1158474868049 mi gtm-4_q18_webapp

Guide to the Markets®
U.S. | |
MARKET INSIGHTS
4Q 2018 As of September 30, 2018

|GTM – U.S.
2
Hannah Anderson
Hong Kong
Global Market Insights Strategy Team 2
Manuel Arroyo Ozores, CFA
Madrid
Lucia Gutierrez Mellado
Madrid
Vincent Juvyns
Luxembourg
Tilmann Galler, CFA
Frankfurt
Maria Paola Toschi
Milan
Tai Hui
Hong Kong
Ian Hui
Hong Kong
Marcella Chow
Hong Kong
Dr. Jasslyn Yeo, CFA
Singapore
Kerry Craig, CFA
Melbourne
Chaoping Zhu, CFA
Shanghai
Alex Dryden, CFA
New York
Dr. David Kelly, CFA
New York
Samantha Azzarello
New York
Gabriela Santos
New York
David Lebovitz
New York
Jordan Jackson
New York
John Manley
New York
Tyler Voigt
New York
Dr. Cecelia Mundt
New York
Yoshinori Shigemi
Tokyo
Shogo Maekawa
Tokyo
Nandini Ramakrishnan
London
Michael Bell, CFA
London
Jai Malhi
London
Ambrose Crofton
London
Karen Ward
London
Agnes Lin
Taipei
Jennie Li
New York
Meera Pandit
New York

|GTM – U.S.
3
37. High yield bonds
38. Global monetary policy
39. Global fixed income
40. Fixed income sector returns
 International
41. Global equity markets
42. Global equity markets: Returns
43. Currency and international equity returns
44. U.S. and international equities at inflection points
45. International equity earnings and valuations
46. Global growth trackers
47. Manufacturing momentum
48. Global inflation
49. Global trade
50. European recovery
51. Japan: Economy and markets
52. China: Economic growth and debt
53. Emerging markets
54. Emerging markets and the U.S. dollar
 Alternatives
55. Correlations and volatility
56. Hedge funds
57. Private equity
58. Yield alternatives: Domestic and global
59. Global commodities
 Investing principles
60. Asset class returns
61. Fund flows
62. Life expectancy and retirement
63. Time, diversification and the volatility of returns
64. Diversification and the average investor
65. Equity market performance around bear markets
66. Cash accounts
67. Institutional investor behavior
68. Local investing and global opportunities
 Equities
4. S&P 500 Index at inflection points
5. S&P 500 valuation measures
6. P/E ratios and equity returns
7. Corporate profits
8. Sources of earnings per share growth
9. Uses of profits
10. Returns and valuations by style
11. Returns and valuations by sector
12. Cyclical and defensive sectors
13. Factor performance and sector weights
14. Annual returns and intra-year declines
15. Recessions and bear markets
16. Interest rates and equities
17. Stock market since 1900
 Economy
18. The length of expansions and depth of recessions
19. Economic growth and the composition of GDP
20. Consumer finances
21. Cyclical sectors
22. Long-term drivers of economic growth
23. Federal finances
24. Unemployment and wages
25. Labor market perspectives
26. Employment and income by educational attainment
27. Inflation
28. Dollar drivers
29. Oil markets
30. Government control, the economy and the stock market
 Fixed income
31. The Fed and interest rates
32. Interest rates and inflation
33. Yield curve
34. Long-run bond returns
35. Bond market duration and yield
36. Fixed income yields and returns
Page reference 3
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1 10

|GTM – U.S.
4
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
600
900
1,200
1,500
1,800
2,100
2,400
2,700
3,000
Oct. 9, 2002
P/E (fwd.) = 14.1x
777
S&P 500 Price Index
Characteristic Mar. 2000 Oct. 2007 Sep. 2018
Index level 1,527 1,565 2,914
P/E ratio (fwd.) 27.2x 15.7x 16.8x
Dividend yield 1.1% 1.8% 2.0%
10-yr. Treasury 6.2% 4.7% 3.1%
S&P 500 Index at inflection points
Source: Compustat, FactSet, Federal Reserve, Standard & Poor’s, J.P. Morgan Asset Management.
Dividend yield is calculated as consensus estimates of dividends for the next 12 months, divided by most recent price, as provided by 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 September 30, 2018.
4
-49%
Mar. 24, 2000
P/E (fwd.) = 27.2x
1,527
Dec. 31, 1996
P/E (fwd.) = 16.0x
741
Sep. 30, 2018
P/E (fwd.) = 16.8x
2,914
+101%
Oct. 9, 2007
P/E (fwd.) = 15.7x
1,565
-57%
Mar. 9, 2009
P/E (fwd.) = 10.3x
677
+331%
+106%
Equities

|GTM – U.S.
5
S&P 500 valuation measures
Source: FactSet, FRB, Robert Shiller, Standard & Poor’s, Thomson Reuters, J.P. Morgan Asset Management.
Price to earnings is price divided by consensus analyst estimates of earnings per share for the next 12 months as provided by IBES since December
1989, and FactSet for September 30, 2018. Average P/E and standard deviations are calculated using 25 years of FactSet history. Shiller’s P/E uses
trailing 10-years of inflation-adjusted earnings as reported by companies. Dividend yield is calculated as the next 12-month consensus dividend
divided by most recent price. 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 Moody’s Baa
seasoned corporate bond yield. Std. dev. over-/under-valued is calculated using the average and standard deviation over 25 years for each measure.
*P/CF is a 20-year average due to cash flow data availability.
S&P 500 Index: Forward P/E ratio
5
Equities
Current:
16.8x
Valuation
measure Description Latest
25-year
avg.*
Std. dev.
Over-/under-
Valued
P/E Forward P/E 16.8x 16.1x 0.2
CAPE Shiller’s P/E 33.2 26.7 1.0
Div. Yield Dividend yield 2.0% 2.0% 0.0
P/B Price to book 3.2 2.9 0.4
P/CF Price to cash flow 12.5 10.7 0.9
EY Spread EY minus Baa yield 1.1% -0.1% -0.6
25-year average: 16.1x
+1 Std. dev.: 19.3x
-1 Std. dev.: 12.9x
8

|GTM – U.S.
6
-60%
-40%
-20%
0%
20%
40%
60%
8.0x 11.0x 14.0x 17.0x 20.0x 23.0x
-60%
-40%
-20%
0%
20%
40%
60%
8.0x 11.0x 14.0x 17.0x 20.0x 23.0x
Forward P/E and subsequent 1-yr. returns
S&P 500 Total Return Index
R² = 10%
Source: FactSet, Standard & Poor’s, Thomson Reuters, J.P. Morgan Asset Management.
Returns are 12-month and 60-month annualized total returns, measured monthly, beginning September 30, 1993. R² represents the percent of total
variation in total returns that can be explained by forward P/E ratios.
P/E ratios and equity returns
Forward P/E and subsequent 5-yr. annualized returns
S&P 500 Total Return Index
6
Equities
Current: 16.8x
R² = 44%
Current: 16.8x

|GTM – U.S.
7
0%
2%
4%
6%
8%
10%
12%
14%
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
-15%
-10%
-5%
0%
5%
10%
15%
20%-30%
-20%
-10%
0%
10%
20%
30%
40%
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
-$1
$2
$5
$8
$11
$14
$17
$20
$23
$26
$29
$32
$35
$38
$41
$44
'02 '05 '08 '11 '14 '17
S&P 500 profit margins
Quarterly operating earnings per share/sales per share
Source: Compustat, FactSet, Standard & Poor’s, J.P. Morgan Asset Management; (Top right) Federal Reserve.
EPS levels are based on operating earnings per share. Earnings estimates are Standard & Poor’s consensus analyst expectations. Past performance
is not indicative of future returns. Currencies in the Trade Weighted U.S. Dollar Major Currencies Index are: Argentine peso, Australian dollar, Brazil
real, British pound, Canadian dollar, Chilean peso, Chinese renminbi, Colombian peso, euro, Honk Kong dollar, Indian rupee, Indonesian rupiah,
Israeli new shekel, Japanese yen, Korean won, Malaysia ringgit, Mexican peso, Philippine peso, Russian ruble, Saudi riyal, Singapore dollar,
Swedish krona, Swiss franc, New Taiwan dollar, Thai baht, Venezuelan bolivar. High foreign sales is the average of the year-over-year % change in
last 12 months sales of the following S&P 500 sectors: information technology, materials, energy, industrials. U.S. dollar has a 9-month lag.
Corporate profits
S&P 500 earnings per share
Index quarterly operating earnings
S&P 500 sales and the U.S. dollar
Year-over-year % change, monthly, USD broad currencies index
7
Equities
2Q18:
$38.65S&P consensus analyst estimates
2Q18:
11.5%
USD (inv.)
High foreign sales S&P 500 revenues
U.S. 56%
International 44%

|GTM – U.S.
8
27%27%
17%
6%
-11%
5%
11%
0%
15%
47%
15%
-40%
-6%
15%13%
24%
19%
19%
-31%
-60%
-40%
-20%
0%
20%
40%
60%
2Q181Q18'17'16'15'14'13'12'11'10'09'08'07'06'05'04'03'02'01
Sources of earnings per share growth
Source: Compustat, FactSet, Standard & Poor’s, J.P. Morgan Asset Management.
EPS levels are based on annual operating earnings per share except for 2018, which is quarterly. Percentages may not sum due to rounding. Past
performance is not indicative of future returns.
S&P 500 year-over-year EPS growth
Annual growth broken into revenue, changes in profit margin & changes in share count
8
Equities
Share of EPS growth 2Q18 Avg. ’01-’17
Margin 14.7% 3.8%
Revenue 10.7% 3.0%
Share count 1.2% 0.2%
Total EPS 26.7% 6.9%
2Q18
3

|GTM – U.S.
9
$0
$100
$200
$300
$400
$500
$600
$700
$800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
$1.8
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Source: Bloomberg, Compustat, FactSet, Standard & Poor’s, J.P. Morgan Asset Management.
M&A activity is the quarterly value of officially announced transactions, and capital expenditures are private non-residential fixed domestic
investment. Buybacks are based on company announcements year to date.
Uses of profits
S&P 500 announced buybacks
Value of buybacks, $bn
S&P 500 dividends per share
Year-over-year % change, quarterly
Corporate spending
Private non-residential fixed investment, y/y, value of deals announced, $tn
9
Equities
2018
2015
2014
2017
2013 2016
3Q18:
8.2%
Capital expendituresM&A activity

|GTM – U.S.
10
Source: FactSet, Russell Investment Group, Standard & Poor’s, J.P. Morgan Asset Management.
All calculations are cumulative total return, including dividends reinvested for the stated period. Since Market Peak represents period 10/9/07 –
9/30/18, illustrating market returns since the S&P 500 Index high on 10/9/07. Since Market Low represents period 3/9/09 – 9/30/18, 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 indices with the exception of the large blend category, which is based on the S&P 500 Index. Past performance is not indicative of future
returns. The price to earnings is a bottom-up calculation based on the most recent index price, divided by consensus estimates for earnings in the
next 12 months (NTM), and is provided by FactSet Market Aggregates.
Returns and valuations by style 10
3Q 2018
Since market low (March 2009)
YTD
Since market peak (October 2007) Current P/E as % of 20-year avg. P/E
Current P/E vs. 20-year avg. P/E
Equities
Value Blend Growth Value Blend Growth
Large
5.7% 7.7% 9.2%
Large
3.9% 10.6% 17.1%
Mid
3.3% 5.0% 7.6%
Mid
3.1% 7.5% 13.4%
Small
1.6% 3.6% 5.5%
Small
7.1% 11.5% 15.8%
Value Blend Growth Value Blend Growth
Large
89.5% 135.5% 193.4%
Large
372.4% 426.3% 498.4%
Mid
125.0% 140.4% 158.0%
Mid
474.5% 480.2% 496.4%
Small
108.6% 133.6% 158.7%
Small
415.8% 463.2% 510.6%
14.1 16.8 21.3
13.8 15.9 19.7
14.5 16.9 22.2
14.2 16.2 21.1
15.5 22.2 37.4
16.0 20.1 29.2
Small
Value Blend Growth
LargeMid
Value Blend Growth
Large
102.3% 105.5% 107.9%
Mid
102.1% 104.2% 105.1%
Small
96.5% 110.4% 128.3%

|GTM – U.S.
11
Returns and valuations by sector
Source: FactSet, Russell Investment Group, Standard & Poor’s, 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 – 8/31/18. Since market low represents period 3/9/09
– 8/31/18. Correlation to Treasury yields are trailing 2-year monthly correlations between S&P 500 sector price returns and 10-year Treasury yield
movements. Foreign percent of sales is from Standard & Poor’s, S&P 500 2017: Global Sales report as of June 2018. Real Estate and Telecom foreign
sales are not included due to lack of availability. NTM Earnings Growth is consensus estimates for earnings in the next 12 months compared to the
consensus estimate 1 year ago. 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 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 yield is calculated as the next 12-month consensus dividend divided by most recent price. Beta calculations are based on 10-years of monthly
price returns for the S&P 500 and its sub-indices. *Communication Services (formerly Telecom) averages and beta are based on 5-years of backtested
data by JPMAM. **Real estate NTM earnings growth is a 15-year average due to data availability. Past performance is not indicative of future returns.
11
Equities
Financials
M
aterials
R
ealEstate
Industrials
C
ons.D
iscr.
Technology
E
nergy
Com
m
.Services*
H
ealth
C
are
Cons.Staples
Utilities
S
&P
500
Index
S&P weight 13.3% 2.4% 2.7% 9.7% 10.3% 21.0% 6.0% 10.0% 15.0% 6.7% 2.8% 100.0%
Russell Growth weight 4.2% 1.7% 2.0% 12.0% 15.4% 32.6% 0.9% 12.0% 13.8% 5.4% 0.0% 100.0%
Russell Value weight 22.8% 3.9% 4.6% 8.1% 5.3% 9.8% 10.8% 6.8% 15.2% 7.2% 5.6% 100.0%
QTD 4.4 0.4 0.9 10.0 8.2 8.8 0.6 9.9 14.5 5.7 2.4 7.7
YTD 0.1 -2.7 1.7 4.8 20.6 20.6 7.5 0.8 16.6 -3.3 2.7 10.6
Since market peak
(October 2007)
18.8 71.9 70.2 124.0 273.7 260.7 25.0 55.6 223.9 161.6 96.2 135.5
Since market low
(March 2009)
548.8 309.4 531.1 515.7 765.1 655.8 128.8 197.2 422.2 266.8 243.3 426.3
Beta to S&P 500 1.42 1.32 1.29 1.22 1.11 1.07 1.01 0.96* 0.76 0.59 0.42 1.00
β
Correl. to Treas. yields 0.64 0.34 -0.62 0.39 0.22 -0.25 0.48 -0.05 0.00 -0.35 -0.54 0.17
ρ
Foreign %of sales 31.2 52.7 - 44.6 34.1 56.9 54.1 - 38.2 32.5 41.3 43.6
%
NTM Earnings Growth 25.2% 24.0% 4.0% 19.8% 13.2% 31.1% 93.6% 14.7% 15.5% 7.2% 7.1% 22.2%
20-yr avg. 5.6% 9.3% 2.9%** 6.7% 9.6% 10.3% 12.8% 9.6%* 9.2% 5.7% 2.7% 6.4%
Forward P/E ratio 12.2x 15.0x 17.3x 16.6x 22.4x 18.2x 16.9x 18.2x 16.7x 17.9x 16.5x 16.8x
20-yr avg. 12.8x 14.0x 15.2x 16.2x 18.0x 20.7x 17.6x 18.3x* 17.0x 16.9x 14.2x 15.9x
Trailing P/E ratio 13.8x 20.0x 36.1x 19.8x 28.5x 27.0x 18.1x 15.7x 32.7x 21.0x 16.4x 21.3x
20-yr avg. 15.5x 18.6x 36.1x 19.8x 18.8x 24.9x 17.4x 21.8x* 24.1x 20.7x 15.8x 19.4x
Dividend yield 2.2% 2.1% 3.6% 2.0% 1.3% 1.5% 2.9% 1.4% 1.6% 3.2% 3.6% 2.0%
20-yr avg. 2.3% 2.6% 4.4% 2.1% 1.4% 0.9% 2.3% 1.7%* 1.8% 2.7% 4.0% 2.0%
P/EWeightDivReturn(%)EPS

|GTM – U.S.
12
2.0
0.9
1.5
2.7 2.2 2.1
2.7 2.4 2.3
4.4
2.9
4.0
10.9
11.9
9.2
7.7
7.9 7.7 6.9
5.8 5.7
2.9
2.8
1.3
0%
2%
4%
6%
8%
10%
12%
14%
-2
-1
0
1
2
3
4
'99 '01 '03 '05 '07 '09 '11 '13 '15 '17
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management.
*Cyclical sectors include Consumer Discretionary, Information Technology, Industrials, Financials, Energy and Materials. REITs are excluded from
this analysis. It is more appropriate to value a REIT by looking at its price relative to its funds from operations (FFO), an income measure that
excludes depreciation. P/E ratios look at price relative to net income, a measure that includes depreciation, making the comparison of valuations
across sectors inappropriate. Defensive sectors include Telecommunications, Health Care, Utilities and Consumer Staples. From 9/30/2018 to
present Communication Services (previously Telecommunications) is included in the cyclical sectors and removed from the defensive sectors due to
changes in the composition of the sector. Sector valuations are equal weighted. 25-yr. annualized return calculated from 9/30/1993-9/30/2018. Past
performance is not indicative of future returns.
Cyclicals vs. defensive valuations*
Relative fwd. P/E ratio of cyclicals vs. defensives, z-score
S&P 500 sector returns: Dividends vs. cap. apprec.
25-year annualized return, %
12
Cyclicals expensive
relative to defensives
Cyclicals cheap
relative to defensives
Current:
-0.16
Cyclical and defensive sectors
Capital appreciation
Dividends
Equities
12.9 12.8
10.7
10.4
10.1
9.8
9.5
8.2
8.0
7.3
5.8
5.2

|GTM – U.S.
13
Factor performance and sector weights
Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management; (Top) Russell. The MSCI High Dividend Yield Index aims to offer a higher
than average dividend yield relative to the parent index that passes dividend sustainability and persistence screens. The MSCI Minimum Volatility Index
optimizes the MSCI USA Index using an estimated security co-variance matrix to produce low absolute volatility for a given set of constraints. The MSCI
Defensive Sectors Index includes: Consumer Staples, Energy, Health Care, Telecommunication Services and Utilities. The MSCI Cyclical Sectors Index
contains: Consumer Discretionary, Financials, Industrials, Information Technology and Materials. Securities in the MSCI Momentum Index are selected
based on a momentum value of 12-month and 6-month price performance. Constituents of the MSCI Quality Index are selected based on three main
variables: high return on equity, stable year-over-year earnings growth and low financial leverage. The Russell 2000 is used for small cap. The MSCI
USA Diversified Multiple Factor Index aims to maximize exposure to four factors – Value, Momentum, Quality and Size.
13
Equities
Sector weights over time
S&P 500 technology, energy and financial sector weights, 20 years
Max Min Current
Technology 33.6% 12.2% 21.0%
Financials 22.3% 9.8% 13.3%
Energy 16.2% 5.1% 6.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Ann. Vol.
Small
Cap
Multi-
Factor
Momen. High Div. Momen. Min. Vol. Cyclical
Small
Cap
High Div. Cyclical
Small
Cap
Min. Vol. Momen.
Small
Cap
Momen. Momen.
Multi-
Factor
Small
Cap
47.3% 21.1% 19.3% 21.1% 17.8% - 25.7% 36.9% 26.9% 14.3% 20.1% 38.8% 16.5% 9.3% 21.3% 37.8% 16.5% 12.3% 18.8%
Cyclic al
Small
Cap
Multi-
Factor
Small
Cap
Defens. Defens. Quality
Multi-
Factor
Min. Vol.
Small
Cap
Multi-
Factor
High Div. Quality High Div. Cyclical Quality Momen. Cyclical
37.2% 18.3% 15.7% 18.4% 17.7% - 26.7% 32.0% 18.3% 12.9% 16.3% 37.4% 14.9% 7.0% 16.3% 27.3% 12.9% 12.2% 17.5%
Multi-
Factor
Momen. Defens.
Multi-
Factor
Quality High Div.
Multi-
Factor
Momen. De fens.
Multi-
Factor
Cyclical
Multi-
Factor
Min. Vol. Cyclical Quality Cyclical
Small
Cap
Momen.
31.6% 16.9% 11.1% 16.6% 10.6% - 27.6% 29.8% 18.2% 10.1% 15.7% 35.0% 14.8% 5.6% 14.0% 26.0% 12.0% 11.2% 15.7%
Momen. Min. Vol. Min. Vol. Defens.
Multi-
Factor
Quality
Small
Cap
Cyclic al Quality Momen. Momen. Momen. Cyclical
Multi-
Factor
Multi-
Factor
Small
Cap
Quality
Multi-
Factor
26.2% 14.5% 6.6% 15.9% 5.5% - 30.2% 27.2% 17.9% 8.4% 15.1% 34.8% 14.7% 2.6% 13.7% 21.5% 11.5% 10.8% 15.3%
High Div. Defens.
Small
Cap
Cyclical Min. Vol.
Small
Cap
High Div. High Div.
Multi-
Factor
Quality Quality Cyclical High Div. Min. Vol.
High
Div.
Min. Vol. High Div. High Div.
24.3% 11.9% 4.6% 15.0% 4.3% - 33.8% 18.4% 15.9% 7.3% 14.0% 33.5% 13.6% 0.7% 10.7% 19.5% 9.8% 10.6% 13.6%
Quality High Div. High Div. Min. Vol. High Div.
Multi-
Factor
Min. Vol. Min. Vol. Momen. Min. Vol. High Div. Defens.
Multi-
Factor
Quality Min. Vol. Defens. Min. Vol. Quality
20.2% 11.8% 3.7% 15.0% 0.0% - 39.3% 18.4% 14.7% 6.1% 11.2% 28.9% 13.0% 0.4% 8.0% 19.2% 7.8% 10.6% 12.6%
Min. Vol. Quality Cyclical Quality Cyclical Momen. Momen. Quality Cyclical Defens. Defens. Quality Defens. Defens.
Small
Cap
Multi-
Factor
Cyclical Defens.
20.0% 10.2% 2.5% 12.0% - 0.8% - 40.9% 17.6% 12.6% - 3.4% 10.7% 28.9% 11.8% - 0.9% 7.7% 14.6% 7.1% 10.0% 12.0%
Defe ns. Cyclical Quality Momen.
Small
Cap
Cyclical Defens. Defens.
Small
Cap
High Div. Min. Vol.
Small
Cap
Small
Cap
Momen. Defens.
High
Div.
Defens. Min. Vol.
17.3% 10.0% 2.5% 10.7% - 1.6% - 44.8% 16.5% 12.0% - 4.2% 10.6% 25.3% 4.9% - 4.4% 5.1% 12.3% 6.5% 9.8% 11.7%
2003 - 2017

|GTM – U.S.
14
26
-10
15
17
1
26
15
2
12
27
-7
26
4
7
-2
34
20
31
27
20
-10
-13
-23
26
9
3
14
4
-38
23
13
0
13
30
11
-1
10
19
9
-17 -18
-17
-7
-13
-8
-9
-34
-8 -8
-20
-6 -6 -5
-9
-3
-8
-11
-19
-12
-17
-30
-34
-14
-8 -7 -8
-10
-49
-28
-16
-19
-10
-6
-7
-12
-11
-3
-10
-60%
-40%
-20%
0%
20%
40%
'80 '85 '90 '95 '00 '05 '10 '15
Annual returns and intra-year declines
Source: FactSet, Standard & Poor’s, 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 2017, over which time period the average
annual return was 8.8%.
S&P 500 intra-year declines vs. calendar year returns
Despite average intra-year drops of 13.8%, annual returns positive in 29 of 38 years
14
Equities
YTD

|GTM – U.S.
15
Recessions and bear markets
Source: FactSet, NBER, Robert Shiller, Standard & Poor’s, J.P. Morgan Asset Management.
*A bear market is defined as a 20% or more decline from the previous market high. The related market return is the peak to trough return over the
cycle. Periods of “Recession” are defined using NBER business cycle dates. “Commodity spikes” are defined as movement in oil prices of over 100%
over an 18-month period. Periods of “Extreme valuations” are those where S&P 500 last 12 months’ P/E levels were approximately two standard
deviations above long-run averages, or time periods where equity market valuations appeared expensive given the broader macroeconomic
environment. “Aggressive Fed Tightening” is defined as Federal Reserve monetary tightening that was unexpected and/or significant in magnitude.
Bear and Bull returns are price returns.
Characteristics of recessions and related stock market declines
U.S. recessions and S&P 500 composite declines from all-time highs
15
Recession
Recession Related market sell-off Macro Environment
Peak Quarter Trough Quarter % Decline Peak date Trough date % Decline
Commodity
Spike
Aggressive
Fed
Extreme
valuations
1 Recession of 1949 4Q48 4Q49 -1.5% 6/15/1948 6/13/1949 -21%
2 Recession of 1953 2Q53 2Q54 -2.4% 1/5/1953 9/14/1953 -15%
3 Recession of 1958 3Q57 2Q58 -3.0% 8/2/1956 10/22/1957 -22%
4 Recession of 1960-61 2Q60 1Q61 -0.1% 8/3/1959 10/25/1960 -14%
5 Recession of 1969-70 4Q69 4Q70 -0.2% 11/29/1968 5/26/1970 -36%
6 Recession of 1973-75 4Q73 1Q75 -3.1% 1/11/1973 10/3/1974 -48%
7 Recession of 1980 1Q80 3Q80 -2.2% 2/13/1980 3/27/1980 -17%
8 Recession of 1981-82 3Q81 4Q82 -2.5% 11/28/1980 8/12/1982 -27%
9 Early 1990s recession 3Q90 1Q91 -1.4% 7/16/1990 10/11/1990 -20%
10 Early 2000s recession 1Q01 4Q01 -0.4% 3/24/2000 10/9/2002 -49%
11 Great Recession 4Q07 2Q09 -4.0% 10/9/2007 3/9/2009 -57%
Non-recession Bear Markets
1 1962 flash crash, Cuban Missile Crisis - - - 12/12/1961 6/26/1962 -28%
2 1987 flash crash, program trading, overheating markets - - - 8/25/1987 12/4/1987 -34%
Average - - -1.9% - - -30%
Equities
-100%
-80%
-60%
-40%
-20%
0%
1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017
Recession
20% Market
decline*
Cuban
Missile Crisis
1987 “Flash
Crash”
1 2 3 4 5 6 7
8
9 10 11
1
2

|GTM – U.S.
16
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
0% 2% 4% 6% 8% 10% 12% 14% 16%
Interest rates and equities
Source: FactSet, FRB, Standard & Poor’s, J.P. Morgan Asset Management.
Returns are based on price index only and do not include dividends. Markers represent monthly 2-year correlations only.
Correlations between weekly stock returns and interest rate movements
Weekly S&P 500 returns, 10-year Treasury yield, rolling 2-year correlation, May 1963 – September 2018
16
Positive
relationship
between yield
movements
and stock
returns
Negative
relationship
between yield
movements and
stock returns
10-year Treasury yield
Correlationcoefficient
Equities
When yields are
below 5%, rising
rates have
historically been
associated with
rising stock
prices

|GTM – U.S.
17
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Stock market since 1900
Source: FactSet, NBER, Robert Shiller, 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.
S&P Composite Index
Log scale, annual
17
1,000 -
100 -
10 -
Equities
Major recessions
Tech boom
(1997-2000)
End of
Cold War
(1991)
Reagan era
(1981-1989)
Post-War
boom
New Deal
(1933-1940)Roaring 20s
Progressive era
(1890-1920)
World War I
(1914-1918)
Great
Depression
(1929-1939)
World War II
(1939-1945)
Korean War
(1950-1953)
Vietnam War
(1969-1972)
Oil shocks
(1973 & 1979)
Stagflation
(1973-1975)
Global financial
crisis (2008)
Black
Monday
(1987)

|GTM – U.S.
18
Source: BEA, NBER, J.P. Morgan Asset Management. *Chart assumes current expansion started in July 2009 and continued through September
2018, lasting 111 months so far. Data for length of economic expansions and recessions obtained from the National Bureau of Economic Research
(NBER). These data can be found at www.nber.org/cycles/ and reflect information through September 2018. Bubble size reflects the severity of the
recession, which is calculated as the decline in real GDP from the peak quarter to the trough quarter except in the case of the Great Depression,
where it is calculated from the peak year (1929) to the trough year (1933), due to a lack of available quarterly data.
The length of expansions and the depth of recessions
Length of economic expansions and recessions
18
Expansions: 47 months
Recessions: 15 months
Average length (months): 111
months*
Economy
The Great Depression and Post-war recessions
Length and severity of recession
Great Depression:
26.7% decline in real GDP
Most recent recession:
4.0% decline in real GDP
LengthofRecessioninYears
0
25
50
75
100
125
1900 1912 1921 1933 1949 1961 1980 2001
-26.7%
-3.4%
-12.7%
-1.5% -2.4%
-3.0%
-0.1%
-0.2%
-3.1%
-2.2%
-2.5%
-1.4% -0.4%
-4.0%
0 yrs
1 yrs
2 yrs
3 yrs
4 yrs
5 yrs
1910 1930 1950 1970 1990 2010

|GTM – U.S.
19
-$1
$1
$3
$5
$7
$9
$11
$13
$15
$17
$19
$21
Real GDP
Source: BEA, FactSet, J.P. Morgan Asset Management.
Values may not sum to 100% due to rounding. Quarter-over-quarter percent changes are at an annualized rate. Average represents the annualized
growth rate for the full period. Expansion average refers to the period starting in the third quarter of 2009.
Economic growth and the composition of GDP
Real GDP
Year-over-year % change
Components of GDP
2Q18 nominal GDP, USD trillions
19
2Q18
YoY % chg: 2.9%
13.6% Investment ex-housing
68.0% Consumption
17.2% Gov’t spending
3.9% Housing
-2.7% Net exports
Average:
2.7%
QoQ % chg: 4.2%
Expansion
average:
2.3%
Economy
1

|GTM – U.S.
20
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120 4Q07:
13.2%
Source: FactSet, FRB, J.P. Morgan Asset Management; (Top and bottom right) BEA.
Data include households and nonprofit organizations. SA – seasonally adjusted. *Revolving includes credit cards. Values may not sum to 100% due
to rounding. **2Q18 figure for debt service ratio and 3Q18 figures for debt service ratio and household net worth are J.P. Morgan Asset Management
estimates.
Consumer finances
Consumer balance sheet
2Q18, trillions of dollars outstanding, not seasonally adjusted
Household debt service ratio
Debt payments as % of disposable personal income, SA
Household net worth
Not seasonally adjusted, USD billions
20
1Q80:
10.6%
3Q18**:
9.9%
3Q07:
$69,430
3Q18**:
$106,929
Economy
Total assets: $122.7n
Total liabilities: $15.7tn
Homes: 23%
Deposits: 9%
Pension funds: 21%
Other financial
assets: 41%
Other tangible: 5%
Mortgages: 66%
Other non-revolving: 1%
Revolving*: 6%
Auto loans: 7%
Other liabilities: 9%
Student debt: 10%
3Q07 Peak: $83.7tn
1Q09 Low: $72.0tn

|GTM – U.S.
21
Light vehicle sales
Millions, seasonally adjusted annual rate
Source: J.P. Morgan Asset Management; (Top left) BEA; (Top and bottom right, bottom left) Census Bureau, FactSet.
Capital goods orders deflated using the producer price index for capital goods with a base year of 2009. SA – seasonally adjusted.
Cyclical sectors
Manufacturing and trade inventories
Days of sales, seasonally adjusted
Housing starts
Thousands, seasonally adjusted annual rate
Real capital goods orders
Non-defense capital goods orders ex-aircraft, USD billions, SA
21
Average: 15.7
Aug. 2018:
16.6
Aug. 2018:
1,282
Average: 1,291
Avg.: 62.1
Jul. 2018:
40.8
Economy
$45
$50
$55
$60
$65
$70
$75
$80
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
Aug. 2018:
62.5

|GTM – U.S.
22
0%
1%
2%
3%
4%
5%
6%
'55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15
1.0% 1.3% 1.6% 1.9% 0.9%
2.2%
1.9%
1.4%
1.1%
0.5%
3.2%
3.2%
3.0% 3.0%
1.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
'68-'77 '78-'87 '88-'97 '98-'07 '08-'17
1.0%
0.6%
0.8%
0.2%
0.04%
0.3%
0.4%
0.6%
0.3%
0.15%
1.3%
1.0%
1.3%
0.5%
0.2%
0.0%
0.3%
0.6%
0.9%
1.2%
1.5%
1.8%
'78-'87 '88-'97 '98-'07 '08-'17 '18-'27
Source: J.P. Morgan Asset Management; (Top left) Census Bureau, DOD, DOJ; (Top left and right) BLS; (Right and bottom left) BEA.
GDP drivers are calculated as the average annualized growth in the 10 years ending in 4Q of the last year. Future working age population is
calculated as the total estimated number of Americans from the Census Bureau, per the September 2018 report, controlled for military enrollment,
growth in institutionalized population and demographic trends. Growth in working age population does not include illegal immigration; DOD Troop
Readiness reports used to estimate percent of population enlisted.
Long-term drivers of economic growth
Drivers of GDP growth
Average year-over-year % change
Growth in private non-residential capital stock
Non-residential fixed assets, year-over-year % change
Growth in working-age population
Percent increase in civilian non-institutional population ages 16-64
22
Growth in workers
+ Growth in real output per worker
Growth in real GDP
Census
forecast
2016: 1.7%
Economy
Immigrant Native born

|GTM – U.S.
23
20%
40%
60%
80%
100%
120%
'40 '48 '56 '64 '72 '80 '88 '96 '04 '12 '20 '28
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
'90 '95 '00 '05 '10 '15 '20 '25
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
Total government spending Sources of financing
Source: CBO, J.P. Morgan Asset Management; (Top and bottom right) BEA, Treasury Department.
2018 Federal Budget is based on the Congressional Budget Office (CBO) April 2018 Baseline Budget Forecast. CBO Baseline is based on the
Congressional Budget Office (CBO) August 2018 Update to Economic Outlook. 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).
Federal finances
The 2018 federal budget
CBO Baseline forecast, USD trillions
Federal budget surplus/deficit
% of GDP, 1990 – 2028, 2018 CBO Baseline
Federal net debt (accumulated deficits)
% of GDP, 1940 – 2028, 2018 CBO Baseline, end of fiscal year
23
Total spending: $4.1tn
Medicare & Medicaid:
$1,090bn (26%)
Defense:
$622bn (15%)
Social Security:
$984bn (24%)
Other: $472bn (11%)
Non-defense disc.:
$658bn (16%)
Net int.: $316bn (8%)
Borrowing: $804bn (19%)
Income:
$1,639bn (40%)
Corp.: $243bn (6%)
Social insurance:
$1,178bn (28%)
Other: $278bn (7%)
CBO
Forecast
2017:
-3.5%
2028:
96.2%
2017:
76.5%
CBO
Forecast
CBO’s Baseline assumptions
2018 '19-'20 '21-'22 '23-'28
Real GDP growth 2.9% 2.6% 1.6% 1.7%
10-year Treasury 2.8% 3.7% 4.0% 3.7%
Headline inflation (CPI) 2.4% 2.4% 2.5% 2.4%
Unemployment 4.0% 3.5% 4.3% 4.8%
Economy
2028:
-5.1%

|GTM – U.S.
24
'70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
0%
2%
4%
6%
8%
10%
12%
Unemployment and wages
Source: BLS, FactSet, J.P. Morgan Asset Management.
Civilian unemployment rate and year-over-year wage growth for private production and non-supervisory workers
Seasonally adjusted, percent
24
Aug. 2018:
3.9%
Oct. 2009:
10.0%
Aug. 2018:
2.8%
Economy
Jun. 2003:
6.3%
Jun. 1992:
7.8%
Nov. 1982:
10.8%
May 1975:
9.0%
50-year avg.
Unemployment rate 6.2%
Wage growth 4.1%
2

|GTM – U.S.
25
62%
63%
64%
65%
66%
67%
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Source: BLS, FactSet, J.P. Morgan Asset Management. (Bottom right) Info. fin. & bus. svcs. = Information, financial activities and professional and
business services; Mfg. trade & trans. = Manufacturing, trade, transportation and utilities; Leisure, hospt. & other svcs. = Leisure, hospitality and other
services; Educ. & health svcs. = Education & health services; Mining & construct = Natural resources mining and construction; Gov’t = Government.
*Aging effect on the labor force participation rate is the estimated number of people who are no longer employed or looking for work because they are
retired. Cyclical effect is the estimated number of people who lose their jobs and stop looking for work or do not look for work because of the
economic conditions. Other represents the drop in labor force participation from the prior expansion peak that cannot be explained by age or cyclical
effects. Estimates for reason of decline in labor force participation rate are made by J.P. Morgan Asset Management.
Labor market perspectives
Employment – Total private payroll
Total job gain/loss, thousands
Labor force participation rate decline since 2007 peak*
Population employed or looking for work as a % of total, ages 16+
Net job creation since February 2010
Millions of jobs
25
8.8mm
jobs lost
19.7 mm
jobs
gained
Aug. 2018: 62.7%
Economy
Aging
Cyclical
OtherLabor force
participation rate
5.4
4.6
4.0 3.9
1.8
-0.1
-2
0
2
4
6
Info. Fin. &
Bus. Svcs.
Mfg. Trade &
Trans.
Leisure,
Hospt. &
Other Svcs.
Educ. &
Health Svcs.
Mining &
Construct.
Gov't

|GTM – U.S.
26
$38,145
$67,763
$98,368
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
High school graduate Bachelor's degree Advanced degree
Source: J.P. Morgan Asset Management; (Left) BLS, FactSet; (Right) Census Bureau.
Unemployment rates shown are for civilians aged 25 and older. Earnings by educational attainment comes from the Current Population Survey and is
published under historical income tables by person by the Census Bureau.
Employment and income by educational attainment
Unemployment rate by education level Average annual earnings by highest degree earned
Workers aged 18 and older, 2017
26
+30K
+31K2.1%
3.5%
3.9%
5.7%Less than high school degree
High school no college
Some college
College or greater
Education level Aug. 2018
Economy

|GTM – U.S.
27
'70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
-3%
0%
3%
6%
9%
12%
15%
Inflation
27
CPI and core CPI
% change vs. prior year, seasonally adjusted
27
Source: BLS, FactSet, J.P. Morgan Asset Management.
CPI used is CPI-U and values shown are % change vs. one year ago. Core CPI is defined as CPI excluding food and energy prices. The
Personal Consumption Expenditure (PCE) deflator employs an evolving chain-weighted basket of consumer expenditures instead of the fixed-
weight basket used in CPI calculations.
Economy
50-yr. avg. Aug. 2018
Headline CPI 4.0% 2.7%
Core CPI 4.0% 2.2%
Food CPI 4.0% 1.4%
Energy CPI 4.5% 10.3%
Headline PCE deflator 3.5% 2.2%
Core PCE deflator 3.4% 2.0%
4

|GTM – U.S.
28
Source: J.P. Morgan Asset Management; (Left) FactSet, Federal Reserve; (Top right) Bureau of Economic Analysis, FactSet; (Bottom right) Tullett
Prebon.
Currencies in the Trade Weighted U.S. Dollar Major Currencies Index are: Australian dollar, British pound, Canadian dollar, euro, Japanese yen,
Swedish krona and Swiss franc. *Interest rate differential is the difference between the 10-year U.S. Treasury yield and a basket of the 10-year yields
of each major trading partner (Australia, Canada, Europe, Japan, Sweden, Switzerland and UK). Weights on the basket are calculated using the 10-
year average of total government bonds outstanding in each region. Europe is defined as the 19 countries in the euro area.
Dollar drivers
The U.S. dollar
Monthly average of major currencies nominal trade-weighted index
The U.S. trade balance
Current account balance, % of GDP
Developed markets interest rate differentials
Difference between U.S. and international 10-year yields*
28
Economy
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
65
70
75
80
85
90
95
100
105
110
115
Sep. 2018:
90.1
2Q18: -2.0%
-1%
0%
1%
2%
3%
'93 '96 '99 '02 '05 '08 '11 '14 '17
Sep. 2018:
2.3%

|GTM – U.S.
29
Production 2015 2016 2017 2018* 2019* Growth since ‘15
U.S. 15.1 14.8 15.7 17.5 18.8 24.2%
OPEC 38.4 39.4 39.3 39.0 39.0 1.5%
Russia 11.0 11.2 11.2 11.3 11.4 3.6%
Global 96.6 97.0 97.7 99.7 101.6 5.2%
Consumption
U.S. 19.5 19.7 20.0 20.4 20.7 5.9%
China 12.4 12.8 13.3 13.7 14.2 14.8%
Global 95.5 97.0 98.5 100.1 101.6 6.4%
Inventory Change 1.1 0.0 -0.8 -0.4 0.1
Source: J.P. Morgan Asset Management; (Top and bottom left) EIA; (Right) FactSet; (Bottom left) Baker Hughes.
*Forecasts are from the September 2018 EIA Short-Term Energy Outlook and start in 2018. **U.S. crude oil inventories include the Strategic
Petroleum Reserve (SPR). Active rig count includes both natural gas and oil rigs. WTI crude prices are monthly averages in USD using continuous
contract NYM prices.
Oil markets
Price of oil
WTI crude, nominal prices, USD/barrel
U.S. crude oil inventories and rig count**
Million barrels, number of active rigs
Change in production and consumption of liquid fuels
Production, consumption and inventories, millions of barrels per day
29
Sep. 2018:
$73.55
Jun. 2008:
$140.00
Jan. 2009:
$41.68
Jun. 2014:
$105.37
Inventories (incl. SPR) Active rigs
Jan. 2016:
$33.62
Economy

|GTM – U.S.
30
Government control, the economy and the stock market
Source: FactSet, Office of the President, J.P. Morgan Asset Management; (Top) Standard & Poor’s; (Bottom) Bureau of Economic Analysis.
Real GDP
Quarter-over-quarter % change, seasonally adjusted annualized rate
S&P 500 Price Index
Rolling six-month returns
30
Economy
Avg. return % of time
Republican 6.3% 11%
Democrat 4.3% 28%
Divided gov’t 3.9% 61%
Avg. GDP
growth
% of time
Republican 2.8% 11%
Democrat 4.4% 28%
Divided gov’t 2.8% 61%
-30%
-20%
-10%
0%
10%
20%
30%
40%
'48 '55 '63 '70 '78 '85 '93 '00 '08 '15
-40%
-20%
0%
20%
40%
'47 '52 '57 '62 '67 '72 '77 '82 '87 '92 '97 '02 '07 '12 '17

|GTM – U.S.
31
2.38%
3.13%
3.38% 3.38%
3.00%
2.26%
2.83% 2.85%
2.13%
0%
1%
2%
3%
4%
5%
6%
7%
'99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '23
FOMC September 2018 forecasts
Percent
2018 2019 2020 2021
Long
run*
Change in real GDP, 4Q to 4Q 3.1 2.5 2.0 1.8 1.8
Unemployment rate, 4Q 3.7 3.5 3.5 3.7 4.5
PCE inflation, 4Q to 4Q 2.1 2.0 2.1 2.1 2.0
Source: Bloomberg, FactSet, Federal Reserve, J.P. Morgan Asset Management.
Market expectations are the federal funds rates priced into the fed futures market as of the date of the September 2018 FOMC meeting and are
through September 2021. *Long-run projections are the rates of growth, unemployment and inflation to which a policymaker expects the economy to
converge over the next five to six years in absence of further shocks and under appropriate monetary policy.
Federal funds rate expectations
FOMC and market expectations for the fed funds rate
31
Federal funds rate
FOMC long-run projection*
FOMC year-end estimates
Market expectations on 9/26/18
Long
run
Fixedincome
The Fed and interest rates 6

|GTM – U.S.
32
-5%
0%
5%
10%
15%
20%
'58 '63 '68 '73 '78 '83 '88 '93 '98 '03 '08 '13 '18
Sep. 30, 1981:
15.84%
Interest rates and inflation
Source: BLS, FactSet, Federal Reserve, 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
2018, where real yields are calculated by subtracting out August 2018 year-over-year core inflation.
Nominal and real 10-year Treasury yields
32
Sep. 30, 2018:
0.86%
Sep. 30, 2018:
3.05%
Nominal 10-year
Treasury yield
Real 10-year
Treasury yield
Fixedincome
Average
(1958-YTD 2018) 9/30/2018
Nominal yields 6.05% 3.05%
Real yields 2.36% 0.86%
Inflation 3.69% 2.19%
7

|GTM – U.S.
33
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Yield curve
Source: FactSet, Federal Reserve, J.P. Morgan Asset Management.
Yield curve
U.S. Treasury yield curve
Fixedincome
3m 1y 2y 3y 7y 10y 30y5y
Dec. 31, 2013
Sep. 30, 2018
2.59%
2.81%
2.88% 2.94%
2.45%
3.04%
3.96%
3.19%
3.05%3.01%
1.75%
0.78%
0.38%0.13%
33

|GTM – U.S.
34
0%
5%
10%
15%
20%
25%
30%
35%
1% 3% 5% 7% 9% 11% 13% 15% 17%
Subsequentfive-yearreturns
Starting yield
Long-run bond returns
Source: Bloomberg Barclays, FactSet, J.P. Morgan Asset Management. *2010s are from January 2010 to September 2013. R2 for bond yields and
subsequent five-year returns is 86%. Past performance is not indicative of comparable future results.
Bloomberg Barclays U.S. Aggregate Index
Relationship between starting bond yields and subsequent five-year returns
2010s*
2000s
1990s
1980s
1970s
Fixedincome
Sep. 30, 2018
yield: 3.5%
34

|GTM – U.S.
35
Bond market duration and yield
Source: Barclays, Bloomberg, FactSet, J.P. Morgan Asset Management.
Duration measures the sensitivity of the price of a bond to a change in interest rates. The higher the duration the greater the sensitivity of the bond is
to movements in the interest rate. Yield is yield to worst.
Duration and yield of the Bloomberg Barclays U.S. Aggregate Index
Years (left) and yield to worst (right)
35
Higher duration = more
sensitive to interest rates
Lower duration = less
sensitive to interest rates
Fixedincome
Average Sep. 2018
Yield (right) 5.11% 3.46%
Duration (left) 4.8 years 6.0 years

|GTM – U.S.
36
Source: Barclays, Bloomberg, FactSet, Standard & Poor’s, U.S. Treasury, J.P. Morgan Asset Management. Sectors shown above are provided by
Bloomberg and are represented by – Broad Market: U.S. Aggregate; MBS: U.S. Aggregate Securitized - MBS; Corporate: U.S. Corporates;
Municipals: Muni Bond 10-year; High Yield: Corporate High Yield; TIPS: Treasury Inflation Protection Securities (TIPS); Floating Rate: FRN (BBB);
Convertibles: U.S. Convertibles Composite. Yield and return information based on bellwethers for Treasury securities. Sector yields reflect yield to
worst. Convertibles yield is based on US portion of Bloomberg Barclays Global Convertibles. 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). Chart is for illustrative purposes only. Past
performance is not indicative of future results.
Fixed income yields and returns
Impact of a 1% rise in interest rates
Assumes a parallel shift in the yield curve and steady spreads
36
Fixedincome
Price return
Total return
U.S. Treasuries 9/30/2018 12/31/2017
2018
YTD
Avg.
Maturity
Correlation
to 10-year
Correlation
to S&P 500
2-Year 2.81% 1.89% 0.12% 2 years 0.71 -0.30
5-Year 2.94% 2.20% -1.35% 5 0.92 -0.28
TIPS 0.91% 0.44% -0.84% 10 0.56 0.23
10-Year 3.05% 2.40% -3.73% 10 1.00 -0.29
30-Year 3.19% 2.74% -6.55% 30 0.93 -0.31
Sector
Convertibles 5.85% 6.35% 8.35% - -0.28 0.89
Floating Rate 3.10% 2.05% 2.06% 3.2 -0.33 0.38
High Yield 6.24% 5.72% 2.57% 6.0 -0.22 0.69
MBS 3.59% 2.91% -1.07% 7.8 0.81 -0.10
Broad Market 3.46% 2.71% -1.60% 8.4 0.87 0.02
Corporates 4.07% 3.25% -2.33% 10.9 0.52 0.29
Municipals 2.76% 2.26% -0.66% 9.9 0.55 -0.10
Yield Return
-5.8%
-6.7%
-5.9%
-5.7%
-3.8%
-0.1%
-1.7%
-17.0%
-8.1%
-5.0%
-4.5%
-1.9%
-3.1%
-2.7%
-2.4%
-2.1%
2.4%
3.0%
4.2%
-13.8%
-5.0%
-1.8%
-1.6%
0.9%
-20% -16% -12% -8% -4% 0% 4% 8%
Munis
IG corps
U.S. Aggregate
MBS
U.S. HY
Floating rate
Convertibles
30y UST
10y UST
TIPS
5y UST
2y UST

|GTM – U.S.
37
High yield bonds
Source: J.P. Morgan Global Economic Research, 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. Spreads indicated are benchmark yield to worst less comparable maturity Treasury yields. 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. High yield is represented by the J.P. Morgan Domestic High Yield Index.
Default rate and spread to worst
Percent
37
30-yr. avg. Latest
Default rate 3.7% 2.0%
Spread to worst 5.8% 3.6%
Fixedincome
Recession
0%
4%
8%
12%
16%
20%
'88 '92 '96 '00 '04 '08 '12 '16

|GTM – U.S.
38
Source: J.P. Morgan Asset Management; (Left) Bank of England, Bank of Japan, European Central Bank, FactSet, Federal Reserve System, J.P.
Morgan Global Economic Research; (Right) Bloomberg. *Includes the Bank of Japan (BoJ), Bank of England (BoE), European Central Bank (ECB)
and Federal Reserve. Balance sheet expansion assumes no more quantitative easing (QE) from BoE; tapering of ECB from 30bn to 15bn EUR in
October 2018 and 0 in January 2019; tapering of BoJ QE to 20trn JPY ann. for the remainder of 2018 and 2019; and tapering of Fed QE per the
September 2017 FOMC statement, incorporating a maturity schedule. **Including: Australia, Canada, Denmark, Eurozone, Japan, Norway, Sweden,
Switzerland, UK and U.S.
Global monetary policy
Global central bank balance sheet expansion*
USD billions, 12-month rolling flow
Number of rate changes by top-10 DM central banks**
38
Cuts
Hikes
Fixedincome
Fed
BoJ
ECB
BoE
Total
0
5
10
15
20
25
30
35
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
-$1,000
-$500
$0
$500
$1,000
$1,500
$2,000
'16 '17 '18 '19

|GTM – U.S.
39
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
'89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17
Source: J.P. Morgan Asset Management; (Left) Barclays, Bloomberg, FactSet; (Right) BIS.
Fixed income sectors shown above are provided by Bloomberg 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), the J.P. Morgan GBI EM Global Diversified Index (LCL) and the
J.P. Morgan CEMBI Broad Diversified Index (Corp). European Corporates are represented by the Bloomberg Barclays Euro Aggregate Corporate
Index and the Bloomberg Barclays Pan-European High Yield index. Sector yields reflect yield to worst. Correlations are based on 10 years of monthly
returns for all sectors. Past performance is not indicative of future results. Global bond market regional breakdown may not sum to 100% due to
rounding.
Global fixed income
Global bond market
USD trillions
39
U.S.: $40tn
Developed
ex-U.S.: $46tn
EM: $23tn
12/31/89 3/31/18
U.S. 61.3% 36.6%
Dev. ex-U.S. 37.8% 42.4%
EM 1.0% 21.1%
Fixedincome
Yield
Aggregates 9/30/2018 12/31/2017 Local USD Duration
Correl to
10-year
U.S. 3.46% 2.71% -1.60% -1.60% 6.0 years 0.87
Gbl. ex-U.S. 1.37% 1.03% - -2.80% 7.6 0.36
Japan 0.28% 0.20% -0.38% -1.20% 9.2 0.48
Germany 0.69% 0.46% 0.49% -2.80% 6.3 0.22
UK 1.96% 1.49% -1.18% -4.74% 10.0 0.18
Italy 2.40% 1.25% -4.27% -7.40% 6.4 0.05
Spain 1.03% 0.90% 1.37% -1.95% 6.9 0.08
Sector
Euro Corp. 1.08% 0.75% -0.64% -3.89% 5.1 years 0.19
Euro HY 4.08% 3.32% 0.12% -3.16% 4.3 -0.34
EMD ($) 6.40% 5.26% - -3.04% 6.5 0.24
EMD (LCL) 6.62% 6.14% 0.24% -8.15% 5.1 0.10
EM Corp. 5.85% 4.53% - -1.60% 5.4 -0.21
2018 YTD Return

|GTM – U.S.
40
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Ann. Vol.
Treas. High Yield EMD LCL. TIPS EMD USD High Yield Muni Muni High Yield EMD LCL. High Yield High Yield High Yield
13.7% 58.2% 15.7% 13.6% 17.4% 7.4% 8.7% 3.8% 17.1% 15.2% 2.6% 8.0% 21.2%
MBS EMD USD High Yield Muni EMD LCL. MBS Corp. MBS EMD USD EMD USD Muni EMD USD EMD LCL.
8.3% 29.8% 15.1% 12.3% 16.8% -1.4% 7.5% 1.5% 10.2% 10.3% -0.7% 7.3% 13.0%
Barclays
Agg
EMD LCL. EMD USD Treas. High Yield Corp. EMD USD EMD USD EMD LCL. High Yield TIPS Corp. EMD USD
5.2% 22.0% 12.2% 9.8% 15.8% -1.5% 7.4% 1.2% 9.9% 7.5% -0.8% 5.6% 11.6%
Muni Corp. Corp. Corp. Corp.
Asset
Alloc.
MBS Treas. Corp. Corp. MBS
Asset
Alloc.
Corp.
1.5% 18.7% 9.0% 8.1% 9.8% -1.9% 6.1% 0.8% 6.1% 6.4% -1.1% 5.0% 6.8%
Asset
Alloc.
Asset
Alloc.
Asset
Alloc.
Asset
Alloc.
Asset
Alloc.
Barclays
Agg
Barclays
Agg
Barclays
Agg
Asset
Alloc.
Muni
Asset
Alloc.
Muni TIPS
0.1% 14.7% 7.9% 8.1% 7.4% -2.0% 6.0% 0.5% 4.7% 5.8% -1.5% 4.9% 6.6%
TIPS TIPS
Barclays
Agg
Barclays
Agg
TIPS Muni
Asset
Alloc.
Asset
Alloc.
TIPS
Asset
Alloc.
Barclays
Agg
Barclays
Agg
Treas.
-2.4% 11.4% 6.5% 7.8% 7.0% -2.2% 5.5% -0.3% 4.7% 5.3% -1.6% 4.0% 5.4%
Corp. Muni TIPS EMD USD Muni Treas. Treas. Corp.
Barclays
Agg
Barclays
Agg
Treas. MBS
Asset
Alloc.
-4.9% 9.9% 6.3% 7.3% 5.7% -2.7% 5.1% -0.7% 2.6% 3.5% -1.7% 3.8% 4.9%
EMD LCL.
Barclays
Agg
Treas. MBS
Barclays
Agg
EMD USD TIPS TIPS MBS TIPS Corp. EMD LCL. Muni
-5.2% 5.9% 5.9% 6.2% 4.2% -5.3% 3.6% -1.4% 1.7% 3.0% -2.3% 3.6% 4.5%
EMD USD MBS MBS High Yield MBS TIPS High Yield High Yield Treas. MBS EMD USD TIPS
Barclays
Agg
-12.0% 5.9% 5.4% 5.0% 2.6% -8.6% 2.5% -4.5% 1.0% 2.5% -3.0% 3.5% 3.0%
High Yield Treas. Muni EMD LCL. Treas. EMD LCL. EMD LCL. EMD LCL. Muni Treas. EMD LCL. Treas. MBS
-26.2% -3.6% 4.0% -1.8% 2.0% -9.0% -5.7% -14.9% -0.1% 2.3% -8.1% 3.3% 3.0%
2008 - 2017
Fixed income sector returns
Source: Barclays, Bloomberg, FactSet, J.P. Morgan Global Economic Research, J.P. Morgan Asset Management.
Past performance is not indicative of future returns. Fixed income sectors shown above are provided by Bloomberg unless otherwise noted and are
represented by Broad Market: Bloomberg Barclays U.S. Aggregate Index; MBS: Bloomberg Barclays US Aggregate Securitized - MBS Index; Corporate:
Bloomberg Barclays U.S. Aggregate Credit - Corporates - Investment Grade; Municipals: Bloomberg Barclays Munipal Bond 10-Year Index;
High Yield: Bloomberg Barclays U.S. Aggregate Credit - Corporate - High Yield Index; Treasuries: Bloomberg Barclays Global U.S. Treasury; TIPS:
Bloomberg Barclays Global Inflation-Linked - U.S. TIPs; Emerging Debt USD: J.P. Morgan EMBIG Diversified Index; Emerging Debt LCL: J.P. Morgan
EM Global Index. The “Asset Allocation” portfolio assumes the following weights: 20% in MBS, 20% in Corporate,15% in Municipals, 5% in Emerging
Debt USD, 5% in Emerging Debt LCL, 10% in High Yield, 20% in Treasuries, 5% in TIPS. Asset allocation portfolio assumes annual rebalancing.
40
Fixedincome

|GTM – U.S.
41
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
Pacific 4%
Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management.
All return values are MSCI Gross Index (official) data. 15-year history based on U.S. dollar returns. 15-year return and beta figures are calculated for
the time period 12/31/02-12/31/17. Beta is for monthly returns relative to the MSCI AC World Index. Chart is for illustrative purposes only. Please see
disclosure page for index definitions. Countries included in global correlations include Argentina, Australia, Austria, Brazil, Canada, China, Colombia,
Denmark, Finland, France, Germany, Hong Kong, India, Italy, Japan, Korea, Malaysia, Mexico, Netherlands, New Zealand, Peru, Philippines,
Portugal, Spain, South Africa, Taiwan, Thailand, Turkey, UK and the U.S. Past performance is not a reliable indicator of current and future results.
Global equity markets
Weights in MSCI All Country World Index
% global market capitalization, float adjusted
Global equity market correlations
Rolling 1-year correlations, 30 countries
41
United
States
55%
Europe
ex-UK
14%
Emerging
markets
11%
Canada 3%
Sep. 2018:
0.50
International
Sep. 2009:
0.77
Local USD Local USD Ann. Beta
Regions
U.S. (S&P 500) - 10.6 - 21.8 9.9 0.85
AC World ex-U.S. 0.7 -2.7 18.8 27.8 9.2 1.12
EAFE 1.8 -1.0 15.8 25.6 8.6 1.08
Europe ex-UK 1.4 -1.6 14.5 27.8 9.4 1.24
Emerging markets -2.6 -7.4 31.0 37.8 12.7 1.29
Selected Countries
United Kingdom 1.0 -2.6 11.8 22.4 7.1 1.03
France 7.1 3.6 14.1 29.9 8.8 1.26
Germany -4.2 -7.3 12.9 28.5 11.5 1.39
Japan 2.7 1.9 20.1 24.4 7.2 0.74
China -8.8 -9.0 55.3 54.3 16.2 1.25
India 2.7 -9.6 30.5 38.8 14.9 1.38
Brazil 5.9 -12.1 26.9 24.5 15.8 1.61
Russia 22.8 9.8 1.2 6.1 8.8 1.57
Returns 2018 YTD 2017 15-years

|GTM – U.S.
42
37.8%
27.8% 27.8%
24.4%
21.8%
10.6%
1.9%
-1.6%
-2.7% -7.4%
-20%
-10%
0%
10%
20%
30%
40%
50%
EM Europe ex-
UK
ACWI ex-
U.S.
Japan U.S. U.S. Japan Europe-ex
UK
ACWI ex-
U.S.
EM
Global equity markets: Returns
All return values are MSCI Gross Index (official) data, except the U.S., which is the S&P 500. *Multiple expansion is based on the forward P/E ratio
and EPS growth outlook is based on NTMA earnings estimates. Chart is for illustrative purposes only. Past performance is not indicative of future
results.
Sources of global equity returns*
Total return, USD
42
International
2018 YTD2017
Currency effect
Multiples
Dividends
EPS growth outlook (local)
Total return

|GTM – U.S.
43
41.4%
21.4%
17.1%
27.2%
17.1%
-45.2%
42.1%
11.6%
-13.3%
17.4%
15.8%
-3.4%
-5.3%
5.0%
27.8%
-2.7%
-60%
-40%
-20%
0%
20%
40%
60%
'03 '05 '07 '09 '11 '13 '15 '17
Source: FactSet, J.P. Morgan Asset Management; (Left) Federal Reserve; (Right) MSCI.
Currencies in the nominal major trade-weighted U.S. dollar index are: Australian dollar, British pound, Canadian dollar, euro, Japanese yen, Swedish
krona and Swiss franc. Past performance is not a reliable indicator of current and future results.
Currency and international equity returns
U.S. dollar in historical perspective
Index level, nom. major trade-weighted exchange rate, Mar. 1973=100
Currency impact on international returns
MSCI All Country World ex-U.S. Index, total return
43
International
5 years:
+55%
7 years:
+39%
5.5 years:
+36%
U.S. dollar return
Local currency return
Currency return
7.5 years:
-14%
10 years:
-44%
9.5 years:
-38%
Dollar strengthening,
hurts international returns
Dollar weakening,
helps international returns

|GTM – U.S.
44
U.S. and international equities at inflection points
Forward price to earnings ratio is a bottom-up calculation based on the most recent 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 price movement only, and do not
include the reinvestment of dividends. Dividend yield is calculated as consensus estimates of dividends for the next 12 months, divided by most
recent price, as provided by FactSet Market Aggregates. Past performance is not a reliable indicator of current and future results.
MSCI All Country World ex-U.S. and S&P 500 Indices
Dec. 1996 = 100, U.S. dollar, price return
44
+115%
+331%
International
-62%
-57%
+216%
+101%
-52%
-49%
+48%
+106%
Sep. 30, 2018
P/E (fwd.) = 12.9x
Sep. 30, 2018
P/E (fwd.) = 16.8x
P/E 20-yr. avg. Div. Yield 20-yr. avg.
S&P 500 16.8x 15.9x 2.0% 2.0%
ACWI ex-U.S. 12.9x 14.3x 3.4% 3.0%
As % of U.S. 77% 90% 173% 149%
9

|GTM – U.S.
45
16.9x
15.5x
13.5x
13.3x
1.6x
0.0x
0.4x
0.8x
1.2x
1.6x
2.0x
2.4x
2.8x
3.2x
3.6x
4.0x
4.4x
4.8x
5.2x
5x
9x
13x
17x
21x
25x
29x
33x
U.S. DM Europe Japan EM
Price-to-book
Price-to-earnings
Source: FactSet, MSCI, Standard & Poor’s, Thomson Reuters, J.P. Morgan Asset Management.
*Valuations refer to NTMA P/E for Europe, U.S., Japan and developed markets and P/B for emerging markets. Valuation and earnings charts use
MSCI indices for all regions/countries, except for the U.S., which is the S&P 500. All indices use IBES aggregate earnings estimates, which may differ
from earnings estimates used elsewhere in the book. MSCI Europe includes the eurozone as well as countries not in the currency bloc, such as
Norway, Sweden, Switzerland and the UK (which collectively make up 46% of the overall index). Past performance is not a reliable indicator of
current and future results.
International equity earnings and valuations
Global earnings
EPS, U.S. dollar, next 12 months, Jan. 2006 = 100
Global valuations
Current and 25-year historical valuations*
45
International
Japan
Europe
U.S.
EM
Axis
25-year range
25-year average
Current
75x

|GTM – U.S.
46
Global growth trackers
Source: Citi, FactSet, J.P. Morgan Asset Management.
The Citi Economic Surprise Index is a 90-day weighted moving average of surprises in economic indicators relative to consensus. A positive reading
means that the data releases have been stronger than expected and a negative reading means that the data releases have been worse than
expected.
Growth surprises
Citi Economic Surprise Indices by region
46
International
U.S.
Eurozone
Emerging markets
Japan
Economic indicators beating
market expectations
Economic indicators missing
market expectations

|GTM – U.S.
47
International
Manufacturing momentum
Source: Markit, J.P. Morgan Asset 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. Heat
map is based on quarterly averages, with the exception of the two most recent figures, which are single month readings. Data for Canada, Indonesia
and Mexico are back-tested and filled in from December 2007 to November 2010 for Canada and May 2011 for Indonesia and Mexico due to lack of
existing PMI figures for these countries. DM and EM represent developed markets and emerging markets, respectively.
Global Purchasing Managers’ Index for manufacturing, quarterly
475
Aug Sep
Global 52.6 52.2
DM 53.8 53.6
EM 50.8 50.3
U.S. 54.7 55.6
Canada 56.8 54.8
Japan 52.5 52.5
UK 53.0 53.8
Euro Area 54.6 53.2
Germany 55.9 53.7
France 53.5 52.5
Italy 50.1 50.0
Spain 53.0 51.4
Greece 53.9 53.6
China 50.6 50.0
Indonesia 51.9 50.7
Korea 49.9 51.3
Taiwan 53.0 50.8
India 51.7 52.2
Brazil 51.1 50.9
Mexico 50.7 51.7
Russia 48.9 50.0
DevelopedEmerging
2018
'08 2009 2015 2016 2017 20182010 2011 2012 2013 2014

|GTM – U.S.
48
Jul Aug
Global 2.7% 2.7%
DM 2.4% 2.3%
EM 3.3% 3.3%
U.S. 2.9% 2.7%
Canada 3.0% 2.8%
Japan 0.9% 1.3%
UK 2.5% 2.7%
Euro Area 2.1% 2.0%
Germany 2.1% 1.9%
France 2.6% 2.6%
Italy 1.9% 1.6%
Spain 2.3% 2.2%
Greece 0.8% 0.9%
China 2.1% 2.3%
Indonesia 3.2% 3.2%
Korea 1.5% 1.4%
Taiwan 1.9% 1.9%
India 5.9% 4.6%
Brazil 4.5% 4.2%
Mexico 4.8% 4.9%
Russia 2.5% 3.1%
2018
DevelopedEmerging
201820172011201020092008 20162015201420132012
Global inflation
Source: Bank of Mexico, DGBAS, Eurostat, FactSet, Federal Reserve, Goskomstat of Russia, IBGE, India Ministry of Statistics & Programme
Implementation, Japan Ministry of Internal Affairs & Communications, Korean National Statistical Office, Melbourne Institute, National Bureau of
Statistics China, Statistics Canada, Statistics Indonesia, UK Office for National Statistics (ONS), J.P. Morgan Asset Management.
Heatmap is based on quarterly averages, with the exception of the two most recent figures, which are single month readings. Colors are based on z-
score of year-over-year inflation rate relative to 10-year history. DM and EM represent developed markets and emerging markets, respectively.
48
International
Year-over-year headline inflation by country and region, quarterly

|GTM – U.S.
49
11%
11%
19%
23%
36%
37%
48%
53%
8%
14%
16%
17%
25%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55%
Brazil
India
China
Russia
Mexico
Korea
S. Africa
Taiwan
U.S.
Japan
Eurozone
UK
Canada
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Source: FactSet, J.P. Morgan Asset Management; (Left) Netherlands Policy Analysis; (Right) IMF.
Global trade
World trade volume
Year-on-year, % change, 3-month moving average, monthly
Exports as a share of GDP
Goods exports, 2017
49
Average:
5.1%
Sep. 2018: 3.7%
International
U.S.
EU
China
Other
EM ex-China

|GTM – U.S.
50
Source: FactSet, J.P. Morgan Asset Management; (Left and top right) Eurostat; (Bottom right) ECB.
Eurozone shown is the aggregate of the 19 countries that currently use the euro.
European recovery
Eurozone GDP growth
Contribution to eurozone real GDP growth, % change year-over-year
Eurozone unemployment
Persons unemployed as a percent of labor force, seasonally adjusted
Eurozone credit demand
Net % of banks reporting positive loan demand
50
Stronger loan
demand
Weaker loan
demand
International
Domestic demand
Real GDP
Net exports
-6%
-4%
-2%
0%
2%
4%
'07 '09 '11 '13 '15 '17
Aug. 2018:
8.1%
May 2013: 12.1%

|GTM – U.S.
51
'02 '04 '06 '08 '10 '12 '14 '16 '18
-6%
-4%
-2%
0%
2%
4%
6%
8%
Source: FactSet, J.P. Morgan Asset Management; (Top and bottom left) Japanese Cabinet Office; (Right) Nikkei. Past performance is not a reliable
indicator of current and future results.
Japan: Economy and markets
Japanese yen and the stock market
Japanese labor market
Unemployment, y/y % change in wages, 3-month moving average
Japanese economic growth
Real GDP, y/y % change
51
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
¥70
¥80
¥90
¥100
¥110
¥120
¥130
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
Japanese ¥ per U.S. $ Nikkei 225 Index
Wage growth
Unemployment rate
2Q18:
1.3%
International
20-yr. average: 0.9%
Jul. 2018:
2.4%
Aug. 2018:
2.4%

|GTM – U.S.
52
0%
50%
100%
150%
200%
250%
300%
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Source: FactSet, J.P. Morgan Asset Management; (Left) CEIC; (Right) BIS.
Household and non-financial corporate debt is based on market value and government debt is based on nominal value. Public debt refers to general
government debt.
China: Economic growth and debt
China real GDP contribution
Chinese debt by sector
% of GDP, 1Q18
52
International
Non-financial corporations
Households
General government
China U.S.
Public debt 47.8% 99.0%
Household debt 49.3% 77.3%
Non-financial corporate debt 164.1% 73.5%
0.3%
-4.0%
-1.3% -0.8%
0.2%
-0.1%
0.3%
-0.1%
-0.6%
0.6%
-0.7%
4.3% 5.3% 4.8%
5.9%
4.3%
3.6% 3.6% 4.1% 4.5%
4.1% 5.3%
5.1%
8.1%
7.1% 4.4%
3.4%
4.3% 3.4% 2.9%
2.9% 2.2%
2.1%
9.7%
9.4%
10.6%
9.6%
7.9% 7.8%
7.3% 6.9%
6.7%
6.9%
6.7%
-4%
0%
4%
8%
12%
16%
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 2Q18
Investment
Consumption
Net exports

|GTM – U.S.
53
1% 0%
28%
44%
86%
12%
30%
52%
70%
90%
79%
72%
61%
79%
88%
0%
20%
40%
60%
80%
100%
India China Brazil Mexico Korea
Source: J.P. Morgan Asset Management; (Left) Consensus Economics; (Right) Brookings Institute.
“Growth differential” is consensus estimates for EM growth in the next 12 months minus consensus estimates for DM growth in the next 12 months,
provided by Consensus Economics. Middle class is defined as $3,600-$36,000 annual per capita income in purchasing power parity terms. Historical
and forecast figures come from the Brookings Development, Aid and Governance Indicators.
Emerging markets
EM vs. DM growth
Monthly, consensus expectations for GDP growth in 12 months
Growth of the middle class
Percent of total population
53
International
DM growth
EM growth
Growth differential
1994 2017F 2030F
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
'97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17

|GTM – U.S.
54
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
External debt as a % of GDP, improvement over 3 years*
Source: J.P. Morgan Asset Management; (Left) MSCI; (Right) FactSet, Oxford Economics.
*Four quarter moving average of quarterly external debt as a percentage of GDP levels, compared to levels that prevailed three years ago. A
negative figure indicates external debt has been rising, while a positive figure indicates external debt has been falling.
Current account figures are an average of the past four quarters.
Emerging markets and the U.S. dollar
Emerging market equities and the dollar
Relative EM/DM equity performance, local currency, U.S. dollar REER
EM currency drivers
54
International
Stronger dollar,
EM underperforming
Weaker dollar,
EM outperforming
MSCI EM / MSCI DM U.S. dollar
Correlation
Pre-Jan. 2010 -0.90
Post-Jan. 2010 -0.77
YTD currency performance
vs. U.S. dollar
Current account balance as a % GDP
External debt is
worsening
External debt is
improving

|GTM – U.S.
55
Correlations and volatility
Source: Barclays Inc., Bloomberg, Cambridge Associates, Credit Suisse/Tremont, FactSet, Federal Reserve, MSCI, NCREIF, Standard & Poor’s,
J.P. Morgan Asset Management.
Indices used – Large Cap: S&P 500 Index; Currencies: Federal Reserve Trade Weighted Dollar; EAFE: MSCI EAFE; EME: MSCI Emerging Markets;
Bonds: Bloomberg Barclays Aggregate; Corp HY: Bloomberg Barclays Corporate High Yield; EMD: Bloomberg Barclays Emerging Market; Cmdty.:
Bloomberg Commodity Index; Real Estate: NAREIT ODCE Index; Hedge Funds: CS/Tremont Hedge Fund Index; Private equity: Cambridge
Associates Global Buyout & Growth Index. Private equity data are reported on a one-quarter lag. All correlation coefficients and annualized volatility
are calculated based on quarterly total return data for period 9/30/08 to 9/30/18, except for Private equity, which is based on the period from 6/30/08
to 6/30/18. This chart is for illustrative purposes only.
55
Alternatives
z
U.S.
Large
Cap EAFE EME Bonds
Corp.
HY Munis Currcy. EMD Cmdty. REITs
Hedge
funds
Private
equity
Ann.
Volatility
U.S. Large Cap 1.00 0.89 0.79 -0.31 0.72 -0.18 -0.51 0.58 0.66 0.83 0.87 0.85 15%
EAFE 1.00 0.90 -0.17 0.77 -0.06 -0.67 0.69 0.64 0.75 0.85 0.79 18%
EME 1.00 -0.09 0.88 0.01 -0.70 0.84 0.70 0.66 0.85 0.73 22%
Bonds 1.00 -0.04 0.83 -0.12 0.27 -0.22 0.04 -0.29 -0.39 3%
Corp. HY 1.00 0.08 -0.53 0.87 0.71 0.72 0.83 0.68 12%
Munis 1.00 -0.14 0.43 -0.19 0.10 -0.12 -0.26 4%
Currencies 1.00 -0.61 -0.56 -0.44 -0.44 -0.54 7%
EMD 1.00 0.59 0.63 0.69 0.53 8%
Commodities 1.00 0.56 0.72 0.76 17%
REITs 1.00 0.71 0.74 25%
Hedge funds 1.00 0.84 6%
Private equity 1.00 10%

|GTM – U.S.
56
Source: Barclays, Bloomberg, FactSet, HFRI, Standard & Poor’s, J.P. Morgan Asset Management.
Hedge funds
Hedge fund returns in different market environments
Average return in up and down months for S&P 500
Hedge fund returns in different market environments
Average return in up and down months for Bloomberg Barclays Agg.
U.S. stock/bond correlations
Rolling 90-day correlation between the S&P 500 and the Bloomberg Barclays U.S. Aggregate
56
HFRI FW Comp.
Bloomberg Barclays U.S. Agg.
HFRI FW Comp.
S&P 500
Alternatives
Stock and bond prices
moving together
Stock and bond prices
moving in opposite directions
1.2%
-1.2%
2.8%
-3.4%
-6%
-4%
-2%
0%
2%
4%
S&P 500 up S&P 500 down
0.6%
0.2%
0.8%
-0.6%
-1.0%
-0.5%
0.0%
0.5%
1.0%
Bloomberg Barclays Agg up Bloomberg Barclays Agg down
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
'89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17

|GTM – U.S.
57
Sources: Cambridge Associates, Prequin, Standard & Poor’s, University of Florida, J.P. Morgan Asset Management.
*Global Buyout & Growth Equity and MSCI AC World total return data are as of March 31, 2018.
Private equity
Public vs. private equity returns
MSCI AC World total return and Global Buyout & Growth Equity Index*
Number of U.S. listed companies
Private equity assets under management
Trillions USD
57
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
'00 '02 '04 '06 '08 '10 '12 '14 '16
Buyout & Growth Equity Index
MSCI ACWI
Alternatives
2017:
4,336
Dry powder
Unrealized value
9.8%
6.1%
9.9%
5.8%
14.2%
9.4%
14.6%
12.4%
0%
2%
4%
6%
8%
10%
12%
14%
16%
5 years 10 years 15 years 20 years

|GTM – U.S.
58
Yield alternatives: Domestic and global
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management; (Top) Ibbotson; (Bottom) Alerian, BAML, Barclays, Bloomberg, Clarkson, Drewry
Maritime Consultants, Federal Reserve, FTSE, MSCI, NCREIF. Dividend vs. capital appreciation returns are through 12/31/17. Yields are as of 9/30/18,
except Global Transport, Global Infrastructure and U.S. Real Estate (6/30/18). Global Transport: Levered yields for transport assets are calculated as
the difference between charter rates (rental income), operating expenses, debt amortization and interest expenses, as a percentage of equity value.
Yields for each of the sub-vessel types above are calculated and respective weightings are applied to each of the sub-sectors to arrive at the current
levered yields for Global Transportation; MLPs: Alerian MLP; Preferreds: BAML Hybrid Preferred Securities; U.S. High Yield: Bloomberg US Aggregate
Corporate High Yield; Global Infrastructure: MSCI Global Infrastructure Asset Index-Low risk; U.S. Real Estate: NCREIF-ODCE Index; Global REITs:
FTSE NAREIT Global REITs; Convertibles: Bloomberg Barclays U.S. Convertibles Composite; International Equity: MSCI AC World ex-U.S.; U.S. 10-
year: Tullett Prebon; U.S. Equity: MSCI USA. Guide to the Markets – U.S. Data are as of September 30, 2018.
Asset class yields
S&P 500 total return: Dividends vs. capital appreciation
Average annualized returns
58
Capital appreciation
Dividends
Alternatives
5.1%
3.3% 4.2% 4.4%
2.5%
1.8%
2.2% 3.4%
13.6%
4.4%
1.6%
12.6% 15.3%
-2.7%
11.6% 7.7%
-5%
0%
5%
10%
15%
20%
1950s 1960s 1970s 1980s 1990s 2000s 2010-2017 1950-2017
9.2%
7.5%
6.2% 6.2%
5.7%
4.4% 4.4%
3.1% 3.1% 3.0%
1.9%
0%
2%
4%
6%
8%
10%
Global
Transport
MLPs U.S. High
Yield
Global
Infrastructure
Preferreds U.S. Real
Estate
Global REITs International
Equity
U.S. 10-year Convertibles U.S. Equity

|GTM – U.S.
59
-3 -2 -1 0 1 2 3 4 5
Bloomberg
Commodity Index
Agriculture
Livestock
Silver
Industrial metals
Natural gas
Gold
Crude oil
'80 '85 '90 '95 '00 '05 '10 '15
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Source: FactSet, J.P. Morgan Asset Management; (Left) Bloomberg, CME; (Top right) BLS, CME; (Bottom right) Bloomberg, BLS.
Commodity prices are represented by the appropriate Bloomberg Commodity sub-index. Crude oil shown is WTI. Other commodity prices are
represented by futures contracts. Z-scores are calculated using daily prices over the past 10 years.
Global commodities
Commodity prices
Commodity price z-scores
Gold prices
USD per ounce
Commodity prices and inflation
59
Headline CPI Bloomberg Commodity Index
Gold, inflation adjusted
Gold
Sep. 2018:
$1,187
Example High level
Current
Low level
$120.47
$41.74
$1,187
$73.25
$8.79
$7.73
$176.79
$1,892
$113.93$26.21
$705
$72.88
$211.51$84.23
$29.39
$1.64
$3.08
$49.29
$40.85
$14.71
$97.67
$22.99
$85.20
Alternatives
$48.60

|GTM – U.S.
60
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Ann. Vol.
EM
Equity
REITs
EM
Equity
REITs
EM
Equity
Fixed
Income
EM
Equity
REITs REITs REITs
Small
Cap
REITs REITs
Small
Cap
EM
Equity
Small
Cap
EM
Equity
EM
Equity
56.3% 31.6% 34.5% 35.1% 39.8% 5.2% 79.0% 27.9% 8.3% 19.7% 38.8% 28.0% 2.8% 21.3% 37.8% 11.5% 12.7% 23.0%
Small
Cap
EM
Equity
Comdty.
EM
Equity
Comdty. Cash
High
Yield
Small
Cap
Fixed
Income
High
Yield
Large
Cap
Large
Cap
Large
Cap
High
Yield
DM
Equity
Large
Cap
Small
Cap
REITs
47.3% 26.0% 21.4% 32.6% 16.2% 1.8% 59.4% 26.9% 7.8% 19.6% 32.4% 13.7% 1.4% 14.3% 25.6% 10.6% 11.2% 22.3%
DM
Equity
DM
Equity
DM
Equity
DM
Equity
DM
Equity
Asset
Alloc.
DM
Equity
EM
Equity
High
Yield
EM
Equity
DM
Equity
Fixed
Income
Fixed
Income
Large
Cap
Large
Cap
Asset
Alloc.
REITs
Small
Cap
39.2% 20.7% 14.0% 26.9% 11.6% - 25.4% 32.5% 19.2% 3.1% 18.6% 23.3% 6.0% 0.5% 12.0% 21.8% 2.9% 11.1% 18.8%
REITs
Small
Cap
REITs
Small
Cap
Asset
Alloc.
High
Yield
REITs Comdty.
Large
Cap
DM
Equity
Asset
Alloc.
Asset
Alloc.
Cash Comdty.
Small
Cap
REITs
Large
Cap
Comdty.
37.1% 18.3% 12.2% 18.4% 7.1% - 26.9% 28.0% 16.8% 2.1% 17.9% 14.9% 5.2% 0.0% 11.8% 14.6% 1.8% 9.9% 18.8%
High
Yield
High
Yield
Asset
Alloc.
Large
Cap
Fixed
Income
Small
Cap
Small
Cap
Large
Cap
Cash
Small
Cap
High
Yield
Small
Cap
DM
Equity
EM
Equity
Asset
Alloc.
Cash
High
Yield
DM
Equity
32.4% 13.2% 8.1% 15.8% 7.0% - 33.8% 27.2% 15.1% 0.1% 16.3% 7.3% 4.9% - 0.4% 11.6% 14.6% 1.3% 9.6% 18.4%
Large
Cap
Asset
Alloc.
Large
Cap
Asset
Alloc.
Large
Cap
Comdty.
Large
Cap
High
Yield
Asset
Alloc.
Large
Cap
REITs Cash
Asset
Alloc.
REITs
High
Yield
High
Yield
DM
Equity
Large
Cap
28.7% 12.8% 4.9% 15.3% 5.5% - 35.6% 26.5% 14.8% - 0.7% 16.0% 2.9% 0.0% - 2.0% 8.6% 10.4% - 0.6% 8.6% 14.5%
Asset
Alloc.
Large
Cap
Small
Cap
High
Yield
Cash
Large
Cap
Asset
Alloc.
Asset
Alloc.
Small
Cap
Asset
Alloc.
Cash
High
Yield
High
Yield
Asset
Alloc.
REITs
DM
Equity
Asset
Alloc.
High
Yield
26.3% 10.9% 4.6% 13.7% 4.8% - 37.0% 25.0% 13.3% - 4.2% 12.2% 0.0% 0.0% - 2.7% 8.3% 8.7% - 1.0% 8.3% 11.3%
Comdty. Comdty.
High
Yield
Cash
High
Yield
REITs Comdty.
DM
Equity
DM
Equity
Fixed
Income
Fixed
Income
EM
Equity
Small
Cap
Fixed
Income
Fixed
Income
Fixed
Income
Fixed
Income
Asset
Alloc.
23.9% 9.1% 3.6% 4.8% 3.2% - 37.7% 18.9% 8.2% - 11.7% 4.2% - 2.0% - 1.8% - 4.4% 2.6% 3.5% - 1.6% 4.1% 11.0%
Fixed
Income
Fixed
Income
Cash
Fixed
Income
Small
Cap
DM
Equity
Fixed
Income
Fixed
Income
Comdty. Cash
EM
Equity
DM
Equity
EM
Equity
DM
Equity
Comdty. Comdty. Cash
Fixed
Income
4.1% 4.3% 3.0% 4.3% - 1.6% - 43.1% 5.9% 6.5% - 13.3% 0.1% - 2.3% - 4.5% - 14.6% 1.5% 1.7% - 2.0% 1.2% 3.3%
Cash Cash
Fixed
Income
Comdty. REITs
EM
Equity
Cash Cash
EM
Equity
Comdty. Comdty. Comdty. Comdty. Cash Cash
EM
Equity
Comdty. Cash
1.0% 1.2% 2.4% 2.1% - 15.7% - 53.2% 0.1% 0.1% - 18.2% - 1.1% - 9.5% - 17.0% - 24.7% 0.3% 0.8% - 7.4% - 0.3% 0.8%
2003 - 2017
Asset class returns
Source: Barclays, Bloomberg, FactSet, MSCI, NAREIT, Russell, Standard & Poor’s, J.P. Morgan Asset Management.
Large cap: S&P 500, Small cap: Russell 2000, EM Equity: MSCI EME, DM Equity: MSCI EAFE, Comdty: Bloomberg Commodity Index, High Yield:
Bloomberg Barclays Global HY Index, Fixed Income: Bloomberg Barclays US Aggregate, REITs: NAREIT Equity REIT Index. 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
Bloomberg Barclays US Aggregate, 5% in the Bloomberg Barclays 1-3m Treasury, 5% in the Bloomberg Barclays Global High Yield Index, 5% in the
Bloomberg Commodity Index and 5% in the NAREIT Equity REIT Index. Balanced portfolio assumes annual rebalancing. Annualized (Ann.) return
and volatility (Vol.) represents period of 12/31/02 – 12/31/17. Please see disclosure page at end for index definitions. All data represents total return
for stated period. Past performance is not indicative of future returns.
60
Investing
principles
10

|GTM – U.S.
61
700
1,400
2,100
2,800
-$60
-$40
-$20
$0
$20
$40
$60
$80
'99 '01 '03 '05 '07 '09 '11 '13 '15 '17
0
400
800
1,200
1,600
2,000
2,400
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Source: Strategic Insight Simfund, J.P. Morgan Asset Management. All data include flows through July 2018 and capture all registered product flows
(open-end mutual funds and ETFs). Simfund data are subject to periodic revisions. World equity flows are inclusive of emerging market, global equity
and regional equity flows. Multi-asset flows include asset allocation, balanced fund, flexible portfolio and mixed income flows.
Guide to the Markets – U.S. Data are as of August 31, 2018.
Fund flows
Cumulative flows into long-term asset products
Mutual fund and ETF flows, quarterly, USD billions
Flows into U.S. equity funds & S&P 500 performance
Mutual fund and ETF flows, price index, quarterly, USD billions
61
S&P 500Flows
Investing
principles
Stocks: $1,576bn in
cumulative flows
since 2007
Bonds: $2,253bn in cumulative
flows since 2007
Multi-asset: $642bn in cumulative
flows since 2007
USD billions AUM YTD 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
U.S. equity 8,800 (3) 16 (14) (17) 112 188 (33) (34) 33 22 2 28 80 116 175 144 58 89
World equity 3,470 95 244 10 205 150 201 61 20 87 60 (32) 190 171 134 89 39 11 (9)
Taxable bond 3,678 169 392 227 58 89 (9) 298 165 212 302 59 107 51 46 27 45 105 59
Tax-free bond 715 16 33 31 21 33 (55) 52 (8) 14 71 12 14 17 7 (7) (3) 12 9
Multi-asset 2,550 10 60 29 61 96 97 51 33 58 39 11 97 78 80 82 51 22 19
Liquidity 2,711 (5) 88 194 39 31 30 (1) (52) (348) (259) 678 542 184 51 (53) (91) 2 257
Registered product flows

|GTM – U.S.
62
63%
22%
73%
33%
90%
48%
0%
20%
40%
60%
80%
100%
80 years 90 years
64%
$120
$126
$120
$115
$118
$121
$124
$127
$130
0%
20%
40%
60%
80%
100%
% of people
who think
they need
>$500,000
for
retirement
55-64 65-74 >75
Source: J.P. Morgan Asset Management; (Left) SSA 2015 Life Tables; (Right) 2017 Retirement Confidence Survey, Employee Benefit Research
Institute and Greenwald & Associates; 2016 Survey of Consumer Finances, Federal Reserve.
EBRI survey was conducted from January 6, 2017 to January 13, 2017 through online interviews with 1,671 individuals (1,082 workers and 589
retirees) ages 25 and older in the United States.
Life expectancy and retirement
Probability of reaching ages 80 and 90
Persons aged 65, by gender, and combined couple
Retirement savings gap
Anticipated amount needed vs. actual savings, thousands
62
Men
Women
Couple – at least one
lives to specified age
Investing
principles
Median value of retirement account
by age of head

|GTM – U.S.
63
-39%
-8%
-15%
-3% -2%
1%
-1% 1% 2%
7%
1%
5%
47%
43%
33%
28%
23% 21%
19%
16% 16% 17%
12%
14%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
1-yr. 5-yr.
rolling
10-yr.
rolling
20-yr.
rolling
Time, diversification and the volatility of returns
Source: Barclays, Bloomberg, FactSet, Federal Reserve, Robert Shiller, Strategas/Ibbotson, J.P. Morgan Asset Management.
Returns shown are based on calendar year returns from 1950 to 2017. Stocks represent the S&P 500 Shiller Composite and Bonds represent
Strategas/Ibbotson for periods from 1950 to 2010 and Bloomberg Barclays Aggregate thereafter. Growth of $100,000 is based on annual average
total returns from 1950 to 2017.
Range of stock, bond and blended total returns
Annual total returns, 1950-2017
63
50/50 portfolio 9.0% $556,848
Bonds 5.9% $316,600
Stocks 11.2% $840,219
Annual avg.
total return
Growth of $100,000
over 20 years
Investing
principles

|GTM – U.S.
64
$30,000
$60,000
$90,000
$120,000
$150,000
$180,000
$210,000
$240,000
Oct '07 Oct '08 Oct '09 Oct '10 Oct '11 Oct '12 Oct '13 Oct '14 Oct '15 Oct '16 Oct '17
Diversification and the average investor
Source: J.P. Morgan Asset Management; (Top) Barclays, Bloomberg, FactSet, Standard & Poor’s; (Bottom) Dalbar Inc.
Indices used are as follows: REITS: NAREIT Equity REIT Index, EAFE: MSCI EAFE, Oil: WTI Index, Bonds: Bloomberg Barclays U.S. Aggregate
Index, Homes: median sale price of existing single-family homes, Gold: USD/troy oz., Inflation: CPI. 60/40: A balanced portfolio with 60% invested in
S&P 500 Index and 40% invested in high-quality U.S. fixed income, represented by the Bloomberg Barclays U.S. Aggregate Index. The portfolio is
rebalanced annually. Average asset allocation investor return is based on an analysis by 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 12/31/17 to match Dalbar’s most recent analysis.
20-year annualized returns by asset class (1998 – 2017)
Portfolio returns: Equities vs. equity and fixed income blend
64
40/60 stocks & bonds
60/40 stocks & bonds
S&P 500
Mar. 2009:
S&P 500 portfolio
loses over $50,000
Nov. 2009:
40/60 portfolio
recovers
Oct. 2010:
60/40 portfolio
recovers
Mar. 2012:
S&P 500
recovers
Oct. 2007:
S&P 500 peak
Investing
principles
9.1%
7.8%
7.2%
6.4% 6.4% 6.1%
5.7%
5.0%
3.4%
2.6%
2.1%
0%
2%
4%
6%
8%
10%
REITs Gold S&P 500 60/40 Oil 40/60 EAFE Bonds Homes Average
Investor
Inflation

|GTM – U.S.
65
41%
23%
15%
8%
-7%
-11%
-14%
-1%
-20%
-10%
0%
10%
20%
30%
40%
50%
24 months prior 12 months prior 6 months prior 3 months prior 3 months after 6 months after 12 months after 24 months after
Equity market performance around bear markets
Source: FactSet, Robert Shiller, Standard & Poor’s, J.P. Morgan Asset Management.
Chart is based on return data from 11 bear markets since 1945. A bear market is defined as a decline of 20% or more in the S&P 500 benchmark.
Monthly total return data from 1938 to 1970 is from the S&P Shiller Composite index. From 1970 to present, return data is from Standard & Poor’s.
Average return leading up to and following equity market peaks
S&P 500 total return index, 1945 - 2017
65
Investing
principles
Equity market peak
Average return
after peak
Average return
before peak

|GTM – U.S.
66
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
Cash accounts Consumer spending Mortgage debt
$0
$2,000
$4,000
$6,000
$8,000
$10,000
'86 '91 '96 '01 '06 '11 '16
Income earned by $100,000 investment in a 6-mo. CD
Source: FactSet, J.P. Morgan Asset Management; (Left) Bankrate.com; (Right) BEA, Federal Reserve System.
Cash accounts and consumer spending are as of 8/31/18 and mortgage debt is as of 6/30/18. M2 includes M1 (currency in circulation and checking
accounts) plus savings deposits, small-denomination time deposits and retail money market mutual funds. Institutional money market funds are
considered a memorandum item, not included in M2. 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. Past performance is not indicative of comparable future results.
Cash accounts 66
2017: $408
2006: $5,240
Investing
principles
Income generated
Income needed to beat inflation
$16.1
Savings & small
time deposits,
$9.7
Currency,
$1.6
$10.2
Cash accounts in perspective
Trillions of U.S. dollars
$14.1
Checking
accounts,
$2.1
Retail MMF, $0.8
Inst. MMF,
$1.9

|GTM – U.S.
67
70%
75%
80%
85%
90%
95%
100%
105%
110%
$0.0
$0.4
$0.8
$1.2
$1.6
$2.0
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 YTD
3.2%
4.0%
3.3%
3.8%
3.9%
44.4%
37.4%
4.0%
16.0%
6.0%
11.0%
19.0%
8.0%
36.0%
0% 10% 20% 30% 40% 50%
Cash
Other Alternatives
Real Estate
Private Equity
Hedge Funds
Fixed Income
Equities
0% 1% 1% 1%
5%
9%
27%
29%
20%
7%
21%
13%
25% 24%
12%
3% 2% 0% 0% 0%
0%
10%
20%
30%
40%
< 6% 6 to
6.5%
6.5 to
7%
7 to
7.5%
7.5 to
8%
8 to
8.5%
8.5 to
9%
9 to
9.5%
9.5 to
10%
> 10%
Source: J.P. Morgan Asset Management; (Left) NACUBO (National Association of College and University Business Officers), Towers Watson; (Top
right) Milliman Pension Funding Index; (Bottom right) Compustat/FactSet, S&P 500 corporate 10-Ks. Endowment asset allocation as of 2017.
Corporate DB plans asset allocation as of 2016. Endowments represents dollar-weighted average data of 805 colleges and universities. Corporate
DB plans represents aggregate asset allocation of Fortune 1000 pension plans. Pension return assumptions based on all available and reported data
from S&P 500 Index companies. Pension assets, liabilities and funded status based on Milliman 100 companies reporting pension data as of August
31, 2018. Return assumption bands are inclusive of upper range. All information is shown for illustrative purposes only.
Institutional investor behavior
Asset allocation: Corporate DB plans vs. endowments Defined benefit plans: Milliman 100 companies
Pension return assumptions: S&P 500 companies
67
Endowments
Corporate DB plans
Return assumption
%ofcompanies
2017: Average 6.6%
1999: Average 9.2%
Investing
principles
Funded status (%)
Assets ($tn)
Liabilities ($tn)
USD trillions

|GTM – U.S.
68
Source: IMF, Openfolio, Strategic Insight Simfund, J.P. Morgan Asset Management.
*Global stock and bond markets data are as of 2013. U.S. investor allocation is the total value of investments in global or domestic equity mutual
funds and ETFs as of 2017. **Investor allocation by region is based on data collected by Openfolio. Average sector allocations at the national level
are determined by looking at the sector allocations of over 20,000 brokerage accounts, and taking a simple average. Portfolio allocations are then
evaluated on a regional basis, and the regional averages are compared to the national average to highlight any investor biases. Further details can
be found on openfolio.com.
Local investing and global opportunities
Investor allocation by region
Likelihood of owning stocks in an industry vs. national average**
Investment universe & U.S. investors
Percentage of total net assets, 2017
68
Investing
principles
Financials Technology
Industrials Energy
+10%
-7%
-8%
+0%
-10%
+14%
-6%
-7%
+9%
-5%
-12%-2%
+11%
-2%
+5%
-9%
U.S. Global
% +/- National Average
24%
36%
70%
76%
64%
30%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Global GDP Global stock &
bond markets*
U.S. investor
allocation

|GTM – U.S.
69
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.
Equities:
The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip U.S. stocks.
The MSCI ACWI (All Country World Index) is a free float-adjusted market capitalization weighted index that
is designed to measure the equity market performance of developed and emerging markets.
The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index
that is designed to measure the equity market performance of developed markets, excluding the US & Canada.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to
measure equity market performance in the global emerging markets.
The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure
developed market equity performance in Europe.
The MSCI Pacific Index is a free float-adjusted market capitalization index that is designed to measure equity
market performance in the Pacific region.
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 ratios and lower forecasted growth values.
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 3000 Index® measures the performance of the 3,000 largest U.S. companies based on total
market capitalization.
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 S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. The index
includes a representative sample of 500 leading companies in leading industries of the U.S. economy. The
S&P 500 Index focuses on the large-cap segment of the market; however, since it includes a significant portion
of the total value of the market, it also represents the market.
Fixed income:
The Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index includes all publicly issued zero-coupon US
Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated
investment grade, and have $250 million or more of outstanding face value. In addition, the securities must be
denominated in U.S. dollars and must be fixed rate and non convertible.
The Bloomberg Barclays Global High Yield Index is a multi-currency flagship measure of the global high
yield debt market. The index represents the union of the US High Yield, the Pan-European High Yield, and
Emerging Markets (EM) Hard Currency High Yield Indices. The high yield and emerging markets sub-
components are mutually exclusive. Until January 1, 2011, the index also included CMBS high yield securities.
The Bloomberg Barclays Municipal Index: consists of a broad selection of investment- grade general
obligation and revenue bonds of maturities ranging from one year to 30 years. It is an unmanaged index
representative of the tax-exempt bond market.
The Bloomberg Barclays US Dollar Floating Rate Note (FRN) Index provides a measure of the U.S. dollar
denominated floating rate note market.
The Bloomberg Barclays US Corporate Investment Grade Index is an unmanaged index consisting of
publicly issued US Corporate and specified foreign debentures and secured notes that are rated investment
grade (Baa3/BBB or higher) by at least two ratings agencies, have at least one year to final maturity and have
at least $250 million par amount outstanding. To qualify, bonds must be SEC-registered.
The Bloomberg Barclays US High Yield Index covers the universe of fixed rate, non-investment grade debt.
Eurobonds and debt issues from countries designated as emerging markets (sovereign rating of
Baa1/BBB+/BBB+ and below using the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and
global bonds (SEC registered) of issuers in non-EMG countries are included.
The Bloomberg Barclays US Mortgage Backed Securities Index is an unmanaged index that measures the
performance of investment grade fixed-rate mortgage backed pass-through securities of GNMA, FNMA and
FHLMC.
The Bloomberg Barclays US TIPS Index consists of Inflation-Protection securities issued by the U.S.
Treasury.
The J.P. Morgan Emerging Market Bond Global Index (EMBI) 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 J.P. Morgan Corporate Emerging Markets Bond Index Broad Diversified (CEMBI Broad Diversified)
is an expansion of the J.P. Morgan Corporate Emerging Markets Bond Index (CEMBI). The CEMBI is a
market capitalization weighted index consisting of U.S. dollar denominated emerging market corporate bonds.
The J.P. Morgan Emerging Markets Bond Index Global Diversified (EMBI Global Diversified) tracks total
returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-
sovereign entities: Brady bonds, loans, Eurobonds. The index limits the exposure of some of the larger
countries.
The J.P. Morgan GBI EM Global Diversified tracks the performance of local currency debt issued by
emerging market governments, whose debt is accessible by most of the international investor base.
The U.S. Treasury Index is a component of the U.S. Government index.
69

|GTM – U.S.
70
J.P. Morgan Asset Management – Index definitions & disclosures
Other asset classes:
The Alerian MLP Index is a composite of the 50 most prominent energy Master Limited Partnerships (MLPs)
that provides investors with an unbiased, comprehensive benchmark for the asset class.
The Bloomberg Commodity Index and related sub-indices are 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
The Cambridge Associates U.S. Global Buyout and Growth Index® is based on data compiled from 1,768
global (U.S. & ex – U.S.) buyout and growth equity funds, including fully liquidated partnerships, formed
between 1986 and 2013.
The CS/Tremont Hedge Fund Index is compiled by Credit Suisse Tremont Index, LLC. It is an asset-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 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 sub strategies. 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.
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 NFI-ODCE, short for NCREIF Fund Index - Open End Diversified Core Equity, is an index of investment
returns reporting on both a historical and current basis the results of 33 open-end commingled funds pursuing a
core investment strategy, some of which have performance histories dating back to the 1970s. The NFI-ODCE
Index is capitalization-weighted and is reported gross of fees. Measurement is time-weighted.
Definitions:
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 investment loss or gain. The value of the investment may fall as well as rise and investors may get
back less than they invested.
Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise.
Investments in commodities may have greater volatility than investments in traditional securities, particularly if
the instruments involve leverage. The value of 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.
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.
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.
70
Investments in emerging markets can be more volatile. 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.
The price of equity securities may rise, or fall because of changes in the broad market or changes in a
company’s 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.
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. Equity Market Neutral Strategies typically maintain characteristic net equity market
exposure no greater than 10% long or short.
Global macro strategies trade a broad range of strategies in which the investment process is predicated on
movements in underlying economic variables and the impact these have on equity, fixed income, hard
currency and commodity markets.
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. Some overseas markets may not be as politically and economically stable as the United States and
other nations.
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. 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.
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.
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.
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, used as a measure of a company's
potential as an investment.
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.
Relative Value Strategies maintain positions in which the investment thesis is predicated on realization of a
valuation discrepancy in the relationship between multiple securities.
Small-capitalization investing typically carries more risk than investing in well-established "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.

|GTM – U.S.
71
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 decision-making, the program explores the implications of current economic data and changing market conditions.
For the purposes of MiFID II, the JPM Asset Management Market Insights program is a marketing communication and is not in scope for any MiFID II / MiFIR (Markets in Financial Instruments Directive/ Markets in Financial
Instruments Regulation) requirements specifically related to investment research. Furthermore, the J.P. Morgan Asset Management Market Insights program, as non-independent research, has not been prepared in
accordance with legal requirements designed to promote the independence of investment research, nor is it subject to any prohibition on dealing ahead of the dissemination of investment research.
This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product,
strategy, plan feature or other purpose 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 examples used
are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in
any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own professional advisers, if any
investment mentioned herein is believed to be suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. 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 production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, 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 yields is not a
reliable indicator of current and future results.
J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by the following entities: in the United Kingdom by
JPMorgan Asset Management (UK) Limited, which is authorized and regulated by the Financial Conduct Authority; in other EEA jurisdictions by JPMorgan Asset Management (Europe) S.à r.l.; in Hong Kong by JF Asset
Management Limited, or JPMorgan Funds (Asia) Limited, or JPMorgan Asset Management Real Assets (Asia) Limited; in Singapore by JPMorgan Asset Management (Singapore) Limited (Co. Reg. No. 197601586K), or
JPMorgan Asset Management Real Assets (Singapore) Pte Ltd (Co. Reg. No. 201120355E); in Taiwan by JPMorgan Asset Management (Taiwan) Limited; in Japan by JPMorgan Asset Management (Japan) Limited which is
a member of the Investment Trusts Association, Japan, the Japan Investment Advisers Association, Type II Financial Instruments Firms Association and the Japan Securities Dealers Association and is regulated by the
Financial Services Agency (registration number “Kanto Local Finance Bureau (Financial Instruments Firm) No. 330”); in Korea by JPMorgan Asset Management (Korea) Company Limited; 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); in Brazil by Banco J.P. Morgan S.A.; in Canada for
institutional clients’ use only by JPMorgan Asset Management (Canada) Inc., and in the United States by JPMorgan Distribution Services Inc. and J.P. Morgan Institutional Investments, Inc., both members of FINRA.; and
J.P. Morgan Investment Management Inc.
In APAC, distribution is for Hong Kong, Taiwan, Japan and Singapore. For all other countries in APAC, to intended recipients only.
Copyright 2018 JPMorgan Chase & Co. All rights reserved
Prepared by: Samantha M. Azzarello, Alexander W. Dryden, Jordan K. Jackson, David M. Lebovitz, Jennie Li, John C. Manley, Meera Pandit, Gabriela D. Santos, Tyler J. Voigt and David P. Kelly.
Unless otherwise stated, all data are as of September 30, 2018 or most recently available.
Guide to the Markets – U.S.
JP-LITTLEBOOK | 0903c02a81cd6a70
71

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