5 49.5 48.5 48.0 48.1 49.4 50.7 51.7 50.2 50.2
Indonesia
51.9 51.5 50.7 49.7 50.5 51.3 51.7 51.6 51.0 50.7 48.5 50.2 50.9 50.3 50.9 51.0 50.5 50.1 51.1 52.4 52.7 52.7 49.5 50.7
Korea
47.4 48.2 50.1 49.9 50.9 52.0 52.6 51.1 49.4 47.2 47.5 49.7 50.2 50.4 50.8 50.9 49.8 50.4 50.2 49.5 48.4 49.3 50.3 48.8
T i an
Taiw
47 8 47.4
47.8
47 4 50.6
50 6 51.5
51 5 50.2
50 2 51.2
51 2 50.7
50 7 47.1
47 1 49.5
49 5 48.6
48 6 50.0
50 0 52.0
52 0 53.0
53 0 53.4
53 4 55.2
55 2 55.5
55 5 54.7
54 7 52.7
52 7 52.3
52 3 52.4
52 4 54.0
54 0 55.8
55 8 56.1
56 1 53.3
53 3
India
52.9 53.7 54.7 53.2 54.2 52.0 51.0 50.1 50.3 50.1 48.5 49.6 49.6 51.3 50.7 51.4 52.5 51.3 51.3 51.4 51.5 53.0 52.4 51.0
Brazil
50.2 52.2 51.1 53.2 52.5 51.8 50.8 50.4 50.4 48.5 49.4 49.9 50.2 49.7 50.5 50.8 50.4 50.6 49.3 48.8 48.7 49.1 50.2 49.3
Mexico
55.5 55.6 57.1 55.0 53.4 52.2 51.7 51.8 51.3 49.7 50.8 50.0 50.2 51.9 52.6 54.0 52.0 51.7 51.8 51.9 51.8 51.5 52.1 52.6
Russia
52.9 52.2 50.0 52.0 52.0 50.8 50.6 50.4 51.7 49.2 49.4 49.4 51.8 49.4 48.8 48.0 48.5 48.3 48.5 48.9 49.1 51.0 51.0 50.4
Source: Markit,
Markit J.P.
J P Morgan Asset Management
Management.
Heatmap colors are based on PMI relative to the 50 level, which indicates acceleration or deceleration of the sector, for the time period shown.
44
May'14
Apr'14
Mar'14
Feb'14
Jan'14
Dec'13
Nov'13
Oct'13
Sep'13
Aug'13
Jul'13
Jun'13
May'13
Apr'13
Mar'13
Feb'13
Jan'13
Dec'12
Nov'12
Oct'12
Global Purchasing Managers Index for Manufacturing
Sovereign Debt Stresses

GDP Growth, Gross Debt to GDP and Borrowing Costs
10%
Bubble size = 10-year

g
government
bond yield
y
China
8%
10%
Indonesia
Real GDP G
Growth (2012 2014F)
International
6%
Malaysia
5%
India
4%
Australia
Korea
2%
Singapore
Turkey
Mexico
Russia
U.K.
Brazil
Japan
Germany
U.S.
South Africa
France
0%
EU
Italy
Spain
-2%
Portugal
-4%
Greece
Emerging Markets
Developed Markets
-6%
-8%
0%
20%
40%
60%
80%
100%
120%
140%
160%
G
Gross
Debt-to-GDP
D b
GDP R
Ratios
i (2013F)
Source: IMF, FactSet, Bloomberg, J.P. Morgan Economics, Barclays, J.P. Morgan Asset Management.
Growth and debt data are based on the April 2014 World Economic Outlook.
Borrowing costs based on local currency debt. EU overall borrowing cost based on Barclays Capital Euro-Aggregate 7-10 year treasury. South Africas
borrowing cost is based on 7-year government bond yield due to data availability. Guide to the Markets U.S.
45
180%
245%
200%
Global Monetary Policy

Central Bank Assets Percent of Nominal GDP
Nominal 5-Year Interest Rates

7%
60%
9/30/14
6%
5%
50%
5
5-yr
G
German
Bund
B d
2%
40%
5-yr U.S. Treasury

5-yr Japanese Gov
Govtt
1%
0%
Bank of Japan
30%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Real Policy Rates Monthly
20%
European Central Bank

U S Federal Reserve
U.S.
10%
0%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
8%
7%
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
Emerging Markets
Developed Markets
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Source: J.P. Morgan Global Economics Research, FactSet, J.P. Morgan Asset Management.
Real policy rates represent GDP weighted aggregates estimated by J.P. Morgan Global Economics Research. Real policy rates are short-term target
interest rates set by central banks minus year-over-year inflation.
46
1.76%
0.09%
0
09%
0.17%
4%
3%
International
United States
Germany
Japan
Europe: Cyclical Headwinds and Tailwinds

European Sovereign Funding Costs
Government Fiscal Drag
10-year benchmark bond yield
% of potential GDP, reduction in structural deficits from one period to the next
16%
35%
9/26/14
30%
14 4%
14.4%
6.08%
3.10%
2.17%
2.38%
1.66%
0.93%
Mo
ore fiscal drag
Greece
Portugal
Spain
Italy
Ireland
Germany
25%
2010-2013
14%
2013-2016
12%
10%
8%
20%
5.9%
LTRO
6%
4 7%
4.7%
International
OMT
10%
5%
Les
ss fiscal drag
15%
3.5%
4% 3.4%
1.5%
2%
0.7%
1.5%
3.5%
3.3%
2.9%
1.9%
1.2%
0.3%
0%
-0.1%
-2%
-1.0%
0%
'08
47
'09
'10
'11
'12
'13
Source: Tullett Prebon, FactSet, IMF, J.P. Morgan Asset Management. Data are based on the April 2014 World Economic Outlook.
Government deficits are calculated by the IMF as the general government structural balance. The structural balance excludes the normal impact of the business cycle, providing a
clearer measure of the independent impact of changes in government spending and taxation on demand in the economy.
*Eurozone includes a J.P. Morgan Asset Management estimate for the 2016 structural deficit as a % of GDP.
Europe: Unemployment, Inflation and Credit Markets

Euro Area Credit Growth
Unemployment Rates
13%
Aug. 2014: 11.5%
% year-over-year loan growth

20%
11%
9%
10%
7%
U.S.
A
Aug.
2014
2014: 6
6.1%
1%
Households
Aug. 2014:
-0.4%
%
-5%
'00 '01
'02
'03
'04 '05
'06 '07
'08
'09
'10 '11
'12
Europe Inflation
Year over year % change
Year-over-year
5%
4%
International
Aug. 2014: -2.2%
5%
5%
3%
Nonfinancial Corporations
15%
Euro Area-16
'13 '14
'06
'07
'08
'09
'10
'11
'12
'13
'14
Euro Area Asset-Backed Securities Outstanding

Core
Euro Area
Periphery
billions
3,000
3%
2%
2 000
2,000
1%
0%
-1%
1,000
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
Source: Eurostat, BLS, SIFMA, ECBC, FactSet, IMF, J.P. Morgan Asset Management.
(Top left) Unemployment rate levels for the U.S. and Euro Area-16 are not directly comparable due to calculation differences. (Bottom right) Euro Area securitization outstanding
includes Covered Bonds, Asset-Backed Securities, Residential Mortgage-Backed Securities, Commercial Real Estate Mortgage-Backed Securities, and Small and MediumSized Enterprise Asset-Backed Securities.
48
Europe: Revenues, Margins and Earnings

Earnings Per Share
Economic Growth and Revenue Growth Estimates
Next 12- month consensus EPS
12- month revenue growth & manufacturing PMI (advanced 12-months)

15%
70
10%
13
$140
S&P 500
60
$130
12
5%
0%
50
-5%
40
$120
11
-10%
10%
Revenue Growth
-15%
30
Manufacturing PMI
-20%
$
$110
10
20
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
$100
9
U.S. and European Operating Profit Margins
$90
LTM EPS/SPS
LTM,
11%
$80
S&P 500
International
10%
7
$70
9%
6
MSCI
Europe
8%
$
$60
$50
7%
6%
MSCI Europe
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
$40
'00
Source: Markit, MSCI, FactSet, J.P. Morgan Asset Management.

Revenue growth reflects next twelve month forward estimates from FactSet for the MSCI Europe Index.
49
'02
'04
'06
'08
'10
'12
'14
Japan: Economic Snapshot

Inflation and Japanese Government Bond Yields
Japanese Yen and the Stock Market
Year-over-year % change for inflation
130
9%
20,000
Japanese Yen per U.S. Dollar
Nikkei 225
18,000
120
Owners of Japanese Gov. Bonds

Other Domestic
71%
Bank of Japan
25%
Foreign
4%
7%
16,000
110
14,000
100
12,000
90
5%
10,000
80
70
3%
8,000
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
6,000
Government Fiscal Balance
Nominal 10-year Yield
% of GDP
IMF
forecast
-12%
-10%
1%
Internatio
onal
-8%
-6%
-4%
-1%
-2%
Core CPI
0%
2%
-3%
'87
'89
'91
'93
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
4%
'90 '92 '94 '96 '98 '00 '02 '04

Source: (Left) Bank of Japan, OECD, IMF, FactSet, J.P. Morgan Asset Management. (Right) FactSet, J.P. Morgan Asset Management.
'06 '08 '10 '12 '14 '16 '18
Core CPI is defined as CPI excluding fresh food. Other Domestic includes banks, insurance and pensions, public pensions, and households. Values
may not sum to 100% due to rounding. Government bond data is calculated from the Bank of Japans September 2014 flow of funds.
50
International Equity Earnings and Valuations

Earnings per Share
Forward Price to Earnings
EPS for next 12-month consensus, local currency, rebased to 100
P/E ratios for next 12-month consensus EPS
280
18x
260
MSCI EM
S&P 500
MSCI Europe
07/08 Peak
217
150
161
Current
200
191
128
% Change
-8%
8%
27%
-20%
Average
11 3
11.3x
13.8x
12.0x
MSCI EM
S&P 500
MSCI Europe
Current
10 8
10.8x
15.3x
13.9x
16x
240
220
14x
200
12x
180
160
10x
Internatio
onal
140
120
8x
100
80
6x
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'05
'06
'07
'08
'09
'10
'11
Source: MSCI,
MSCI FactSet,
FactSet JJ.P.
Management.
Forward Price to Earnings Ratio is based on each index price, divided by consensus estimates for earnings per share (EPS) in the next 12 months (NTM),
and is provided by FactSet Market Aggregates. Past performance is not indicative of future returns.
51
'12
'13
'14
Exports, Demographics and Development

Exports as a % of GDP
Demographic Snapshot
2013, goods exported
GDP Per
Capita
p
Population
% of Pop.
under 20
Investm ent
(% of GDP)
U.S.
$54,980
319 mm
26%
20%
Canada
49,838
35
22
24
U.K.
43,830
65
24
15
Germ any
47,893
81
18
17
U.S.
France
45,123
64
24
20
Europe
Japan
38,142
127
18
22
Italy
36,216
60
19
18
Korea
25,931
50
22
27
India
1,584
1,260
38
35
Brazil
11,080
200
33
18
Mexico
10,767
120
38
22
Russia
14,645
143
21
24
China
7,333
1,368
20
48
10.8%
Brazil
Developed
16.0%
India
24.9%
China
26 2%
26.2%
Russia
9.4%
U.S.
14.6%
Japan
18.5%
Eurozone
Em erging
Other
19.6%
UK
International
BRIC
20.7%
France
24.6%
Italy
37.6%
Germany
0%
5%
10%
15%
20%
25%
30%
35%
40%
Source: FactSet, World Bank, United Nations, J.P. Morgan Global Economics Research, OECD, China Bureau of Statistics, Ministry of Statistics & Programme Implementation of
India JJ.P.
India,
Management.
GDP Per Capita, Population and Investment as % of GDP are IMF estimates for 2014.
52
Emerging Market Currencies
9%
Stronger
ency
Curre
EM Current Accounts and Currency Performance
China (Mainland)
Korea
-6%
-3%
0%
3%
Taiwan
14%
9%
-9%
India
Brazil
-18%
Turkey
Graph Key
South Africa
Currency Performance &

2013
2013 Current Account
Indonesia
-27%
Performance since
Currency
Jan. 2013 & 2014 Current Account
-36%
Current Account Deficit
Current Account (% of GDP)
Source: IMF World Economic Outlook, FactSet, J.P. Morgan Asset Management.
Current accounts as a percentage of GDP are IMF figures for full year 2013 and latest available quarterly data for 2014.
Russia current account reflects IMF estimates for 2014. Guide to the Markets U.S.
53
6%
Russia
Mexico
Weaker
Currency
International
Currenc
cy Performanc
ce
-9%
Current Account Surplus
Emerging Market Diversity

Emerging
Markets:Service
Commodities
vs. Services
Emerging Markets:
vs. Commodity
Orientation
% of exports in service or commodity sectors, 2012
% of exports in service or commodity sectors, 2012
Percent of
Exports,
E
t Mf
Mfg. &
Services
Service
ServiceOriented
Com m odity
odityOriented
Percent of
E
Exports,
t
Com m odities
China
94.7
Chile
72.5
Korea
89.2
Russia
70.9
Mexico
78.6
Indonesia
54.5
India
73.8
Brazil
52.3
EM GDP growth: Sensitivity to DM growth
Estimated increase in real GDP growth from a 1% increase in DM growth

U.S.
Brazil
Europe
Japan
Russia
Commodities
Services
Mexico
Korea
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
0.7%
MSCI EM Country
y Index by
y Sector
100%
13%
10%
International
80%
63%
40%
29%
20%
3%
22%
0%
Brazil
54
19%
33%
60%
18%
22%
31%
17%
18%
15%
12%
Other
14%
Commodities
Financials
23%
38%
17%
37%
Consumer
23%
19%
7%
Russia
Tech
11%
17%
11%
India
China
34%
Mexico*
22%
Korea
Source: MSCI, FactSet, MacData, IMF, J.P. Morgan Asset Management. Other is comprised of Health Care, Industrials, Telecom, and Utilities
sectors. *Mexican telecom sector accounts for 20.2% of the countrys market capitalization. Values may not sum to 100% due to rounding. (Top
Right) Assumes a 1% increase in GDP growth from Japan, Europe, and the U.S., and estimates a reaction function through a multistage regression
measuring emerging market economies sensitivity to export volumes. Developed market imports are used as a proxy for developed demand and
estimated from a 1% pick up in domestic GDP. Increases in industrial production are estimated while controlling for emerging market domestic
demand in order to limit feedback loops and isolate the impulse from developed market demand only. The sample period tested ranges between
1993 and 2013 reflecting quarterly data. Guide to the Markets U.S.
China: Economic and Credit Growth

China Real GDP Contribution
Credit* vs. GDP Growth
Year-over-year % change
Year-over-year % change, 3-month moving average for credit
16%
40%
Investment
Consumption
9.2%
35%
Credit
Net Exports
12%
10.4%
8.1%
8%
5.5%
4.5%
Real GDP
30%
9.3%
9.6%
GDP Deflator
7.7%
7.7%
3.6%
4.2%
4.4%
25%
20%
4%
4 3%
4.3%
Internatio
onal
0%
4.6%
0.8%
4.5%
5.3%
15%
4.2%
3.9%
-0.2%
-0.3%
0.4%
10%
-0.4%
-3.4%
5%
-4%
0%
-5%
-8%
2008
55
2009
2010
2011
2012
2013
'03
03
'04
04
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
Source: National Bureau of Statistics of China, The Peoples Bank of China, EM Advisors Group, FactSet, CEIC, J.P. Morgan Asset Management.
Values may not sum to 100% due to rounding. *As defined by Total Social Financing: RMB bank loans, bankers acceptance bills, trust loans,
entrusted loans, corporate bond financing, foreign currency loans, and non-financial equity financing. TSF data uses an assumption of outstanding
credit in Dec. 2001. Guide to the Markets U.S.
'11
11
'12
12
'13
13
'14
14
Global Equity Valuations Developed Markets

Developed Market Countries
Example
Std Dev from Global Avverage
+7 Std Dev
+6 Std Dev
Expensive
relative to
ld
world
+5 Std Dev
+4 Std Dev
+3 Std Dev
+2 Std Dev
Expensive
relative to own
history
+1 Std Dev
Average
-1 Std Dev
Cheap relative to
own history
-2 Std Dev
-3 Std Dev
-4 Std Dev
-5 Std Dev
Internatio
onal
World
(ACWI)
EAFE
Index
U.K.
Germany France Australia Canada
Current
Average
Cheap
relative to
world
Japan Switzerland United

States
Current
Com posite
Index
F d.
Fw
d P/E
P/B
P/CF
Di Yld
Div.
Yld.
F d.
Fw
d P/E
P/B
P/CF
Di Yld.
Div.
Yld
0.45
-0.53
-0.78
-0.67
-0.65
-0.57
0.48
0.49
1.52
2.21
14.2
13.9
13.1
12.5
13.7
14.0
14.5
14.1
15.9
15.4
2.0
1.6
1.8
1.6
1.5
1.9
2.0
1.3
2.6
2.7
8.4
7.6
7.4
7.5
7.8
8.5
9.2
7.9
11.8
10.4
2.5%
3.2%
3.8%
2.9%
3.3%
4.8%
2.7%
1.9%
3.2%
1.9%
13.0
12.6
11.4
11.5
11.3
13.4
13.6
16.0
13.3
13.9
2.0
1.7
2.0
1.5
1.6
2.2
2.1
1.4
2.4
2.5
7.5
6.7
7.4
5.7
5.8
9.2
8.6
6.4
9.8
8.7
2.5%
3.2%
3.6%
3.1%
3.4%
4.3%
2.3%
1.6%
2.7%
1.9%
World (ACWI)
EAFE Index
U.K.
Germ any
France
Australia
Canada
Japan
Sw itzerland
United States
Current
10-year avg.
Source: MSCI,
MSCI FactSet,
FactSet JJ.P.
Management.
Note: Each valuation index shows an equally weighted composite of four metrics: price to forward earnings (Fwd. P/E), price to current book (P/B), price to last 12 months
cash flow (P/CF) and price to last 12 months dividends. Results are then normalized using means and average variability over the last 10 years. The grey bars represent one
standard deviation in variability relative to that of the MSCI All Country World Index (ACWI). See disclosures page at the end for metric definitions.
56
Global Equity Valuations Emerging Markets

Emerging Market Countries
Example
Std Dev from Global Avverage
+7 Std Dev
+6 Std Dev
Expensive
relative to
world
+5 Std Dev
+4
4 Std D
Dev
+3 Std Dev
+2 Std Dev
Expensive
relative to own
history
+1 Std Dev
Average
-1 Std Dev
Cheap relative to
own history
-2 Std Dev
3 Std Dev
-3
-4 Std Dev
-5 Std Dev
Internatio
onal
World
EM
(ACWI) Index
57
World(ACWI)
EM Index
Russia
China
Brazil
T i an
Taiw
Korea
Thailand
South Africa
Indonesia
Russia China
Current
Com posite
Index
0.45
-1.52
-4.89
-2.85
-2.12
-0.79
0 79
0.32
0.45
1.11
2.62
Brazil Taiwan Korea Thailand South Indonesia

Africa
Mexico
Current
Current
Average
Cheap
relative to
world
India
10-year avg.
Fw d.
d P/E
P/B
P/CF
Div Yld
Div.
Yld.
Fw d.
d P/E
P/B
P/CF
Div Yld
Div.
Yld.
14.2
10.8
4.5
8.5
10.4
13 0
13.0
10.0
13.5
14.3
14.7
2.0
1.5
0.6
1.3
1.3
18
1.8
1.1
2.2
2.5
3.4
8.4
5.4
2.3
3.3
5.9
62
6.2
5.6
9.6
11.4
12.9
2.5%
2.8%
5.2%
3.5%
4.0%
3 1%
3.1%
1.2%
2.9%
3.1%
2.4%
13.0
11.0
7.4
11.7
9.9
14 1
14.1
9.6
10.8
11.5
12.6
2.0
1.9
1.4
2.1
1.9
19
1.9
1.4
2.0
2.5
3.5
7.5
6.3
4.5
6.9
5.6
67
6.7
5.0
7.1
8.8
10.1
2.5%
2.7%
2.2%
2.7%
3.2%
3 6%
3.6%
1.5%
3.6%
3.2%
2.7%
Mexico
3.85
19.3
2.8
8.7
1.3%
14.4
2.8
7.5
1.8%
I di
India
3 88
3.88
16 6
16.6
29
2.9
12 1
12.1
1 4%
1.4%
15 4
15.4
32
3.2
12 9
12.9
1 3%
1.3%
Source: MSCI, FactSet, J.P. Morgan Asset Management.

Note: Each valuation index shows an equally weighted composite of four metrics: price to forward earnings (Fwd. P/E), price to current book (P/B), price
to last 12 months cash flow (P/CF) and price to last 12 months dividends. Results are then normalized using means and average variability over the
last 10 years. The grey bars represent one standard deviation in variability relative to that of the MSCI All Country World Index (ACWI). See disclosures
page at the end for metric definitions. See disclosures page at the end for metric definitions. Guide to the Markets U.S.
Asset Class Returns

2004
Asset Class
2006
2007
2008
2009
Ba rc la ys
Agg
5.2%
MS CI
EME
79.0%
MS CI
EAFE
32.5%
3 1. 6 %
MS CI
EME
34.5%
3 5 . 1%
MS CI
EME
39.8%
MS CI
EME
26.0%
Bbe rg
Cmdty
2 1. 4 %
MS CI
EME
32.6%
Bbe rg
Cmdty
16 . 2 %
MS CI
EAFE
20.7%
MS CI
EAFE
14 . 0 %
MS CI
EAFE
26.9%
MS CI
EAFE
11. 6 %
Ma rke t
Ne utra l
1. 1%
Ma rke t
Ne utra l
9.3%
Asse t
Alloc .
- 24.0%
REITs
58
2005
REITs
Ca sh
1. 8 %
2010
2011
2012
REITs
REITs
REITs
27.9%
8.3%
Russe ll
2000
26.9%
2013
19 . 7 %
Russe ll
2000
38.8%
Ba rc la ys
Agg
7.8%
MS CI
EME
18 . 6 %
28.0%
MS CI
EME
19 . 2 %
Ma rke t
Ne utra l
4.5%
Russe ll
2000
27.2%
Bbe rg
Cmdty
16 . 8 %
S &P
500
2 . 1%
REITs
YTD
3Q14
13 . 4 %
S &P
500
1. 1%
MS CI
EME
19 7 . 7 %
MS CI
EME
11. 5 %
S &P
500
32.4%
S &P
500
8.3%
Ba rc la ys
Agg
0.2%
Russe ll
2000
13 8 . 3 %
Russe ll
2000
9 . 1%
MS CI
EAFE
17 . 9 %
MS CI
EAFE
23.3%
Ba rc la ys
Agg
4 . 1%
Ca sh
REITs
REITs
0.0%
12 8 . 5 %
8.6%
Russe ll
2000
16 . 3 %
Asse t
Alloc .
15 . 0 %
Asse t
Alloc .
3.0%
Ma rke t
Ne utra l
- 0.7%
S &P
500
10 4 . 3 %
S &P
500
7.4%
Ma rke t
Ne utra l
9.3%
MS CI
EME
2.7%
Asse t
Alloc .
- 2.2%
MS CI
EAFE
10 4 . 1%
MS CI
EAFE
7.4%
REITs
Ca sh
REITs
2.9%
0.0%
- 2.5%
Asse t
Alloc .
10 0 . 2 %
Asse t
Alloc .
7.2%
MS CI
EME
- 3.4%
Ma rke t
Ne utra l
64.9%
Ma rke t
Ne utra l
5 . 1%
REITs
Russe ll
2000
18 . 3 %
12 . 2 %
Russe ll
2000
18 . 4 %
Asse t
Alloc .
12 . 5 %
Asse t
Alloc .
8.3%
S &P
500
15 . 8 %
Asse t
Alloc .
7.4%
Russe ll
2000
- 33.8%
S &P
500
26.5%
S &P
500
15 . 1%
0 . 1%
S &P
500
16 . 0 %
S &P
500
10 . 9 %
Ma rke t
Ne utra l
6 . 1%
Asse t
Alloc .
15 . 2 %
Ba rc la ys
Agg
7.0%
Bbe rg
Cmdty
- 35.6%
Asse t
Alloc .
22.2%
Asse t
Alloc .
12 . 5 %
Asse t
Alloc .
- 0.6%
Asse t
Alloc .
11. 3 %
Bbe rg
Cmdty
9 . 1%
S &P
500
4.9%
Ma rke t
Ne utra l
11. 2 %
S &P
500
5.5%
S &P
500
- 37.0%
Bbe rg
Cmdty
18 . 9 %
MS CI
EAFE
8.2%
Russe ll
2000
- 4.2%
Ba rc la ys
Agg
4.2%
0.0%
MS CI
EAFE
- 1. 0 %
Ma rke t
Ne utra l
6.5%
Russe ll
2000
4.6%
MS CI
EAFE
- 11. 7 %
Ma rke t
Ne utra l
0.9%
Ba rc la ys
Agg
- 2.0%
Ma rke t
Ne utra l
- 1. 2 %
MS CI
EAFE
- 5.8%
MS CI
EME
- 2.3%
Russe ll
2000
- 4.4%
Russe ll
2000
- 7.4%
Ba rc la ys
Agg
4.3%
REIT
REITs
Ca sh
3.0%
Ca sh
Ca sh
REITs
4.8%
4.8%
- 37.7%
Ba rc la ys
Agg
4.3%
Russe ll
2000
- 1. 6 %
MS CI
EAFE
- 4 3 . 1%
Ba rc la ys Ba rc la ys
Agg
Agg
5.9%
6.5%
Ma rke t
Ne utra l
4 . 1%
Ca sh
0 . 1%
Ca sh
Bbe rg
Cmdty
- 13 . 3 %
10-yrs. '04 - '13

Cum.
Ann.
Ca sh
0 . 1%
Ca sh
Ba rc la ys Ba rc la ys
Agg
Agg
56.0%
4.5%
Ca sh
17 . 1%
Ba rc la ys
Bbe rg
MS CI
Ma rke t
MS CI
Bbe rg
Bbe rg
Bbe rg
Bbe rg
Bbe rg
Ca sh
REITs
Ca sh
Agg
Cmdty
EME
Ne utra l
EME
Cmdty
Cmdty
Cmdty
Cmdty
Cmdty
1. 2 %
2.4%
2 . 1%
- 15 . 7 %
- 53.2%
0 . 1%
- 0.8%
- 18 . 2 %
- 1. 1%
- 9.5%
- 5.6%
- 11. 8 %
9.0%
Source: Russell,
Russell MSCI,
MSCI Bloomberg
Bloomberg, Standard & Poor
Poors
s, Credit Suisse,
Suisse Barclays Capital,
Capital NAREIT
NAREIT, FactSet,
FactSet J.P.
J P Morgan Asset Management
Management.
The Asset Allocation portfolio assumes the following weights: 25% in the S&P 500, 10% in the Russell 2000, 15% in the MSCI EAFE, 5% in the MSCI
EME, 25% in the Barclays Capital Aggregate, 5% in the Barclays 1-3m Treasury, 5% in the CS/Tremont Equity Market Neutral Index, 5% in the
Bloomberg Commodity Index and 5% in the NAREIT Equity REIT Index. Balanced portfolio assumes annual rebalancing. All data represents total
return for stated period. Past performance is not indicative of future returns. Data are as of 9/30/14, except for the CS/Tremont Equity Market Neutral
Index, which reflects data through 8/31/14. 10-yrs returns represent period of 1/1/04 12/31/13 showing both cumulative (Cum.) and annualized
(Ann.) over the period. Please see disclosure page at end for index definitions. *Market Neutral returns include estimates found in disclosures.
Guide to the Markets U.S. Data are as of 9/30/14.
Ca sh
1. 6 %
Bbe rg
Cmdty
0.9%
Correlations and Volatility

z
U S Large Cap
U.S.
EAFE
U.S.
Large
Cap
EAFE
EME
1 00
1.00
0 89
0.89
1.00
EME
Bonds
Corp. HY
Munis
Munis
Currcy.
EMD
Cmdty.
REITs
0 79
0.79
-0 26
-0.26
0 77
0.77
-0 09
-0.09
-0 53
-0.53
0 63
0.63
0 50
0.50
0 79
0.79
0 82
0.82
0 60
0.60
16%
0.91
-0.16
0.78
-0.03
-0.73
0.70
0.59
0.71
0.88
0.72
20%
1.00
-0.11
0.82
0.04
-0.68
0.79
0.64
0.61
0.90
0.57
25%
1.00
-0.06
0.82
-0.08
0.27
-0.23
-0.02
-0.27
-0.18
3%
1.00
0.16
-0.52
0.87
0.56
0.72
0.78
0.41
12%
1.00
-0.07
0.47
-0.17
0.06
-0.07
-0.11
4%
1.00
-0.52
-0.60
-0.46
-0.60
-0.67
7%
1.00
0.47
0.65
0.67
0.34
8%
1.00
0.37
0.70
0.46
20%
1.00
0.56
0.43
26%
1.00
0.59
8%
1.00
4%
EMD
Commodities
REITs
Hedge Funds
Eq Market Neutral*
Source: Standard & Poors, FRB, Barclays Capital Inc., MSCI Inc., Credit Suisse/Tremont, NCREIF, DJ UBS, J.P. Morgan Asset Management.
Indexes used Large Cap: S&P 500 Index; Currencies: Federal Reserve Trade Weighted Dollar; EAFE: MSCI EAFE; EME: MSCI Emerging
Markets; Bonds: Barclays Capital Aggregate; Corp HY: Barclays Capital Corporate High Yield; EMD: Barclays Capital Emerging Market; Cmdty.:
DJ UBS Commodity
C
dit IIndex;
d
R
Reall E
Estate:
t t NAREIT E
Equity
it REIT IIndex;
d
H
Hedge
d F
Funds:
d CS/T
CS/Tremontt M
Multi-Strategy
lti St t
Index;
I d
Equity
E it Market
M k t Neutral:
N t l
CS/Tremont Equity Market Neutral Index. *Market Neutral returns include estimates found in disclosures.
All correlation coefficients and annualized volatility calculated based on quarterly total return data for period 9/30/04 to 9/30/14.
This chart is for illustrative purposes only. Guide to the Markets U.S.
59
Ann.
Volatility
Bonds
Currencies
Asset Class
Eq
Hedge Market
Funds `Neutral*
Corp.
HY
Alternative Asset Class Returns

10-yrs '04 - '13
2004
2005
2006
2007
2008
Re a l
Esta te
35.0%
P riva te
y
Equity
28.3%
Re a l
Esta te
35.6%
P riva te
y
Equity
19 . 7 %
G bl.
Ma c ro
4.7%
P riva te
Equity
25.9%
G loba l
Equity
17 . 4 %
P riva te
Equity
28.7%
Distrsd.
18 . 1%
2 6 . 1%
MLP s
Distrsd.
16 . 7 %
10 . 4 %
HF Agg.
9 . 1%
HF Agg.
MLP s
9.3%
6.3%
G bl.
Ma c ro
7.5%
Eq. Mkt.
Ntrl.
6 . 1%
6 . 1%
G bl.
Ma c ro
6 . 1%
Mrgr.
Arb.
3.7%
Mrgr.
Arb.
5.5%
Re l. V a l.
Asset Class
MLP s
G loba l
Equity
17 . 0 %
G loba l
Equity
12 . 0 %
60
Re a l
Esta te
13 . 7 %
Eq. Mkt.
Ntrl.
3.4%
Re l. V a l.
2009
2010
2011
MLP s
MLP s
MLP s
76.4%
35.9%
12 . 7 %
Eq. Mkt.
Ntrl.
- 3.0%
G loba l
Equity
30.0%
G bl.
Ma c ro
11. 4 %
Mrgr.
Arb.
- 6.7%
Re a l
Esta te
27.6%
MLP s
2012
2013
YTD
3Q14
Ann.
Return
MLP s
MLP s
MLP s
MLP s
13 . 9 %
Re a l
Esta te
18 . 0 %
27.6%
19 . 5 %
2.7%
15 . 0 %
Re a l
Esta te
26.7%
P riva te
Equity
11. 0 %
G loba l
Equity
16 . 5 %
G loba l
Equity
26.2%
Re a l
Esta te
14 . 6 %
G bl.
Ma c ro
2 . 1%
P riva te
Equity
15 . 0 %
18 . 2 %
P riva te
Equity
20.4%
Re a l
Esta te
9.4%
P riva te
Equity
14 . 0 %
P riva te
Equity
20.8%
G loba l
Equity
6.7%
2 . 1%
Re a l
Esta te
8.5%
P riva te
Equity
10 . 3 %
Re l. V a l.
Distrsd.
Distrsd.
Re l. V a l.
Distrsd.
Distrsd.
9.7%
15 . 1%
6.3%
1. 6 %
7.7%
9.6%
Mrgr.
Arb.
1. 0 %
G loba l
Equity
7.3%
G loba l
Equity
9.3%
Re l. V a l.
HF Agg.
6.5%
7.8%
Distrsd.
HF Agg.
Re l. V a l.
0.9%
5.8%
6.8%
HF Agg.
Re l. V a l.
Re l. V a l.
Re l. V a l.
11. 0 %
- 17 . 3 %
23.0%
12 . 5 %
Mrgr.
Arb.
2.3%
Distrsd.
Re l. V a l.
HF Agg.
Distrsd.
Distrsd.
Re l. V a l.
Distrsd.
HF Agg.
Re l. V a l.
15 . 3 %
10 . 0 %
- 18 . 7 %
20.2%
12 . 2 %
0.8%
8.5%
9.6%
6.2%
Mrgr.
Mrgr
Arb.
14 . 6 %
Mrgr.
Mrgr
Arb.
8.9%
Distrsd.
MLP s
Re l. V a l.
HF Agg.
0.0%
4.8%
Distrsd.
HF Agg.
- 22.3%
18 . 6 %
13 . 3 %
G loba l
Equity
7.7%
P riva te
Equity
- 22.4%
P riva te
Equity
13 . 4 %
Re l. V a l.
Distrsd.
MLP s
12 . 2 %
6.8%
G bl.
Ma c ro
8.2%
Eq. Mkt.
Ntrl.
5.7%
Eq. Mkt.
Ntrl.
7.0%
Re a l
Esta te
- 16 . 3 %
HF Agg.
Ann.
Volatility
G loba l
Equity
11. 1%
G loba l
Equity
0.9%
MLP s
7.5%
5 . 1%
4.4%
Eq. Mkt.
Ntrl.
6.4%
G bl.
Ma c ro
2.9%
Eq. Mkt.
Ntrl
Ntrl.
3 . 1%
Mrgr.
Arb
Arb.
5.3%
Mrgr.
Arb
Arb.
2.6%
Eq. Mkt.
Ntrl
Ntrl.
0.3%
Mrgr.
Arb
Arb.
5.0%
G bl.
Ma c ro
4.8%
- 2.0%
Mrgr.
Arb.
1. 8 %
G bl.
Ma c ro
0 . 1%
Eq. Mkt.
Ntrl.
2.4%
Re a l
Esta te
- 2.0%
G bl.
Ma c ro
4.5%
Eq. Mkt.
Ntrl.
3.7%
G loba l
Equity
- 6.0%
G bl.
Ma c ro
- 1.
1 3%
Re a l
Esta te
- 0.5%
P riva te
Equity
-
P riva te
Equity
-
Eq. Mkt.
Ntrl.
2.7%
Mrgr.
Arb.
3.6%
8.5%
G bl.
Ma c ro
- 0.7%
- 36.9%
Mrgr.
Arb
Arb.
11. 9 %
Mrgr.
Arb
Arb.
4.6%
Eq. Mkt.
Ntrl
Ntrl.
- 1. 5 %
Re a l
Esta te
- 37.3%
G bl.
Ma c ro
6.9%
G bl.
Ma c ro
3.2%
G loba l
Equity
- 39.2%
Eq. Mkt.
Ntrl.
- 1.
1 7%
Eq. Mkt.
Ntrl.
2.5%
HF Agg.
HF Agg.
Re a l
Esta te
25.3%
HF Agg.
HF Agg.
5.3%
Source: Standard & Poors, Alerian, HFRI, MSCI, Cambridge Associates, NAREIT, FactSet, J.P. Morgan Asset Management.
Hedge fund indices include distressed and restructuring (Distrsd.), relative value (Rel. Val.), global macro (Gbl. Macro), merger arbitrage (Mrger. Arb.), equity market neutral (Eq.
Mkt. Ntrl.), and the aggregate (HF Agg.). Returns may fluctuate as hedge fund reporting occurs on a lag. QTD and YTD private equity data is
unavailable and provided by Cambridge Associates. Real estate returns reflect the NAREIT Real Estate 50 Index and global equity returns reflect
the MSCI AC World Index. Annualized volatility and returns are calculated from quarterly data between 12/31/03 and 12/31/13.
Please see disclosure pages for index definitions. Guide to the Markets U.S.
Fund Flows
Mutual Fund Flows
AUM
Billions, USD
YTD 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Domestic Equity
6,175
,
((20))
18
World Equity
2,214
72
142
Taxable Bond
2,939
50
545
Hybrid
M
Money
M
Market
k t
((159)) ((133)) ((81))
57
258
176
151
107
72
24
(4)
(23)
58
11
(21) 252
127
219
301
22
100
45
21
39
125
76
(36)
15
(58)
50
(12)
11
70
11
15
(15)
(7)
17
12
(14)
(12)
1,382
31
73
47
40
35
20
(26)
40
20
43
53
39
(37)
(14)
2 582
2,582
(137)
15
(0)
654
245
62
375
159
194
(124) (525) (539) 637
Aug. 14: $1,398 billion into bond funds

and fixed income ETFs since 07
Billions, USD, includes both mutual funds and ETFs

$800
$600
$1,000
$200
Aug. 14: $641 billion into

stock funds and equity
ETFs since 07
Bonds
(157) (263) (46)
Cumulative Flows Into U.S. Equity Funds
$400
$600
Asset Class
((25))
142
$800
61
120
(80)
$1,200
Aug. 14: $590 billion into U.S.

equity funds and ETFs by
institutional investors since 07
Institutional
$0
-$200
$200
$400
-$400
$200
-$600
$0
100
26
Billions, USD, includes both mutual funds and ETFs

$1,400
$
,
17
57
Cumulative Flows Into Stock & Bond Funds

$1,600
((3))
Tax-exempt Bond
((28)) ((149)) ((69))
Stocks
Retail
Aug. 14: $649 billion out of U.S.
equity funds and ETFs by retail
investors since 07
-$800
'07
0
'08
08
'09
09
'10
0
'11
07
'08
08
'09
09
'10
10
'11
11
'12
12
'13
13
'14
14
'07
Source: Investment Company Institute, J.P. Morgan Asset Management.
Data include flows through August 2014 and exclude ETFs except for the bottom left chart. ICI data are subject to periodic revisions. World
equity flows are inclusive of emerging market, global equity and regional equity flows. Hybrid flows include asset allocation, balanced fund,
flexible portfolio and mixed income flows.
'12
'13
3
'14
Yield Alternatives: Domestic and Global

S&P 500 Total Return: Dividends vs. Capital Appreciation
Average annualized returns
Capital Appreciation
20%
Dividends
15%
10%
13.6%
13.9%
12.6%
3.0%
5%
6.0%
5.4%
4.7%
4.4%
5.1%
5.8%
4.4%
4.2%
3.3%
0%
15.3%
1.6%
1.8%
2.5%
4.0%
-2.7%
-5 3%
-5.3%
-5%
-10%
1926 - 1929
1930's
1940's
1950's
1960's
Equity Dividend Yields
5.9%
5.7%
5.2%
5%
2.9%
3%
Asset Class
1926 to 2013
10-year government
bond yield
3.7%
3.2%
62
2000's
7%
6%
2%
1990's
Major world markets

markets, annualized
10-year government
bond yield
4.6%
4%
1980's
REIT Yields
Major world markets,

markets annualized
5%
1970's
4.5%
4.1%
4.0%
2.8%
4%
2.5%
2.0%
1.8%
3 3%
3.3%
3 3%
3.3%
J
Japan
UK
U.K.
3%
2%
1%
1%
0%
US
U.S.
A t li
Australia
UK
U.K.
F
France
S it l d Canada
Switzerland
C
d
ACWI
J
Japan
0%
US
U.S.
Si
Singapore
A t li
Australia
C
Canada
d
F
France
Source: (Top chart) Standard & Poors, Ibbotson, J.P. Morgan Asset Management. (Bottom right) FactSet, NAREIT, J.P. Morgan Asset Management.
Dividend vs. capital appreciation returns are through 12/31/13. Yields shown are that of the appropriate FTSE NAREIT REIT index, which excludes
property development companies. (Bottom left) FactSet, MSCI, J.P. Morgan Asset Management. Yields shown are that of the appropriate MSCI index.
Gl b l
Global
Global Commodities
Gold Prices
Commodity Prices
Weekly index prices rebased to 100
$ / oz
450
$3,000
Gold, Inflation Adjusted

Gold
Gold
$2,500
Precious Metals
400
Sep. 2014:
$1,217
$2,000
$1,500
350
$1 000
$1,000
300
Industrial Metals
$500
$0
250
'75
'80
'85
'90
'95
'00
'05
'10
Commodity
y Prices and Inflation
Year-over-year % chg.
200
8%
6%
150
Asset Class
100
CPI Basket
Grains
Livestock
50
Energy
Headline CPI
(Y/Y % chg.)
DJ-UBS Commodity Index

(Y/Y % chg.)
60%
4%
40%
2%
20%
0%
0%
-2%
-20%
-4%
-40%
0
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
-6%
-60%
'96
'98
'00
'02
'04
'06
'08
Source: Dow Jones/UBS, EcoWin, BLS, U.S. Department of Energy, FactSet, J.P. Morgan Asset Management. CPI adjusted gold values are calculated
using monthly averages of gold spot prices divided by the CPI value for that month. CPI is rebased to 100 at the end of the chart. Returns based on
nominal prices. Commodity prices represented by the appropriate Bloomberg Commodity sub-index. Guide to the Markets U.S.
63
80%
'10
'12
'14
Historical Returns by Holding Period

Range of Stock, Bond and Blended Total Returns
Annual total returns, 1950 2013
60%
50%
Annual Avg. Growth of $100,000

Total
T
t l Return
R t
over 20 years
51%
40%
Stocks
43%
30%
11.1%
$827,444
Bonds
6.1%
$327,240
50/50 Portfolio
9.0%
$564,491
32%
28%
20%
23% 21%
19%
16% 17%
18%
10%
12%
6%
0%
-2%
-2%
-8%
-10%
1%
2%
-1% 1%
5%
1%
-15%
Stocks
Asset Class
-20%
20%
-30%
Bonds
50/50 Portfolio
-37%
-40%
1-yr.
y
5-yr.
y
rolling
10-yr.
y
rolling
Sources: Barclays Capital, FactSet, Robert Shiller, Strategas/Ibbotson, Federal Reserve, J.P. Morgan Asset Management.
Returns shown are based on calendar year returns from 1950 to 2013. Growth of $100,000 is based on annual average total returns from
1950-2013. Guide to the Markets U.S.
64
14%
20-yr.
y
rolling
Diversification and the Average Investor

Maximizing the Power of Diversification (1994 2013)
Traditional Portfolio
More Diversified Portfolio

Equity Mkt. Neutral
Commodities
8%
26%
S&P 500
30%
REIT
8%
8%
55%
MSCI EAFE
Barclays
y Agg.
gg
15%
S&P 500
Russell 2000
4%
22%
13%
9%
MSCI EAFE
MSCI EM
Barclays Agg.
Return: 8.02%
Standard Deviation: 10.64%
Return: 7.95%
Standard Deviation: 9.71%
20-year Annualized Returns by Asset Class (1994 2013)

12%
10.3%
10.2%
9.2%
10%
Asset Class
8%
6.1%
6%
5.8%
5.7%
4%
3.1%
2.5%
2.4%
Average
Investor
Inflation
2%
0%
REITs
65
Oil
S&P 500
EAFE
Gold
Bonds
Homes
Source: Morningstar Direct, Dalbar Inc.,

J.P. Morgan Asset Management. (Top)
Indexes and weights of the traditional
portfolio are as follows: U.S. Stocks:
55% S&P 500; U.S. Bonds: 30%
Barclays Capital Aggregate;
I t
International
ti
l Stocks:
St k 15% MSCI EAFE.
EAFE
Portfolio with 25% in alternatives is as
follows: U.S. Stocks: 22.2% S&P 500,
8.8% Russell 2000; International
Stocks: 4.4% MSCI EM, 13.2% MSCI
EAFE; U.S. Bonds: 26.5% Barclays
Capital Aggregate; Alternatives: 8.3%
CS/Tremont Equity Market Neutral:
8.3%,, DJ/UBS Commodities: 8.3%
NAREIT Equity REIT Index. Return and
standard deviation calculated using
Morningstar Direct.
Charts are shown for illustrative
purposes only. Past performance is not
indicative of future returns.
Diversification does not guarantee
investment returns and does not
eliminate
li i t risk
i k off lloss. (Bottom)
(B tt ) IIndexes
d
used are as follows: REITS: NAREIT
Equity REIT Index, EAFE: MSCI EAFE,
Oil: WTI Index, Bonds: Barclays Capital
U.S. Aggregate Index, Homes: median
sale price of existing single-family
homes, Gold: USD/troy oz, Inflation:
CPI. Average asset allocation investor
y
by
y
return is based on an analysis
Dalbar Inc., which utilizes the net of
aggregate mutual fund sales,
redemptions and exchanges each
month as a measure of investor
behavior. Returns are annualized (and
total return where applicable) and
represent the 20-year period ending
12/31/13 to match Dalbars most recent
analysis Guide to the Markets U.S.
analysis.
US
Cash Accounts
Annual Income Generated by $100,000 Investment in a 6-month CD
Money Supply
Component
$10,000
$8,000
,
$ Billions
Weight in
Money
Supply
2006: $5
$5,240
240
M2-M1
$6,000
$4,000
2013:
$390
Retail MMMFs
8,640
637
78.4%
5.8%
$2,000
$0
Savings deposits
'90
'95
'00
'05
7,476
67.8%
'10
M2 Money Supply as a % of Nominal GDP
Small time deposits
70%
527
4.8%
2Q14: 65.2%
65%
Institutional MMMFs
60%
Average: 52.9%
55%
Cash in IRA & Keogh

accounts
Asset Class
50%
66
1,741
646
15.8%
5.9%
45%
Total
40%
'80
'85
'90
'95
'00
'05
11,027
100.0%
'10
Source: Federal Reserve, St. Louis Fed, Bankrate.com, J.P. Morgan Asset Management.
All cash measures obtained from the Federal Reserve are seasonally adjusted monthly numbers. All numbers are in billions of U.S. dollars.
Small denomination time deposits are those issued in amounts of less than $100
Small-denomination
$100,000.
000 All IRA and Keogh account balances at commercial banks and thrift institutions are subtracted
from small time deposits. Annual income is for illustrative purposes and is calculated based on the 6-month CD yield on average during each year and $100,000 invested. IRA and
Keogh account balances at money market mutual funds are subtracted from retail money funds.
Past performance is not indicative of comparable future results.
Corporate DB Plans and Endowments

Asset Allocation: Corporate DB Plans vs. Endowments
Endowments
Defined Benefit Plans: Russell 3000 Companies

Trillions ($)
$2.5
Funded Status (%)
105%
Liabilities (($))
Corporate Defined Benefit Plans
$2.0
100%
Assets ($)
95%
27.0%
Equities
$1.5
48.0%
85%
$1.0
9.0%
Fixed Income
90%
80%
38.0%
$0.5
75%
Hedge Funds
Private Equity
7.3%
3.0%
10%
% of total
20%
'10
1999: Average 9.2%

2013: Average 7.3%
30%
4.0%
0%
'09
'11
'12
'13
Q3 '14*
40%
2.0%
3.0%
Cash
'08
Pension Return Assumptions: S&P 500 companies
15 9%
15.9%
2.0%
Other
70%
'07
% of Comp
panies
Asset Class
$0.0
4.0%
17.7%
Real Estate
67
20.1%
30%
40%
50%
60%
34%
27%
29%
20%
20%
20%
13%
12%
10%
9%
10%
6%
0%
1%
5%
1%
1%
7%
3%
0%
0%
0%
0%
< 6%
6 to 6.5 to 7 to 7.5 to 8 to 8.5 to 9 to 9.5 to > 10%

6.5%
6
5% 7% 7
7.5%
5% 8% 8
8.5%
5% 9% 9
9.5%
5% 10%
Return Assumption
Source: NACUBO (National Association of College and University Business Officers), Towers Watson, Compustat/FactSet, J.P. Morgan Asset
Management. Asset allocation as of 2012. *Funded status for 3Q14 estimated using market returns. Endowments represents dollar-weighted
average data of 842 colleges and universities. Pension Return Assumptions based on all available and reported data from S&P 500 Index
companies. Pension Assets, Liabilities and Funded Status based on Russell 3000 companies reporting pension data. Return assumption bands are
inclusive of upper range. All information is shown for illustrative purposes only. Guide to the Markets U.S. Data are as of 9/30/14.
J.P. Morgan Asset Management Index Definitions

All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not
include fees or expenses.
The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. This world-renowned
index includes a representative sample of 500 leading companies in leading industries of the U.S. economy.
Although the S&P 500 Index focuses on the large-cap segment of the market, with approximately 75% coverage
of U.S. equities, it is also an ideal proxy for the total market. An investor cannot invest directly in an index.
Th S&P 400 Mid Cap
The
C Index
I d is
i representative
i off 400 stocks
k iin the
h mid-range
id
sector off the
h ddomestic
i stockk
market, representing all major industries.
The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based on total market
capitalization.
The Russell 1000 Index measures the performance of the 1,000 largest companies in the Russell 3000.
The Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher
price-to-book ratios and higher forecasted growth values.
The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower
price-to-book
i t b k ratios
ti andd llower fforecasted
t d growth
th values.
l
The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000
Index.
The Russell Midcap Growth Index measures the performance of those Russell Midcap companies with higher
price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000
Growth index.
The Russell Midcap Value Index measures the performance of those Russell Midcap companies with lower
price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value
index.
The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000
Index.
The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher
price-to-book ratios and higher forecasted growth values.
The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower
price-to-book ratios and lower forecasted growth values.
The Russell Top 200 Index measures the performance of the largest cap segment of the U.S. equity universe.
pp
y 200 of the largest
g securities based on a combination of their market capp and current
It includes approximately
index membership and represents approximately 68% of the U.S. market.
The MSCI EAFE (Europe, Australia, Far East) Net Index is recognized as the pre-eminent benchmark in the
United States to measure international equity performance. It comprises 21 MSCI country indexes, representing
the developed markets outside of North America.
The MSCI Emerging Markets IndexSM is a free float-adjusted market capitalization index that is designed to
measure equity market performance in the global emerging markets. As of June 2007, the MSCI Emerging
Markets Index consisted of the following 25 emerging market country indices: Argentina, Brazil, Chile, China,
Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco,
Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.
The MSCI ACWI (All Country World Index) Index is a free float-adjusted market capitalization weighted index
that is designed to measure the equity market performance of developed and emerging markets. As of June 2009
the MSCI ACWI consisted of 45 country indices comprising 23 developed and 22 emerging market country
indices.
68
The MSCI Small Cap IndicesSM target 40% of the eligible Small Cap universe within each industry group, within
each country. MSCI defines the Small Cap universe as all listed securities that have a market capitalization in the
range of USD200-1,500 million.
The MSCI Value and Growth IndicesSM cover the full range of developed, emerging and All Country MSCI Equity
indexes. As of the close of May 30, 2003, MSCI implemented an enhanced methodology for the MSCI Global
Value and Growth Indices, adopting a two dimensional framework for style segmentation in which value and growth
securities are categorized using different attributes - three for value and five for growth including forward-looking
variables. The objective of the index design is to divide constituents of an underlying MSCI Standard Country Index
into a value index and a growth index, each targeting 50% of the free-float adjusted market capitalization of the
underlying country index. Country Value/Growth indices are then aggregated into regional Value/Growth indices.
Prior to May 30, 2003, the indices used Price/Book Value (P/BV) ratios to divide the standard MSCI country indices
into value and growth indices. All securities were classified as either "value" securities (low P/BV securities) or
"growth" securities (high P/BV securities), relative to each MSCI country index.
The following MSCI Total Return IndicesSM are calculated with gross dividends:
This series approximates the maximum possible dividend reinvestment. The amount reinvested is the dividend
distributed to individuals resident in the country of the company,
company but does not include tax credits.
credits
The MSCI Europe IndexSM is a free float-adjusted market capitalization index that is designed to measure
developed market equity performance in Europe. As of June 2007, the MSCI Europe Index consisted of the
following 16 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece,
Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
The MSCI Pacific IndexSM is a free float-adjusted market capitalization index that is designed to measure equity
market performance in the Pacific region. As of June 2007, the MSCI Pacific Index consisted of the following 5
Developed Market countries: Australia, Hong Kong, Japan, New Zealand, and Singapore.
g Fund Index is compiled
p
byy Credit Suisse Tremont Index,, LLC. It is an assetCredit Suisse/Tremont Hedge
weighted hedge fund index and includes only funds, as opposed to separate accounts. The Index uses the Credit
Suisse/Tremont database, which tracks over 4500 funds, and consists only of funds with a minimum of US$50
million under management, a 12-month track record, and audited financial statements. It is calculated and
rebalanced on a monthly basis, and shown net of all performance fees and expenses. It is the exclusive property of
Credit Suisse Tremont Index, LLC.
The NCREIF Property Index is a quarterly time series composite total rate of return measure of investment
performance of a very large pool of individual commercial real estate properties acquired in the private market for
investment purposes only. All properties in the NPI have been acquired, at least in part, on behalf of tax-exempt
institutional investors - the great majority being pension funds. As such, all properties are held in a fiduciary
environment.
i
The NAREIT EQUITY REIT Index is designed to provide the most comprehensive assessment of overall industry
performance, and includes all tax-qualified real estate investment trusts (REITs) that are listed on the NYSE, the
American Stock Exchange or the NASDAQ National Market List.
The Dow Jones Industrial Average measures the stock performance of 30 leading blue-chip U.S. companies.
The Bloomberg Commodity Index is composed of futures contracts on physical commodities and represents
twenty two separate commodities traded on U.S. exchanges, with the exception of aluminum, nickel, and zinc.
J.P. Morgan Asset Management Index Definitions

All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not
include fees or expenses.
The S&P GSCI Index is a composite index of commodity sector returns representing an unleveraged, long-only
investment in commodity futures that is broadly diversified across the spectrum of commodities. The returns are
calculated on a fully collateralized basis with full reinvestment. Individual components qualify for inclusion in the
index on the basis of liquidity and are weighted by their respective world production quantities.
The Barclays Capital U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar
denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for
government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major
sectors are subdivided into more specific indexes that are calculated and reported on a regular basis.
This U.S. Treasury Index is a component of the U.S. Government index.
West Texas Intermediate (WTI) is the underlying commodity for the New York Mercantile Exchange's oil futures
contracts.
The Barclays Capital High Yield Index covers the universe of fixed rate, non-investment grade debt. Pay-in-kind
(PIK) bonds,
bonds Eurobonds,
Eurobonds and debt issues from countries designated as emerging markets (e
(e.g.,
g Argentina
Argentina, Brazil
Brazil,
Venezuela, etc.) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries
are included. Original issue zeroes, step-up coupon structures, and 144-As are also included.
The Barclays Capital 1-3 Month U.S. Treasury Bill Index includes all publicly issued zero-coupon U.S. 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 Barclays Capital General Obligation Bond Index is a component of the Barclays Capital Municipal Bond
Index. To be included in the index, bonds must be general obligation bonds rated investment-grade (Baa3/BBB- or
higher) by at least two of the following ratings agencies: Moody
Moody'ss, S&P
S&P, Fitch.
Fitch If only two of the three agencies rate
the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security,
the rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued
as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31,
1990, and must be at least one year from their maturity date. Remarketed issues, taxable municipal bonds, bonds
with floating rates, and derivatives, are excluded from the benchmark.
The Barclays Capital Revenue Bond Index is a component of the Barclays Capital Municipal Bond Index. To
be included in the index, bonds must be revenue bonds rated investment-grade (Baa3/BBB- or higher) by at least
two of the following ratings agencies: Moody's, S&P, Fitch. If only two of the three agencies rate the security, the
lower rating is used to determine index eligibility.
eligibility If only one of the three agencies rates a security
security, the rating must
be investment-grade. They must have an outstanding par value of at least $7 million and be issued as part of a
transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31, 1990, and
must be at least one year from their maturity date. Remarketed issues, taxable municipal bonds, bonds with
floating rates, and derivatives, are excluded from the benchmark.
The Barclays High Yield Municipal Index includes bonds rated Ba1 or lower or non-rated bonds using the middle
rating of Moodys, S&P and Fitch.
The Barclays Capital Taxable Municipal Bond Index is a rules-based, market-value weighted index engineered
for the long-term taxable bond market. To be included in the index, bonds must be rated investment-grade
(Baa3/BBB- or higher) by at least two of the following ratings agencies if all three rate the bond: Moody
Moody'ss, S&P
S&P,
Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If only
one of the three agencies rates a security, the rating must be investment-grade. They must have an outstanding
par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be
fixed rate and must be at least one year from their maturity date. Remarketed issues (unless converted to fixed
rate), bonds with floating rates, and derivatives, are excluded from the benchmark.
69
Municipal Bond Index: To be included in the index, bonds must be rated investment-grade (Baa3/BBB- or higher)
by at least two of the following ratings agencies: Moody's, S&P, Fitch. If only two of the three agencies rate the
security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the
rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued as
part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31,
1990, and must be at least one year from their maturity date. Remarketed issues, taxable municipal bonds, bonds
with floating rates,
rates and derivatives are excluded from the benchmark
benchmark.
The Barclays Capital Emerging Markets Index includes USD-denominated debt from emerging markets in the
following regions: Americas, Europe, Middle East, Africa, and Asia. As with other fixed income benchmarks
provided by Barclays Capital, the index is rules-based, which allows for an unbiased view of the marketplace and
easy replicability.
The Barclays Capital MBS Index covers the mortgage-backed pass-through securities of Ginnie Mae, Fannie
Mae, and Freddie Mac. Aggregate components must have a weighted average maturity of at least one year, must
have $250 million par amount outstanding, and must be fixed rate mortgages.
The Barclays Capital Corporate Bond Index is the Corporate component of the U.S. Credit index.
The Barclays Capital TIPS Index consists of Inflation-Protection securities issued by the U.S. Treasury.
The J.P. Morgan EMBI Global Index includes U.S. dollar denominated Brady bonds, Eurobonds, traded loans and
local market debt instruments issued by sovereign and quasi-sovereign entities.
The J.P. Morgan Domestic High Yield Index is designed to mirror the investable universe of the U.S. dollar
domestic high yield corporate debt market.
The CS/Tremont Equity Market Neutral Index takes both long and short positions in stocks with the aim of
minimizing exposure to the systematic risk of the market (i.e., a beta of zero).
CS/Tremont
e o t Multi-Strategy
u t St ategy Index
de co
consists
s s s oof funds
u ds that
a aallocate
oca e cap
capital
a based oon pe
perceived
ce ed oppo
opportunities
u es
Thee CS/
among several hedge fund strategies. Strategies adopted in a multi-strategy fund may include, but are not limited
to, convertible bond arbitrage, equity long/short, statistical arbitrage and merger arbitrage.
The Barclays U.S. Dollar Floating Rate Note (FRN) Index provides a measure of the U.S. dollar denominated
floating rate note market.
*Market Neutral returns for November 2008 are estimates by J.P. Morgan Funds Market Strategy, and are based
on a December 8, 2008 published estimate for November returns by CS/Tremont in which the Market Neutral
returns were estimated to be +0.85% (with 69% of all CS/Tremont constituents having reported return data).
Presumed to be excluded from the November return are three funds, which were later marked to $0 by CS/Tremont
in connection with the Bernard Madoff scandal. J.P. Morgan Funds believes this distortion is not an accurate
representation of returns in the category. CS/Tremont later published a finalized November return of -40.56% for
the month, reflecting this mark-down. CS/Tremont assumes no responsibility for these estimates.
J.P. Morgan Asset Management Definitions, Risks & Disclosures

Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise.
The price of equity securities may rise, or fall because of changes in the broad market or changes in a companys
financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting
individual companies, sectors or industries, or the securities market as a whole, such as changes in economic or
political conditions. Equity securities are subject to stock market risk meaning that stock prices in general may
decline over short or extended periods of time.
Small capitalization investing typically carries more risk than investing in well-established
Small-capitalization
well established "blue-chip"
"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.
Mid-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies.
Historically, mid-cap companies' stock has experienced a greater degree of market volatility than the average
stock.
Real estate investments may be subject to a higher degree of market risk because of concentration in a specific
industry, sector or geographical sector. Real estate investments 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.
borrower
International investing involves a greater degree of risk and increased volatility. Changes in currency exchange
rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Also, some
overseas markets may not be as politically and economically stable as the United States and other nations.
Investments in emerging markets can be more volatile. As mentioned above, the normal risks of investing in
foreign countries are heightened when investing in emerging markets. In addition, the small size of securities
markets and the low trading volume may lead to a lack of liquidity, which leads to increased volatility. Also,
emerging markets may not provide adequate legal protection for private or foreign investment or private property.
Investments in commodities may have greater volatility than investments in traditional securities, particularly if the
instruments involve leverage.
leverage The value of commodity-linked
commodity linked derivative instruments may be affected by changes in
overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular
industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international
economic, political and regulatory developments. Use of leveraged commodity-linked derivatives creates an
opportunity for increased return but, at the same time, creates the possibility for greater loss.
Investing in alternative assets involves higher risks than traditional investments and is suitable only for
sophisticated investors. Alternative investments involve greater risks than traditional investments and should not be
deemed a complete investment program. They are not tax efficient and an investor should consult with his/her tax
advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also
be highly leveraged and engage in speculative investment techniques, which can magnify the potential for
i
investment
t
t loss
l
or gain.
i Th
The value
l off th
the iinvestment
t
t may ffallll as wellll as rise
i andd iinvestors
t may gett bbackk lless th
than
they invested.
Derivatives may be riskier than other types of investments because they may be more sensitive to changes in
economic or market conditions than other types of investments and could result in losses that significantly exceed
the original investment. The use of derivatives may not be successful, resulting in investment losses, and the cost
of such strategies may reduce investment returns.
Price to forward earnings is a measure of the price-to-earnings ratio (P/E) using forecasted earnings. Price to
book value compares a stock's market value to its book value. Price to cash flow is a measure of the market's
expectations of a firm's future financial health. Price to dividends is the ratio of the price of a share on a stock
exchange to the dividends per share paid in the previous year,
year used as a measure of a company
company'ss potential as an
investment.
There is no guarantee that the use of long and short positions will succeed in limiting an investor's exposure to
domestic stock market movements, capitalization, sector swings or other risk factors. Investing using long and
short selling strategies may have higher portfolio turnover rates. Short selling involves certain risks, including
additional costs associated with covering short positions and a possibility of unlimited loss on certain short sale
positions.
70
The HFRI Monthly Indices (HFRI) are equally weighted performance indexes, utilized by numerous hedge fund
managers as a benchmark for their own hedge funds. The HFRI are broken down into 4 main strategies, each with
multiple substrategies. All single-manager HFRI Index constituents are included in the HFRI Fund Weighted
Composite, which accounts for over 2200 funds listed on the internal HFR Database.
Equity Market Neutral Strategies employ sophisticated quantitative techniques of analyzing price data to
ascertain information about future price movement and relationships between securities, select securities for
purchase and sale.
sale Equity Market Neutral Strategies typically maintain characteristic net equity market exposure no
greater than 10% long or short.
Distressed Restructuring Strategies employ an investment process focused on corporate fixed income
instruments, primarily on corporate credit instruments of companies trading at significant discounts to their value at
issuance or obliged (par value) at maturity as a result of either formal bankruptcy proceeding or financial market
perception of near term proceedings.
Merger Arbitrage Strategies which employ an investment process primarily focused on opportunities in equity and
equity related instruments of companies which are currently engaged in a corporate transaction.
g trade a broad range
g of strategies
g in which the investment pprocess is ppredicated on
Global Macro Strategies
movements in underlying economic variables and the impact these have on equity, fixed income, hard currency
and commodity markets.
Relative Value Strategies maintain positions in which the investment thesis is predicated on realization of a
valuation discrepancy in the relationship between multiple securities.
The Cambridge Associates LLC U.S. Private Equity Index is an end-to-end calculation based on data
compiled from 1,052 U.S. private equity funds (buyout, growth equity, private equity energy and mezzanine funds),
including fully liquidated partnerships, formed between 1986 and 2013.
The Alerian MLP Index is a composite of the 50 most prominent energy Master Limited Partnerships (MLPs) that
provides investors with an unbiased,
unbiased comprehensive benchmark for the asset class.
class
J.P. Morgan Asset Management Risks & Disclosures

The Market Insights program 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 decisionmaking, the program explores the implications of current economic data and changing market conditions.
The views contained herein are not to be taken as an advice or recommendation to buy or sell any investment in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any
of the transactions mentioned herein. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to
change without prior notice. All information presented herein is considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. This material should not
be relied upon
pon by
b you
o in evaluating
e al ating the merits of investing
in esting in any
an securities
sec rities or products.
prod cts In addition,
addition the Investor
In estor should
sho ld make an independent assessment of the legal
legal, reg
regulatory,
lator tax,
ta credit
credit, and accounting
acco nting and determine,
determine together with
ith
their own professional advisers if any of the investments mentioned herein are suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. It should be noted
that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yield may not
be a reliable guide to future performance. Exchange rate variations may cause the value of investments to increase or decrease. Investments in smaller companies may involve a higher degree of risk as they are usually more sensitive
to market movements. Investments in emerging markets may be more volatile and therefore the risk to your capital could be greater. Further, the economic and political situations in emerging markets may be more volatile than in
established economies and these may adversely influence the value of investments made.
It shall be the recipients sole responsibility to verify his / her eligibility and to comply with all requirements under applicable legal and regulatory regimes in receiving this communication and in making any investment. All case studies
shown are for illustrative purposes only and should not be relied upon as advice or interpreted as a recommendation. Results shown are not meant to be representative of actual investment results.
J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by the following entities: in Brazil by Banco J.P. Morgan S.A.
(Brazil) which is regulated by The Brazilian Securities and Exchange Commission (CVM) and Brazilian Central Bank (Bacen); in the United Kingdom by JPMorgan Asset Management (UK) Limited, which is authorized and regulated by
the Financial Conduct Authority (FCA); in other EU jurisdictions by JPMorgan Asset Management (Europe) S. r.l.; in Switzerland by J.P. Morgan (Suisse) SA, which is regulated by the Swiss Financial Market Supervisory Authority
FINMA; in Hong Kong by JF Asset Management Limited, JPMorgan Funds (Asia) Limited or JPMorgan Asset Management Real Assets (Asia) Limited, all of which are regulated by the Securities and Futures Commission; in India by
JPMorgan Asset Management India Private Limited which is regulated by the Securities & Exchange Board of India; in Singapore by JPMorgan Asset Management (Singapore) Limited or JPMorgan Asset Management Real Assets
(Singapore) Pte. Ltd., both are regulated by the Monetary Authority of Singapore; in Taiwan by JPMorgan Asset Management (Taiwan) Limited or JPMorgan Funds (Taiwan) Limited, both are regulated by the Financial Supervisory
Commission; in Japan by JPMorgan Asset Management (Japan) Limited which is a member of the Investment Trusts Association, Japan, the Japan Investment Advisers Association and the Japan Securities Dealers Association, and is
regulated
egu ated by the
t e Financial
a c a Se
Services
ces Agency
ge cy ((registration
eg st at o number
u be Kanto
a to Local
oca Finance
a ce Bureau
u eau ((Financial
a c a Instruments
st u e ts Firm)) No.
o 330
330);); in Korea
o ea by JPMorgan
J o ga Asset
sset Management
a age e t ((Korea)
o ea) Co
Company
pa y Limited
ted which
c iss regulated
egu ated by tthee
Financial Services Commission (without insurance by Korea Deposit Insurance Corporation) and in Australia to wholesale clients only as defined in section 761A and 761G of the Corporations Act 2001 (Cth) by JPMorgan Asset
Management (Australia) Limited (ABN 55143832080) (AFSL 376919) which is regulated by the Australian Securities and Investments Commission; in Canada by JPMorgan Asset Management (Canada) Inc.; and in the United States
by J.P. Morgan Investment Management Inc., or J.P. Morgan Distribution Services , Inc., member FINRA SIPC.
EMEA Recipients: You should note that if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also take note that information and
data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA Privacy Policy which can be accessed through the following website
http://www.jpmorgan.com/pages/privacy.
Past performance is no guarantee of comparable future results.
Diversification does not guarantee investment returns and does not eliminate the risk of loss.
Brazilian recipients:
Prepared by: Andrew D. Goldberg, Anastasia V. Amoroso, James C. Liu, Gabriela D. Santos,
David M. Lebovitz, Hannah J. Anderson, Ainsley E. Woolridge, and David P. Kelly.
Unless otherwise stated, all data are as of September 30, 2014 or most recently
available.
JP-LITTLEBOOK
71

JP Morgan LittleBook Q4 2014

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4Q | 2014

Guide to the Markets

Global Market Insights Strategy Team

Dr. David P. Kelly, CFA

Maria Paola Toschi

Anastasia V. Amoroso, CFA

Manuel Arroyo Ozores,

Tilmann Galler, CFA

David Stubbs, PhD

Kerry Craig, CFA

S&P 500 Index at Inflection Points

Fixed Income Sector Returns

Owners of Treasury Securities

Economic Growth and the Composition of GDP

Global Equity Markets

Asset Class Returns

S&P 500 Index at Inflection Points

Sep. 30, 2014

Mar. 24, 2000

Data are as of 9/30/14.

Returns and Valuations by Style

Current P/E vs. 20-year avg. P/E

Current P/E as % of 20-year avg. P/E

237.6% 228.0% 231.0%

305.6% 287.3% 270.4%

234.8% 246.3% 257.4%

E.g.: Large Cap Blend stocks are 5.6%

Since Market Low (March 2009)

Since Market Peak (October 2007)

Source: Russell Investment Group,

Guide to the Markets U.S.

Beta to S&P 500

Forward P/E Ratio

Since Market Peak

Since Market Low

Trailing P/E Ratio

Returns and Valuations by Sector

Guide to the Markets U.S.

Stock Valuation Measures: S&P 500 Index

U.S. Equity: Valuation Measures

EY Minus Baa Yield

S&P 500 Index: Forward P/E Ratio

S&P 500 Earnings Yield vs. Baa Bond Yield

S&P 500 Earnings Yield

Moodys Baa Yield: 4.8%

Data are as of 9/30/2014.

Corporate Profits and Leverage

S&P 500 Earnings Per Share

Operating basis, quarterly

S&P 500 Operating

After Tax Adj

Data are as of 9/30/14.

Sources of Earnings per Share Growth

Share of EPS Growth

Source: Standard & Poors, Compustat, J.P. Morgan Asset Management.

Data are as of 9/30/14.

Sources of Total Return

Total return broken into multiples, earnings and dividends, quarterly

Share of Total Return

Source: Standard & Poors, IBES, J.P. Morgan Asset Management.

Equity Performance in Bull Markets

S&P 500 Levels Near Market Highs

Price returns to peak after crossing average real earnings yield

Returns to peak price after average valuation