JP MORGAN Little Book

4Q
1Q | 2015
2013
AsAsofofSeptember
December 30,
31, 2013
2014
Guide to the Markets
Global Market Insights Strategy Team
Americas
Europe
Asia
Dr. David P. Kelly, CFA

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

Milan
Geoff Lewis
Hong Kong
Anastasia V. Amoroso, CFA

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

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

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

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

London
Hannah J. Anderson
New York
Alexander W. Dryden
London
Abigail B. Dwyer
New York
Nandini Ramakrishnan
London
Past performance is no guarantee of comparable future results. For China and Australia distribution, please note this
communication is for intended recipients only and is for wholesale clients only in Australia. For details, please refer to the full
disclaimer at the end. Unless otherwise stated, all data is as of December 31, 2014 or most recently available.
Page Reference
Equities
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
S&P 500 Index at Inflection Points

Returns and Valuations by Style
Returns and Valuations by Sector
Stock Valuation Measures: S&P 500 Index
Corporate Profits and Leverage
Sources of Earnings per Share Growth
Equity Performance in Bull Markets
Interest Rates and Equities
Deploying Corporate Cash
y
Declines
Annual Returns and Intra-year
Equity Correlations and Volatility
Stock Market Since 1900
Economy
16.
17.
18.
19.
20.
21.
22.
23.
24.
25
25.
26.
27.
28.
29.
30.
Interest Rates and Inflation

The Fed and Interest Rates
Shape of the Yield Curve
Global Monetary Policy
Sources of Bond Returns
36.
37.
38.
39.
40.
41.
Fixed Income Yields and Returns

Global Fixed Income
Municipal Finance
High Yield Bonds
Emerging Market Debt
Fixed Income Sector Returns
International
Page 16
Economic Growth and the Composition of GDP

Consumer Finances
Credit Conditions
Cyclical Sectors
Residential Real Estate
Long-term Drivers of Economic Growth
Federal Finances
Unemployment and Wages
Labor Market Perspectives
Employment and Income by Educational Attainment
Inflation
Trade and the U.S. Dollar
Energy: Supply, Demand and Prices
Energy Price Impacts
Consumer Confidence and the Stock Market
Fixed Income
31.
32.
33.
34.
35.
Page 4
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
Global Equity Markets

International Equity Earnings and Valuations
Global Economic Growth
Manufacturingg Momentum
Sovereign Debt Stresses
Europe: Cyclical Headwinds and Tailwinds
Europe: Unemployment, Inflation, and Credit Markets
Japan: Economic Snapshot
China: Economic and Credit Growth
Demographics and Development
Emerging Market Currencies
Emerging Market Equities
Global Equity Valuations: Developed Markets
Global Equity Valuations: Emerging Markets
Asset Class
g 31
Page
56.
57
57.
58.
59.
60.
61.
62.
63.
64
64.
65.
66.
67.
Page 42
Asset Class Returns

Correlations and Volatility
Alternative Asset Class Returns
Fund Flows
Yield Alternatives: Domestic and Global
Global Real Assets
Global Commodities
Life Expectancy and Pension Shortfall
Historical Returns by Holding Period
Diversification and the Average Investor
Cash Accounts
Corporate DB Plans and Endowments
Page 56
S&P 500 Index at Inflection Points

S&P 500 Index
Characteristic
Equities
2,200
Mar-2000
Oct-2007
Dec-2014
1,527
25
25.6x
6x
1.1%
6.2%
1,565
15 2x
15.2x
1.8%
4.7%
2,059
16 2x
16.2x
1.9%
2.2%
Index level
P/E ratio (fwd.)
(fwd )
Dividend yield
10-yr. Treasury
2,000
1,800
2 059
2,059
Oct. 9, 2007
P/E (fwd.)
(fwd ) = 15.2x
15 2x
Mar. 24
Mar
24, 2000
P/E (fwd.) = 25.6x
1,565
1,527
1,600
Dec. 31, 2014

P/E (fwd.) = 16.2x
+101%
1,400
+106%
+204%
-57%
1,200
-49%
1,000
Dec. 31, 1996
P/E (fwd.) = 16.0x
741
800
Mar. 9, 2009
P/E (fwd.) = 10.3x
Oct. 9, 2002
P/E (fwd.) = 14.1x
677
777
600
'97
97
'98
98
'99
99
'00
00
'01
01
'02
02
'03
03
'04
04
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
'11
11
'12
12
Source: Standard & Poors, First Call, Compustat, FactSet, J.P. Morgan Asset Management.
Dividend yield is calculated as the annualized dividend rate divided by 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 12/31/14.
'13
13
'14
14
Returns and Valuations by Style
4.9%
4.8%
6.1%
9.4%
5.9%
9.7%
5.8%
10.1%
Blend
Growth
13.5%
13.7%
13.0%
14.7%
4.2%
13.2%
4.9%
11.9%
5.6%
Value
Large
5.0%
Value
Mid
Growth
Current P/E vs. 20-year avg. P/E
Small
Blend
Mid
Value
Large
2014
Small
Large
Mid
Small
Equities
4Q14
15.5
Blend
16.2
14.0
16.4
18.7
16.1
18.6
14.2
16.4
21.0
20.0
16.5
18.1
14.5
Growth
21.9
20.0
17.3
21.5
Current P/E as % of 20-year avg. P/E
Large
42.1%
54.0%
70.1%
Large
254.4% 244.2% 246.9%
68 5%
68.5%
70 0%
70.0%
69 6%
69.6%
Mid
d
330 1% 310.3%
330.1%
310 3% 292.0%
292 0%
48.1%
57.6%
66.7%
Small
Value
Blend
Growth
266.2% 279.9% 293.3%
Value
Blend
Growth
Large
Growth
110.1%
100.6%
89.0%
Mid
Blend
E.g.: Large Cap Blend stocks are fairly

valued compared to historical average.
118.1%
112.7%
94.5%
Small
Value
Mid
d
Since Market Low (March 2009)
Small
Since Market Peak (October 2007)
113.1%
104.4%
93.3%
Source: Russell Investment Group, Standard & Poors, FactSet, 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 12/31/14, illustrating market returns
since the S&P 500 Index high on 10/9/07. Since Market Low represents period 3/9/09 12/31/14, illustrating market returns since the S&P
500 Index low on 3/9/09. Returns are cumulative returns, not annualized. For all time periods, total return is based on Russell-style indexes with the
exception of the large blend category, which is reflected by the S&P 500 Index. Past performance is not indicative of future returns. P/E ratios reflect
latest available data. Earnings estimates are as of November for Russell Indexes and as of December for Standard & Poors.
ex
In
d
50
0
10.4%
12.2%
10.1%
8.4%
4.5%
11.3%
12.1%
18.7%
6.6%
9.8%
10.5%
7.4%
2.3%
2.1%
2.1%
3.2%
0.1%
6.4%
3.2%
4.0%
3.0%
100.0%
100.0%
100.0%
2014
15.2
20.1
25.3
9.8
-7.8
9.7
16.0
3.0
29.0
6.9
13.7
4Q14
7.2
5.2
7.5
6.8
-10.7
8.7
8.2
-4.2
13.2
-1.8
4.9
-19.6
78.6
118.7
52.4
16.9
115.8
112.3
22.5
54.0
33.5
54.0
338.7
274.2
252.6
318.9
114.1
399.5
197.7
133.9
169.5
217.9
244.2
Beta to S&P 500
1.44
1.10
0.70
1.20
0.99
1.13
0.57
0.63
0.50
1.27
1.00
C
Correl
l to Treas.
T
Yields
Yi ld
0 20
0.20
0 03
0.03
-0.16
0 16
0 17
0.17
0 29
0.29
0 06
0.06
-0.19
0 19
-0.21
0 21
-0.50
0 50
0 12
0.12
0 04
0.04
Since Market Peak

(October 2007)
Since Market Low

(March 2009)
Forward P/E Ratio
13.6x
15.9x
17.2x
16.3x
16.5x
18.4x
19.1x
13.5x
17.4x
16.1x
16.2x
15-yr avg.
12.7x
20.6x
17.3x
17.0x
13.6x
18.5x
18.4x
16.9x
14.0x
16.0x
16.1x
Trailing P/E Ratio
16.8x
19.3x
24.4x
17.9x
12.8x
21.0x
22.5x
10.9x
19.9x
19.1x
18.6x
20-yr avg.
16.5x
26.0x
24.1x
20.3x
17.1x
19.3x
21.3x
19.8x
15.0x
19.5x
19.5x
Dividend Yield
1.8%
1.5%
1.4%
2.1%
2.9%
1.4%
2.5%
4.7%
3.5%
2.1%
1.9%
20-yr avg.
2.1%
0.7%
1.4%
1.7%
1.7%
0.9%
2.1%
4.2%
4.3%
2.1%
1.7%
Return (%)
14.2%
14.2%
13.7%
19.7%
28.3%
9.5%
Weight
S&
P
at
er
ia
ls
M
Ut
il
iti
es
es
Te
le
co
m
Co
n
s.
St
ap
l
Di
sc
r.
s.
Co
n
er
gy
En
du
st
ria
ls
In
ar
e
He
al
th
og
ol
Te
ch
n
16.6%
5.3%
29.9%
P/E
S&P Weight
Russell Growth Weight
Russell Value Weight
Div
v
Equities
Fi
na
nc
ia
ls
Returns and Valuations by Sector
Source: Standard & Poors, Russell Investment Group, FactSet, J.P. Morgan Asset Management.
All calculations are cumulative total return, not annualized, including dividends for the stated period. Since Market Peak represents period 10/9/07 12/31/14.
Since Market Low represents period 3/9/09 12/31/14. Correlation to Treasury Yields are trailing 2-year monthly correlations between S&P 500 sector price
returns and 10-year Treasury yield movements. Forward P/E Ratio is a bottom-up calculation based on the most recent S&P 500 Index price, divided by
consensus estimates for earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates. Trailing P/E ratios are bottom-up values
defined as month-end price divided by the last 12 months of available reported earnings. Historical data can change as new information becomes available.
Note that P/E ratios for the S&P 500 may differ from estimates elsewhere in this book due to the use of a bottom-up
bottom up calculation of constituent earnings (as
described) rather than a top-down calculation. This methodology is used to allow proper comparison of sector level data to broad index level data. Dividend
yields are bottom-up values defined as the annualized value of the most recent cash dividend as a percent of month-end price. Beta calculations are based
on 10 years of monthly price returns for the S&P 500 and its sub-indices. Betas are calculated on a monthly frequency over the past 10-years.
Past performance is not indicative of future returns.
Guide to the Markets U.S.

Data are as of 12/31/14.
Stock Valuation Measures: S&P 500 Index
Equities
U.S. Equity: Valuation Measures

Valuation
Measure
P/E
Description
Price to Earnings
CAPE
Div. Yield
Shiller's P/E
Dividend Yield
REY
Real Earnings Yield
P/B
P/CF
EY Spread
Historical Averages
5-year
1-year
ago
avg
avg.
Latest
10-year
avg
avg.
25-year
avg *
avg.
16.2x
15.4x
13.5x
13.8x
15.6x
27.3
25.5
22.5
22.9
25.3
1.9%
1.9%
2.0%
2.0%
2.1%
3.7%
3.7%
4.3%
3.3%
2.3%
P i tto Book
Price
B k
29
2.9
27
2.7
23
2.3
24
2.4
29
2.9
Price to Cash Flow

EY Minus Baa Yield
11.4
10.8
9.3
9.7
11.3
1.5%
1.6%
2.2%
1.3%
-0.7%
S&P 500 Index: Forward P/E Ratio
S&P 500 Earnings Yield vs. Baa Bond Yield
26x
14%
24x
S&P 500 Earnings Yield

(Inverse of fwd. P/E): 6.2%
12%
22x
20x
10%
18x
Current: 16.2x
16x
Average: 15.6x
14x
8%
6%
12x
4%
Moodys Baa Yield: 4.7%
10x
8x
'90
90
2%
'92
92
'94
94
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
'14
14
'90
90
'92
92
'94
94
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
Source: Standard & Poors, FactSet, Robert Shiller Data, FRB, J.P. Morgan Asset Management. Price to Earnings is price divided by consensus analyst
estimates of earnings per share for the next 12 months. Shillers P/E uses trailing 10-years of inflation adjusted earnings as reported by companies.
Dividend Yield is calculated as the trailing 12-month average dividend divided by price. Real Earnings Yield is defined as (trailing four quarters of reported
earnings/price) - year over year core CPI inflation. Price to Book Ratio is the price divided by book value per share. Price to Cash Flow is price divided by
NTM cash flow. EY Minus Baa Yield is the forward earnings yield (consensus analyst estimates of EPS over the next 12 months divided by price) minus
the Moodys Baa seasoned corporate bond yield. *P/CF is a 20-year avg. due to cash flow data availability.
'08
08
'10
10
'12
12
'14
14
Corporate Profits and Leverage

S&P 500 Earnings Per Share and Performance
Index level and quarterly operating earnings
Equities
$31
Profit Margins
11%
4Q14*: $30.50
S&P 500 Operating EPS % of Sales per Share**

After-Tax Adj
After-Tax,
Adj. Corp.
Corp Profits
Profits, % of GDP
10%
3Q14*:
10.1%
9%
$27
2Q07: $24.06
8%
3Q14:
8.8%
7%
$23
6%
5%
$19
4%
'60
'65
'70
'75
'80
'85
'90
'95
'00
'05
'10
Total Leverage
$15
S&P 500,
500 ratio of total debt to total equity
equity, quarterly
220%
$11
200%
180%
$7
160%
A
Average:
162%
140%
$3
4Q14:
100%
120%
100%
-$1
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
80%
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
Source: BEA, Standard & Poors, Compustat, J.P. Morgan Asset Management.
EPS levels are based on operating earnings per share. *Most recently available data is 3Q14 as 4Q14 is a Standard & Poors preliminary estimate. **S&P 500
Operating EPS % of Sales per Share fell to 0% in 4Q2008 and is adjusted on the chart. Past performance is not indicative of future returns.
'12
12
'14
14
Sources of Earnings per Share Growth

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

Margin
Revenue
Share count
40%
3Q14*
Q
3.6%
6.3%
0.1%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
3Q94
3Q96
3Q98
3Q00
3Q02
3Q04
3Q06
3Q08
3Q10
Source: Standard & Poors, Compustat, J.P. Morgan Asset Management.

EPS levels are based on operating earnings per share. *Most recently available data is 3Q14. Past performance is not indicative of future returns.
4Q2008, 1Q2010 and 2Q2010 reflect -101%, 92% and 51% growth in operating earnings, and are adjusted on the chart.
3Q12
3Q14
Equity Performance in Bull Markets

S&P 500 Performance and Average Valuation
S&P 500 Levels Near Market Highs
300%
90%
% of days during bull markets the S&P 500 is at and near record highs
Price returns to peak after crossing average real earnings yield
Equities
Returns to p
peak price
p
after average
g valuation
Returns before markets pass average valuation
240%
83% 84%
1991-2000
80%
78%
2002-2007
2009-Today
Average valuation is
defined as the average real
earnings yield of the S&P
500 from 1963 until today
70%
0%*
60%
83%
180%
50%
42%
40%
49%
120%
36%
33%
0%
30%
30%
4%
60%
20%
16%
15%
10%
29%
49%
73%
121%
59%
180%
101%
204%
'66
'70
'74
'82
'87
'90
'02
'09
0%
0%
Start of Bull Market
10
17%
13% 11%
New High
Within 1%
Within 5%
Percent of days during a Bull Market
spent at record highs
highs, or within a 1% or 5% range of the record high
Source: Standard & Poors, J.P. Morgan Asset Management.

Valuations are based on real earnings yield for the S&P 500 which is defined as (trailing four quarters of reported earnings/price) - year over year core
CPI inflation. Period after average valuation defined by 15-day moving average passing below average real earnings yield. *As depicted on the left hand
chart, the return to peak price for the current bull market is 0% as the S&P 500 has yet to cross its long run average real earnings yield. The S&P 500
would need to appreciate over 22% to reach its long-term average real earnings yield of 2.5%.
Data are as of 12/31/14
Interest Rates and Equities

Correlations Between Weekly Stock Returns and Interest Rate Movements
Weekly S&P 500 returns, 10-year Treasury yield, rolling 2-year correlation, May 1963 Dec. 2014
Equities
0.8
When yields are
below 5%,
5% rising
rates are
generally
associated with
rising stock
prices
0.6
Positive
relationship
between yield
movements
and stock
returns
Corre
elation Coefficient
0.4
Graph Key
Last 12 Months
1963 12 Months Ago
0.2
-0.2
Negative
relationship
between yield
movements
t and
d
stock returns
-0.4
-0.6
-0.8
0%
2%
4%
6%
8%
10%
10-Year
10
Year Treasury Yield
Source: Standard & Poors, U.S. Treasury, FactSet, J.P. Morgan Asset Management.
Returns are based on price index only and do not include dividends. Markers represent monthly 2-year correlations only.
11
12%
14%
16%
Deploying Corporate Cash

Corporate Growth
Equities
Corporate Cash as a % of Current Assets
S&P 500 companies cash and cash equivalents, quarterly
$bn, nonfarm nonfinancial capex, quarterly value of deals completed
32%
$1,800
30%
$1,700
$1,600
28%
$1,600
$1,400
26%
$1,500
$1,200
24%
$1,400
$1,000
22%
$1,300
$800
20%
$1,200
$600
18%
$1,100
$400
16%
$1,000
$200
14%
$900
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
$0
Cash Returned to Shareholders
60%
$39
$bn S&P 500 companies,

$bn,
companies rolling 4-quarter
4 quarter averages
$36
50%
40%
$1,800
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Dividend Payout Ratio

S&P 500 companies,
companies LTM
M&A Activity
Capital Expenditures
Dividends per Share
$160
$140
$33
$120
$30
$100
$27
$80
$24
30%
$60
$21
$18
Share Buybacks
$15
20%
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
$20
'00
00 '01
01 '02
02 '03
03 '04
04 '05
05 '06
06 '07
07 '08
08 '09
09 '10
10 '11
11 '12
12 '13
13 '14
14
Source: Standard & Poors, FRB, Bloomberg, FactSet, J.P. Morgan Securities, J.P. Morgan Asset Management. (Top left) Standard & Poors,
FactSet, J.P. Morgan Asset Management. (Top right) M&A activity is the quarterly value of officially agreed transactions and capital expenditures
are for nonfarm nonfinancial corporate business. (Bottom left) Standard & Poors, FactSet, J.P. Morgan Asset Management. (Bottom right) Standard
& Poors, Compustat, FactSet, J.P. Morgan Asset Management.
12
$40
Annual Returns and Intra-year Declines

S&P 500 Intra-year Declines vs. Calendar Year Returns
Despite average intra-year drops of 14.2%, annual returns positive in 27 of 35 years*
2014
Equities
40%
34
31
30%
27
26
26
30
27
26
23
20
20%
15
17
15
14
20
12
10%
-8
-7
-10
-8
-9
-8
-7
-6
-6
0
-3
-5
-9
-8
11
-11
-13
-17
-18
11
3
-2
-10%
13
13
-20%
26
-12
-17
-19
-20
-8
-10
-13
-7
-8
-6
-10
-10
-14
-7
-16
-17
-19
-23
-30%
-28
-30
-34
-34
-40%
40%
-38
-50%
-49
-60%
'80
'82
'84
'86
'88
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
Source: Standard & Poors, FactSet, J.P. Morgan Asset Management.

Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops from a peak to a trough during
the year. For illustrative purposes only. *Returns shown are calendar year returns from 1980 to 2014.
13
'10
'12
'14
Equity Correlations and Volatility

Sovereign Debt
Crisis
Large Cap Stocks

Correlations Among Stocks
Equities
70%
Great Depression /
World War II
60%
Cuban Missile Crisis
50%
Lehman
B k
Bankruptcy
t
1987 Crash
OPEC Oil
Crisis
40%
Tech Bust & 9/11
30%
20%
Dec. 2014: 37.4%
Average: 27.0
10%
0%
'26
'32
'38
'44
'50
'56
'62
Daily Volatility of DJIA
'68
'74
'80
'86
Volatility
y Measure 08 Peak
DJIA (Left)
3.30%
VIX (Right)
80.9
3.5%
3.0%
'92
Average
g
0.71%
20.0
'98
'04
'10
Latest
0.58%
19.2
90
75
DJIA vol. shown

in 3-month
moving average
2.5%
2.0%
60
45
1.5%
30
1.0%
15
0.5%
0.0%
0
'30
30
14
'35
35
'40
40
'45
45
'50
50
'55
55
'60
60
'65
65
'70
70
'75
75
'80
80
'85
85
'90
90
'95
95
'00
00
'05
05
'10
10
Source: (Top) Empirical Research Partners LLC, Standard & Poors, J.P. Morgan Asset Management. Capitalization weighted correlation of top 750 stocks by market
capitalization, daily returns, 1926 Sep. 1, 2014. (Bottom) CBOE, Dow Jones, J.P. Morgan Asset Management. DJIA volatility are represented as three-month moving
averages of the daily absolute percentage change in the Dow Jones Industrial Average.
Charts shown for illustrative purposes only. Guide to the Markets U.S.
Stock Market Since 1900

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

Data shown in log scale to best illustrate long-term index patterns.
Past performance is not indicative of future returns. Chart is for illustrative purposes only.
15
'60
'70
'80
'90
'00
'10
Economic Growth and the Composition of GDP

Components of GDP
Real GDP
Year-over-year % chg
3Q14 nominal GDP, trillions USD
10%
Real GDP
YoY % chg:
Econom
my
8%
QoQ % chg:
3Q14
$18
2.7%
5.0%
$16
$14
6%
Average:
3.0%
3.2% Housing
13.3% Investment Ex-housing
18.2% Govt Spending
$12
4%
$10
2%
$8
68 2% Consumption
68.2%
$6
0%
Expansion
Average:
2.3%
-2%
$4
$2
-4%
$0
- 2.9% Net Exports
-$2
-6%
'65
65
'70
70
'75
75
'80
80
'85
85
'90
90
'95
95
'00
00
'05
05
'10
10
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 second quarter of 2009.
16
Consumer Finances
Consumer Balance Sheet
3Q14, Trillions of dollars outstanding, not seasonally adjusted
$100
Total Assets: $
$95.4tn
3Q-07 Peak: $82.1tn

1Q-09
Q
Low: $67.0tn
$
Household Debt Service Ratio

Debt payments as % of disposable personal income, seasonally adjusted
14%
4Q07:
13 2%
13.2%
13%
$90
12%
Homes: 24%
Econom
my
$80
1Q80:
10.6%
4Q14**:
9.9%
11%
$70
$60
$50
Other Tangible: 6%
Deposits: 9%
9%
'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14
Household Net Worth

Billions USD,
USD not seasonally adjusted
Pension Funds: 21%

%
$40
$30
$20
10%
Other Financial
Assets: 39%
Other Non-revolving: 1%
Revolving*: 6%
Auto Loans: 7%
Other Liabilities: 9%
Student Debt: 9%
Total Liabilities: $14.1tn
2Q07:
$67,874
$90,000
$80,000
$70,000
$60,000
$50 000
$50,000
$40,000
$30,000
$10
Mortgages: 68%
$0
$20,000
$10,000
'90
90
'92
92
'94
94
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
Source: (Left) FRB, J.P. Morgan Asset Management. Data include households and nonprofit organizations. (Right) BEA, FRB, J.P. Morgan Asset
Management. *Revolving includes credit cards. **4Q14 household debt service ratio and 4Q14 household net worth are J.P. Morgan Asset Management
estimates. Values may not sum to 100% due to rounding.
17
4Q14**:
Q
$82,907
'08
08
'10
10
'12
12
'14
14
Credit Conditions
Common Equity as a % of Total Assets
Delinquency Rates
14%
12%
All FDIC insured institutions, 1934 2013
All banks, seasonally adjusted
2013:
11.1%
12%
8%
10%
Econom
my
Residential Mortgages
Consumer Loans
Commercial and Industrial Loans
10%
7.0%
6%
Average: 7.7%
8%
4%
6%
2 2%
2.2%
2%
4%
0.8%
0%
'34
'40
'46
'52
'58
'64
'70
'76
'82
'88
'94
'00
'06
'92
'12
Loan Growth
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Lending Standards for Approved Mortgage Loans
G th in
Growth
i loans
l
outstanding
t t di att commercial
i l bbanks,
k YoY,
Y Y seasonally
ll adjusted
dj t d
Average FICO score based on origination date
760
30%
Real Estate Loans
Nov. 2014:
12.8%
20%
10%
Nov. 2014:
744
740
720
0%
-10%
Nov. 2014:
2.7%
Commercial and Industrial Loans
680
-20%
-30%
'00
'01
'02
'03
'04
'05
'06
'07
'08
700
'09
'10
'11
'12
'13
'14
660
00 '01
01 '02
02 '03
03 '04
04 '05
05 '06
06 '07
07 '08
08 '09
09 '10
10 '11
11 '12
12 '13
13 '14
14
'00
Source: (Top left) FDIC, J.P. Morgan Asset Management. (Top right) Federal Reserve, FactSet, J.P. Morgan Asset Management. (Bottom left): Federal Reserve, FactSet, J.P.
Morgan Asset Management. (Bottom Right) McDash, J.P. Morgan Securitized Product Research, J.P. Morgan Asset Management.
All data reflect most recently available releases.
18
Cyclical Sectors
Manufacturing and Trade Inventories
Light Vehicle Sales
Days of sales, seasonally adjusted
Millions, seasonally adjusted annual rate

24
47
22
46
Dec. 2014:
16.8
20
18
Econom
my
16
45
44
43
42
Oct. 2014:
39.5
41
Average: 15.3
14
40
12
39
10
38
37
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Housing Starts
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Real Capital Goods Orders
Th
Thousands,
d seasonally
ll adjusted
dj t d annuall rate
t
N d f
Non-defense
capital
it l goods
d orders
d ex. aircraft,
i ft $ bn,
b seasonally
ll adjusted
dj t d
2,400
$75
$70
2,000
Nov. 2014:
61.0
$65
1,600
$60
A
Average:
1 348
1,348
1 200
1,200
$55
800
Average: 56.8
$50
Nov. 2014:
1,028
400
$45
$40
0
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
'14
14
'96
'98
'00
'02
'04
'06
'08
'10
Source: (Top left) BEA, FactSet, J.P. Morgan Asset Management. (Top right) Census Bureau, FactSet, J.P. Morgan Asset Management. (Bottom left) Census Bureau,
FactSet, J.P. Morgan Asset Management. (Bottom right) Census Bureau, FactSet, J.P. Morgan Asset Management.
Capital goods orders deflated using the producer price index for capital goods with a base year of 2004.
19
'12
'14
Residential Real Estate

Housing Affordability Index
Home Prices
Avg. mortgage payment as a % of household income
Indexed to 100, seasonally adjusted
40%
125
120
Case Shiller 20-city
3 %
35%
FHFA Purchase Only
30%
Average Existing Home
Econom
my
115
Nov. 2014:
12.1%
25%
20%
110
Average: 20.3%
15%
10%
105
'75
'78
'81
'84
'87
'90
'93
'96
'99
'02
'05
'08
'11
'14
Home Inventories
100
Millions annual rate

Millions,
rate, seasonally adjusted
4.5
95
4
90
3.5
Nov. 2014:
2.4
85
2.5
80
2
75
1.5
'94
94
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
'14
14
Sources: (Left) National Association of Realtors, Standard & Poors, FHFA, FactSet, J.P. Morgan Asset Management. (Top right) Census Bureau, J.P. Morgan Asset Management.
Monthly mortgage payment assumes the prevailing 30-year fixed-rate mortgage rates and average new home prices excluding a 20% down payment. (Bottom right) Census
Bureau, National Association of Realtors, J.P. Morgan Asset Management.
'05
05
'06
06
'07
07
20
'08
08
'09
09
'10
10
'11
11
'12
12
'13
13
'14
14
Long-term Drivers of Economic Growth

Gross Investment and Depreciation
Growth in Employment and Real Output Per Worker*
Private nonresidential fixed investment, % of GDP
Depreciation
Five year moving average of year-over-year % change
16%
Gross investment
spending
p
g
5%
Average growth
A
th
50 yr.
10 yr.
12%
4%
Econom
my
8%
4%
5 yr.
Employment
1.5%
0.5%
1.1%
Real Output
Per Worker
1.5%
1.1%
1.3%
GDP
3.0%
1.6%
2.4%
3%
Real Output Per Worker

0%
'90
'95
'00
'05
'10
Real Capital Stock Growth
2%
Nonresidential fixed assets,

assets year
year-over-year
over year % chg
5%
4%
3%
2%
1%
Employment Growth
2013: 1.6%
0%
1%
-1%
'70
'80
'90
1990
1995
2000
2005
2010
Source: BEA, BLS, FactSet, J.P. Morgan Asset Management.
*Labor Force includes the population age 16+ working or looking for work, Real Output Per Worker is calculated as real GDP growth minus civilian
employment growth. Averages are calculated as the annualized growth rate.
0%
21
'00
'10
Federal Finances
Federal Budget Surplus/Deficit
The 2015 Federal Budget
% of GDP, 1990 2024, 2014 CBO Baseline
CBO Baseline forecast, trillions USD

$4.0
T t l Spending:
Total
S
di
$3.8tn
$3 8t
Econom
my
$3.5
$3.0
-10%
10%
Other
$550bn (15%)
Borrowing:
$469bn (13%)
-8%
Other: $302bn (8%)
-4%
Net Int.: $251bn (7%)

Non-defense Disc.:
$506bn (13%)
$2.5
$2.0
$0.5
-6%
0%
Social Insurance:
$1,065bn (28%)
Defense:
$608bn (16%)
2%
4%
'90
'95
'00
'05
'10
'15
'20
% of GDP
GDP, 1940 2024,
2024 2014 CBO Baseline,
Baseline end of fiscal year
Income:
$1 526bn (41%)
$1,526bn
Forecast
120%
100%
2024:
2015:
77.2%
74.0%
80%
60%
Medicare & Medicaid:

$948bn (25%)
40%
$0.0
20%
Total Government Spending
Sources of Financing
'40
40
'48
48
'56
56
'64
64
'72
72
'80
80
'88
88
'96
96
'04
04
Source: U.S. Treasury, BEA, CBO, St. Louis Fed, J.P. Morgan Asset Management.
2015 Federal Budget is based on the CBOs August 2014 Baseline Budget Forecast. 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). 2015 numbers are CBO estimates as of August 2014.
22
'25
Federal Net Debt (Accumulated Deficits)
Social Security:
$887bn (24%)
$1.0
2015:
-2.6%
-2%
Corp.: $389bn (10%)

$1.5
Forecast
-12%
'12
12
'20
20
Unemployment and Wages

Civilian Unemployment Rate and
Year-over-Year Growth in Wages of Production and Non-Supervisory Workers
Seasonally adjusted, percent
12%
Oct. 2009:
10.0%
Econom
my
10%
Unemployment
8%
50-yr. Average: 6.1%

6%
Nov. 2014:
5.8%
49-yr. Average: 4.3%
4%
Nov. 2014:
2.2%
2%
Wage Growth
0%
'70
70
Source: BLS, FactSet, J.P. Morgan Asset Management.
23
'80
80
'90
90
'00
00
'10
10
Labor Market Perspectives

Employment Total Private Payroll
Labor Force Participation Rate
Total job gain/loss (thousands)

600
68%
8.8mm
jobs lost
400
67%
200
66%
65%
Econom
my
-200
10.9 mm
jobs
gained
-400
-600
64%
63%
-800
-1,000
Nov. 2014: 62.8%
62%
'05
'06
'07
'08
'09
'10
'11
'12
'13
'90
'14
Net Job Creation Since Feb. 2010 Millions of Jobs
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Ratio of Unemployed to Job Openings

7
3 mm
3.2
2.9
2 mm
2.1
1.9
1 mm
0.9
0 mm
-0.5
-1 mm
Info. Fin & Mfg. Trade & Leisure,
Edu. &
Mining &
Bus. Svcs.
Trans.
Hospt. & Health Svcs. Construct.
Other Svcs.
24
Gov't
Oct. 2014: 1.9

'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Employment and Income by Educational Attainment

Unemployment Rate by Education Level
Average Annual Earnings by Highest Degree Earned

Full-time workers aged 18 and older, 2012, USD
18%
$90,000
Less than High School Degree

High School No College
Some College
College or Greater
16%
$80,000
14%
Econom
my
$84,852
+28K
$70,000
Nov 2014:
Nov.
8.5%
12%
Nov. 2014:
5.6%
10%
$56,665
$60,000
$50,000
+26K
8%
$40,000
6%
$30,000
$30,627
Nov. 2014:
4.9%
4%
$20,000
,
Nov. 2014:
3.2%
2%
0%
$0
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
Source: BLS, Census Bureau, FactSet, J.P. Morgan Asset Management.

Unemployment rates shown are for civilians aged 25 and older.
25
$10,000
'12
'14
High School Graduate
Bachelor's
Bachelor
s Degree
Advanced Degree
Inflation
CPI and Core CPI
CPI
Components
% change vs. prior year, seasonally adjusted

15%
Headline CPI
Core CPI
Headline PCE
Core PCE
Econom
my
12%
50
50-yr.
A
Avg.
N
Nov.
2014
4.2%
4.1%
3.6%
3.5%
1.3%
1.7%
1.2%
1.4%
9%
6%
3%
Weight in
CPI
12-month Change
F d & Bev.
Food
B
14 1%
14.1%
3 2%
3.2%
Housing
32.3%
3.0%
Apparel
3.5%
-0.3%
Transportation
p
5.6%
1.8%
Medical Care
5.8%
2.3%
Recreation
2.0%
-2.8%
Edu. & Comm.
0.6%
-4.0%
Other
1.6%
1.5%
100.0%
1.3%
Energy
8.9%
-4.8%
Food
14.1%
3.2%
Core CPI
77.1%
1.7%
Headline CPI
Less:
0%
-3%
'65
'70
'75
'80
'85
'90
'95
'00
'05
'10

CPI used is CPI-U and values shown are % change vs. one year ago and reflect November 2014 CPI data. CPI component weights are as of November 2014.
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.
26
Trade and the U.S. Dollar

Current Account Balance and Oil Imports, % of GDP
-7%
U.S. Dollar Index

Monthly average of nominal trade-weighted exchange index: major currencies
115
4Q05:
-6.2%
F
Forecast*
*
110
-6%
Econom
my
105
-5%
100
95
-4%
90
-3%
C
Current
tA
Accountt B
Balance
l
3Q14:
-2.3%
Mar 2009:
Mar.
2009
84.0
85
80
-2%
2Q08:
2Q08
-3.1%
-1%
Net Oil Imports
75
3Q14:
-1.0%
'99
99
'01
01
'03
03
'05
05
'07
07
'09
09
'11
11
'13
13
Source: BEA, EIA, Federal Reserve, FactSet, J.P. Morgan Asset Management.
Mar. 2008:
70.3
70
65
0%
'15
15
'96
'98
'00
'02
'04
*Oil imports as a percent of GDP is an EIA forecast. **December U.S. Dollar index value is a J.P. Morgan Asset Management estimate.
27
Dec 2014**:
Dec.
2014 :
84.3
'06
'08
'10
'12
'14
Energy: Supply, Demand and Prices

Change in Production and Consumption of Oil
Production, consumption and inventories, million barrels per day
Price of Oil
Brent crude, nominal prices , USD/bbl

$160
2013
2014*
2014
2015*
2015
Production
Growth since
2013
$140
$120
Econom
my
$100
U.S.
12.3
13.9
14.9
20.7%
OPEC
36.0
36.0
35.9
-0.3%
Other
41.8
42.1
41.9
0.4%
Global
90.2
92.0
92.8
2.9%
$80
$60
Dec. 2014:
$57.33
$40
$20
$0
'86
'88
'90
'92
'94
'96
'98
'00
U.S. Natural Gas Production**
Consumption
Trillions of cubic feet

feet, USD
U.S.
19.0
19.0
19.1
0.7%
35
Europe
13.6
13.5
13.4
-1.9%
30
Japan
4.5
4.4
4.2
-6.4%
25
China
10.6
11.0
11.3
6.9%
20
Other
42.8
43.6
44.3
3.6%
15
Global
90.5
91.4
92.3
2.0%
10
'02
'04
'06
'08
'10
'12
'14
EIA
Forecast
Gbl. Natural Gas Prices

Japan
Germany
U.S.
$13.86
$10.16
$3.65
Shale Gas
Other***
Inventory Change
-0.3
0.5
0.4
'95
95
'00
00
'05
05
'10
10
'15
15
'20
20
Source: EIA, FactSet, J.P. Morgan Asset Management. *Forecasts are from EIA Annual Energy Outlook and start in 2013. **Production numbers as of 2013. ***Other includes
conventional on and offshore natural gas drilling, tight gas, and coalbed methane. Natural gas prices are $/mmbtu and are as of December 2014.
28
'25
25
Energy Price Impacts

Percent of Income Spent on Gasoline and Motor Oil
Before-tax income quintile, percent of spending, 2013
Oil Importers and Exporters

Net imports as a percent of GDP, 2013
14%
Imports as a % of GDP
12%
-14%
8%
-8%
10%
-6%
6%
Canada
8%
-4%
4%
-2%
2%
0%
2%
4%
6%
-3.6%
U.K.
0.9%
4%
2%
0%
Lowest
Second
Third
Fourth
Highest
Develop
ped
Econom
my
6%
Gasoline Prices
United States all city average

average, USD per gallon
$5.00
U.S.
1.6%
Italy
2.2%
France
2.4%
Germany
2.4%
Japan
3.6%
Dec. 2014:
$2.61
$4.00
$3.00
$2.00
$1.00
Developin
ng
Russia*
-13.6%
Brazil
China
South Africa
India
'80
80
'90
90
'00
00
'10
10
Source: (Top left) BEA, (Bottom Left) Department of Labor, FactSet, (Right) EIA, IMF, J.P. Morgan Asset Management.
$0.00
*Russia imports as a percent of GDP was -13.6% in 2013 and is adjusted on the chart.
29
0.7%
2.4%
4.8%
5.3%
Consumer Confidence and the Stock Market

Consumer Sentiment Index University of Michigan
130
Impact on Consumer Sentiment from a

10% y-o-y rise
i iin gasoline
li prices
i
10% y-o-y rise in home prices
10% y-o-y rise in the S&P 500
1% y-o-y rise in the unemployment rate
120
Econom
my
110
Aug. 1972
100 Aug
-6.2%
-0.8
0 8 pts
t
+1.9
+2.8
-5.2
Jan. 2000
-2.0%
Jan. 2004
+4.4%
Mar. 1984
+13.5%
Jan. 2007
-4.2%
May 1977
+1.2%
Dec 2014:
Dec.
93.6
90
Average: 84.8
80
Mar. 2003
+32.8% Oct. 2005
+14.2%
70
Oct. 1990
+29 1%
+29.1%
60
Feb. 1975
+22.2%
50
May 1980
+19.2%
Nov. 2008 Aug. 2011

+15.4%
+22.3%
Sentiment Cycle Low and

subsequent 12-month S&P 500 Index
return
40
'72
72
'74
74
'76
76
'78
78
'80
80
'82
82
'84
84
'86
86
'88
88
'90
90
'92
92
'94
94
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
Source: University of Michigan, FactSet, J.P. Morgan Asset Management.

Peak is defined as the highest index value before a series of lower lows, while a trough is defined as the lowest index value before a series of higher
highs. Subsequent 12-month S&P 500 returns are price returns only, which excludes dividends. Impact on consumer sentiment is based on a multivariate
monthly regression between 1/31/2000 5/31/2014.
30
'10
10
'12
12
'14
14
Interest Rates and Inflation

Nominal and Real 10-year Treasury Yields
20%
Average
Sep. 30,
Sep
30 1981:
15.84%
(1958 2014)
Nominal Yields
Real Yields
Inflation
15%
12/31/14
2.17%
0.46%
1.71%
Nominal 10-year
Treasury Yield
10%
Fixed In
ncome
6.30%
2.50%
3.80%
Dec 31
Dec.
31, 2014: 2.17%
2 17%
5%
Real 10-year
Treasury Yield
0%
Falling Rate Corp. Bonds S&P 500
1982-2014
9.6%
11.7%
Ann. Inflation
3.0%
3.0%
Ann. Real Return 6.6%
8.6%
Rising Rate Corp. Bonds S&P 500

1958-1981
3.0%
8.6%
Ann. Inflation
5.0%
5.0%
Ann. Real Return -2.0%
3.5%
Dec. 31, 2014: 0.46%
-5%
'60
31
'65
'70
'75
'80
'85
'90
'95
'00
'05
Source: Federal Reserve, BLS, J.P. Morgan Asset Management.

Real 10-year Treasury yields are calculated as the daily Treasury yield less year-over-year core CPI inflation for that month except for December 2014,
where real yields are calculated by subtracting out November 2014 year-over-year core inflation. All returns above reflect annualized total returns, which
include reinvestment of dividends. Corporate bond returns are based on a composite index of investment grade bond performance.
'10
'15
The Fed and Interest Rates

Feds Balance Sheet: Assets
Federal Funds Rate Expectations
$ trillions
FOMC and market expectations for the Fed Funds rate
$4.5
7%
$4.0
$
Other
$3.5
U.S. Treasuries
$3.0
Agency MBS
Federal Funds Rate

O C Year-End Estimates
FOMC
Market Expectations
FOMC Long Run Projection
6%
5%
$2.5
4%
$2.0
3%
$1.5
2%
$1.0
1%
Fixed In
ncome
$0.5
0%
$0.0
'04
'06
'07
'08
'09
'10
'11
'12
'13
'14
Feds Balance Sheet: Liabilities
'99
'01
'03
'05
'07
'09
'11
'13
'15
'17
Federal Reserve Summary of Economic Projections
$ trillions
FOMC December 2014 Forecasts*

Percent
$4.5
$4.0
Excess Reserves
$3.5
Other Liabilities
$3.0
Required Reserves
2014
2015
2016
2017
Long
Run
Change in real GDP, Q4 to Q4
2.4
2.8
2.8
2.4
2.2
$1.5
Unemployment Rate, Q4
5.8
5.3
5.1
5.1
5.4
$1.0
PCE Inflation, Q4 to Q4
1.3
1.3
1.9
1.9
2.0
0.13
1.13
2.50
3.63
3.75
$2.5
$2.0
$0.5
$0.0
Federal Funds Rate, end of year

'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
Source: Federal Reserve, FactSet, J.P. Morgan Asset Management.

Monetary base is defined as the total amount of a currency that is either circulated in the hands of the public or in the commercial bank deposits held
in the central bank's reserves. Other liabilities of the Federal Reserve primarily consist of currency outstanding. Market expectations are the federal
funds rates priced into the fed futures market. *Forecasts of 17 Federal Open Market Committee (FOMC) participants, midpoints of central tendency
except for federal funds rate which is a median estimate.
32
Shape of the Yield Curve

Yield Curve
U.S. Treasury Yield Curve
4.5%
4.0%
4 0%
4.0%
Dec. 31, 2013
3.5%
3.0%
3.0%
2.5%
2.5%
1.8%
2.0%
1.5%
1.0%
Fixed In
ncome
0.5%
0.0%
1.1%
0.1%
0.7%
0.8%
0.3%
0.4%
3m 1y
2y
3y
2.0%
2.2%
1 7%
1.7%
5y
7y
10y
Treasuries Outstanding 3Q14
0 8%
0.8%
3 2%
3.2%
0.7%
3.0%
0.6%
2.8%
0.5%
2.6%
0.4%
2.4%
10Y UST (RHS)

2Y UST (LHS)
0.2%
Jan '14
14
Apr '14
14
Jul '14
14
Oct '14
14
Source: Federal Reserve, FactSet, J.P. Morgan Asset Management.

33
30y
Nominal 2 Year and 10 Year U.S. Treasury Yields
0.3%
2.8%
Dec. 31, 2014
By holder,
holder end of period,
period not seasonally adjusted
Households
6%
Financial
institutions
7%
State and local

gov'ts
g
7%
Mutual funds
9%
2.2%
2.0%
Jan '15
15
Foreign private
15%
Other
1%
Foreign
g official
32%
Federal
Reserve
19%
Global Monetary Policy

Central Bank Assets Percent of Nominal GDP
JPMAM
Forecast*
80%
Correlation of Government Bonds
6-month rolling correlation of weekly change in USTs and German Bund yields
1
0.8
70%
10-yr. Bonds
0.6
0.4
60%
0.2
2-yr. Bonds
0
Fixed In
ncome
50%
-0.2
'10
40%
'12
'13
'14
Real Policy Rates Monthly

Bank of Japan
30%
20%
E
European
Central
C t lB
Bank
k
10%
U.S. Federal Reserve

0%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
34
'11
8%
7%
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
Emerging Markets
Developed Markets
'00
00 '01
01 '02
02 '03
03 '04
04 '05
05 '06
06 '07
07 '08
08 '09
09 '10
10 '11
11 '12
12 '13
13 '14
14
Source: J.P. Morgan Global Economics Research, FactSet, J.P. Morgan Asset Management.
Real policy rates represent GDP weighted aggregates estimated by J.P. Morgan Global Economics Research. Real policy rates are short-term target
interest rates set by central banks minus year-over-year inflation. *Central bank assets as percent of nominal GDP is forecasted through 2015 using J.P.
Morgan Global Economics Research nominal GDP forecasts and assumptions for central bank balance sheet size based on statements released by
each respective central bank and its governors.
Sources of Bond Returns

Treasury Base Rate Return Spread to Treasury Return
2014 A
2014 B
5-yr.
1 3%
1.3%
10-yr.
8.2%
30-yr.
26.0%
Fixed In
ncome
10-yr. Muni
Total Return
2014 C
2014
2014 A + B + C
2013
EM (USD)
0.3%
10.7%
2.6%
29.4%
3.4%
8.7%
4.3%
-1.1%
-3.3%
6.8%
-1.2%
2.5%
4.8%
5.6%
IG Corp.
3.7%
U.S. MBS
2.0%
0.4%
U.S. Agg.
2.7%
0.1%
4.2%
-0.5%
-1.4%
-20%-10%
20% 10% 0% 10% 20%
-20%
20%
-10%
10%
0%
Source: Federal Reserve, Barclays, J.P. Morgan Asset Management.
3.7%
3.2%
1.3%
0.1%
10%
-20%
20%
-10%
10%
0%
10%
10-yr.
30-yr.
10-yr. Muni
U.S. HY
EM (USD)
7.5%
IG Corp.
6.1%
U.S. MBS
6.0%
U.S. Agg.
0.1%
FRN (BBB)
-20%-10%
20% 10% 0% 10% 20% 30%
All returns reflect year to date returns. Treasury base, spread, and coupon returns based on Barclays and J.P. Morgan Asset Management
estimates. The sum of charts A and B equate to price return for each sector. Indices used include Barclays US Treasury Bellwethers (10Y),
Barclays US Aggregate, Barclays US Aggregate Credit Corporate Investment Grade, Barclays US Aggregate Credit Corporate High Yield,
Barclays Muni 10-year Index, Barclays US MBS Index, Barclays Floating Rate Index, and Barclays Emerging Markets USD.
35
5-yr.
2 9%
2.9%
1 6%
1.6%
4.4%
U.S. HY
FRN (BBB)
Coupon Return
Fixed Income Yields and Returns

Yield
Price Impact of a 1% Rise/Fall in Interest Rates*
Return
# of
issues
Correlation to
10-year
Avg.
Maturity
12/31/2014
9/30/2014
4Q14
2014
2y UST
2-Year
95
0.63
2 years
0.67%
0.58%
0.17%
0.66%
5y UST
5-Year
97
0.90
1.65%
1.78%
1.14%
2.89%
TIPS
10-Year
17
1.00
10
2.17%
2.52%
3.57%
10.74%
10y UST
30-Year
20
0.92
30
2.75%
3.21%
10.06%
29.38%
30y UST
TIPS
35
0.58
10
0.49%
0.55%
-0.03%
3.64%
U.S. Treasuries
Fixed In
ncome
-5.7%
5 0%
5.0%
6.7%
9.5%
23.2%
-17.8%
-0.1%
0.85
7.7 years
2.25%
2.36%
1.79%
5.97%
Convertibles
-3.2%
410
0.80
6.5
2.60%
2.88%
1.79%
6.08%
ABS
-3.9%
Municipals
9,080
0.45
10.0
2.04%
2.13%
1.38%
8.72%
US HY
-4.3%
Corporates
5,212
0.45
10.7
3.11%
3.10%
1.77%
7.46%
MBS
-5.5%
High Yield
2,253
-0.24
6.5
6.61%
6.13%
-1.00%
2.45%
US Aggregate
-5.6%
Floating Rate
49
-0.21
2.7
1.61%
0.98%
-1.43%
0.08%
Munis
-5 7%
-5.7%
Convertibles
518
-0.29
--
1.11%
1.14%
1.06%
8.17%
IG Corps
1,727
-0.04
4.4
2.15%
2.18%
1.27%
3.44%
MBS
0.9%
-8.6%
9,054
ABS
36
-4.7%
Floating Rate
Sector
Broad Market
-2.0%
-30%
-6.7%
-10%
0.1%
3.6%
3.9%
4.2%
3.4%
5.5%
5.5%
7.7%
10%
30%
Source: U.S. Treasury, Barclays Capital, FactSet, J.P. Morgan Asset Management. Fixed income sectors shown above are provided by Barclays Capital and are represented by
Broad Market: Barclays U.S. Aggregate; MBS: U.S. Aggregate Securitized - MBS Index; Corporate: U.S. Corporates; Municipals: Muni Bond 10-year Index; High Yield: Corporate High
Yield Index; TIPS: Treasury Inflation Protection Securities (TIPS)
(TIPS). Floating Rate: Barclays FRN (BBB); Convertibles: Barclays U.S.
U S Convertibles Composite; ABS: Barclays ABS +
CMBS. Treasury securities data for # of issues based on U.S. Treasury benchmarks from Barclays Capital. Yield and return information based on bellwethers for Treasury securities.
Sector yields reflect yield to worst, while Treasury yields are yield to maturity. Correlations are based on 10-years of monthly returns for all sectors. Change in bond price is calculated
using both duration and convexity according to the following formula: New Price = (Price + (Price * -Duration * Change in Interest Rates))+(0.5 * Price *
Convexity * (Change in Interest Rates)^2). *Calculation assumes 2-year Treasury interest rate falls 0.67% to 0.00%, as interest rates can only fall
to 0.00%. Chart is for illustrative purposes only. Past performance is not indicative of future results.
Global Fixed Income

Return
Yield
Aggregates
Correl to
Duration
10-year
12/31/2014 9/30/2014
4Q14
2014
Global Bond Market

USD, trillions
$100
U.S.
0.83
5.6 Yrs
2.25%
2.36%
1.79%
5.97%
$90
Gbl. ex. U.S.
0.37
7.1
1.29%
1.46%
-2.61% -2.21%
$80
Japan
0.49
8.3
0.36%
0.52%
-6.38% -8.35%
12/31/89
U.S.
60.7%
Dev. ex U.S.
38.2%
EM
1.1%
EM: $14tn
6/30/14
36.1%
49.5%
14.4%
Fixed In
ncome
$70
Germany
0.25
6.0
0.58%
0.76%
-1.87% -3.70%
U.K.
0.17
9.4
1.94%
2.36%
1.57%
5.82%
Italy
0.07
6.6
1.50%
1.67%
-1.80%
0.84%
Spain
0 10
0.10
58
5.8
1 17%
1.17%
1 32%
1.32%
-1.87%
1 87%
0 67%
0.67%
Euro Corp.
0.11
4.8
1.04%
1.20%
-2.73% -4.82%
Euro HY.
-0.39
3.9
4.65%
4.58%
-3.27% -6.02%
EMD ($)
0.20
6.7
5.62%
5.39%
-0.55%
EMD (LCL)
0.08
4.9
6.50%
6.74%
-5.71% -5.72%
EM Corp.
-0.26
5.6
5.56%
5.28%
0.31%
$60
Developed ex
U.S.: $50tn
$50
$40
Sector
$30
U.S.: $35tn
$20
7.43%
$10
6.74%
$0
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Source: Barclays Capital, BIS, FactSet, J.P. Morgan Asset Management. All returns are in USD. Fixed income sectors shown above are provided by Barclays Capital and are
represented by the global aggregate for each country except where noted. EMD sectors are represented by the J.P. Morgan EMBIG Diversified Index (USD), 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 Barclays Euro Aggregate Corporate Index
and the Barclays Pan-European High Yield index. Sector yields reflect yield to worst. Duration is modified duration. Correlations are based on 7-years
of monthly returns for the all sectors. Past performance is not indicative of future results.
37
Municipal Finance
10-Year Muni Taxable Equivalent Yield
Taxable equivalent Muni and Treasury yields
State & Local Government Debt Service

% of current expenditures
12%
10%
3Q14: 7.9%
9%
Taxable Equivalent 10-yr. Muni Yield
8%
10%
7%
6%
5%
8%
Fixed In
ncome
4%
3%
'90
6%
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
Municipal Bond Issuance*

Billions USD,
USD revenue and GO issues
$500
10-yr. Treasury Yield
4%
$400
$300
2%
$200
$100
Spread
0%
$0
'90
38
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
'96
'98
'00
'02
'04
'06
'08
'10
'12
Source (Left chart): Barclays Capital, U.S. Treasury, FactSet, J.P. Morgan Asset Management. (Top right) BEA, J.P. Morgan Asset Management. (Bottom right) SIFMA, J.P.
Morgan Asset Management.
Taxable equivalent yields are calculated for the highest federal marginal tax bracket. 2014 tax rate includes the net investment income tax of 3.8%.
*Excludes maturities of 13 months or less and private placements. Interest payments include interest accrued on defined benefit liabilities.
2014 issuance data is as of November 2014.
'14
High Yield Bonds

U.S. High Yield Spreads and Defaults
20%
HY Spreads
HY Defaults Rates
HY Spreads
15%
Average
5.9%
4.0%
Latest
5.7%
3.0%
'06
'08
HY D
Default
f lt R
Rates
t
10%
5%
Fixed In
ncome
0%
'88
'90
'92
'94
'96
'98
'00
'02
100%
Other 17%
Euro HY
9%
80%
60%
EM HY
U.S. HY
'10
Sector Weights
Global High Yield Spreads

Spread
p
over Treasuries
7%
40%
5%
20%
3%
Other 7%
Energy 2%
Energy 17%
Industrial 29%
Industrial 20%
Telecom 18%
Telecom
T
l
10%
Financial 7%
Financial 13%
Consumer 28%
'12
'14
Other 5%
Energy 11%
Industrial 24%
Telecom 21%
Financial 22%
Consumer 31%
Consumer 17%
0%
'12
39
'04
'13
'14
U.S. HY
Euro HY
EM HY
Source: U.S. Treasury, J.P. Morgan, Strategic Insight, J.P. Morgan Asset Management. Default rates are defined as the par value percentage of the total market trading at or
below 50% of par value and include any Chapter 11 filing, prepackaged filing or missed interest payments. 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. J.P. Morgan Domestic HY, J.P. Morgan Euro HY, and
J.P. Morgan CEMBI Non-IG indexes were used for Spreads and Industry Weights. Past performance is not indicative of comparable future results.
Emerging Market Debt

EMD Indices by Region
EMD Sovereign Spreads
100%
Local denominated debt, 5 years, spread to Treasuries, basis points

Brazil 27%
80%
60%
Mexico 20%
Poland 11%
40%
S. Africa 9%
Other 23%
0%
Local Sovereign
Latin America
30%
Russia
Europe 13%
Brazil
Europe 31%
Asia 39%
Turkey 10%
20%
Fixed In
ncome
Latin America
35%
Asia 21%
Middle East &
Africa 13%
Middle East &

Africa 18%
USD Sovereign
USD Corporate
1,089
India
633
Turkey
628
62
8
592
Indonesia
428
Colombia
EMD Indices by Credit Ratings

100%
Mexico
80%
China
181
Philippines
168
60%
Investment
Grade 85%
Investment
Grade 65%
Investment
Grade 69%
40%
0%
348
Non Investment
Grade 15%
g
Local Sovereign
Non
Investment
Grade 35%
Non
Investment
Grade 31%
USD Sovereign
g
USD Corporate
p
Graph Key
Current spread
5 year average
146
Hungary
20%
40
1,317
49
Poland
200
400
600
800
1,000
1,200
1,400
Source: J.P. Morgan Global Economic Research, FactSet, J.P. Morgan Asset Management.
Spreads measure the credit risk premium over comparable maturity U.S. Treasury bonds. The J.P. Morgan EMBI Global (EMBIG) Index is a USD-denominated external debt index
tracking bonds issued by sovereigns and quasi-sovereigns in developing nations. The J.P. Morgan Corporate Emerging Bond Index Broad (CEMBI) is a
USD-denominated external debt index tracking bonds issued by corporations in developing nations. The J.P. Morgan Government Bond Index EM
(GBI-EM) is a local currency denominated index tracking bonds issued by emerging market sovereigns. Past performance is not indicative of
Comparable future results. Index breakdown may not equate to 100% due to rounding.
Fixed In
ncome
Fixed Income Sector Returns

2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
4Q14
10-yrs. '05 - '14

Cum.
Ann.
EMD USD
EMD LCL.
EMD LCL.
Treas.
Gbl. HY
EMD LCL.
TIPS
Gbl. HY
Gbl. HY
Muni
Treas.
Gbl. HY
Gbl. HY
10.2%
15.2%
18.1%
13.7%
59.4%
15.7%
13.6%
19.6%
7.3%
8.7%
1.9%
115.3%
8.0%
EMD USD
EMD USD
111.5%
7.8%
EMD LCL.
Gbl. HY
TIPS
Gbl. Sov.
EMD USD
Gbl. HY
Muni
EMD USD
Gbl. Corp.
EMD USD
6.3%
13.7%
11.6%
9.4%
29.8%
14.8%
12.3%
17.4%
1.8%
7.4%
Barclays
Agg
1.8%
Gbl. HY
EMD USD
Gbl. Sov.
MBS
Gbl. Corp.
EMD USD
Treas.
EMD LCL.
Asset Alloc.
MBS
MBS
EMD LCL.
EMD LCL.
3.6%
9.9%
10.9%
8.3%
23.7%
12.2%
9.8%
16.8%
-1.3%
6.1%
1.8%
90.4%
6.7%
TIPS
Gbl. Corp.
Treas.
2 8%
2.8%
8 3%
8.3%
9 0%
9.0%
EMD LCL.
Asset Alloc.
22 0%
22.0%
7 5%
7.5%
Barclays
Agg
7 8%
7.8%
Gbl. Corp.
12 5%
12.5%
MBS
-1.4%
1 4%
Barclays
Agg
6 0%
6.0%
1 4%
1.4%
Treas.
Asset Alloc.
Muni
Muni
5.1%
0.1%
64.4%
5.1%
Muni
Asset Alloc. Asset Alloc.

67 4%
67.4%
5 3%
5.3%
Treas.
Gbl. Sov.
Asset Alloc.
Muni
Asset Alloc.
Gbl. Corp.
EMD USD
Asset Alloc.
2.8%
7.3%
7.2%
1.5%
16.2%
7.0%
7.3%
8.3%
Barclays
Agg
-2.0%
Muni
Asset Alloc.
Asset Alloc.
TIPS
Asset Alloc.
TIPS
Muni
Asset Alloc.
TIPS
Gbl. Corp.
Gbl. Corp.
2.7%
6.9%
-1.5%
11.4%
6.9%
7.0%
-2.2%
3.9%
0.0%
60.5%
4.8%
Barclays
Agg
7.0%
Barclays
Agg
6.5%
MBS
MBS
MBS
TIPS
M i
Muni
TIPS
MBS
M i
Muni
T
Treas.
TIPS
Gbl Corp.
Gbl.
C
MBS
MBS
2.6%
5.2%
6.9%
-2.4%
9.9%
6.3%
6.2%
5.7%
-2.7%
3.6%
-0.3%
59.0%
4.7%
Muni
EMD USD
EMD LCL.
Gbl. Sov.
Gbl. Sov.
Gbl. Corp.
EMD USD
6.2%
-5.2%
6.1%
5.2%
Barclays
Agg
4.2%
Gbl. Sov.
4.7%
Barclays
Agg
5.9%
-4.9%
2.5%
-0.6%
Barclays
Agg
58.4%
Barclays
Agg
4.7%
Gbl. Corp.
Gbl. Corp.
MBS
Treas.
Gbl. Corp.
MBS
EMD USD
Gbl. HY
Gbl. HY
Treas.
Treas.
6 1%
6.1%
-11.2%
11 2%
5 9%
5.9%
5 9%
5.9%
4 0%
4.0%
2 6%
2.6%
-5.3%
5 3%
0 0%
0.0%
-2.5%
2 5%
53 5%
53.5%
4 4%
4.4%
Barclays
Agg
2.4%
1 7%
1.7%
Barclays
Agg
4 3%
4.3%
Gbl. Corp.
Treas.
Muni
EMD USD
Gbl. Sov.
MBS
Gbl. HY
Treas.
TIPS
Gbl. Sov.
Gbl. Sov.
TIPS
TIPS
-2.7%
3.1%
4.3%
-12.0%
4.3%
5.4%
3.1%
2.0%
-8.6%
-2.8%
-3.1%
53.4%
4.4%
Gbl. Sov.
TIPS
Gbl. HY
Gbl. HY
Treas.
Muni
EMD LCL.
Gbl. Sov.
EMD LCL.
EMD LCL.
EMD LCL.
Gbl. Sov.
Gbl. Sov.
-8.8%
0.4%
3.2%
-26.9%
-3.6%
4.0%
-1.8%
1.8%
-9.0%
-5.7%
-5.7%
30.3%
2.7%
Asset Alloc.
41
Barclays
Agg
5 2%
5.2%
Source: Barclays Capital

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

4Q14
Country
y / Region
g
Local
Weights in MSCI All Country World Index
2014
USD
Local
% global market capitalization, float adjusted

USD
Europe exU.K.
16%
4.9
13.7
EAFE
1.8
-3.5
6.4
-4.5
Europe ex-U
ex-U.K.
K
02
0.2
-4 3
-4.3
74
7.4
-5 8
-5.8
Pacific ex-Japan
3.1
-1.5
5.8
-0.3
Emerging Markets
0.1
-4.4
5.6
-1.8
Canada 4%
%
Regions / Broad Indexes

U.S. (S&P 500)
United Kingdom
-0.4
-4.2
0.5
-5.4
Rolling 1-year
1 year correlations
correlations, 30 countries
Japan
7%
France
-1.7
-5.8
3.6
-9.0
0.80
Germany
4.0
-0.4
2.8
-9.8
0.70
Japan
6.7
-2.4
9.8
-3.7
China
7.0
7.2
8.3
8.3
0.40
India
1.5
-0.7
26.4
23.9
0.30
Brazil
-7.5
-14.8
-2.8
-13.7
Russia
-5.9
-32.8
-12.1
-45.9
0.90
0.60
0.50
Dec. 2014: 0.44
0.20
0.10
0.00
'95
95
42
U.K. 7%
Emerging
Markets
11%
Global Equity Market Correlations
MSCI: Selected Countries
Internatio
onal
United
States
51%
'97
97
'99
99
'01
01
'03
03
'05
05
'07
07
Source: Standard & Poors, MSCI, FactSet, J.P. Morgan Asset Management.
All return values are MSCI Gross Index (official) data. Chart is for illustrative purposes only. Past performance is not indicative of future results. Please
see disclosure page for index definitions. Countries included in global correlations include Argentina, South Africa, Japan, UK, Canada, France,
Germany, Italy, Australia, Austria, Brazil, China, Colombia, Denmark, Finland, Hong Kong, India, Malaysia, Mexico, Netherlands, New Zealand, Peru,
Philippines, Portugal, Korea, Spain, Taiwan, Thailand, Turkey, United States.
Guide to the Markets U.S. Data as of 12/31/14.
'09
09
'11
11
'13
13
International Equity Earnings and Valuations

Earnings per Share
EPS for next 12-month consensus, local currency, rebased to 100
Forward Price to Earnings

P/E ratios for next 12-month consensus EPS
260
18x
MSCI EM
S&P 500
MSCI Europe
240
07/08 Peak
217
150
161
Current
167
179
123
% Change
g
-23%
19%
-24%
Average
11.3x
13.8x
12.0x
MSCI EM
S&P 500
MSCI Europe
Current
11.0x
16.2x
14.1x
16x
220
200
14x
180
12x
160
10x
Internatio
onal
140
120
8x
100
6x
80
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
'11
11
'12
12
'13
13
'14
14
'04
04
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
'11
11
Source: MSCI, FactSet, J.P. Morgan Asset Management.

Forward Price to Earnings Ratio is based on each index price, divided by consensus estimates for earnings per share (EPS) in the next 12 months (NTM),
and is provided by FactSet Market Aggregates. Past performance is not indicative of future returns.
43
'12
12
'13
13
'14
14
Global Economic Growth

Emerging Market Country Real GDP Growth
Historical
Year-over-year % chg. forecasts from JPMSI

10%
4Q13
1Q14
2Q14
JPMSI Forecast
3Q14
4Q14
1Q15
2Q15
3Q15
8%
6%
4%
2%
0%
-2%
-4%
Emerging Markets
China
India
Korea
Mexico
South Africa
Russia
Brazil
Developed Market Country Real GDP Growth

Year over year % chg.
Year-over-year
chg forecasts from JPMSI
Hi t i l
Historical
10%
4Q13
Internatio
onal
8%
1Q14
2Q14
JPMSI Forecast
F
t
3Q14
4Q14
1Q15
2Q15
3Q15
6%
4%
2%
0%
-2%
-4%
Developed Countries
US
U.S.
UK
U.K.
Canada
Germany
France
Source: J.P. Morgan Global Economic Research, J.P. Morgan Asset Management.
Forecast and aggregate data come from J.P. Morgan Global Economic Research. Historical growth data collected from FactSet Economics.
44
Italy
Japan
Manufacturing Momentum
Internatio
onal
Global
Dec'14
D
Nov'14
Oct'14
O
Se
ep'14
51.4 50.8 51.0 50.1 50.4 50.4 50.6 51.5 51.7 51.9 52.9 52.9 53.0 53.2 52.4 51.9 52.2 52.6 52.4 52.6 52.2 52.2 51.8 51.6
U.S.
55.8 54.3 54.6 52.1 52.3 51.9 53.7 53.1 52.8 51.8 54.7 55.0 53.7 57.1 55.5 55.4 56.4 57.3 55.8 57.9 57.5 55.9 54.8 53.9
Canada
50.5 51.7 49.3 50.1 53.2 52.4 52.0 52.1 54.2 55.6 55.3 53.5 51.7 52.9 53.3 52.9 52.2 53.5 54.3 54.8 53.5 55.3 55.3 53.9
U.K.
51.0 48.2 50.1 50.4 51.9 52.5 54.5 58.0 57.0 56.4 57.9 57.0 56.5 56.5 55.5 57.0 56.4 56.7 54.9 52.6 51.6 53.3 53.3 52.5
Euro Area
47.9 47.9 46.8 46.7 48.3 48.8 50.3 51.4 51.1 51.3 51.6 52.7 54.0 53.2 53.0 53.4 52.2 51.8 51.8 50.7 50.3 50.6 50.1 50.8
Germ any
49.8 50.3 49.0 48.1 49.4 48.6 50.7 51.8 51.1 51.7 52.7 54.3 56.5 54.8 53.7 54.1 52.3 52.0 52.4 51.4 49.9 51.4 49.5 51.2
France
42.9 43.9 44.0 44.4 46.4 48.4 49.7 49.7 49.8 49.1 48.4 47.0 49.3 49.7 52.1 51.2 49.6 48.2 47.8 46.9 48.8 48.5 48.4 47.5
Italy
47.8 45.8 44.5 45.5 47.3 49.1 50.4 51.3 50.8 50.7 51.4 53.3 53.1 52.3 52.4 54.0 53.2 52.6 51.9 49.8 50.7 49.0 49.0 48.4
Spain
46.1 46.8 44.2 44.7 48.1 50.0 49.8 51.1 50.7 50.9 48.6 50.8 52.2 52.5 52.8 52.7 52.9 54.6 53.9 52.8 52.6 52.6 54.7 53.8
Greece
41.7 43.0 42.1 45.0 45.3 45.4 47.0 48.7 47.5 47.3 49.2 49.6 51.2 51.3 49.7 51.1 51.0 49.4 48.7 50.1 48.4 48.8 49.1 49.4
I l d
Ireland
50 3 51.5
50.3
51 5 48.6
48 6 48.0
48 0 49.7
49 7 50.3
50 3 51.0
51 0 52.0
52 0 52.7
52 7 54.9
54 9 52.4
52 4 53.5
53 5 52.8
52 8 52.9
52 9 55.5
55 5 56.1
56 1 55.0
55 0 55.3
55 3 55.4
55 4 57.3
57 3 55.7
55 7 56.6
56 6 56.2
56 2 56.9
56 9
Australia
40.2 45.6 44.4 36.7 43.8 49.6 42.0 46.4 51.7 53.2 47.7 47.6 46.7 48.6 47.9 44.8 49.2 48.9 50.7 47.3 46.5 49.4 50.1 46.9
Japan
47.7 48.5 50.4 51.1 51.5 52.3 50.7 52.2 52.5 54.2 55.1 55.2 56.6 55.5 53.9 49.4 49.9 51.5 50.5 52.2 51.7 52.4 52.0 52.0
China
52.3 50.4 51.6 50.4 49.2 48.2 47.7 50.1 50.2 50.9 50.8 50.5 49.5 48.5 48.0 48.1 49.4 50.7 51.7 50.2 50.2 50.4 50.0 49.6
Indonesia
49.7 50.5 51.3 51.7 51.6 51.0 50.7 48.5 50.2 50.9 50.3 50.9 51.0 50.5 50.1 51.1 52.4 52.7 52.7 49.5 50.7 49.2 48.0 47.6
Korea
49.9 50.9 52.0 52.6 51.1 49.4 47.2 47.5 49.7 50.2 50.4 50.8 50.9 49.8 50.4 50.2 49.5 48.4 49.3 50.3 48.8 48.7 49.0 49.9
Taiw an
51.5 50.2 51.2 50.7 47.1 49.5 48.6 50.0 52.0 53.0 53.4 55.2 55.5 54.7 52.7 52.3 52.4 54.0 55.8 56.1 53.3 52.0 51.4 50.0
India
53.2 54.2 52.0 51.0 50.1 50.3 50.1 48.5 49.6 49.6 51.3 50.7 51.4 52.5 51.3 51.3 51.4 51.5 53.0 52.4 51.0 51.6 53.3 54.5
Brazil
53.2 52.5 51.8 50.8 50.4 50.4 48.5 49.4 49.9 50.2 49.7 50.5 50.8 50.4 50.6 49.3 48.8 48.7 49.1 50.2 49.3 49.1 48.7 50.2
Mexico
55.0 53.4 52.2 51.7 51.8 51.3 49.7 50.8 50.0 50.2 51.9 52.6 54.0 52.0 51.7 51.8 51.9 51.8 51.5 52.1 52.6 53.3 54.3 55.3
Russia
52.0 52.0 50.8 50.6 50.4 51.7 49.2 49.4 49.4 51.8 49.4 48.8 48.0 48.5 48.3 48.5 48.9 49.1 51.0 51.0 50.4 50.3 51.7 48.9
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.
45
Au
ug'14
Jul'14
J
un'14
Ju
May'14
Apr'14
A
Mar'14
eb'14
Fe
Jan'14
Dec'13
D
Nov'13
Oct'13
O
Se
ep'13
Au
ug'13
Jul'13
J
un'13
Ju
May'13
Apr'13
A
Mar'13
eb'13
Fe
Jan'13
Global Purchasing Managers Index for Manufacturing
Sovereign Debt Stresses

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

g
government
bond yield
y
China
8%
10%
Indonesia
Malaysia
Internatio
onal
Real GDP Growth (2012 2

2014F)
6%
5%
India
Turkey
y
4%
Australia
Singapore
Korea
Mexico
2%
U.K.
Russia
Brazil
South Africa
France
0%
Japan
U.S.
Germany
EU
P t
Portugal
l
Spain
Italy
-2%
-4%
Greece
Emerging Markets
Developed Markets
-6%
-8%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Gross
G
oss Debt-to-GDP
ebt to G
Ratios
at os ((2013)
0 3)
Source: IMF, FactSet, Bloomberg, J.P. Morgan Economics, Barclays, J.P. Morgan Asset Management.
Growth and debt data are based on the October 2014 World Economic Outlook.
Borrowing costs based on local currency debt. EU overall borrowing cost based on Barclays Capital Euro-Aggregate 7-10 year treasury. South Africas
borrowing cost is based on 7-year government bond yield due to data availability.
46
180%
245%
200%
Europe: Cyclical Headwinds and Tailwinds

European Sovereign Funding Costs
10-year benchmark bond yield
35%
Government Fiscal Drag
% of potential GDP, reduction in structural deficits from one period to the next
30%
9.42%
2.67%
1.86%
1.61%
1.24%
0.53%
Mo
ore fiscal drag
Greece
Portugal
Italy
Spain
Ireland
Germany
13.9%
14%
12/31/14
25%
2010-2013
12%
2013-2016
10%
8%
20%
LTRO
6.0%
6%
4.6%
4%
OMT
10%
Les
ss fiscal drag
Internatio
onal
15%
4 0%
4.0%
3.5%
3.3%
2%
1.2%
1.1%
3.1%
2.7%
1.4%
0.8%
0.5%
0.5%
0%
-0.4%
5%
-0.1%
-2%
0%
'08
08
47
'09
09
'10
10
'11
11
'12
12
'13
13
Source: Tullett Prebon, FactSet, IMF, J.P. Morgan Asset Management. Data are based on the October 2014 World Economic Outlook.
Government deficits are calculated by the IMF as the general government structural balance. The structural balance excludes the normal impact of the business cycle, providing a
clearer measure of the independent impact of changes in government spending and taxation on demand in the economy.
*Eurozone includes a J.P. Morgan Asset Management estimate for the 2016 structural deficit as a % of GDP.
Europe: Unemployment, Inflation and Credit Markets

Unemployment Rates
Oct. 2014: 11.5%
12%
Euro Area Credit Growth

% year-over-year loan growth
20%
Euro Area
10%
Nonfinancial Corporations
15%
8%
10%
6%
Nov. 2014: 5.8%

4%
5%
Nov. 2014: -1.6%
Households
U.S.
Nov. 2014:
-0.4%
2%
-5%
0%
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'06
'07
'08
'09
'10
'11
'12
'13
'14
Euro Area Asset-Backed Securities Outstanding
Europe Inflation
Year over year % change

Year-over-year
billions
Core
Euro Area
Periphery
5%
4%
3,000
Internatio
onal
2,500
3%
2 000
2,000
2%
1%
1,500
0%
-1%
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
1,000
'03
03
'04
04
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
'11
11
'12
12
Source: Eurostat, BLS, SIFMA, ECBC, FactSet, IMF, J.P. Morgan Asset Management.
(Top left) Unemployment rate levels for the U.S. and Euro Area are not directly comparable due to calculation differences. (Bottom right) Euro Area securitization outstanding
includes Covered Bonds, Asset-Backed Securities, Residential Mortgage-Backed Securities, Commercial Real Estate Mortgage-Backed Securities,
and Small and Medium-Sized Enterprise Asset-Backed Securities.
48

'13
13
Japan: Economic Snapshot

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

Other Domestic
74%
Bank of Japan
21%
Foreign
4%
8%
6%
16,000
110
14,000
100
12,000
90
10,000
80
4%
70
8,000
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
6,000
Government Fiscal Balance

% of GDP
Nominal 10-year Yield
2%
-12%
IMF
forecast
-10%
Internatio
onal
-8%
-6%
0%
-4%
Core CPI
-2%
0%
-2%
2%
4%
'88
88
'90
90
'92
92
'94
94
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
'14
14
'90
90 '92
92 '94
94 '96
96 '98
98 '00
00 '02
02 '04
04 '06
06 '08
08 '10
10 '12
12 '14
14 '16
16 '18
18 '20
20
Source: (Left) Bank of Japan, OECD, IMF, FactSet, J.P. Morgan Asset Management. (Right) FactSet, J.P. Morgan Asset Management.
Core CPI is defined as CPI excluding fresh food. Other Domestic includes banks, insurance and pensions, public pensions, and households. Values
may not sum to 100% due to rounding. Government bond data is calculated from the Bank of Japans December 2014 flow of funds.
49
China: Economic and Credit Growth

China Real GDP Contribution
Credit* vs. GDP Growth
16%
40%
Year-over-year % change
Year-over-year % change, 3-month moving average for credit
Investment
Consumption
9.2%
35%
Credit
Net Exports
12%
Real GDP
30%
10.4%
GDP Deflator
9.3%
9.6%
25%
8.1%
8%
7.7%
5.5%
4.5%
7.7%
4.5%
20%
3.9%
4.2%
15%
4%
4.2%
International
4.6%
0%
0.9%
4.5%
5.2%
10%
4.1%
3.8%
5%
0 4%
0.4%
-0.4%
-0.2%
-0.3%
-3.5%
0%
-5%
-4%
2008
2009
2010
2011
2012
2013
03
'03
'04
04
'05
05
'06
06
'07
07
'08
08
'09
09
Source: National Bureau of Statistics of China, The Peoples Bank of China, EM Advisors Group, FactSet, CEIC, J.P. Morgan Asset Management.
Values may not sum to 100% due to rounding. *As defined by Total Social Financing: RMB bank loans, bankers acceptance bills, trust loans,
entrusted loans, corporate bond financing, foreign currency loans, and non-financial equity financing. TSF data uses an assumption of outstanding
credit in Dec. 2001.
50
'10
10
'11
11
'12
12
'13
13
'14
14
Demographics and Development

The Impact of Urbanization
Urbanization ratios and GDP per capita (current USD), 1961 2013
Demographic Snapshot
GDP Per
Capita
Population
% of Pop.
under 20
Investm ent
((% of GDP))
U.S.
$53,101
316 mm
26%
20%
Canada
51,990
35
22
24
U.K.
39,567
64
24
14
Germ any
44,999
81
18
17
France
43,000
64
24
19
Japan
38,491
127
18
21
Italy
y
34,715
,
60
19
17
Korea
24,329
50
22
26
India
1,505
1,243
38
35
Brazil
11,311
,
198
33
18
Mexico
10,630
118
38
22
Russia
14,819
143
21
24
China
6,747
1,361
20
48
$60,000
U.S.
2013: $53,142
Developed
Japan
$50,000
G DP per Capita
$40,000
$30,000
South
Korea
Internatio
onal
$20,000
1961: $2,935
China
$10,000
,
India
$15%
25%
35%
45%
55%
65%
75%
85%
95%
Em erging
Urbanization Ratio
Source: FactSet, World Bank, United Nations, J.P. Morgan Global Economics Research, OECD, Bureau of Statistics of China, Ministry of Statistics &
Programme Implementation of India, J.P. Morgan Asset Management.
GDP per capita and Investment as % of GDP in the Demographic Snapshot table are IMF estimates for 2014.
51
Emerging Market Currencies

Commodity Exposure and External Vulnerability
2014 Currency Performance
Performance of foreign currency versus USD
Net Com
mmodity Exporterss
25%
Russia
-45.2%
17%
2014
Currency Performance
Indonesia
Chile
9%
South Africa
Brazil
Depreciation
(over -10%)
Mexico
-18.7%
Colombia
-13.4%
Depreciation
(
(-0%
to -10%))
Colombia
Russia
Chile
-11.2%
Brazil
-11.1%
Mexico
1%
Net Comm
modity Importers
Internatio
onal
-8%
-6%
-4%
-2%
0%
2%
4%
6%
-9.5%
South Africa
-8.1%
Turkey
-7%
Turkey
-4.0%
China
Korea
India
-2.4%
China
-2.0%
India
-1.7%
Indonesia
-15%
Korea
-23%
Current Account Deficit
Current Account Surplus
Source: IMF, U.N. Commodity Trade Statistics Database, FactSet, J.P. Morgan Asset Management.
Commodities defined by SITC codes 0-4. Net commodity exporters/importers plotted as a % of GDP.
Current accounts as a percentage of GDP are IMF estimates for 2014.
52
8%
-50% -40% -30% -20% -10%
0%
10%
20%
Emerging Market Equities

MSCI EM Index by Region
Latin America
ex Brazil
7%
EM Earnings by Region
Africa/Mideast
8%
Brazil
12%
EPS for next 12-month consensus, local currency, rebased to 100

400
Europe
350
Latin America
Asia
300
Europe
10%
250
Asia ex China
& Korea
28%
Korea
16%
200
150
China
19%
100
50
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
MSCI EM Country Index by Sector

100%
Internatio
onal
80%
7%
13%
23%
19%
60%
40%
69%
36%
24%
15%
10%
0%
Brazil
24%
31%
14%
53
9%
Other
15%
Commodities
17%
18%
33%
17%
Financials
40%
Russia
Tech
Consumer
14%
20%
15%
India
China
35%
Mexico*
Mexico
Source: MSCI, FactSet, J.P. Morgan Asset Management. Other is comprised of Health Care, Industrials, Telecom, and Utilities sectors.
*Mexican Telecom sector accounts for 17% of the countrys market capitalization. Values may not sum to 100% due to rounding.
14%
23%
4%
20%
21%
23%
Korea
Global Equity Valuations: Developed Markets

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

States
Current
Com posite
Index
Fw d. P/E
P/B
P/CF
Div. Yld.
Fw d. P/E
P/B
P/CF
Div. Yld.
0.71
14.8
2.1
8.7
2.5%
13.1
2.0
7.5
2.5%
3.2%
Current
10-year avg.
EAFE Index
-0.48
14.2
1.6
7.5
3.2%
12.7
1.7
6.7
U.K.
-0.76
13.8
1.8
7.3
3.9%
11.4
2.0
7.4
3.7%
France
-0.69
13.8
1.4
7.7
3.3%
11.5
1.6
5.9
3.5%
Germ any
-0.58
12.9
1.6
7.5
2.9%
11.5
1.6
5.8
3.1%
Australia
-0.37
14.7
1.9
8.8
4.8%
13.5
2.2
9.2
4.3%
Canada
0.46
15.5
1.9
8.6
2.8%
13.7
2.1
8.5
2.3%
Japan
0.70
14.3
1.4
8.1
1.8%
16.1
1.4
6.4
1.6%
Sw itzerland
1.36
15.7
2.5
11.3
3.2%
13.5
2.4
9.9
2.8%
United States
2.68
16.4
2.8
11.0
1.9%
14.0
2.4
8.7
1.9%

Note: Each valuation index shows an equally weighted composite of four metrics: price to forward earnings (Fwd. P/E), price to current book (P/B), price to last 12 months
cash flow (P/CF) and price to last 12 months dividends. Results are then normalized using means and average variability over the last 10 years.
The grey bars represent one standard deviation in variability relative to that of the MSCI All Country World Index (ACWI).
54
See disclosures page at the end for metric definitions.

Global Equity Valuations: Emerging Markets
Std D
Dev from Global Ave
erage
Emerging Market Countries
Expensive
relative to
world
Expensive
relative to own
history
Cheap relative
to own historyy
World
(ACWI)
Internatio
onal
Example
+7 Std Dev
+6 Std Dev
+5 Std Dev
+4 Std Dev
+3 Std Dev
+2 Std Dev
+1 Std Dev
Average
-1 Std Dev
-2 Std Dev
-3 Std Dev
-4 Std Dev
-5 Std Dev
-6 Std Dev
World (ACWI)
EM Index
Russia
Brazil
China
T i an
Taiw
Korea
Thailand
South Africa
Indonesia
Mexico
India
EM
Index
Russia
Current
Com posite
Index
0.71
-1.49
-5.52
-2.58
-2.35
-0.54
0 54
0.09
0.22
1.41
2.62
3.17
3.90
Brazil
China
Taiwan
Korea Thailand South Indonesia Mexico

Africa
Current
Average
Cheap
relative to
world
India
10-year avg.
Fw d. P/E
P/B
P/CF
Div. Yld.
Fw d. P/E
P/B
P/CF
Div. Yld.
14.8
11.0
3.8
10.2
9.4
13 2
13.2
9.6
13.2
15.7
15.0
18.3
16.7
2.1
1.4
0.4
1.2
1.4
19
1.9
1.0
2.1
2.6
3.3
2.6
3.0
8.7
5.4
1.8
5.2
4.0
69
6.9
5.8
9.4
11.0
12.6
7.1
12.2
2.5%
2.8%
6.6%
4.5%
3.2%
3 0%
3.0%
1.3%
3.0%
3.0%
2.4%
1.4%
1.5%
13.1
11.1
7.3
10.0
11.7
14 2
14.2
9.7
10.9
11.7
12.8
14.7
15.7
2.0
1.9
1.3
1.8
2.1
19
1.9
1.4
2.0
2.5
3.5
2.8
3.2
7.5
6.3
4.4
5.6
6.8
67
6.7
5.1
7.2
8.9
10.3
7.5
13.0
2.5%
2.7%
2.2%
3.2%
2.7%
3 6%
3.6%
1.5%
3.6%
3.2%
2.7%
1.8%
1.3%

Note: Each valuation index shows an equally weighted composite of four metrics: price to forward earnings (Fwd. P/E), price to current book (P/B), price
to last 12 months cash flow (P/CF) and price to last 12 months dividends. Results are then normalized using means and average variability over the
last 10 years. The grey bars represent one standard deviation in variability relative to that of the MSCI All Country World Index (ACWI). See disclosures
page at the end for metric definitions. See disclosures page at the end for metric definitions.
55
Current
Asset Class Returns

2005
2008
2009
Ba rc la ys
Agg
5.2%
MS CI
EME
79.0%
MS CI
EAFE
32.5%
2010
2011
2012
REITs
REITs
REITs
27.9%
8.3%
Russe ll
2000
26.9%
Ba rc la ys
Agg
7.8%
3 5 . 1%
MS CI
EME
39.8%
Bbe rg
Cmdty
2 1. 4 %
MS CI
EME
32.6%
Bbe rg
Cmdty
16 . 2 %
MS CI
EAFE
14 . 0 %
MS CI
EAFE
26.9%
MS CI
EAFE
11. 6 %
Ma rke t
Ne utra l
1. 1%
28.0%
MS CI
EME
19 . 2 %
12 . 2 %
Russe ll
2000
18 . 4 %
Ma rke t
Ne utra l
9.3%
Asse t
Alloc .
- 24.0%
Russe ll
2000
27.2%
Bbe rg
Cmdty
16 . 8 %
Asse t
Alloc .
8.3%
S &P
500
15 . 8 %
Asse t
Alloc .
7.4%
Russe ll
2000
- 33.8%
S &P
500
26.5%
S &P
500
15 . 1%
Ma rke t
Ne utra l
6 . 1%
Asse t
Alloc .
15 . 2 %
Ba rc la ys
Agg
gg
7.0%
Bbe rg
Cmdty
y
- 35.6%
Asse t
Alloc .
22.2%
Asse t
Alloc .
12 . 5 %
S &P
500
4.9%
Ma rke t
Ne utra l
11. 2 %
S &P
500
5.5%
S &P
500
- 37.0%
Bbe rg
Cmdty
18 . 9 %
MS CI
EAFE
8.2%
Russe ll
2000
- 4.2%
Ba rc la ys
Agg
4.2%
Ca sh
Ca sh
REITs
4.8%
4.8%
- 37.7%
MS CI
EAFE
- 11. 7 %
Ma rke t
Ne utra l
0.9%
Russe ll
2000
- 1. 6 %
MS CI
EAFE
- 4 3 . 1%
Russe ll
2000
4.6%
Asset Class
2007
MS CI
EME
34.5%
REITs
56
2006
REITs
Ca sh
1. 8 %
3.0%
Ba rc la ys
Agg
4.3%
Ba rc la ys
Agg
Bbe rg
Cmdty
REITs
MS CI
EME
2.4%
2 . 1%
- 15 . 7 %
- 53.2%
Ca sh
REITs
Ba rc la ys Ba rc la ys
Agg
Agg
5.9%
6.5%
Ma rke t
Ne utra l
4 . 1%
2013
2014
4Q14
REITs
REITs
10-yrs. '05 - '14

Cum.
Ann.
19 . 7 %
Russe ll
2000
38.8%
28.0%
12 . 9 %
MS CI
EME
18 . 6 %
S &P
500
32.4%
S &P
500
13 . 7 %
Russe ll
2000
9.7%
12 2 . 3 %
8.3%
Ma rke t
Ne utra l
4.5%
MS CI
EAFE
17 . 9 %
MS CI
EAFE
23.3%
Ba rc la ys
Agg
6.0%
S &P
500
4.9%
Russe ll
2000
111. 3 %
Russe ll
2000
7.8%
S &P
500
2 . 1%
Russe ll
2000
16 . 3 %
Asse t
Alloc .
15 . 0 %
Asse t
Alloc .
5.2%
Asse t
Alloc .
2.0%
S &P
500
10 9 . 5 %
S &P
500
7.7%
0 . 1%
S &P
500
16 . 0 %
Ma rke t
Ne utra l
9.3%
Russe ll
2000
4.9%
Ba rc la ys
Agg
1. 8 %
Asse t
Alloc .
9 1. 7 %
Asse t
Alloc .
6.7%
Asse t
Alloc .
- 0.6%
Asse t
Alloc .
11. 3 %
REITs
Ca sh
Ma rke t
Ne utra l
1. 0 %
MS CI
EAFE
6 1. 5 %
MS CI
EAFE
4.9%
Ca sh
2.9%
0.0%
0.0%
Ma rke t
Ne utra l
- 0.5%
0.0%
Ba rc la ys
Agg
- 2.0%
MS CI
EME
- 1. 8 %
MS CI
EAFE
- 3.5%
MS CI
EAFE
- 4.5%
MS CI
EME
- 4.4%
Ca sh
Ca sh
MS CI
EME
13 2 . 0 %
MS CI
EME
8.8%
REITs
REITs
Ba rc la ys Ba rc la ys
Agg
Agg
58.4%
4.7%
Ma rke t
Ne utra l
54.0%
Ma rke t
Ne utra l
4.4%
Ca sh
Ca sh
0 . 1%
Bbe rg
Cmdty
- 13 . 3 %
0 . 1%
MS CI
EME
- 2.3%
15 . 7 %
1. 5 %
Ca sh
Ma rke t
Ne utra l
MS CI
EME
Bbe rg
Cmdty
Bbe rg
Cmdty
Bbe rg
Cmdty
Bbe rg
Cmdty
Bbe rg
Cmdty
Bbe rg
Cmdty
0 . 1%
- 0.8%
- 18 . 2 %
- 1. 1%
- 9.5%
- 17 . 0 %
- 12 . 1%
- 17 . 1%
- 1. 9 %
Ca sh
Ca sh
Source: Russell, MSCI, Bloomberg,

g Standard & Poors, Credit Suisse, Barclays
y Capital,
p
NAREIT, FactSet, J.P. Morgan
g Asset Management.
g
The Asset Allocation portfolio assumes the following weights: 25% in the S&P 500, 10% in the Russell 2000, 15% in the MSCI EAFE, 5% in the MSCI EME,
25% in the Barclays Capital Aggregate, 5% in the Barclays 1-3m Treasury, 5% in the CS/Tremont Equity Market Neutral Index, 5% in the Bloomberg
Commodity Index and 5% in the NAREIT Equity REIT Index. Balanced portfolio assumes annual rebalancing. All data represents total return for stated period.
Past performance is not indicative of future returns. Data are as of 12/31/14, except for the CS/Tremont Equity Market Neutral Index, which
reflects data through 11/30/14. 10-yrs returns represent period of 12/31/04 12/31/14 showing both cumulative (Cum.) and annualized (Ann.)
over the period. Please see disclosure page at end for index definitions. *Market Neutral returns include estimates found in disclosures.
Correlations and Volatility

z
U.S. Large Cap
EAFE
EME
Bonds
U.S.
Large
Cap
EAFE
EME
1.00
0.88
1.00
Bonds
Munis
Currcy.
EMD
Cmdty.
REITs
0.78
-0.26
0.76
-0.09
-0.50
0.61
0.50
0.78
0.81
0.61
16%
0.91
-0.17
0.78
-0.03
-0.72
0.70
0.63
0.68
0.87
0.74
20%
1.00
-0.11
0.82
0.04
-0.66
0.79
0.67
0.58
0.89
0.58
25%
1.00
-0.06
0.81
-0.08
0.26
-0.24
-0.01
-0.27
-0.18
3%
1.00
0.16
-0.53
0.87
0.57
0.70
0.78
0.41
12%
1.00
-0.08
0.47
-0.17
0.06
-0.07
-0.11
4%
1.00
-0.53
-0.66
-0.40
-0.58
-0.69
7%
1.00
0.49
0.62
0.66
0.34
8%
1.00
0.36
0.72
0.45
21%
1.00
0.54
0.43
26%
1.00
0.60
7%
1.00
4%
Corp. HY
Munis
Currencies
EMD
Commodities
REITs
Hedge Funds
Asset Class
Eq
Hedge Market
Funds `Neutral*
Corp.
HY
Eq Market Neutral*
Source: Standard & Poors, FRB, Barclays Capital Inc., MSCI Inc., Credit Suisse/Tremont, NCREIF, DJ UBS, J.P. Morgan Asset Management.
Indexes used Large Cap: S&P 500 Index; Currencies: Federal Reserve Trade Weighted Dollar; EAFE: MSCI EAFE; EME: MSCI Emerging
Markets; Bonds: Barclays Capital Aggregate; Corp HY: Barclays Capital Corporate High Yield; EMD: Barclays Capital Emerging Market; Cmdty.:
DJ UBS Commodity Index; Real Estate: NAREIT Equity REIT Index; Hedge Funds: CS/Tremont Multi-Strategy Index; Equity Market Neutral:
CS/Tremont Equity Market Neutral Index. *Market Neutral returns include estimates found in disclosures.
All correlation coefficients and annualized volatility calculated based on quarterly total return data for period 12/31/04 to 12/31/14.
This chart is for illustrative purposes only.
57
Ann.
Volatility
Alternative Asset Class Returns
2005
2006
2007
2008
P riva te
Equity
q y
28.3%
Re a l
Esta te
35.6%
P riva te
Equity
q y
19 . 7 %
G bl.
Ma c ro
4.7%
MLP s
MLP s
76.4%
35.9%
G loba l
Equity
17 . 4 %
P riva te
Equity
28.7%
12 . 7 %
Eq. Mkt.
Ntrl.
- 3.0%
G loba l
Equity
30.0%
Re a l
Esta te
26.7%
G bl.
Ma c ro
11. 4 %
Mrgr.
Arb.
- 6.7%
Re a l
Esta te
27.6%
P riva te
Equity
20.4%
HF Agg.
Re l. V a l.
Re l. V a l.
Re l. V a l.
11. 0 %
- 17 . 3 %
23.0%
12 . 5 %
Re a l
Esta te
13 . 7 %
Distrsd.
10 . 4 %
Distrsd.
Re l. V a l.
HF Agg.
Distrsd.
9 . 1%
15 . 3 %
10 . 0 %
- 18 . 7 %
20.2%
Mrgr.
Arb.
14 . 6 %
Mrgr.
Arb.
8.9%
6.3%
Eq. Mkt.
Ntrl.
6 . 1%
G bl.
Ma c ro
6 . 1%
Asset Class
2 6 . 1%
G loba l
Equity
17 . 0 %
HF Agg.
MLP s
58
MLP s
MLP s
2009
Mrgr.
Arb.
5.5%
Re l. V a l.
5.3%
HF Agg.
13 . 3 %
G loba l
Equity
7.7%
Di t d
Distrsd.
HF A
Agg.
- 22.3%
18 . 6 %
P riva te
Equity
- 22.4%
P riva te
Equity
13 . 4 %
2010
2014
4Q14
27.6%
Re a l
Esta te
28.7%
Re a l
Esta te
12 . 3 %
P riva te
Equity
q y
15 . 0 %
Re a l
Esta te
25.2%
G loba l
Equity
26.2%
G loba l
Equity
9.9%
G bl.
Ma c ro
3.4%
MLP s
MLP s
13 . 8 %
18 . 1%
P riva te
Equity
14 . 0 %
P riva te
Equity
20.8%
G bl.
Ma c ro
6 . 1%
G loba l
Equity
3.0%
Re a l
Esta te
8.0%
P riva te
Equity
10 . 3 %
Re l. V a l.
Distrsd.
Re l. V a l.
9.7%
15 . 1%
5.2%
Eq. Mkt.
Ntrl.
1. 1%
G loba l
Equity
7.0%
2012
13 . 9 %
Re a l
Esta te
18 . 0 %
P riva te
Equity
11. 0 %
G loba l
Equity
16 . 5 %
Re a l
Esta te
9.4%
MLP s
Mrgr.
Arb.
2.3%
2013
MLP s
Distrsd.
9.6%
Distrsd.
Re l. V a l.
Distrsd.
HF Agg.
MLP s
HF Agg.
Re l. V a l.
12 . 2 %
0.8%
8.5%
9.6%
4.8%
- 0.3%
6.4%
G loba l
Equity
9.3%
Di t d
Distrsd.
HF A
Agg.
6 . 1%
7.8%
Re l. V a l.
HF Agg.
Re l. V a l.
- 0.9%
5.3%
6.7%
Mrgr.
Arb.
4.9%
G bl.
Ma c ro
4.6%
Eq. Mkt.
Ntrl.
3.7%
Mrgr.
Arb.
3.5%
G loba l
Equity
11. 1%
Di t d
Distrsd.
MLP s
0.0%
4.8%
4.6%
4.4%
Eq. Mkt.
Ntrl.
3.6%
Eq. Mkt.
Ntrl.
3 . 1%
Mrgr.
Arb.
5.3%
Mrgr.
Arb.
2.0%
- 2.0%
Mrgr.
Arb.
1. 8 %
G bl.
Ma c ro
0 . 1%
G loba l
Equity
- 6.0%
G bl.
Ma c ro
- 1. 3 %
Re a l
Esta te
- 0.5%
Mrgr.
Arb.
4.6%
Eq. Mkt.
Ntrl.
- 1. 5 %
Distrsd.
MLP s
12 . 2 %
6.8%
- 36.9%
G bl.
Ma c ro
8.2%
Eq. Mkt.
Ntrl.
5.7%
Re a l
Esta te
- 37.3%
G bl.
Ma c ro
6.9%
G bl.
Ma c ro
3.2%
Eq. Mkt.
Ntrl.
7.0%
Re a l
Esta te
- 16 . 3 %
G loba l
Equity
- 39.2%
Eq. Mkt.
Ntrl.
- 1. 7 %
Eq. Mkt.
Ntrl.
2.5%
HF Agg.
A
7.5%
8.5%
HF Agg.
R ll. V a l.
Re
l
Eq. Mkt.
Ntrl.
6.4%
G bl.
Ma c ro
- 0.7%
Mrgr.
Arb.
11. 9 %
Re l. V a l.
2011
10-yrs '05 - '14

Ann.
Ann.
Return Volatility
HF Agg.
HF Agg.
Mrgr.
Arb.
- 0.7%
Distrsd.
- 4.0%
Distrsd.
MLP s
1. 9 %
- 12 . 3 %
G bl.
Ma c ro
4.4%
P riva te
Equity
-
P riva te
Equity
-
Eq. Mkt.
Ntrl.
2.7%
Source: Standard & Poors, Alerian, HFRI, MSCI, Cambridge Associates, NAREIT, FactSet, J.P. Morgan Asset Management.
Hedge fund indices include distressed and restructuring (Distrsd.), relative value (Rel. Val.), global macro (Gbl. Macro), merger arbitrage (Mrger. Arb.), equity
market neutral (Eq. Mkt. Ntrl.), and the aggregate (HF Agg.). Returns may fluctuate as hedge fund reporting occurs on a lag. QTD and YTD private equity data is
unavailable and provided by Cambridge Associates. Real estate returns reflect the NAREIT Real Estate 50 Index and global equity returns reflect
the MSCI AC World Index. Annualized volatility and returns are calculated from quarterly data between 12/31/04 and 12/31/14.
Please see disclosure pages for index definitions.
Fund Flows
Mutual Fund Flows
AUM
Billions, USD
YTD 2014 2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
Domestic Equity
6,283
(39)
19
(159)
(133)
(81)
(28)
(149)
(68)
(3)
17
100
120
(25)
57
258
176
World Equity
2,158
89
141
57
26
(80)
142
151
107
72
24
(4)
(23)
58
11
Taxable Bond
2,942
39
(13)
256
129
221
301
22
100
44
21
40
125
76
(36)
560
24
(58)
50
(12)
12
70
11
15
(15)
(7)
17
12
(14)
(12)
Hybrid
1,377
31
71
45
40
35
20
(26)
40
20
43
53
39
(37)
(13)
Money Market
2,623
(75)
15
(0)
(124)
(525)
(539)
637
654
245
62
(157)
(263)
(46)
375
159
194
Tax-exempt Bond
Cumulative Flows Into Global Stock & Bond Funds
Cumulative Flows Into U.S. Equity Funds
$1,600
$800
Billions USD,
Billions,
USD includes both mutual funds and ETFs
$1,400
$1,200
Nov. 14: $1,406 billion into bond funds

and fixed income ETFs since 07
$1,000
Nov. 14: $707 billion into

stock
t k ffunds
d and
d equity
it
ETFs since 07
Asset Class
$800
59
$600
Bonds
$0
Nov. 14: $626 billion into U.S.

equity funds and ETFs by
institutional investors since 07
$400
Institutional
$0
Retail
-$400
$400
$200
Billions USD,
Billions,
USD includes both mutual funds and ETFs
Stocks
Nov. 14: $643 billion out of U.S.

equity funds and ETFs by retail
investors since 07
-$800
'07
'08
'09
'10
'07
07
'08
08
'09
09
'10
10
'11
11
'12
12
'13
13
'14
14
Source: Investment Company Institute, J.P. Morgan Asset Management.
TOP: Data includes flows through November 2014 and excludes ETFs. BOTTOM: Data includes flow through November 2014 and includes
ETFs. ICI data are subject to periodic revisions. World equity flows are inclusive of emerging market, global equity and regional equity flows.
Hybrid flows include asset allocation, balanced fund, flexible portfolio and mixed income flows.
'11
'12
'13
'14
Yield Alternatives: Domestic and Global

S&P 500 Total Return: Dividends vs. Capital Appreciation
Average annualized returns
Capital Appreciation
20%
Dividends
%
15%
13.6%
13.9%
10%
12.6%
3.0%
5%
4.7%
4.4%
6.0%
5.4%
5.1%
5.9%
4.4%
4.2%
3.3%
0%
15.3%
1.6%
1.8%
2.5%
4.0%
-2.7%
-5.3%
5 3%
-5%
-10%
1926 to 1929
1930's
1940's
1950's
1960's
Equity Dividend Yields
10-year government
bond yield
4.6%
1926 to 2014
10-year government
bond yield
7%
5.8%
5.6%
5%
2.9%
3%
Asset Class
2000's
5.0%
3.3%
4.1%
2.8%
4%
2.5%
1.8%
2%
2.0%
3.6%
3.8%
3.0%
2.9%
U.K.
Japan
p
3%
2%
1%
1%
0%
U.S.
Australia
U.K.
France
Canada
Switzerland
ACWI
Japan
p
0%
U.S.
Canada
Singapore
g p
France
Australia
Source: (Top chart) Standard & Poors, Ibbotson, J.P. Morgan Asset Management. (Bottom right) FactSet, NAREIT, J.P. Morgan Asset Management.
Dividend vs. capital appreciation returns are through 12/31/14. Yields shown are that of the appropriate FTSE NAREIT REIT index, which excludes
property development companies. (Bottom left) FactSet, MSCI, J.P. Morgan Asset Management. Yields shown are that of the appropriate MSCI index.
60
1990's
Major world markets

markets, annualized
6%
3.8%
4%
1980's
REIT Yields
Major world markets,

markets annualized
5%
1970's
Global
Global Real Assets

Commercial Vacancy Rates by Sector
Property Appreciation and Operating Income Growth
Percent at year end
YoY NCREIF ODCE Index* unlevered property appreciation and NOI growth
25%
12%
Sector
Office
Retail
Industrial
Apartment
20%
2013
16.7%
10.1%
9.5%
4.2%
Appreciation
8%
4%
0%
Net Operating Income Growth
-4%
15%
-8%
'10
'11
'12
'13
'14
Allowed Return on Equity over the Cost of Debt
OECD Infrastructure
16%
10%
Recession
14%
Electric
12%
Nat. Gas
10%
Asset Class
10y UST
6%
4%
2%
0%
0%
'90
90
'92
92
'94
94
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
'10
10
'12
12
'70
70
'80
80
Source: Reis, Inc., PREA, NCREIF, Regulatory Research Associates, Barclays Capital, FactSet, J.P. Morgan Asset Management.
Vacancy rate data provided by Reis, Inc. *NCREIF Open End Diversified Core Equity Index.
61
Utility
bond
8%
5%
'90
90
'00
00
'10
10
Global Commodities
Commodity Prices
Gold Prices
Weekly index prices rebased to 100
$ / oz
450
$3,000
Gold, Inflation Adjusted

Gold
Gold
$2,500
Precious Metals
400
Dec. 2014:
$1,206
$2,000
$1,500
350
$1,000
300
$500
Industrial Metals
$0
'75
250
'80
'85
'90
'95
'00
'05
'10
Commodity Prices and Inflation

Year-over-year % chg.
chg
200
8%
6%
150
CPI Basket
Asset Class
100
50
Energy
0
'05
05
'06
06
'07
07
'08
08
'09
09
'10
10
'11
11
'12
12
'13
13
'14
14
DJ-UBS Commodity Index

(Y/Y % chg.)
60%
4%
40%
2%
20%
0%
0%
-2%
-20%
-4%
-40%
-6%
-60%
'96
96
'98
98
'00
00
'02
02
'04
04
'06
06
'08
08
Source: Dow Jones/UBS, EcoWin, BLS, U.S. Department of Energy, FactSet, J.P. Morgan Asset Management. CPI adjusted gold values are calculated
using monthly averages of gold spot prices divided by the CPI value for that month. CPI is rebased to 100 at the end of the chart. Returns based on
nominal prices. Commodity prices represented by the appropriate Bloomberg Commodity sub-index.
62
Grains
Livestock
80%
Headline CPI
(Y/Y % chg.)
'10
10
'12
12
'14
14
Life Expectancy and Pension Shortfall

Probability of Reaching Ages 80 and 90
Perceived retirement shortfall by country
100%
25
Persons aged 65, by gender, and combined couple
Men
87%
Women
Couple at least one
lives to specified age
80%
20
11
69%
10
15
60%
Savings expected
to last (years)
Expected savings
shortfall (years)
58%
8
8
10
10
41%
10
10
40%
14
Brazil
Canada
U.S.
U.K.
Singapore
S
90 Years
Australia
80 Years
France
0%
Average
Asset Class
Source: (Left) SSA 2010 Life Tables, J.P. Morgan Asset Management. (Right) The Future of Retirement: A new reality study by HSBC, J.P. Morgan Asset
Management. Figures represent the expected portion of retirement that will not be covered by retirement savings based on survey data.
Data as of 12/31/14.
10
10
18%
20%
63
UAE
12
11
Mexico
11
10
India
China
28%
Historical Returns by Holding Period

Range of Stock, Bond and Blended Total Returns
Annual total returns, 1950 2014

60%
50%
Annual Avg. Growth of $100,000

Total
T
t l Return
R t
over 20 years
Stocks
51%
40%
43%
30%
10.8%
$833,227
Bonds
6.2%
$327,106
50/50 Portfolio
9.0%
$565,743
32%
28%
20%
23% 21%
18%
19%
14%
16% 17%
12%
10%
6%
0%
-2%
-8%
Asset Class
-10%
-2%
1%
-1%
1%
2%
-15%
-20%
Stocks
-30%
Bonds
50/50 Portfolio
-37%
-40%
1-yr.
5-yr.
rolling
10-yr.
rolling
Sources: Barclays Capital, FactSet, Robert Shiller, Strategas/Ibbotson, Federal Reserve, J.P. Morgan Asset Management.
Returns shown are based on calendar year returns from 1950 to 2014. Growth of $100,000 is based on annual average total returns from
1950-2014.
64
5%
1%
20-yr.
rolling
Diversification and the Average Investor

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

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

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

J.P. Morgan Asset Management. (Top)
Indexes and weights of the traditional
portfolio are as follows: U.S. Stocks:
55% S&P 500; U.S. Bonds: 30%
Barclays Capital Aggregate;
I t
International
ti
l Stocks:
St k 15% MSCI EAFE.
EAFE
Portfolio with 25% in alternatives is as
follows: U.S. Stocks: 22.2% S&P 500,
8.8% Russell 2000; International
Stocks: 4.4% MSCI EM, 13.2% MSCI
EAFE; U.S. Bonds: 26.5% Barclays
Capital Aggregate; Alternatives: 8.3%
CS/Tremont Equity Market Neutral:
8.3%,, DJ/UBS Commodities: 8.3%
NAREIT Equity REIT Index. Return and
standard deviation calculated using
Morningstar Direct.
Charts are shown for illustrative
purposes only. Past performance is not
indicative of future returns.
Diversification does not guarantee
investment returns and does not
eliminate
li i t risk
i k off lloss. (Bottom)
(B tt ) IIndexes
d
used are as follows: REITS: NAREIT
Equity REIT Index, EAFE: MSCI EAFE,
Oil: WTI Index, Bonds: Barclays Capital
U.S. Aggregate Index, Homes: median
sale price of existing single-family
homes, Gold: USD/troy oz, Inflation:
CPI. Average asset allocation investor
y
by
y
return is based on an analysis
Dalbar Inc., which utilizes the net of
aggregate mutual fund sales,
redemptions and exchanges each
month as a measure of investor
behavior. Returns are annualized (and
total return where applicable) and
represent the 20-year period ending
12/31/13 to match Dalbars most recent
analysis Guide to the Markets U.S.
analysis.
US
Cash Accounts
Annual Income Generated by $100,000 Investment in a 6-mo. CD
$10,000
$8 000
$8,000
Money Supply
Component
$ Billions
Weight in
Money
Supply
2006: $5,240
M2-M1
$6,000
8,710
78.1%
$4,000
2014:
$130
$2,000
Retail MMMFs
Savings deposits
$0
'90
'95
'00
'05
'10
5.6%
7,558
67.8%
524
4 7%
4.7%
'15
M2 Money Supply as a % of Nominal GDP
Small time deposits
70%
628
3Q14: 65.0%
65%
Institutional MMMFs
1,788
16.0%
652
5.8%
60%
Average: 53
53.0%
0%
Asset Class
55%
66
Cash in IRA & Keogh

accounts
50%
45%
40%
'80
Total
'85
'90
'95
'00
'05
'10
11,149
100.0%
'15
Source: Federal Reserve, St. Louis Fed, Bankrate.com, J.P. Morgan Asset Management.
All cash measures obtained from the Federal Reserve are seasonally adjusted monthly numbers. All numbers are in billions of U.S. dollars. Small-denomination time deposits are
those issued in amounts of less than $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions are subtracted from
small time deposits. Annual income is for illustrative purposes and is calculated based on the 6-month CD yield on average during each year and
$100,000 invested. IRA and Keogh account balances at money market mutual funds are subtracted from retail money funds.
Past performance is not indicative of comparable future results.
Corporate DB Plans and Endowments

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

$2.5
Corporate Defined Benefit Plans
100%
95%
Assets ($)
48.0%
9.0%
Fixed Income
105%
Liabilities ($)
$2.0
27.0%
Equities
Funded Status (%)
Trillions ($)
$1.5
90%
$1.0
85%
80%
38 0%
38.0%
$0.5
Hedge Funds
Private Equity
75%
20.1%
$0.0
4.0%
70%
'07
15.9%
'08
'09
'10
'11
'12
'13
Q4 '14*
Pension Return Assumptions: S&P 500 companies
2.0%
40%
Real Estate
Asset Class
Other
67
Cash
17.7%
2.0%
7.3%
3.0%
% of C
Companies
34%
30%
20%
20%
13%
12%
10%
9%
10%
6%
0%
1%
7%
5%
1%
3%
1%
0%
0%
0%
0%
< 6%
6 to 6.5 to
6.5% 7%
7 to 7.5 to
7.5% 8%
8 to 8.5 to
8.5% 9%
0%
10%
20%
30%
40%
50%
60%
Return Assumption
Source: NACUBO (National Association of College and University Business Officers), Towers Watson, Compustat/FactSet, J.P. Morgan Asset
Management. Asset allocation as of 2012. *Funded status for 4Q14 estimated using market returns. Endowments represents dollar-weighted
average data of 842 colleges and universities. Pension Return Assumptions based on all available and reported data from S&P 500 Index
companies. Pension Assets, Liabilities and Funded Status based on Russell 3000 companies reporting pension data. Return assumption bands are
inclusive of upper range. All information is shown for illustrative purposes only.
29%
20%
3.0%
4.0%
27%
9 to 9.5 to > 10%

9.5% 10%
J.P. Morgan Asset Management Index Definitions

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

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

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

The Market Insights program provides comprehensive data and commentary on global markets without reference to products. Designed as a tool to help clients understand the markets and support investment decisionmaking, the program explores the implications of current economic data and changing market conditions.
The views contained herein are not to be taken as an advice or recommendation to buy or sell any investment in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any
of the transactions mentioned herein. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to
change without prior notice. All information presented herein is considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. This material should not
be relied upon
pon by
b you
o in evaluating
e al ating the merits of investing
in esting in any
an securities
sec rities or products.
prod cts In addition,
addition the Investor
In estor should
sho ld make an independent assessment of the legal
legal, reg
regulatory,
lator tax,
ta credit
credit, and accounting
acco nting and determine,
determine together with
ith
their own professional advisers if any of the investments mentioned herein are suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. It should be noted
that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yield may not
be a reliable guide to future performance. Exchange rate variations may cause the value of investments to increase or decrease. Investments in smaller companies may involve a higher degree of risk as they are usually more sensitive
to market movements. Investments in emerging markets may be more volatile and therefore the risk to your capital could be greater. Further, the economic and political situations in emerging markets may be more volatile than in
established economies and these may adversely influence the value of investments made.
It shall be the recipients sole responsibility to verify his / her eligibility and to comply with all requirements under applicable legal and regulatory regimes in receiving this communication and in making any investment. All case studies
shown are for illustrative purposes only and should not be relied upon as advice or interpreted as a recommendation. Results shown are not meant to be representative of actual investment results.
J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by the following entities: in Brazil by Banco J.P. Morgan S.A.
(Brazil) which is regulated by The Brazilian Securities and Exchange Commission (CVM) and Brazilian Central Bank (Bacen); in the United Kingdom by JPMorgan Asset Management (UK) Limited, which is authorized and regulated by
the Financial Conduct Authority (FCA); in other EU jurisdictions by JPMorgan Asset Management (Europe) S. r.l.; in Switzerland by J.P. Morgan (Suisse) SA, which is regulated by the Swiss Financial Market Supervisory Authority
FINMA; in Hong Kong by JF Asset Management Limited, JPMorgan Funds (Asia) Limited or JPMorgan Asset Management Real Assets (Asia) Limited, all of which are regulated by the Securities and Futures Commission; in India by
JPMorgan Asset Management India Private Limited which is regulated by the Securities & Exchange Board of India; in Singapore by JPMorgan Asset Management (Singapore) Limited or JPMorgan Asset Management Real Assets
(Singapore) Pte. Ltd., both are regulated by the Monetary Authority of Singapore; in Taiwan by JPMorgan Asset Management (Taiwan) Limited or JPMorgan Funds (Taiwan) Limited, both are regulated by the Financial Supervisory
Commission; in Japan by JPMorgan Asset Management (Japan) Limited which is a member of the Investment Trusts Association, Japan, the Japan Investment Advisers Association and the Japan Securities Dealers Association, and is
regulated
egu ated by the
t e Financial
a c a Se
Services
ces Agency
ge cy ((registration
eg st at o number
u be Kanto
a to Local
oca Finance
a ce Bureau
u eau ((Financial
a c a Instruments
st u e ts Firm)) No.
o 330
330);); in Korea
o ea by JPMorgan
J o ga Asset
sset Management
a age e t ((Korea)
o ea) Co
Company
pa y Limited
ted which
c iss regulated
egu ated by tthee
Financial Services Commission (without insurance by Korea Deposit Insurance Corporation) and in Australia to wholesale clients only as defined in section 761A and 761G of the Corporations Act 2001 (Cth) by JPMorgan Asset
Management (Australia) Limited (ABN 55143832080) (AFSL 376919) which is regulated by the Australian Securities and Investments Commission; in Canada by JPMorgan Asset Management (Canada) Inc.; and in the United States
by J.P. Morgan Investment Management Inc., or J.P. Morgan Distribution Services , Inc., member FINRA SIPC.
EMEA Recipients: You should note that if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also take note that information and
data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA Privacy Policy which can be accessed through the following website
http://www.jpmorgan.com/pages/privacy.
Past performance is no guarantee of comparable future results.
Diversification does not guarantee investment returns and does not eliminate the risk of loss.
Brazilian recipients:
Prepared by: Andrew D. Goldberg, Anastasia V. Amoroso, James C. Liu, Gabriela D. Santos,
David M. Lebovitz, Hannah J. Anderson, Abigail B. Dwyer, Ainsley E. Woolridge, and David P. Kelly.
Unless otherwise stated, all data are as of December 31, 2014 or most recently
available.
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4Q

Guide to the Markets

Global Market Insights Strategy Team

Dr. David P. Kelly, CFA

Maria Paola Toschi

Anastasia V. Amoroso, CFA

Manuel Arroyo Ozores,

Tilmann Galler, CFA

David Stubbs, PhD

Kerry Craig, CFA

S&P 500 Index at Inflection Points

Interest Rates and Inflation

Fixed Income Yields and Returns

Economic Growth and the Composition of GDP

Global Equity Markets

Asset Class Returns

S&P 500 Index at Inflection Points

Dec. 31, 2014

Returns and Valuations by Style

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

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

254.4% 244.2% 246.9%

266.2% 279.9% 293.3%

E.g.: Large Cap Blend stocks are fairly

Since Market Low (March 2009)

Since Market Peak (October 2007)

Beta to S&P 500

Since Market Peak

Since Market Low

Forward P/E Ratio

Trailing P/E Ratio

Returns and Valuations by Sector

Guide to the Markets U.S.

Stock Valuation Measures: S&P 500 Index

U.S. Equity: Valuation Measures

Real Earnings Yield

Price to Cash Flow

S&P 500 Index: Forward P/E Ratio

S&P 500 Earnings Yield vs. Baa Bond Yield

S&P 500 Earnings Yield

Moodys Baa Yield: 4.7%

Corporate Profits and Leverage

S&P 500 Operating EPS % of Sales per Share**

Data are as of 12/31/14.

Sources of Earnings per Share Growth

Share of EPS Growth

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

Data are as of 12/31/14.

Equity Performance in Bull Markets

S&P 500 Levels Near Market Highs

Price returns to peak after crossing average real earnings yield

Start of Bull Market

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

Interest Rates and Equities

Deploying Corporate Cash

Corporate Cash as a % of Current Assets

S&P 500 companies cash and cash equivalents, quarterly

$bn, nonfarm nonfinancial capex, quarterly value of deals completed

Cash Returned to Shareholders

$bn S&P 500 companies,

Dividend Payout Ratio

Dividends per Share

Guide to the Markets U.S. Data are as of 12/31/14.