JP Morgan Asset Management - ValueNotes Investment Confidence Index Wave 9

J.P.
Morgan Asset Management ValueNotes Investment Confidence Index Wave IX, December 2011
Indias only Investor and Advisor focused sentiment indicator
J.P. Morgan Asset Management ValueNotes Investment Confidence Survey November 23rd to December 04th, 2011
J.P. Morgan Asset Management Standard Template 2009.ppt
J.P. Morgan Asset Management ValueNotes Investment Confidence Index
Background Introduction to the indices
Survey methodology
Respondent profile Investor and advisor confidence Key findings Investment activity Retail investors and corporate treasuries Other sentiment influencers
1 J.P. Morgan Asset Management ValueNotes Investment Confidence Survey November 23rd to December 04th, 2011
Background
The inaugural Investor Confidence Index was launched in the UK in the early 1990s Subsequently launched in Germany, France and other European countries
In Asia, similar Investor Confidence Indices launched by the firm in Hong Kong, Japan and Taiwan
The Hong Kong Investor Confidence Index has just completed its 21st wave (3Q 2011) and continues to evoke much interest The J.P. Morgan Asset Management ValueNotes Investment Confidence Index (ICI) was launched in India in July 2009
J.P. Morgan Asset Management ValueNotes Investment Confidence Index
The definitive indicator of investment confidence levels across key investment centers Focused on three important investor segments: retail investors, corporates and the advisor community (distributors) Key objectives

To quantify confidence in the investment environment To study investment behavior and sentiment over time based on key factors To evaluate trends in such behavior To study short-term and long-term changes in investment outlook
Quarterly indices tracking sentiment across the investment community
Investment Confidence Index: A composite index reflecting the combined sentiment of retail investors, corporates and distributors Retail Investor Confidence Index: Based on a survey of retail investors across India Corporate Confidence Index: Based on a survey of corporate treasuries across India Advisor Confidence Index: Based on a survey of distributors of financial products
Banks, National/Regional Distributors (N/RDs) and Independent Financial Advisors (IFAs)
Survey Methodology: face to face, online and telephonic interviews
Screener questions capture respondent profile Six index questions - capture respondents confidence, over the next six months
1) Improvement in the Indian economic situation
Ahmedabad
Delhi
2) Improvement in the general investment market environment and atmosphere 3) Improvement in the global economic situation 4) Increase in the BSE Sensex 5) Appreciation in personal/clients investment portfolio 6) Increase in personal/clients investments
Mumbai Pune Hyderabad Bengaluru
Kolkata
Chennai
Other sentiment drivers
Index Construction Methodology

Indices constructed in a similar manner from the six Index questions posed to all
Each Index question assigned a point between 0 and 200
Extremely Unlikely
Somewhat Unlikely
More or Less the Same as Current
Somewhat Likely
Extremely Likely
50
100
150
200
All six Index questions carry equal weight Investment Confidence Index equally weights retail, corporate and advisor indices Advisor Confidence Index equally weights the Bank Confidence Index, N/RD Confidence Index and the IFA Confidence Index
Respondent Sample Wave IX, December 2011

Category Number of respondents Retail 1,635 Corporate 50 IFAs (Advisors) 242 Banks (Advisors) 20 NRDs (Advisors) 20
City Retail IFAs Corporate
Delhi / NCR 12% 11% 26%
Mumbai 14% 11% 34%
Kolkata 12% 11% 12%
Chennai 11% 15% 6%
Bengaluru 12% 11% 10%
Pune 12% 12% 8%
Hyderabad 12% 15% 4%
Ahmedabad 15% 14% 0%
Wallet Size (INR) Retail Treasury size (INR) Corporate
2 to 5 lakhs 26% 10 lakhs to 1 crore 0%
5 to 10 lakhs 34% 1 crore to 50 crores 8%
10 to 25 lakhs 25 to 50 lakhs 22% 50 to 150 crores 8% 12% 150 to 500 crores 40%
50 lakhs + 12% 500 crores + 44%
Investor and Advisor Confidence, Wave IX, December 2011 - Key Findings
Investment Confidence Index (ICI) remains flat

Investment Confidence Index (125) shows no improvement from July 2011, remains subdued. Retail investor confidence reaches its lowest in nine quarters, optimism within India Inc. and advisors improves.
Investment Confidence Index and its underlying indices

200 Investment Confidence Index Retail Corporate Advisor
160 150 138 136 136 134 152 145 146 142 147 146 141 131 152 140 135 134 145 144 132 146 135 134 130 122 152 140 132 125 124 109 137 132 127 125 115
100 Jul 2009 Sep 2009 Feb 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jul 2011 Dec 2011
IFA confidence plummets 17 points, touches all time low

Bank confidence has recovered by 18 points from its July 2011 low to reach 133. N/RDs are also marginally more optimistic this quarter (129).
IFAs vs. Banks vs. N/RDs
200 IFA Banks N/RDs
158
157 150 146 143 140 140 148
150
138 135 135
150
147
147
139 130 126 136 124 115 133 129 119
140
135
147
127
100 Jul 2009 Sep 2009 Feb 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jul 2011 Dec 2011
Confidence in Indias growth story revives, but is still measured
Sentiment surrounding the Indian economy and investment environment is still weak as compared to that September 2010 levels.
200
Confidence over appreciation in portfolio and change in investment amounts falls continuously over the year.
Jul 2009 Sep 2009 Feb 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jul 2011 Dec 2011
148 154 147 152 157 153
149 149 151 156 154 146 139 129
139 146 142 145 145 150 139 136 130
141 149 143 144 149 148
136 121 130
134 126
113
111
125 131 117
127 121 126
100
50
Improvement in Indian Improvement in Improvement in global economic situation investment market economic environment and environment atmosphere
103 107
Increase in BSE Sensex
Appreciation in investment portfolio
Change in amount of investments
132
136
150
143 146 141 139 141 142 130 123 125
Investment Confidence Index
146 141 140 145 146 132 124 125
Investors more confident about global economic recovery than corporates and advisors

India Inc. (92) is the most sceptical about improvement in the global economic situation. Advisors most upbeat about increase in their clients investments.
Neutral Improvement in Indian economic situation 131 130 129 135 119 124 128 92 101 134 Increase in BSE Sensex 110 131 Appreciation in investment portfolio 136 119
135
Corporate
Improvement in investment market environment and atmosphere
Improvement in global economic environment
Retail
Advisor
Change in amount of investments 50 100
125 120 142
Somewhat Unlikely
More or Less the Same as Current
Somewhat Likely
150
Extremely Likely
200
Other sentiment drivers - Economic signals, Sensex expectations
Strong GDP growth the most favoured economic indicator through the year
In December 2011, retail investors (21%) voted for increase in employment opportunities as the most positive economic indicator. Governments fiscal measures was the second most favoured indicator for retail (20%) and corporate investors (22%). Corporate and advisor votes for strong GDP growth have decreased over the year indicating that they expect GDP growth to decline in the coming months.
60% 40% 24% 20% 0% Good corporate results Increase in employment opportunities Better than expected monsoon Strong GDP growth Fiscal and monetary measures Growth in Exports
December 2011
36%
Retail
Corporate
Advisors
21%
8% 4%
13%
17% 8%
19%
19%
24%
20%
22%
21% 9%
10%
6%
7%
60%
Good corporate results

40% 20% 0% Dec 2010 Mar 2011 Jul 2011 Dec 2011 24% 15% 24%
53% 49%
Retail 46% 25% 26%
Corporate
Advisors 36%
Strong GDP growth

31% 23% 20%
19% 12%14%
15% 11%12% 4%
20%
13%10%
19%
24%
Dec 2010
Mar 2011
Jul 2011
Dec 2011
Inflation and global uncertainty voted biggest fears for Indian economy

High fiscal deficit, a growing concern among advisors (24%) over the year. Inflation concerns have dropped significantly among corporates and advisors. In this quarter, only 32% corporate investors voted high inflation as the most negative economic indicator as against 56% in July 2011.
60% 40% 20% 0% 32% 24% 15% 10% 24% 13%
December 2011
26%
Retail
Corporate
Advisors 25%
18% 16% 13%
19% 18% 7% 6% 1% 6% 6% 1%
4% 3% Currency fluctuation
4% 6% 3%
Inflation
High govt borrowings / high fiscal deficit

70% 60%
Increase in interest rates
Poor governance and corruption
Eurozone sovereign debt crisis
Decrease in Global uncertainty industrial output
80% 63% 60% 40% 48%
Retail
58% 54% 31%
Corporate
Advisors
Inflation
32% 26% 24%
Corruption
19%
8% 16% 22% 22% 12% 23% 18% 22% 18% 16% 13%
20%
0%
19%
26%
Dec 2010
Mar 2011
Jul 2011
Dec 2011
Dec 2010
Mar 2011
Jul 2011
Dec 2011
BSE Sensex likely to trade between 17,000 20,000 in June 2012
48% retail investors and 76% advisors expect the benchmark index to trade between 17,000 and 20,000 in June 2012. Indian investors and advisors were an optimistic lot in July 2011 and 67% of them expected the Sensex to trade between 19,000 and 20,000 in December 2011.
BSE Sensex during the 18% 3% 5% 32% 29% 20% 13% 15% 15% 2%
Retail Advisor
Indian investors and advisors bullish about the Sensex in June 2012
40% 30% 20%
10%
0%
3%
1%
6% 2%
9% 5%
8%
5%
5% 0% 21000 22000
Retail
3% 0% 22000 and above

Advisor
0- 13000
13000 14000
14000 15000
15000 16000
16000 17000
17000 18000
18000 19000
19000 20000
20000 21000
Majority of investors and advisors prove inaccurate about Sensex trading levels in December 2011
40% 30% 20% 15% 10% 0% 0% 12% 10% 4% 17000 18000 18000 19000 19000 20000 20000 21000 21000 22000 1% BSE Sensex in December 2011 BSE Sensex in July 2011 35% 25% 19% 10% 7% 22000 23000 0% 2% 23000 24000 1% 0% 24000 25000
23% 23%
0%
0- 14000
0% 1%
14000 15000
3%
0%
2% 5%
1% 1%
25000 26000
15000 16000
16000 17000
Sensex expectations not met

Investors and advisors generally expect a 5-10% increase from the Index levels during the survey. For the last two quarters the Sensex has been trading 15-20% lower than the expected level.
Sensex Wave level during the survey Weighted Expected Sensex - 6 months later Deviation Expected v/s Actual Sensex level during the survey
Actual
Sensex level - 6 months later
Deviation Expected v/s Actual Sensex level six months later
Retail July 2009 September 2009 15,670 16,591
Advisors 16,722
Retail 6%
Advisors 7% 17,465
Retail -5%
Advisors -4%
17,127
16,430 17,701 20,069 20,509 19,445 18,197 15,870
17,315
17,464 17,704 19,355 19,519 19,093 19,100 17,391
18,611
17,718 17,900 17,900 19,389 19,389 19,596 18,942
1%
6% 0% -4% -5% -2% 5% 10%
9%
8% 1% -11% -5% 0% 8% 19%
17,528
17,971 20,509 19,445 18,846 16,454 15,870 N/A
-1%
-3% -14% 0% 4% 16% 20% N/A
6%
-1% -13% -8% 3% 18% 23% N/A
February 2010
June 2010 September 2010 December 2010 March 2011 July 2011 December 2011
Investment strategy and activity Retail and corporate investors
Mutual funds attract investors
Investments in stocks have fallen by 6 percentage points since last quarter, whereas investments in mutual funds rose by 9% during the same period. Investment activity in gold and other bullion falls 19 percentage points since December 2010.
80% Dec 2010 Mar 2011 Jul 2011 Dec 2011
Retail investment activity in the past 12 months

56% 58% 59% 58%
37% 42% 41% 35% 22% 20% 29%
60%
40%
54%
36% 24%
27% 25% 17% 9%
7%
Time deposit Insurance and Retirement products Property Gold and other bullion
9%
8%
0%
Foreign currencies
80% 60% 40% 20% 0%
68%
61% 64% 58%
66% 50%
70% 61%
23% 19% 22% 23%
13% 16%
20%
14% 4% 2% 4% 3%
12% 13% 12%
8%
Stocks
Mutual Funds
Bonds
Certificate of deposits
Warrants
Derivatives*
* Other stock market derivative products (e.g. futures, options)
Investors prefer to preserve capital instead of taking risks

42% of retail investors describe their current investment strategy as preserve capital. Only 14% expected to adopt an extremely aggressive investment strategy in the next six months, while 39% investors not expected to change their investment strategy in the coming months.
Investment strategy in coming 6 months
Current investment strategy
16%
13%
Risk Averse
10%
5%
14%
Extremely aggressive Somewhat aggressive No change
Preserve Capital
Cautious Investments
29%
32% 39% Somewhat conservative Extremely conservative
42%
Willing to take risks
Risk-averse investors prefer mutual funds to stocks
Risk-averse investors reduce investments in stocks (from 70% to 56%) during the last 3 quarters; increase activity in mutual funds (from 44% to 68%). Risk takers increased their exposure in stocks (from 67% to 74%). Investors viewing long-term investment period as 1 2 years increased activity in mutual funds (from 38% to 78%) in the last 3 quarters.
70% 54% 52% 48% 44%
Mutual Funds
Retail investment in mutual funds and stocks v/s current investment strategy
80% 60% 40% 20% 0% Mar 2011 Jul 2011
Mutual Funds
65% 60% 41%
73% 64% 69% 68%
70%
65% 67%
52%
75% 68% 61% 59%
Stocks
74%
61% 56% 52%
I am very risk averse I want to preserve my capital I am a fairly cautious investor I am a risk taker
Dec 2011
Mar 2011
Jul 2011
Stocks
Dec 2011
Retail investment in mutual funds and stocks v/s interpretation of long term investment period
80% 60% 40% 54% 58% 52% 48% 38% 72% 65% 60% 60% 57% 78% 76%
69% 66% 65% 64% 61% 63% 58% 53%
68%70% 61% 60% 57%
1 year 2 years 62% 62% 56% 51% 48% 2 years 3 years 3 years 5 years 5 years 10 years Over 10 years
20%
0% Mar 2011 Jul 2011 Dec 2011 Mar 2011 Jul 2011 Dec 2011
Corporate investors increase investments in mutual funds significantly
Corporate investment activity in debt and equity mutual funds surged by 12% and 18% respectively since July 2011. Activity in stocks (30%) appears to be reviving after falling to a low point in July 2011 (18%).
Corporate investment activity in the past 12 months
100% 80% 60% 40% 20% 0%
90% 92% 67%

74% 70% 70% 43% 32% 22% 36% 47% 44% 30% 32% 74%
86%
Dec 2010
Mar 2011
Jul 2011
Dec 2011
37% 38%
44%
45% 46% 30%
26%
18%
Term deposits
100% 80% 60% 40% 20% 0% 30% 59% 48%
Inter-corporate deposits
Commercial Papers
Debt Mutual Funds
Equity Mutual Funds
Stocks
45%
34%
38% 22% 24% 25% 16% 4% 6% 10% 4% 4%
28%
8% Bonds Certificate of deposits Warrants
14%
6% 2%
8%
0% 2%
4%
Derivatives*
Structured products
Others
* Other stock market derivative products (e.g. futures, options)
Money Market Funds lose sheen due to incessant interest rate hikes
Investment activity in Money Market Funds (60%) fell significantly in December 2011 after hovering around 85% in the last two quarters. Investments in floating rate bonds, debt funds and gilt funds surged by 16 percentage points and 14 percentage points respectively over the last quarter.
Corporate investments in debt mutual funds in the past 12 months
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Bond funds Money Market Funds Fixed Maturity Plans Floating Rate Debt Funds GILT funds 20% 35% 26% 46% 36% 67% 69% 86% 84% Dec 2010 Mar 2011 Jul 2011 Dec 2011
60%
60%
42%
39% 40% 30% 25% 32% 22% 8%
14%
Corporates likely to maintain current investment levels in liquid funds
Despite RBIs regulation on limiting banks exposure in liquid funds to 10% (of the previous years networth), 48% of corporate investors will maintain the current investment amount.
76% of corporate investors are expected to maintain their investments in duration funds; corporates more likely to increase investments (44%) in short term bond funds.
Effect of RBIs regulation on exposure to liquid funds
50% 30% 10% 16% 18% 12% 4% Somewhat likely to increase Maintain the current investment amount Somewhat likely to decrease 10% 2% Definitely will decrease 48% Jul 2011 Dec2011
80% 60% 40% 20% 0%
Definitely will increase
Corporate investments in duration funds

100% 80% 60% 44% 12%
24%
10% 18% 72%
16% 8%
Increase portfolio
6%
50% 64% 76%
Decrease portfolio
40%
20%
0%
Short term bond funds Income/ Dynamic / Active Bond Funds Gilt funds Income/ Duration funds
Portfolio will remain the same
Corporates expecting 10-20% returns view long-term as 2-5 years
Investors who expect more than 20% from their investments were divided on their interpretation of long term investment period.
Interpretation of long term v/s annual returns
100%
0% 0% 9% 14% 18% 29% 60% 36% 40% 29% 50% 20% 18% 14% 0% 25% 5% 0% 3 years 5 years 0% Over 10 years 0% 0% 0 5% 52% 5 10% 25% 100% 29% 38% 16 20% 5% 13% 0% 0% Above 20%
80% 50%
11 15%
0%
Less than 1 year
0% 1 year 2 years
0% 2 years 3 years
5 years 10 years
Other findings - Investment sentiment by demography, investment preferences, capital investments
HNIs most confident this quarter; confidence falters across all age groups
Investors with smaller wallet sizes (INR 2- 5 lakhs and INR 5-10 lakhs) witnessed continuous decline in confidence levels over the past year. Investors aged 25 35 years are the most confident age group (134), while those aged 50 -55 years are the least optimistic (122).
Retail Confidence - By Liquid Assets/ Wallet Size
Retail Confidence (Dec 2010)- 159.5 Retail Confidence (Mar 2011)- 142.0 Retail Confidence (Jul 2011) - 137.5 160 Retail Confidence (Dec 2011) - 131.5 159 158 144 142 138 139 138 136 139 129 125
Dec 2010 Mar 2011 Jul 2011 Dec 2011
180
162
162
160
140 120 100
146 136 133
144
137
143
INR 2 to 5 lakhs
INR 5 to 10 lakhs
INR 10 to 25 lakhs
INR 25 to 50 lakhs
INR 50 lakhs and above
Retail Confidence - By Age

180 160 140 120 100 Age 22 to 25 Age 25 to 30 Age 30 to 35 Age 35 to 40 Age 40 to 45 Age 45 to 50 Age 50 to 55 Age 55 to 60 Age 60 to 65 Retail Confidence (Dec 2010) - 159.5 Retail Confidence (Mar 2011) - 142.0 Retail Confidence (Jul 2011) - 137.5 Retail Confidence (Dec 2011) - 131.5 161 160 164 157 157 149 143 143 142 136 140 140 139 138 137 134 134 132 132 125
Dec 2010 Mar 2011 Jul 2011 Dec 2011
153
138140
157 136 130 122
151 135 125 127 140 139 124 126
126
Hyderabad investors upbeat; Mumbai IFAs the most despondent
Slowdown in domestic economic growth coupled with global economic uncertainty weigh down investor confidence across all cities, except Mumbai (148) and Hyderabad (152). Delhi/ NCR IFAs (139) continue to occupy their pole position in the current quarter too.
200 160 120 80 Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad Retail confidence (Dec 2010)- 159.5 Retail confidence (Jul 2011) - 137.5 165 151 158 165 141 148 Retail confidence (Mar 2011) - 142.0 Retail confidence (Dec 2011) - 131.5 149 133 138 125 162 152 144 125 147 147 Retail (Dec 2010) Retail (Jul 2011) 152 136 136 135 Retail (Mar 2011) Retail (Dec 2011) 160 152 150 138 110
176
130 135
127 125
128
126
200
160
IFA confidence (Dec 2010)- 132.2 IFA confidence (Jul 2011) - 109.0 159 154 146 145 139 139 130 106
IFA confidence (Mar 2011) - 123.5 IFA confidence (Dec 2011) - 115.0 139
IFA (Dec 2010) IFA (Jul 2011) 152
IFA (Mar 2011) IFA (Dec 2011) 146 133 141
146 150
130 132 120
152
131 141 120 137 135 118 139 137 126
140
115
121
120
117
80
Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad
Investors continue to favour Banking and Financial services
Investors (42%) and advisors (55%) vote for banking and financial services as the most attractive sector for investments. Telecom is expected to attract the least number of investors as it ranks at the bottom of investors and advisors wish list.
Preferred sectors for investment Retail investors and Advisors
60%
56%55%
Retail (Jul 2011) Advisor (Jul 2011)
Retail (Dec 2011) Advisor (Dec 2011)
50% 42% 40% 36% 26% 24% 18%19% 15% 8% 4% 0% Automobiles Banking and Financial Services Capital Goods FMCG Oil and gas IT & ITES Telecom Others 10% 19% 38%
30% 23%23% 20%
25% 22%
27% 22% 21% 14% 8% 6% 5% 2% 11%12% 3%
10% 7%
12%
10%
Investors upbeat about investing internationally; advisors cautious
48% of retail investors are inclined towards considering international investments, while advisors are marginally cautious as only 35% of them responded that they would recommend their clients to invest internationally.
International investment preference- Retail investors
International investment preference- Advisors
35%
Yes 48%
Yes No
No
52%
65%
Investors prefer Asian markets, advisors recommend emerging markets

Advisors (33%) show a clear preference for emerging markets such as Eastern Europe and Latin America. Asia (38%) is the most preferred destination for retail investors, followed by the US (21%).
50%
Retail Advisors
40%
38% 33%
30% 21% 20% 15% 13% 10% 9% 6% 3% 0% USA Europe Japan Asia South East Asia Greater China Emerging markets 2% 0% Others 5% 13% 9% 4% 3% 13%
Expectation of increase in income and profits moderates

Only 50% of corporates expect their PAT to increase in the next 6 months, in comparison to 85% in Dec 2010. Retail investors expectation of increase in income in the coming six months also declined noticeably.
Retail Investor increase in personal income

100% 22% 32% 80% 19% 22%
Corporate treasuries in profits (NPAT)

14% 42% 18%
16%
Extremely likely Somewhat likely More or less the same
36%
60% 53% 40% 49% 35% 26% 20% 17% 1% 0% Retail (Dec 2010) 23% 2% 0% Retail (Mar 2011) Retail (Jul 2011) 22% 16% 0% 0% 26% 8% 2% 0% 2% 0% 4% 47% 38% 71% 34% 36% 54%
Somewhat unlikely Extremely unlikely
0%
7% 1%
Retail (Dec 2011)
3% 1%
Corporate (Dec Corporate (Mar Corporate (Jul Corporate (Dec 2010) 2011) 2011) 2011)
Corporate community likely to make capital investments in the next 6 12 months
Corporates appear to be bullish about the economy as over 50% of them are expected to undertake capital investments in the next 6 12 months
100% 90%
80% 70% 60% 50% 40% 30% 20% 10% 0% Dec 2010 18% Mar 2011 12% 24% 12% 24% 4% Jul 2011 Dec 2011 27% 40% 24% 20% 8% 14%
Extremely likely
8% Somewhat likely
24% 38% More or less the same 36% 38% Extremely unlikely 8% 2% Somewhat unlikely
20%
Investors prefer financial advisors and personal network
Retail investors prefer financial advisors (20%) and personal network (26%) as a source of information for making financial decisions. Retail investors using advisory services of brokers have fallen by 8 percentage points over the year.
30% 27% 25% 19% 18% 18% 20% 19% 18% 16% 15% 12% 11% 11% 10% 8% 9% 7% 5% 6%
Dec 2010
Mar 2011
Jul 2011
Dec 2011
26% 26% 25% 24%
20%
13%
11% 10%
7%
9% 8%
9% 6%
5%
0% Broker services Financial advisor Bank relationship manager News & financial media Online resources Personal network Personal research
Thank you
Annexure
Indices by city December 2011 (Wave IX)

Dec 2011 Delhi/NCR
Retail Confidence Index Improvement in Indian economic situation Improvement in investment market environment and atmosphere Improvement in global economic environment Increase in BSE Sensex Appreciation in investment portfolio Change in amount of investments
Mumbai 148.0 160.2 149.6
Kolkata 124.5 125.0 125.8
Chennai 124.9 131.2 137.1
Bengaluru 125.2 136.0 130.1
Pune 128.4 132.2 133.8
Hyderabad 151.9 158.0 146.0
Ahmedabad 110.0 69.0 113.8
140.8 149.0 144.5
126.9
145.8 137.8 140.5
144.7
146.7 144.4 142.4
118.8
128.3 118.5 131.0
123.1
122.8 129.6 105.4 Dec 2011
121.9
129.3 132.1 102.0
125.8
123.9 131.9 122.9
156.3
151.8 161.3 138.3
110.5
123.8 129.3 113.4
Delhi/NCR
IFA Confidence Index Improvement in Indian economic situation Improvement in investment market environment and atmosphere Improvement in global economic environment Increase in BSE Sensex Appreciation in investment portfolio Change in amount of investments
Mumbai 106.2 101.9 92.6 77.8 114.8 122.2
Kolkata 120.2 113.5 115.4 103.8 132.7 126.9
Chennai 115.1 120.3 109.5 97.3 124.3 117.6
Bengaluru 119.6 116.1 103.6 107.1 116.1 126.8
Pune 117.5 112.1 113.8 108.6 120.7 119.0
Hyderabad 120.8 112.5 123.6 112.5 112.5 125.0
Ahmedabad 116.9 124.2 116.7 100.0 107.6 115.2
139.1 146.2 128.8 100.0 142.3 157.7
159.6
127.8
128.8
121.6
148.2
131.0
138.9
137.9
Indices by city July 2011 (Wave VIII)

July 2011 Delhi/NCR
Retail Confidence Index Improvement in Indian economic situation Improvement in investment market environment and atmosphere Improvement in global economic environment Increase in BSE Sensex Appreciation in investment portfolio Change in amount of investments 158.4 165.0 158.1 150.2 162.7 156.9 157.2
Mumbai
135.0 118.2 123.5 136.9 132.8 144.2 154.4
Kolkata
137.7 141.4 139.9 133.3 143.2 133.3 134.8
Chennai
143.5 142.2 136.7 140.4 148.8 146.4 146.7
Bengaluru
126.9 135.5 124.1 123.0 133.3 130.0 115.1
Pune
136.1 141.0 136.3 129.5 133.2 137.3 139.3
Hyderabad
125.8 132.2 121.0 113.9 130.0 125.7 132.2
Ahmedabad
137.7 133.7 138.4 146.8 135.4 133.4 138.4
July 2011 Delhi/NCR

IFA Confidence Index Improvement in Indian economic situation Improvement in investment market environment and atmosphere Improvement in global economic environment Increase in BSE Sensex Appreciation in investment portfolio Change in amount of investments 138.8 140.6 131.3 114.1 142.2 145.3 159.4
Mumbai
129.9 131.5 131.5 98.9 135.9 141.3 140.2
Kolkata
132.1 124.2 131.8 97.0 136.4 151.5 151.5
Chennai
140.1 145.2 148.4 104.8 145.2 135.5 161.3
Bengaluru
140.6 140.8 132.9 111.8 146.1 144.7 167.1
Pune
135.1 132.8 131.0 112.1 139.7 143.1 151.7
Hyderabad
137.4 130.3 125.8 112.1 133.3 139.4 183.3
Ahmedabad
141.0 125.9 137.0 116.7 142.6 157.4 166.7
Indices by city March 2011 (Wave VII)

March 2011 Delhi/NCR
Retail Confidence Index Improvement in Indian economic situation Improvement in investment market environment and atmosphere Improvement in global economic environment Increase in BSE Sensex Appreciation in investment portfolio Change in amount of investments 151.5 154.2 151.7 147.3 151.7 153.5 150.2
Mumbai
130.2 132.9 128.3 107.1 123.8 139.8 149.0
Kolkata
133.5 143.5 134.8 128.8 130.5 130.3 133.0
Chennai
151.9 156.7 152.7 155.2 154.2 143.6 146.1
Bengaluru
147.2 161.6 144.1 152.5 143.6 143.3 137.9
Pune
136.5 143.2 138.8 119.5 136.1 139.0 142.2
Hyderabad
135.4 144.8 135.7 120.7 142.1 134.0 135.2
Ahmedabad
150.0 159.2 148.8 137.1 144.2 153.2 157.8
March 2011 Delhi/NCR

Mumbai
145.6 146.9 145.3 123.4 148.4 148.4 160.9
Kolkata
130.3 110.0 111.7 96.7 140.0 153.3 170.0
Chennai
150.3 160.0 156.7 131.7 140.0 145.0 168.3
Bengaluru
131.4 130.0 128.3 105.0 126.7 125.0 173.3
Pune
137.2 136.7 141.7 116.7 136.7 138.3 153.3
Hyderabad
139 137.1 146.8 106.5 130.6 145.2 167.7
Ahmedabad
132.8 131.7 131.7 120.0 140.0 131.7 141.7
Indices by city December 2010 (Wave VI)

December 2010 Delhi/NCR
Retail Confidence Index Improvement in Indian economic situation Improvement in investment market environment and atmosphere Improvement in global economic environment 164.6 169.8 162.6 161.6
Mumbai
165.3 167.5 168.0 165.1
Kolkata
149.2 162.4 151.0 147.3
Chennai
161.9 170.3 161.7 158.6
Bengaluru
146.8 156.2 148.1 144.3
Pune
176.3 184.4 174.1 181.0
Hyderabad
152.0 165.9 150.2 158.2
Ahmedabad
159.8 167.3 167.5 140.0

Appreciation in investment portfolio Change in amount of investments
165.0
166.7 162.1
164.2
162.7 163.9
155.8
140.5 137.9
157.5
158.4 165.0
145.5
144.5 142.4
180.2
181.2 156.6
150.5
151.0 136.2
164.0
164.3 155.6
December 2010 Delhi/NCR

Mumbai
154.0 154.8 151.6 127.4 154.8 161.3 174.2
Kolkata
139.0 145.7 131.4 124.3 131.4 148.6 152.9
Chennai
145.8 154.7 134.4 118.8 126.6 160.9 179.7
Bengaluru
151.7 148.3 146.7 125.0 150.0 156.7 183.3
Pune
152.2 143.5 148.4 124.2 148.4 167.7 180.6
Hyderabad
125.9 124.1 129.6 105.6 111.1 135.2 150.0
Ahmedabad
146.1 148.6 138.9 134.7 144.4 152.8 156.9
Indices by city September 2010 (Wave V)

September 2010 Delhi/NCR
Mumbai
163.5 169.1 168.7 136.2
Kolkata
151.3 158.4 153.1 148.6
Chennai
169.0 176.3 170.8 165.7
Bengaluru
156.3 162.5 158.6 151.0
Pune
151.5 158.3 152.9 127.0
Hyderabad
162.5 177.9 179.4 166.2
Ahmedabad
167.7 170.1 167.2 161.2

166.0
152.2 155.2
169.8
165.4 171.7
154.6
147.1 146.2
171.5
159.4 170.3
161.5
150.0 154.4
162.0
155.9 152.9
163.2
151.7 136.5
172.4
165.9 169.7

Mumbai
156.3 160.9 151.6 107.8 159.4 178.1 179.7
Kolkata
149.7 143.3 150.0 120.0 163.3 156.7 165.0
Chennai
166.4 176.7 165.0 135.0 168.3 170.0 183.3
Bengaluru
158.3 160.6 163.6 128.8 165.2 157.6 174.2
Pune
157.1 153.0 156.1 122.7 156.1 166.7 187.9
Hyderabad
155.8 145.0 155.0 110.0 165.0 187.5 172.5
Ahmedabad
161.6 169.4 161.3 116.1 179.0 171.0 172.6
Indices by city June 2010 (Wave IV)

June 2010 Delhi/NCR
Mumbai
152.7 155.5 157.6 148.8
Kolkata
148.9 161.5 152.5 143.4
Chennai
158.9 165.4 162.2 155.0
Bengaluru
146.8 143.8 155.0 147.5
Pune
143.6 149.5 144.3 133.5
Hyderabad
129.0 157.8 137.3 118.8
Ahmedabad
158.9 165.4 162.2 155.0

160.4
153.6 157.5
150.2
150.2 153.7
150.5
146.3 139.5
156.7
159 155.2
151.0
147.3 136.6
144.3
144.1 145.8
144.0
105.8 110.8
156.7
159.0 155.2
June 2010 Delhi/NCR

Mumbai
142.5 145.0 147.5 113.8 138.8 147.5 162.5
Kolkata
143.6 148.3 140.0 96.7 146.7 155.0 175.0
Chennai
145.8 148.4 148.4 106.3 148.4 151.6 171.9
Bengaluru
141.7 159.4 148.4 142.2 98.4 148.4 153.1
Pune
135.2 162.9 145.2 143.5 100.0 135.5 124.2
Hyderabad
134.4 165.0 145.0 135.0 95.0 130.0 136.7
Ahmedabad
138.3 160.0 145.0 141.7 95.0 138.3 150.0
Indices by city February 2010 (Wave III)

February 2010 Delhi/NCR
Mumbai
161.7 165.5 158.5 156.1
Kolkata
137.2 137.0 143.9 136.3
Chennai
166.2 176.4 164.2 157.5
Bengaluru
150.5 151.9 149.0 146.6
Pune
152.9 158.3 156.4 151.7
Hyderabad
101.5 136.9 110.4 88.4
Ahmedabad
155.7 169.8 174.5 149.3

152.6
159.0 128.9
167.2
165.7 157.2
138.0
134.4 133.5
168.7
164.2 166.4
149.0
155.8 150.5
152.4
146.9 151.7
130.4
62.1 80.7
161.0
141.0 138.8
February 2010 Delhi/NCR

Mumbai
142.5 145.0 147.5 113.8 138.8 147.5 162.5
Kolkata
150.3 156.7 146.7 125.0 148.3 153.3 171.7
Chennai
152.5 153.3 148.3 121.7 153.3 156.7 181.7
Bengaluru
146.0 167.7 140.3 150.0 129.0 137.1 151.6
Pune
140.3 178.3 146.7 136.7 110.0 138.3 131.7
Hyderabad
143.9 158.3 148.3 143.3 123.3 145.0 145.0
Ahmedabad
150.6 178.3 160.0 155.0 121.7 141.7 146.7
Indices by city September 2009 (Wave II)

Mumbai
148.9 154.7 151.2 147.0
Kolkata
141.2 146.4 140.8 134.5
Chennai
163.6 169.7 161.2 159.5
Bengaluru
157.2 159.2 160.4 160.1
Pune
143.6 146.8 141.6 131.8
Hyderabad
130.3 140.9 131.5 119.0
Ahmedabad
130.5 133.4 135.1 128.5

153.4
141.9 141.2
148.0
148.3 144.1
146.4
141.5 137.4
169.9
159.7 161.4
153.1
155.8 154.3
154.7
139.4 147.0
139.4
132.0 119.0
127.7
128.2 130.0

Mumbai
154.8 160.0 160.0 134.4 155.6 163.3 155.6
Kolkata
145.2 145.2 140.3 133.9 141.9 154.8 154.8
Chennai
151.4 148.3 153.3 126.7 148.3 156.7 175.0
Bengaluru
146.9 160.0 155.0 143.3 123.3 145.0 155.0
Pune
149.4 160.0 158.3 145.0 123.3 158.3 151.7
Hyderabad
143.8 154.2 147.9 158.3 129.2 125.0 147.9
Ahmedabad
153.2 167.7 162.9 162.9 116.1 159.7 150.0
Indices by city July 2009 (Wave I)

July 2009 Delhi/NCR
Mumbai
142.5 149.0 145.0 132.0
Kolkata
144.6 149.5 146.0 141.8
Chennai
160.2 166.2 157.7 156.3
Bengaluru
131.7 131.1 134.5 126.6
Pune
149.6 154.6 152.1 139.9
Hyderabad
98.1 102.7 101.7 96.5
Ahmedabad
137.2 137.9 136.0 133.7

143.0
135.9 140.5
141.0
144.3 144.0
144.8
144.8 140.8
160.8
159.4 160.8
133.0
130.2 134.5
155.5
150.4 145.0
103.5
99.8 84.3
139.5
137.9 138.3
July 2009 Delhi/NCR

Mumbai
142.5 149.0 145.0 132.0 141.0 144.3 144.0
Kolkata
144.6 149.5 146.0 141.8 144.8 144.8 140.8
Chennai
160.2 166.2 157.7 156.3 160.8 159.4 160.8
Bengaluru
131.7 131.1 134.5 126.6 133.0 130.2 134.5
Pune
149.6 154.6 152.1 139.9 155.5 150.4 145.0
Hyderabad
98.1 102.7 101.7 96.5 103.5 99.8 84.3
Ahmedabad
137.2 137.9 136.0 133.7 139.5 137.9 138.3
Indices Overall
Jul 2009 Sep 2009 Feb 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jul 2011 Dec 2011 Retail Advisor Corporate 138.3 136.0 133.5 145.1 151.7 142.5 147.1 145.9 130.7 151.7 135.4 134.0 160.1 144.1 131.8 159.5 147.2 132.2 142.0 131.5 123.5 137.5 124.9 109.0 131.5 115.0 127.2
Survey Methodology
Interviews - face-to-face, online and telephone with investors and advisors in Delhi / NCR, Kolkata, Ahmedabad, Mumbai, Pune, Hyderabad, Bengaluru and Chennai
Screeners to capture respondent profile

Retail: Gender, location, age, occupational status, sector of engagement, liquid assets, investment activity in the past year Corporate: Treasury size, years of treasury experience and treasury activity in the past year
Advisors: Extent of distribution reach, location (for IFAs)
Six index questions to compute indices - respondents confidence, over the next six months

Improvement in the Indian economic situation, general Investment market environment and atmosphere, global economic situation BSE Sensex increasing from current levels Prospect of self (retail and corporate) / clients (advisors) investment portfolio appreciating and
Increase / decrease in investments (self - retail and corporate, clients advisors)
Other questions primary source of investment information, new capital investment projects, types of financial advisory services rendered, preferred investment destination, positive and negative economic indicators, interpretation of a long term invest ment, expected percentage of annual return, likelihood of non-investment income increasing, and range BSE Sensex will trade at in December 2011,preferred sector for investment, effect of RBIs regulation on limiting investment in liquid funds on corporate s.
current survey conducted between 23rd November 4th December, 2011
Index Construction Methodology

Three indices constructed in a similar manner from the six Index questions posed to all
Each Index question assigned a point between 0 and 200

Extremely likely - 200 points Somewhat likely 150 points More or less the same as current 100 points Somewhat unlikely 50 points Extremely unlikely 0 points
All six Index questions carry equal weight

Sub indices computed for each Index question, weighted by number of responses Average of the six sub indices is the overall Index for the category / segment / city
The Advisor Confidence Index equally weights the Bank Confidence Index, N/RDs Confidence Index and the IFA Confidence Index
indices at any point, can range from 0 to 200; 200 being the highest possible confidence
Respondent Sample - Retail, Corporate & Advisor
Eligibility
Retail

Employees from media, advertising & marketing, PR, research and financial websites excluded Employees and immediate relatives of J.P. Morgan Asset Management and ValueNotes not eligible for participation Investment experience > 2 years Age >=22 and <=65
>= INR 2 lakhs in wallet size

Invested in stocks, mutual funds, bonds, foreign currency, certificate of deposits, warrants or derivative products in the last year Actively save for investments, whether regularly or once in a while
Corporate
Treasury size > =INR 10 lakhs
Treasury experience >= 2 years
Advisors

Distribute financial products >= 2 years of experience in financial services N/RDs with nation wide reach
Retail respondent profile
1,623 retail investors from the selected cities surveyed
Retail By city
Retail By wallet size
Delhi / NCR
15%
12%
Mumbai Kolkata 14%

Chennai
6%
12% 26%
INR 2 to 5 lakhs
INR 5 to 10 lakhs
12%
INR 10 to 25 lakhs Bengaluru 22%
12% 12%
11%
12%
Pune
INR 25 to 50 lakhs
Hyderabad Ahmedabad
34%
INR 50 lakhs and above
Corporate respondent profile
Treasury size represents investments excluding strategic equity holdings and hedging investments
Corporate By City
Corporate By treasury size
8%
10%
4% 0%
Delhi / NCR 26%

Mumbai Kolkata Chennai
0%
8%
8%
INR 10 lakhs 100 lakhs (INR 1 crore)

INR 1 50 crores
44%
6%
Bengaluru 12%
INR 50 150 crores

INR 150 500 crores
Pune Hyderabad 34% Ahmedabad

40%
INR 500 crores and above
Advisor respondent profile
Advisors include 20 banks, 20 National / Regional Distributors (N/RDs) and 242 IFAs from the selected cities Advisor sentiment equally weighted across the three categories
IFAs By City
Delhi / NCR
14% 11%
Mumbai 11%
15% 11%
Kolkata Chennai Bengaluru

Pune
12% 15%
11% Hyderabad Ahmedabad
Advisory services profile
Financial planning & advice (86%) is the top service offered by advisors followed by portfolio management services (64%)
Basic tax planning Capital market advice Financial product advice Financial planning & advice Portfolio management services None of the above Others 41% 47%
61%
86% 64%
0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
0%
Disclaimers / Risk Factors
Statutory details: Sponsor: JPMorgan Asset Management (Asia) Inc. Trustee: JPMorgan Mutual Fund India Private Limited, a company incorporated under the Companies Act, 1956. Asset Management Company: JPMorgan Asset Management India Private Limited, a company incorporated under the Companies Act, 1956. JPMorgan Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, by JPMorgan Asset Management (Asia) Inc., liability restricted to initial contribution of Rs.1 lakh. Risk Factors / Disclaimers: Mutual fund investments are subject to market risks. Please read the Offer Document, Statement of Additional Information and Scheme Information Document carefully before investing.
The information contained herein is provided based on a public survey. Although we endeavour to ensure that the information is as current and accurate as possible, errors do occasionally occur. Therefore, we cannot guarantee the accuracy and adequacy of the information. Readers should, wherever possible, verify the information before acting on it.
This information is based on our assumptions and interpretations of the survey conducted. No part of our compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed herein. Be aware that our assumptions and interpretations are partially based on our observation of participants past behavior. Do not base your actions on the materi al so provided. These observations will change if different assumptions and interpretations are applied for the purpose of preparing this survey report.
Research Methodology
Retail investors, corporate investors and advisors were surveyed through a combination of face-to-face interviews, online surveys (through www.valuenotes.com) and telephone interviews. The surveys were conducted in selected Indian cities -Delhi / NCR, Kolkata, Ahmedabad, Mumbai, Pune, Hyderabad, Bengaluru and Chennai. The number of responses to each question is multiplied by the respective confidence-level point and these are aggregated at each Index question level. Sub indices are calculated for each of these six Index questions, which is the arithmetical mean of the aggregates. The arithmetical mean of the sub indices forms the Overall Confidence Index for that respondent category. The Advisor Confidence Index gives equal weights to the Bank Confidence Index, ND Confidence Index and the IFA Confidence Index to arrive at the overall advisor sentiment. The Confidence Index, at any given point can vary between 0 and 200. 200 denotes the highest level of confidence in improvement from current conditions, 100 denotes a neutral sentiment and 0 denotes an extremely negative outlook.
Accuracy or Adequacy of Information The information contained herein is provided based on a public survey. Although we endeavour to ensure that the information is as current and accurate as possible, errors do occasionally occur. Therefore, we cannot guarantee the accuracy and adequacy of the information. Readers should, wherever possible, verify the information before acting on it. Interpretations and assumptions which may differ from person to person This information is based on our assumptions and interpretations of the survey conducted. No part of our compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed herein. Be aware that our assumptions and interpretations are partially based on our observation of participants past behavior. Do not base your actions on the material so provided. These observations will change if different assumptions and interpretations are applied for the purpose of preparing this survey report. Reproduction of material is prohibited unless approval is taken Information provided in this survey report is with the intent that it be readily available for personal and public non-commercial use and may be reproduced, in part or in whole and by any means, without charge or further permission from J. P. Morgan Asset Management. We only ask that Users exercise due diligence in ensuring the accuracy of the materials reproduced; J. P. Morgan Asset Management be identified as the source; and, the reproduction is not represented as an official version of the materials reproduced, nor as having been made, in affiliation with or with the endorsement of J. P. Morgan Asset Management. Our Corporate logo may not be used for any purpose without explicit authorization. Reproduction of material included in this survey report, in whole or in part, for the purposes of commercial distribution is prohibited except with written permission from J. P. Morgan Asset Management. Through the permission granting process, J. P. Morgan Asset Management helps ensure individuals/organizations wishing to reproduce materials for commercial purposes have access to the most accurate, up-to-date versions. To obtain permission to reproduce materials on this site for commercial purposes, please contact: Marketing and Communications, JPMorgan Asset Management India Private Limited, JP Morgan Towers, Off CST Road, Kalina, Santacruz East, Mumbai.

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