GHF

MARKET INSIGHTS
Guide to the Markets

Europe | 3Q 2015 | As of 30 June 2015
Global Market Insights Strategy Team

Americas
Europe
Asia
Dr. David P. Kelly, CFA
Stephanie H. Flanders
Tai Hui
New York
London
Hong Kong
Andrew D. Goldberg
New York
Manuel Arroyo Ozores, CFA
Yoshinori Shigemi
Madrid
Tokyo
Anastasia V. Amoroso, CFA
Tilmann Galler, CFA
Grace Tam, CFA
Houston
Frankfurt
Hong Kong
Julio C. Callegari
Lucia Gutierrez-Mellado
Kerry Craig, CFA
So Paulo
Madrid
Melbourne
James C. Liu, CFA
Vincent Juvyns
Ian Hui
Chicago
Luxembourg
Hong Kong
David M. Lebovitz
Dr. David Stubbs
Akira Kunikyo
New York
London
Tokyo
Gabriela D. Santos
Maria Paola Toschi
Ben Luk
New York
Milan
Hong Kong
Hannah J. Anderson
Alexander W. Dryden
Anthony Tsoi, CFA
New York
London
Hong Kong
Abigail B. Dwyer
Nandini L. Ramakrishnan
New York
London
Ainsley E. Woolridge
New York
For China, Australia, Vietnam and Canada distribution: Please note this communication is for intended recipients only. In Australia for wholesale clients use only and in
Canada for institutional clients use only. For further details, please refer to the full disclaimer. Unless otherwise stated, all data is as of 30 June 2015 or most recently available.
Page reference
Europe economy
4.
5.
6.
7.
8.
9.
10.
11.
Europe: GDP and inflation

Eurozone cyclical indicators
Eurozone recovery monitor
Eurozone credit conditions
European Central Bank (ECB) policies
Europe cash accounts
Europe corporate finances
UK economic indicators
38.
39.
40.
41.
42.
43.
44.
45.
Interest rates and equities

Japanese equities
Developed markets equity valuations by country
Emerging markets equity valuations by country
Emerging markets valuations and returns
Emerging markets: Dividends and valuations
Equity income
Annual returns and intra-year declines
Fixed income
Global economy
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
Global Purchasing Managers Index (PMI) for manufacturing

Global and European inflation dynamics
Economic and monetary policy divergence
US dollar
US Federal Reserve policies
US: GDP and inflation
US employment
US cyclical indicators
US consumer finances
Japan: GDP and inflation
Japan: Abenomics and the economy
China: GDP, inflation and policy rate
China cyclical indicators
China financial dynamics
Emerging markets challenges
Emerging markets trade connections with developed markets
Equities
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
World stock market returns

European sector returns
Bond and equity relative valuations
MSCI Europe Index at inflection points
MSCI Europe Index equity valuations
MSCI Europe earnings and profit margins
US S&P 500 at inflection points
US S&P 500 equity valuations
US S&P 500 earnings and profit margins
Bear markets
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
Fixed income sector returns

Fixed income market data
Central bank policy
Government interest rates
Fixed income interest rate risk
Liquidity and duration risks
Government bonds
Investment-grade bonds
US high yield bonds
European high yield bonds
Emerging markets debt
Emerging markets debt composition
Other assets and investor behaviour

58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
Asset class returns

Correlation of returns (EUR)
Asset volatility
Commodity returns
Commodities
Oil consumption and production
Life expectancy and pension shortfall
Consumer confidence and the stock market
Industry fund flows
US asset returns by holding period
Alternative asset class returns
Risk/return characteristics of alternatives
Alternative strategies
Europe economy
Europe: GDP and inflation

Real GDP
GTM Europe
Average
since 1999
EU28, change quarter on quarter

2
Real GDP
0,3%
1Q15
0,4%
Inflation
| 4
Average
May
since 1999 2015
EU28, change year on year

5
Headline CPI*
2,3%
0,3%
Core CPI
1,6%
0,9%
Average
3
0
2
-1
1
-2
0
-3
-1
'99
'01
'03
'05
'07
'09
'11
'13
'99
'01
'03
'05
'07
'09
Source: (Both charts) Eurostat, FactSet, J.P. Morgan Asset Management. *CPI is the Consumer Price Index. Core CPI is defined as CPI excluding food, energy and
tobacco. Guide to the Markets - Europe. Data as of 30 June 2015.
'11
'13
Europe economy
Eurozone cyclical indicators
| 5
GTM Europe
New auto registrations
Retail sales growth
EU19, millions of new passenger cars, seasonally adjusted

1,2
EU19, excluding motor vehicles, change year on year
Apr 2015:
2,2%
4
%
1,1
2
May 2015:
0,78
1,0
0,9
-2
Average: 0,89
0,8
-4
0,7
0,6
-6
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
'01
'15
Gross fixed capital formation*
'03
'05
'07
'09
'11
'13
Industrial production and money supply
Rebased to 100 at March 2008

110
US*
EU19, change year on year, three-month moving average

16
M1 (y/y) lead by 12 months
Industrial production (y/y)
%
12
%
8
12
100
90
Eurozone
8
0
4
80
70
-4
'08
'09
'10
'11
'12
'13
'14
'15
-8
'93
'95
'97
'99
'01
'03
'05
'07
Source: (Top left, top and bottom right) ECB, Eurostat, FactSet, J.P. Morgan Asset Management. (Bottom left) Eurostat, US Bureau of Economic Analysis, FactSet,
J.P. Morgan Asset Management. *US data is nonresidential gross fixed capital formation, Eurozone data is overall gross fixed capital formation due to data
availability. M1 is defined as the sum of currency held by the public and transaction deposits at depository institutions. Guide to the Markets - Europe. Data as of 30
June 2015.
'09
'11
'13
'15
Europe economy
Eurozone recovery monitor
GTM Europe
Manufacturing purchasing managers indices
Economic sentiment
Index level
65
Index level
120
Germany
France
Italy
Spain
| 6
Greece
110
55
100
45
90
80
35
Germany
France
Italy
Spain
'11
'13
Greece
25
70
60
'07
'08
'09
Unemployment rate
30
%
'10
'12
Germany
France
Eurozone
'14
Italy
Spain
'15
Greece
'07
'08
'09
'10
'11
'12
'14
'15
Gross exports
Rebased to 100 at December 2007, two-quarter moving average
140
130
25
120
20
110
15
100
10
Ireland
Spain
Italy
90
80
70
'07
'08
'09
'10
'11
'12
'13
'14
'07
'08
'09
'10
'11
Source: (Top left) Markit, J.P. Morgan Asset Management. (Bottom left and bottom right) Eurostat, FactSet, J.P. Morgan Asset Management. (Top right) European
Commission, FactSet, J.P. Morgan Asset Management. Guide to the Markets - Europe. Data as of 30 June 2015.
'13
'12
Germany
France
Portugal
'13
'14
Europe economy
Eurozone credit conditions
GTM Europe
| 7
Credit demand and eurozone GDP growth
Bank loans to households and non-financial corporations
Net % of banks reporting positive loan demand, GDP growth

100
billions, net lending flow, three-month moving average

30
20
Stronger loan
demand
50
10
00
-10
-20
'09
-50
-2
-100
-4
Weaker loan
demand
-6
Overall corporate (lhs)
Housing loans (lhs)
Eurozone GDP growth

y/y (rhs)
'11
'12
'13
'14
-200
'05
'06
'07
'08
'09
'10
'11
'13
'14
'15
Corporate lending rates

Non-financial corporations, new business lending up to 1 million, 1-5 years
7
%
6
-8
'15
Italy
Spain
France
Germany
2
'05
'06
'07
'08
Source: (Left) ECB, Eurostat, FactSet, J.P. Morgan Asset Management. (Top and bottom right) ECB, Thomson Reuters Datastream,
J.P. Morgan Asset Management. Guide to the Markets - Europe. Data as of 30 June 2015.
'12
-150
Consumer credit (lhs)
'10
'09
'10
'11
'12
'13
'14
'15
Europe economy
European Central Bank (ECB) policies
GTM Europe
ECB balance sheet: Assets
| 8
Central bank quantitative easing purchases
trillions
4,0
Jul 2015
Sep 2016:
est. 39%
3,5
% of net issuance over

QE period*
% of debt outstanding
20
150
100
10
50
5
Jan 2005
Jul 2012:
249%
2,5
0
Fed
2,0
BoE
BoJ
ECB
Changes in equities and exchange rates

Since policy announcements**
80
%
60
1,5
1,0
20
0,5
0
0,0
Equities
Exchange rate
15,6
40
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
250
%
200
15
Aug 2012
Jun 2015:
-20%
3,0
30
%
25
'16
-20
31,7
46,0
38,5
20,0
-10,1
-1,9
US QE1
US QE2
US QE3
11,5
-9,2
-15,0
Eurozone
Japan
Source: (Left) ECB, FactSet, J.P. Morgan Asset Management. (Top right) Bank of England (BoE), Bank of Japan (BoJ), Deutsche Bank, European Central Bank
(ECB), US Federal Reserve, J.P. Morgan Asset Management. (Bottom right) Bank of England, FactSet, IMF, MSCI, Standard & Poors, J.P. Morgan Asset
Management. *QE period for Fed is September 2008 to October 2014, BoE is March 2009 to June 2012, ECB is from March 2015 to September 2016. QE period for
BoJ is April 2013 to October 2015 and based on Deutsche Bank estimates, as are net issuance amounts over the QE period for Japan and eurozone. **All US data
is for 2 years following initial policy announcement. US QE1 is from November 2008, US QE2 is from November 2010, US QE3 is from September 2012.
Eurozone QE is from August 2014 to 30 June 2015. Japan QE is from April 2013 to 30 June 2015. US equities is the S&P 500, Eurozone equities is the MSCI EMU
and Japan equities is the MSCI Japan. Guide to the Markets - Europe. Data as of 30 June 2015.
Europe economy
Europe cash accounts
GTM Europe
Euro area deposits

trillions
| 9
Income generated by 100.000 investment in a one-year

bank deposit
Aug 2012: 3,3tn
3,5
2007: 4.580
5.000
Income
Inflation (y/y)
3,0
4.000
May 2015:
1,8tn
2,5
Jun 2015:
115
3.000
2,0
2.000
1.000
1,5
1,0
0,5
0,0
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
-1.000
-1
'00
'02
'04
'06
'08
Source: (Left) ECB, J.P. Morgan Asset Management. (Right) Bloomberg, Eurostat, J.P. Morgan Asset Management. Blue marker points represent year on year
inflation and illustrate how the value of income would have been eroded due to inflation. Guide to the Markets - Europe. Data as of 30 June 2015.
'10
'12
'14
Europe economy
Europe corporate finances
GTM Europe
| 10
Total leverage
MSCI Europe Index: Geographical sources of revenue
MSCI Europe, ratio of total debt to total equity, quarterly

340
RoW*
Asia 11%
9%
%
320
Europe
53%
Americas
26%
300
280
260
Interest coverage ratio (EBIT / net interest)
Average: 260%
MSCI Europe, quarterly

6
x
5
3Q15:
3,6x
240
220
4
Average: 3,1x
1Q15:
194%
200
2
180
1
'97
'99
'01
'03
'05
'07
'09
'11
'13
'97
'99
'01
'03
'05
Source: (Top left) MSCI, Thomson Reuters Datastream, Worldscope, J.P. Morgan Asset Management. (Right and bottom left) MSCI, FactSet,
J.P. Morgan Asset Management. *RoW denotes revenues coming from the world excluding Europe, Asia and the Americas. Guide to the Markets - Europe.
Data as of 30 June 2015.
10
'07
'09
'11
'13
Europe economy
UK economic indicators
GTM Europe
Real GDP growth
Unemployment rate and consumer confidence

9,0
%
8,0
Rebased to 100 at 1Q08

110
US
Germany
UK
106
| 11
France
Japan
10
Consumer confidence
Unemployment rate
0
-10
7,0
102
-20
6,0
98
-30
5,0
94
90
4,0
'08
'09
'10
'11
'12
'13
'14
'15
Current account
% of GDP
4
%
2
-40
'05
'06
'07
'08
'09
'10
'11
Trade balance
Change year on year
Current transfers
Current account balance
'13
'14
-50
Nominal wage growth*

Headline CPI
Real wage growth
Wage growth
Investment income
'12
6
4
-2
0
-4
-2
-6
-8
'05
'07
'09
'11
'13
-4
'05
'06
'07
'08
'09
'10
Source: (Top left) OECD, J.P. Morgan Asset Management. (Bottom left) FactSet, ONS, J.P. Morgan Asset Management. (Top right) FactSet, GFK, ONS,
J.P. Morgan Asset Management. (Bottom right) FactSet, ONS, J.P. Morgan Asset Management. *Nominal wages include bonuses. Guide to the Markets - Europe.
11
'11
'12
'13
'14
Global Purchasing Managers Index (PMI) for manufacturing
Europe
Emerging
Developed
Global economy
Global
Jun
May
Apr
Mar
Feb
Jan
Dec
Nov
Oct
Sep
2015
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
| 12
50,6 51,5 51,6 51,9 52,8 52,9 52,9 53,1 52,4 51,9 52,2 52,6 52,4 52,5 52,2 52,2 51,8 51,5 51,7 51,9 51,8 51,0 51,2 51,2
Eurozone
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 50,6 51,0 51,0 52,2 52,0 52,2 52,5
France
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 49,2 47,6 48,8 48,0 49,4 50,7
Germany
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 50,9 51,1 52,8 52,1 51,1 51,9
Italy
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 49,9 51,9 53,3 53,8 54,8 54,1
Spain
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 54,7 54,2 54,3 54,2 55,8 54,5
Ireland
51,0 52,0 52,7 54,9 52,4 53,5 52,8 52,9 55,5 56,1 55,0 55,3 55,4 57,3 55,7 56,6 56,2 56,9 55,1 57,5 56,8 55,8 57,1 54,6
UK
54,6 58,4 56,9 56,4 57,8 57,2 56,5 55,9 55,3 57,2 56,6 56,8 54,9 53,0 51,5 53,4 53,3 52,7 52,9 53,9 54,3 51,8 51,9 51,4
US
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 53,9 55,1 55,7 54,1 54,0 53,6
Japan
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 52,2 51,6 50,3 49,9 50,9 50,1
Brazil
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 50,7 49,6 46,2 46,0 45,9 46,5
Russia
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 47,6 49,7 48,1 48,9 47,6 48,7
India
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 52,9 51,2 52,1 51,3 52,6 51,3
China
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 49,7 50,7 49,6 48,9 49,2 49,4
Korea
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 51,1 51,1 49,2 48,8 47,8 46,1
Taiwan
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 51,7 52,1 51,0 49,2 49,3 46,3
Lowest relative to 50 PMI
12
Dec
2014
Nov
Oct
Sep
Aug
Jul
2013
GTM Europe
50
Highest relative to 50 PMI
Source: FactSet, Markit, J.P. Morgan Asset Management. The Global Purchasing Managers Index (PMI) assesses the economic health of the manufacturing sector by
surveying output and employment intentions. For Global PMI, heatmap colours are based on PMI relative to global recent history; for countries, heatmap colours are
based on PMI relative to all countries shown. Global PMI is a GDP-weighted calculation. Guide to the Markets - Europe. Data as of 30 June 2015.
Global and European inflation dynamics
GTM Europe
| 13
Developed economies inflation

CPI change year on year
5
%
4
Global economy
Average Jan 2009 to Jun 2015: 1,4%

Average Jan 1990 to Dec 2008: 2,3%
3
2
1
0
-1
'90
'94
'98
'02
Long-term inflation expectations
'06
'10
'14
Eurozone inflation and consumer confidence
5-year/5-year inflation*
4,0
%
3,5
UK
US
Eurozone
6
%
5
CPI** lagged six
months (y/y)
Consumer confidence
-5
-10
3,0
-15
-20
2,5
-25
0
2,0
-30
-35
1,5
Dec 13
Jun 14
Dec 14
Jun 15
-2
'03
-40
'04
'05
'06
'07
'08
'09
'10
'11
Source: (Top) J.P. Morgan Economic Research, J.P. Morgan Asset Management. (Bottom left) Bloomberg, J.P. Morgan Asset Management. (Bottom right) Eurostat,
FactSet, J.P. Morgan Asset Management. *5-year/5-year inflation expectations is the market expectation for average inflation over 5 years beginning in 5 years time,
derived from inflation swaps. **CPI is the Consumer Price Index. Guide to the Markets - Europe. Data as of 30 June 2015.
13
'12
'13
'14
Economic and monetary policy divergence
GTM Europe
Nominal GDP growth
Market expectations for target policy rate
Rebased to 100 at 1Q08

125
3,0
| 14
%
US
US Fed FOMC June 2015 forecasts midpoint
Global economy
120
2,5
UK
US
UK
115
Eurozone
core
Eurozone
Dec 2017:
1,85%
2,0
110
1,5
105
100
Eurozone
periphery
95
1,0
Dec 2017:
1,72%
Dec 2016:
1,37%
Dec 2015:
0,73%
Dec 2016:
1,05%
Japan
0,5
90
Dec 2015:
0,30%
Dec 2017:
0,30%
Dec 2016:
0,08%
Dec 2015: 0,01%

-0,1
85
'08
'09
'10
'11
'12
'13
'14
'16
'17
Source: (Left) FactSet, French National Institute of Statistics and Economic Studies (INSEE), German Federal Statistical Office, Irish Central Statistics Office (CSO),
Italian National Statistical Institute (ISTAT), Japanese Cabinet Office, National Statistical Service of Greece, Portuguese National Statistical Institute (INE), Spanish
National Statistical Institute (INE), UK Office for National Statistics (ONS), US Bureau of Economic Analysis, J.P. Morgan Asset Management. (Right) Bloomberg, US
Federal Reserve, J.P. Morgan Asset Management. Eurozone core is France and Germany and eurozone periphery is Greece, Italy, Ireland, Portugal and Spain. The
market expectations for the path of interest rates is derived from the futures market. There is no active Japanese futures market, therefore no market expectations for
the target policy rate. Guide to the Markets - Europe. Data as of 30 June 2015.
14
'18
US dollar
GTM Europe
US dollar index
Average
May 2015
since 1973
Real broad effective exchange rate (REER)

130
Global economy
120
1973-1978:
-21,8%
110
100
US dollar index
1985: Plaza
Accord
1978-1985:
+52,7%
1987: Louvre
Accord
95,7
2002-2011:
-28,6%
1995-2002:
+34,2%
93,0
2011-2015:
+15,5%
1985-1988:
-29,5%
90
| 15
1988-1995:
-7,1%
80
70
'73
'77
'81
'85
Current account
'89
Eurozone
% of GDP
4
%
2
US
'93
'97
'01
'05
'09
'13
US dollar performance vs. selected currencies

Last 12 months
25
%
18
20,8
20,9
22,9
17,2
0
8,7
11
-2
5,4
-4
-6
-3
-8
'05
'07
'09
'11
'13
-0,1
Chinese
renminbi
Swiss
franc
British Canadian Japanese Mexican

pound
dollar
yen
peso
Source: (Top) US Federal Reserve, J.P. Morgan Asset Management. (Bottom left) BEA, ECB, FactSet, J.P. Morgan Asset Management. (Bottom right) FactSet,
15
Euro
US Federal Reserve policies
GTM Europe
Individual FOMC member forecasts for the federal funds rate
US Federal Reserve balance sheet: Assets
Global economy
$ trillions
5
$
4
| 16
Forecast
Other
From the June 2015 meeting

5,0
Midpoint
%
Individual FOMC member forecasts
4,5
3
4,0
US Treasuries
2
3,5
Agency MBS
3,0
0
'08
'09
'10
'11
'12
'13
'14
'15
2,5
US Federal Reserve MBS purchases

$ billions
120
$
100
New purchases*
2,0
Reinvested purchases*
1,5
80
60
1,0
40
0,5
20
0
Sep 13 Dec 13
0,0
Mar 14
Jun 14
Sep 14
Dec 14
Mar 15
2015
2016
Source: (All charts) FactSet, US Federal Reserve, J.P. Morgan Asset Management. *New purchases are the stated purchases from the US Federal Reserve.
Reinvested purchases are bonds purchased with the principal received from maturing bonds. Guide to the Markets - Europe. Data as of 30 June 2015.
16
2017
Longer run
US: GDP and inflation

Real GDP
Change quarter on quarter, SAAR
10
%
Real GDP
Inflation
Average
since 1999
1Q15
2,0%
-0,2%
Average Average
May
since
since
2015
1964
1999
Change year on year

15
Global economy
| 17
GTM Europe
Headline CPI*
4,1%
2,3%
0,0%
Core CPI
4,1%
2,0%
1,7%
12
6
4
Average
2
0
-2
3
-4
-6
-8
-10
'99
Components of nominal GDP 1Q15

Consumption
68,5%
Government
17,9%
Investment ex- housing
13,4%
Housing
3,3%
Net exports
-3,2%
'01
'03
'05
'07
'09
'11
'13
-3
'64
'69
'74
'79
'84
'89
'94
Source: (Left) BEA, FactSet, J.P. Morgan Asset Management. (Right) BLS, FactSet, J.P. Morgan Asset Management. SAAR is seasonally adjusted annual rate. *CPI
is the Consumer Price Index. Core CPI is defined as CPI excluding food and energy. Guide to the Markets - Europe. Data as of 30 June 2015.
17
'99
'04
'09
'14
US employment
GTM Europe
Unemployment rate
Labour force participation rate
Seasonally adjusted
% of population aged 16+ working or looking for work

67
%
66
Global economy
11
%
10
65
Retired
Other
63
8
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
Wage growth
Change year on year
3,5
Employment Cost Index
%
3,0
Average: 6,1%
6
Jun 2015:
5,3%
2,5
2,0
1,5
1,0
'69
'74
'79
'84
'89
'94
'99
'04
'09
'14
1Q15:
2,7%
4,0
%
3,5
3,0
2,5
2,0
3
'64
Jun 2015:
62,6%
62
'07
'08
'09
Jun 2015:
1,5
2,0%
Average hourly earnings
1,0
'10
'11
'12
'13
'14
Source: (Left) BEA, FactSet, J.P. Morgan Asset Management. (Top right) Constructing the Reason-for-Nonparticipation Variable Using the Monthly CPS,
6 February 2014, Shigeru Fujita, Federal Reserve Bank of Philadelphia, J.P. Morgan Asset Management. (Bottom right) BLS, FactSet,
18
Disabled
64
| 18
US cyclical indicators
GTM Europe
Light vehicle sales
Manufacturing and trade inventories
Millions, SAAR
24
Days of sales, seasonally adjusted
48
June 2015:
17,1
Global economy
20
46
Apr 2015:
41,4
44
42
16
Average: 15,3
40
12
38
36
8
'93
'95
'97
'99
'01
'03
'05
'07
'09
'11
'93
'13
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
Housing starts
Real capital goods orders*
Thousands, SAAR
2,500
Non-defense capital goods orders ex-aircraft, $ billions, seasonally adjusted

55
$
50
2,000
May 2015:
1.036
1,500
45
40
Average: 1.342
1,000
500
30
25
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
May 2015:
40,7
Average: 39,5
35
'93
'93
'95
'97
'99
'01
'03
'05
Source: (Top left) BEA, FactSet, J.P. Morgan Asset Management. (Top and bottom right and bottom left) FactSet, US Census Bureau,
J.P. Morgan Asset Management. *Capital goods orders deflated using the producer price index for capital goods. SAAR is seasonally adjusted annual rate.
Guide to the Markets - Europe. Data as of 30 June 2015.
19
| 19
'07
'09
'11
'13
US consumer finances
GTM Europe
Household net worth

$ billions, SAAR
2Q15*:
$85.772
2Q07:
$67.858
80.000
$
| 20
Home sales, prices and housing starts

Rebased to 100 at December 1999
175
Global economy
60.000
150
40.000
+26,3%
125
20.000
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
100
Household debt service ratio

Debt payments as % of disposable personal income, seasonally adjusted
14
4Q07: 13,2%
%
13
+55,1%
75
Price index
12
2Q15*:
9,9%
11
Existing home sales

50
10
Housing starts
+116,7%
9
8
'80
'85
'90
'95
'00
'05
'10
'15
25
'99
'01
'03
'05
'07
'09
Source: (Top and bottom left) FactSet, US Federal Reserve, J.P. Morgan Asset Management. (Right) FactSet, National Association of Realtors, US Census Bureau,
J.P. Morgan Asset Management. Price index is the mean existing home sale price. SAAR is seasonally adjusted annual rate. *2Q15 numbers for US household net
worth and debt service ratio are J.P. Morgan Asset Management forecasts. Guide to the Markets - Europe. Data as of 30 June 2015.
20
'11
'13
Japan: GDP and inflation
GTM Europe
Real GDP growth
Average
1Q15
since 1999
Change quarter on quarter

4
Real GDP
0,2%
1,0%
Global economy
Inflation
Change year on year
| 21
Average
since 1999
May
2015
Headline CPI*
0,0%
0,5%
Core CPI
-0,3%
0,4%
CPI less food &

consumption tax
-0,1%
0,0%
Average
1
2
0
1
-1
0
-2
-1
-3
-2
-4
-3
-5
'99
'01
'03
'05
'07
'09
'11
'13
'99
'01
'03
'05
'07
Source: (Left) FactSet, Japan Statistics Bureau & Statistics Centre, J.P. Morgan Asset Management. (Right) Bloomberg, Japan Ministry of Internal Affairs &
Communications, FactSet, J.P. Morgan Asset Management. *CPI is the Consumer Price Index. Core CPI is defined as CPI excluding food and energy.
21
'09
'11
'13
Japan: Abenomics and the economy
GTM Europe
Japanese yen and the stock market
Japanese wage growth

Change year on year, three-month moving average
22.000
130
per $
Nikkei 225 Index
Core inflation*
Wage growth
Change over last 12 months

per $
-17,2%
Nikkei 225
33,5%
20.000
Global economy
| 22
1
0
120
18.000
-1
110
16.000
-2
'03
'05
'07
'09
'11
14.000
Labour force participation rate

12-month moving average
65
%
64
'13
All
59,4%
OECD
avg.
74,2%
Female
49,4%
65,1%
Current
100
12.000
90
63
10.000
62
61
May 2015:
59,4%
60
80
8.000
59
58
'80
'85
'90
'95
'00
'05
'10
'15
6.000
'03
70
'04
'05
'06
'07
'08
'09
'10
'11
Source: (Top left) FactSet, Japan Ministry of Internal Affairs & Communications, Japan Ministry of Health, Labour and Welfare, J.P. Morgan Asset Management. (Bottom
left) OECD, Statistics Bureau of Japan, J.P. Morgan Asset Management. (Right) FactSet, Nikkei, J.P. Morgan Asset Management. *CPI is the Consumer Price Index.
Core CPI is defined as CPI excluding food and energy. Guide to the Markets - Europe. Data as of 30 June 2015.
22
'12
'13
'14
China: GDP, inflation and policy rate
GTM Europe
Nominal GDP growth

GDP growth
Change year on year
21
Investment
24
Consumption
18
18
Global economy
May 2015
Inflation
Change year on year
Net exports
| 23
Food CPI
Headline CPI*
Core CPI
1,6%
1,2%
1,6%
12
15
1Q15:
7,0%
12
0
-6
'00
'02
'04
'06
'08
'10
'12
'14
Policy rate and reserve ratio requirement (RRR)
Policy rate on one-year renminbi deposits

5
%
PBoC policy rate
4
RRR
25
%
20
15
10
-3
-6
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
'10
'12
'14
0
'04
'06
'08
'10
'12
Source: (Left and top right) FactSet, National Bureau of Statistics of China, J.P. Morgan Asset Management. (Bottom right) FactSet, Peoples Bank of China (PBoC),
J.P. Morgan Asset Management. *CPI is the Consumer Price Index. Core CPI is defined as CPI excluding food and energy. Guide to the Markets - Europe.
23
'14
China cyclical indicators
GTM Europe
Merchandise trade growth
Top 100 cities property prices and housing inventory

40
Change month on month, number of months

2
%
2nd tier cities
1
Global economy
%
20
3rd tier cities
| 24
25
mths
20
15
Exports
0
10
0
-1
Imports
-20
'11
'12
'13
'14
Property prices
1st tier cities
-2
'15
0
'11
Retail and auto sales
'12
'13
'14
'15
Fixed asset investment

60
24
%
Auto sales
20

70
40
50
Infrastructure
Manufacturing
Real estate
30
16
20
10
12
0
Retail sales
8
'06
-10
'07
'08
'09
'10
'11
'12
'13
'14
'15
'06
'07
'08
'09
'10
'11
'12
Source: (All charts) CEIC, FactSet, National Bureau of Statistics of China, J.P. Morgan Asset Management. Tier 1 cities include Beijing, Shanghai, Guangzhou and
Shenzhen. Tier 2 cities include 31 provincial capital cities and municipalities not included in Tier 1 cities, and Tier 3 cities include the other 65 cities in the Soufun
survey. Guide to the Markets - Europe. Data as of 30 June 2015.
24
'13
'14
'15
Global economy
China financial dynamics
GTM Europe
Private non-financial debt
2014 public, household and non-financial corporate debt
% of GDP, quarters since the start of debt rise

230
Japan starting in 1965
%
% of GDP
350
%
300
Public debt
Non-financial corporate debt
Household debt
250
180
China starting in 1998
200
150
130
100
50
0
80
1
27
53
79
105
Japan
131
Credit to private sector
UK
US
Eurozone
China
Korea
Foreign exchange reserves
% of GDP
140
%
120
2013: 140%
% of GDP
50
%
40
100
30
80
20
60
10
40
0
'77
'81
'85
'89
'93
'97
'01
'05
'09
'13
'00
'02
'04
'06
'08
Source: (Top left) BIS, CEIC, Lombard Street Research, J.P. Morgan Asset Management. (Bottom left) World Bank, J.P. Morgan Asset Management. (Top right) BIS,
IMF World Economic Outlook April 2015, Lombard Street Research, J.P. Morgan Asset Management. (Bottom right) Bloomberg, FactSet,
Oxford Economics, J.P. Morgan Asset Management. Guide to the Markets - Europe. Data as of 30 June 2015.
25
| 25
'10
'12
'14
Global economy
Emerging markets challenges
GTM Europe
Consensus growth forecasts
EM equity performance and US rate hikes
Estimates for next 12 months

9
%
8
MSCI EM Index in USD, rebased to 100 on the date of first rate hike
150
30 Jun 2004
30 Jun 1999
125
4 Apr 1994
India
| 26
7
China
6
5
Indonesia
Thailand
100
75
50
Turkey
-250
-125
125
Days
Relative EM / DM equity performance and USD REER*
Equity performance rebased to 100 at 1993

250
90
MSCI EM / MSCI DM
200
0
Brazil
-1
100
150
Russia
110
-2
100
-3
50
-4
Jul 13
Oct 13
Jan 14
Apr 14
Jul 14
Oct 14
Jan 15
Apr 15
0
'93
USD REER (inverted)
'95
'97
'99
'01
'03
'05
'07
Source: (Left) Bloomberg, J.P. Morgan Asset Management. (Top right) MSCI, US Federal Reserve, J.P. Morgan Asset Management. (Bottom right) FactSet, MSCI,
J.P. Morgan Asset Management. *REER is real effective exchange rate. Guide to the Markets - Europe. Data as of 30 June 2015.
26
250
'09
'11
'13
120
130
Emerging markets trade connections with developed markets

EM exports breakdown
China
Czech
Republic
Korea
Hungary
Taiwan
Poland
Mexico
Turkey
Thailand
Philippines
Vietnam
Malaysia
60
Asian countries
EMEA countries
LatAm countries
India
Commodity Exporters
70
EM GDP growth: Sensitivity to DM growth*
Ukraine
Chile
Europe
US
S. Africa
Japan
Russia
If the US economy expands by 1%,
then the Mexican economy is
estimated to grow by an additional
0,3%, other things equal.
Colombia
Brazil
50
S. Africa
Indonesia
40
Argentina
30
20
Peru
10
Mexico
Brazil
Russia
Colombia
Chile
Nigeria
Venezuela
0
0
10
20
30
40
50
60
70
80
90
100
Commodity exports as % of merchandise exports - 2013
Manufacturers
Manufacturing exports as % of merchandise exports - 2013
Global economy
80
Taiwan
Turkey
Korea
Thailand
0,0
0,2
0,4
0,6
Source: (Left) IMF, World Trade Organisation, J.P. Morgan Asset Management. (Right) FactSet, IMF, J.P. Morgan Asset Management. *Assumes a 1% increase in
GDP growth from Japan, Europe and the US, and estimates a reaction function through a multistage regression measuring emerging market economies sensitivity to
export volumes. Developed market imports are used as a proxy for developed demand and estimated from a 1% pick up in domestic GDP. The sample period tested
ranges between 1993 and 2014 reflecting quarterly data. Guide to the Markets - Europe. Data as of 30 June 2015.
27
| 27
Estimated increase in real GDP growth from a 1% increase in DM growth
100
90
GTM Europe
0,8
1,0 % 1,2
World stock market returns
Equities
Local
28
GTM Europe
| 28
2009
2010
2011
2012
2013
2014
YTD
2Q15
Ten-yr
Ann.
-23,0%
TOPIX
-40,6%
73,4%
MSCI EM
62,8%
35,4%
Sm all Caps
24,4%
5,5%
US S&P 500
2,1%
20,8%
Asia ex-Jp
19,7%
27,2%
Sm all Caps
35,8%
29,5%
US S&P 500
13,7%
24,5%
TOPIX
17,0%
-0,0%
TOPIX
5,8%
11,0%
Asia ex-Jp
10,0%
26,1%
MSCI EM
33,6%
-33,7%
US S&P 500
-37,0%
67,2%
Asia ex-Jp
67,2%
28,3%
Asia ex-Jp
15,6%
3,5%
HDY Equity
1,5%
18,1%
Europe
16,4%
26,7%
US S&P 500
32,4%
19,7%
Asia ex-Jp
7,7%
15,3%
Sm all Caps
7,7%
-2,1%
Sm all Caps
0,8%
10,1%
MSCI EM
10,3%
18,6%
MSCI EM
28,8%
4,6%
Portfolio
11,1%
-37,9%
HDY Equity
-34,4%
40,2%
Sm all Caps
40,8%
27,5%
MSCI EM
14,4%
-5,7%
Small Caps
-8,7%
16,8%
MSCI EM
17,4%
21,5%
TOPIX
54,4%
16,5%
Sm all Caps
6,7%
14,7%
Asia ex-Jp
6,3%
-2,8%
Portfolio
-0,4%
9,3%
Sm all Caps
8,2%
33,8%
Sm all Caps
23,3%
16,0%
HDY Equity
21,6%
3,2%
Europe
6,5%
-38,6%
Sm all Caps
-40,4%
37,6%
Portfolio
35,8%
23,9%
TOPIX
1,0%
-5,8%
Portfolio
-7,5%
16,3%
Small Caps
18,4%
20,5%
Europe
22,3%
16,2%
HDY Equity
8,7%
13,3%
Portfolio
6,3%
-2,8%
MSCI EM
0,8%
8,9%
US S&P 500
7,7%
33,6%
Portfolio
23,9%
12,5%
Portfolio
19,4%
-1,0%
HDY Equity
4,7%
-40,3%
Portfolio
-40,1%
34,0%
HDY Equity
30,2%
23,1%
US S&P 500
15,1%
-7,5%
Europe
-8,8%
15,6%
Portfolio
17,1%
15,3%
Portfolio
23,6%
15,3%
Portfolio
8,2%
13,3%
Europe
7,7%
-3,0%
Europe
-3,6%
8,5%
Portfolio
8,0%
27,0%
HDY Equity
17,7%
5,2%
Sm all Caps
13,6%
-4,9%
US S&P 500
5,5%
-43,3%
Europe
-38,5%
32,5%
Europe
28,6%
20,9%
Portfolio
11,1%
-9,6%
TOPIX
-17,0%
14,2%
US S&P 500
16,0%
13,9%
HDY Equity
20,5%
11,8%
MSCI EM
5,6%
12,0%
MSCI EM
5,8%
-3,0%
Asia ex-Jp
0,8%
8,2%
HDY Equity
7,7%
26,7%
Europe
25,5%
3,6%
US S&P 500
15,8%
-8,8%
Sm all Caps
-3,8%
-49,8%
Asia ex-Jp
-47,7%
22,5%
US S&P 500
26,5%
16,2%
HDY Equity
8,0%
-14,3%
Asia ex-Jp
-14,6%
13,6%
HDY Equity
14,0%
-1,1%
Asia ex-Jp
6,2%
10,1%
TOPIX
10,3%
9,9%
US S&P 500
1,2%
-3,3%
US S&P 500
0,3%
6,4%
Europe
6,4%
20,9%
US S&P 500
4,9%
-8,7%
TOPIX
3,0%
-14,5%
TOPIX
-11,1%
-50,8%
MSCI EM
-45,7%
1,5%
TOPIX
7,6%
11,7%
Europe
7,5%
-15,4%
MSCI EM
-12,5%
5,9%
TOPIX
20,9%
-6,5%
MSCI EM
3,8%
7,4%
Europe
5,2%
8,7%
HDY Equity
1,5%
-3,8%
HDY Equity
-2,0%
3,5%
TOPIX
3,9%
2005
2006
2007
55,0%
MSCI EM
35,8%
20,2%
Europe
19,6%
26,7%
Asia ex-Jp
38,0%
45,3%
TOPIX
45,2%
19,6%
Asia ex-Jp
28,6%
41,9%
Asia ex-Jp
24,1%
2008
Source: MSCI, TOPIX, Standard & Poors, FactSet, J.P. Morgan Asset Management. Annualised return covers the period 2005 to 2014. HDY Equity: MSCI AC World
High Dividend Yield Index; Small Cap: MSCI Europe Small Cap Index. Hypothetical portfolio (for illustrative purposes only and should not be taken as a
recommendation): 30% Europe; 20% S&P 500; 15% EM; 10% Asia ex-Japan; 10% TOPIX; 10% HDY equity and 5% small cap. All indices are total return.
European sector returns
GTM Europe
| 29
29
Cons.
staples
Cons.
disc.
Europe weight
23,1%
13,6%
13,5%
11,8%
11,0%
Growth weight
11,7%
17,9%
20,9%
17,5%
Value weight
34,6%
9,1%
6,1%
2Q15
-2,8
-5,1
YTD
9,2
Since market peak*
Telecom
Utilities
Tech
Europe
7,5%
7,1%
5,0%
3,9%
3,4%
100%
13,6%
6,6%
1,7%
3,2%
0,1%
6,7%
100%
5,9%
8,4%
8,6%
12,8%
6,7%
7,8%
0,1%
100%
-3,7
-3,5
-5,3
-4,4
-2,6
1,2
-2,3
-5,9
-3,6
8,1
5,9
14,2
8,6
6,4
0,2
11,3
-1,7
7,9
7,7
-27,9
109,6
87,5
75,7
22,5
-0,8
7,2
55,5
-7,3
4,7
20,5
Since market low*
206,8
200,8
174,2
288,4
187,3
135,1
47,2
133,6
63,1
164,7
158,3
Beta to Europe
1,34x
0,62x
0,63x
0,95x
1,14x
1,31x
1,00x
0,78x
0,86x
0,99x
1,00x
Correl to int. rates**
0,43
0,26
0,29
0,36
0,40
0,37
0,34
0,33
0,33
0,33
0,41
Forward P/E ratio
11,8x
18,2x
19,2x
14,9x
15,9x
16,8x
14,4x
20,0x
14,5x
18,7x
15,1x
15-year average
11,1x
16,2x
16,0x
14,6x
14,2x
12,3x
11,9x
18,6x
13,8x
21,7x
13,5x
Trailing P/E ratio
13,7x
19,4x
20,8x
17,2x
18,0x
17,9x
13,3x
21,3x
15,0x
22,2x
16,7x
15-year average
12,9x
17,5x
17,3x
17,2x
16,4x
14,1x
12,1x
21,0x
14,5x
22,6x
15,1x
Dividend yield
3,6%
2,6%
2,8%
2,4%
2,6%
3,0%
5,4%
4,0%
4,4%
1,6%
3,2%
15-year average
3,7%
2,6%
2,7%
2,8%
2,7%
2,9%
3,9%
4,3%
4,7%
1,7%
3,2%
Source: FactSet, MSCI, J.P Morgan Asset Management. All calculations are total return in local currency, not annualised. *Since market peak represents period
9 October 2007 to end of latest quarter. Since market low represents period 9 March 2009 to end of latest quarter. **Correlation to interest rates is calculated using
daily sector returns and daily 10-year German Bund yield over the last 10 years. Guide to the Markets - Europe. Data as of 30 June 2015.
Return
P/E
Industrials Materials
Weights
Energy
Health
care
Financials
Div
Equities
MSCI Europe Index
Bond and equity relative valuations

Histogram: S&P 500 earnings yield (inverse of P/E)
Number of days: 1965 2015
4.000
GTM Europe
| 30
Equity risk premium*

8
3.500
3.000
2.500
Equities relatively
less expensive
30 Jun 2015:
5,00%
(lower than 73% of
days since 1965)
%
6
2.000
1.500
1.000
Equities
500
0
0
9 10 11 12 13 14 15 16
Average: 1,8%
Histogram: Nominal 10-year Treasury yield

Number of days: 1965 2015
2.500
2.000
Equities relatively
more expensive
30 Jun 2015:
2,35%
(lower than 96% of
days since 1965)
1.500
-2
1.000
500
-4
0
2
10 11 12 13 14 15 16
'89
'91
'93
'95
'97
'99
'01
'03
'05
Source: (All charts) FactSet, Standard & Poors, Tullett Prebon, J.P. Morgan Asset Management. *The equity risk premium is the S&P 500 forward earnings yield less
the US Treasury 10-year yield. Guide to the Markets - Europe. Data as of 30 June 2015.
30
'07
'09
'11
'13
MSCI Europe Index at inflection points

MSCI Europe Index
Characteristic
Index level
1.800
4 Sep 2000:
P/E = 21,8x
1.623
1.400
P/E ratio (fwd)

Dividend yield
Euro 10 year
GTM Europe
Sep 2000 Jul 2007 Jun 2015

1.623
1.641
1.455
21,8x
13,0x
15,1x
1,8%
2,8%
3,3%
5,2%
4,6%
0,8%
16 Jul 2007:
P/E = 13,0x
1.641
| 31
30 Jun 2015:
P/E = 15,1x
1.455
Total return:
+133%
Equities
-55%
+180%
-54%
+158%
1.000
31 Dec 1996:
P/E = 16,3x
714
12 Mar 2003:
P/E = 11,9x
676
9 Mar 2009:
P/E = 8,3x
714
600
'96
'97
'98
'99
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
Source: FactSet, MSCI, Tullett Prebon, J.P. Morgan Asset Management. Local currency returns. P/E ratios are forward P/E ratios. Forward P/E ratio is a bottom-up
calculation based on the most recent price data divided by the mean consensus estimates for earnings in the next 12 months and is provided by FactSet Market
Aggregates. Return calculations shown in green are based on the total return index. Guide to the Markets - Europe. Data as of 30 June 2015.
31
'12
'13
'14
MSCI Europe Index equity valuations
GTM Europe
Forward P/E ratio
Earnings yield and 10-year bond yield
24
x
12
20
30 Jun 2015:
15,1x
16
10
Earnings yield
(inverse of forward P/E)
Average: 13,9x
12
Equities
| 32
8
'01
'03
'05
'07
'09
'11
'13
30 Jun 2015:
6,6%
MSCI Europe cyclically adjusted P/E ratio

Adjusted using trailing 10-year average inflation-adjusted earnings
40
x
30
Average: 17,8x
20
10
30 Jun 2015:
0,8%
10-year European
bond yield
30 Apr 2015:
16,0x
'79
'84
'89
'94
'99
'04
'09
'14
'00
'02
'04
'06
'08
'10
Source: (Top left) FactSet, J.P. Morgan Asset Management. (Bottom left) FactSet, MSCI, J.P. Morgan Asset Management. (Right) FactSet, MSCI, Tullett Prebon,
J.P. Morgan Asset Management. Forward P/E ratio is a bottom-up calculation based on the most recent price data divided by consensus estimates for earnings in the
next 12 months and is provided by FactSet Market Aggregates. Earnings yield is calculated as the inverse of the forward P/E ratio. Guide to the Markets - Europe.
32
'12
'14
MSCI Europe earnings and profit margins

MSCI Europe earnings and performance
GTM Europe
| 33
MSCI Europe annual earnings estimates
Index level, analyst estimates of the next 12 months of earnings

10,5
MSCI Europe profits
MSCI Europe index level
1.600
10,0
1.500
Monthly earnings per share consensus estimates

145
$
135
'13
'14
'15
125
9,5
1.400
9,0
1.300
Equities
8,5
'16
115
105
95
1.200
8,0
1.100
7,5
1.000
7,0
900
6,5
'11
'12
'13
'14
US and European operating profit margins

Earnings per share/sales per share for MSCI Europe and S&P 500*
11
%
10
US
9
8
800
6,0
5,5
'07
Europe
7
700
'08
'09
'10
'11
'12
'13
'14
6
'04
'05
'06
'07
'08
'09
'10
'11
Source: (Left) FactSet, MSCI, J.P. Morgan Asset Management. (Top right) FactSet, MSCI, J.P. Morgan Asset Management. (Bottom right) FactSet, MSCI, Standard
& Poors, J.P. Morgan Asset Management. *Data is last 12 months. Guide to the Markets - Europe. Data as of 30 June 2015.
33
'12
'13
'14
US S&P 500 at inflection points
GTM Europe
| 34
S&P 500 Index

Characteristic
2,200
Index level
P/E ratio (fwd)
Dividend yield
2,000
US 10 year
Mar 2000
1.527
Oct 2007
1.565
Jun 2015
2.063
27,2x
1,1%
6,2%
15,7x
1,7%
4,6%
16,4x
1,9%
2,4%
1,800
Equities
9 Oct 2007:
P/E = 15,7x
1.565
24 Mar 2000:
P/E = 27,2x
1.527
1,600
1,400
Total return:
+116%
30 Jun 2015:
P/E = 16,4x
2.063
+248%
+121%
-47%
-55%
1,200
1,000
800
31 Dec 1996:
P/E = 16,0x
741
9 Mar 2009:
P/E = 10,3x
677
9 Oct 2002:
P/E = 14,1x
777
600
'96
'97
'98
'99
'00
'01
'02
'03
'04
'05
'06
'07
'08
'09
'10
'11
Source: FactSet, Standard & Poors, Tullett Prebon, J.P. Morgan Asset Management. The P/E ratios are forward P/E ratios. Forward P/E ratio is a bottom-up
calculation based on the most recent price data divided by the mean consensus estimates for earnings in the next 12 months and is provided by FactSet Market
Aggregates. Return calculations shown in green are based on the total return index. Guide to the Markets - Europe. Data as of 30 June 2015.
34
'12
'13
'14
US S&P 500 equity valuations
GTM Europe
Earnings yield and Baa corporate bond yield
Forward P/E ratio
11
28
x
| 35
31 Dec 1999:
25,4x
24
10
30 Jun 2015:
6,1%
Baa corporate
bond yield
16
Average:
16,3x
12
Equities
30 Jun 2015:
16,4x
20
'89
'91
'93
'95
'97
'99
'01
'03
'05
'09
'11
'13
S&P 500 Shiller cyclically adjusted P/E

Adjusted using trailing 10-year average inflation-adjusted earnings
30 Jun 2015:
50
x
26,7x
40
30
3
'89
30 Jun 2015:
5,2%
Earnings yield
(inverse of forward P/E)
'91
'93
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
Average:
16,6x
20
10
0
'00
'10
'20
'30
'40
'50
'60
'70
Source: (Left) FactSet, IBES, Moodys, Standard & Poors, J.P. Morgan Asset Management. (Top right) FactSet, Standard & Poors, J.P. Morgan Asset Management.
Forward P/E ratio is a bottom-up calculation based on the most recent price data divided by consensus estimates for earnings in the next 12 months and is provided
by FactSet Market Aggregates. (Bottom right) FactSet, Robert Shiller, J.P. Morgan Asset Management. Guide to the Markets - Europe. Data as of 30 June 2015.
35
'07
'80
'90
'00
'10
US S&P 500 earnings and profit margins

S&P 500 earnings and performance
S&P 500 earnings per share growth
Index level, analyst estimates of the next 12 months of earnings
Change year on year, 1Q15

15
%
12
9,1
9
130
S&P 500 profits
S&P 500 index level

2.000
120
12,0
1.600
-3
-6
100
1.400
70
Total index
Domestic
companies
Ex-energy
Exporters
Employee compensation and profitability
1.200
% of GDP
60
Employee compensation
%
58
1.000
56
54
52
50
'60
90
80
1,1
-5,0
110
12
%
10
Corporate profits
800
60
600
'07
'08
'09
'10
'11
'12
'13
'14
'65
'70
'75
'80
'85
'90
'95
Source: (Left and top right) FactSet, Standard & Poors, J.P. Morgan Asset Management. (Bottom right) BEA, FactSet, J.P. Morgan Asset Management. Exporters is
defined as the 40% of the S&P 500 with the highest percentage of overseas revenues and domestic companies are the remaining 60% of the S&P 500.
36
| 36
6
1.800
Equities
GTM Europe
'00
'05
'10
'15
Bear markets
GTM Europe
S&P 500 declines from all-time highs

%
20% market
decline
Equities
Recession
Characteristics of past bear markets*

Market corrections
1
2
3
4
5
6
7
8
9
10
Crash of 1929
1937 Fed Tightening
Post WWII Crash
Flash Crash of 1962
Tech Crash of 1970
Stagflation
Volcker Tightening
1987 Crash
Tech Bubble
Global Financial Crisis
Cycle peak
Bull market
duration
(months)
Decline from
all-time high
Aug 1929
Feb 1937
May 1946
Dec 1961
Dec 1968
Dec 1972
Nov 1980
Aug 1987
Aug 2000
Oct 2007
37
22
48
14
73
29
31
59
118
55
-84%
-74%
-54%
-22%
-29%
-43%
-19%
-27%
-42%
-51%
Recession
Commodity
Aggressive
spike
Fed tightening
Extreme
valuations
Commentary
Excessive leverage, irrational exuberance
Premature monetary tightening
Post-war demobilisation, recession fears
Flash crash, Cuban Missile Crisis
Economic overheating, civil unrest
OPEC oil embargo
Extremely high rates to rein in inflation
Program trading, overheated market
Extreme valuations, mostly in tech stocks
Leverage, housing, Lehman collapse
Source: FactSet, NBER, Robert Shiller, Standard & Poors, J.P. Morgan Asset Management. *A bear market represents a 20% or more decline from the previous
market high using a monthly frequency. Periods of Recession are defined using NBER business cycle dates. Commodity spike is defined as significant rapid
upward moves in oil prices. Periods of Extreme valuations are those where S&P 500 last twelve months P/E levels were approximately two standard deviations
above long run averages. Aggressive Fed Tightening is defined as Federal Reserve monetary tightening that was unexpected and significant in magnitude.
37
| 37
Interest rates and equities
GTM Europe
| 38
Correlations between weekly equity returns and interest rate movements

Rolling two-year correlation of weekly returns of the S&P 500, MSCI Europe Index and the 10-year Treasury yield, 1980 - 2015
Market reaction when the US Fed raised rates
0,8
S&P 500
MSCI Europe
Positive
relationship
between yield
movements and
equity returns
0,6
Correlation
Equities
0,4
S&P 500
price return
87
87-89
94-95
99-00
04-06
Initial reaction
-5%
-7%
-10%
-7%
-8%
Subsequent
market
reaction
32%
24%
7%
18%
20%
Total reaction
26%
17%
-2%
10%
11%
0,2
0,0
-0,2
Negative
relationship
between yield
movements and
equity returns
-0,4
-0,6
-0,8
0
10
12
14
10-year Treasury yield

Source: FactSet, MSCI, Standard & Poors, US Treasury, J.P. Morgan Asset Management. Returns are based on price index only and do not include dividends. The
initial reaction represents the period during which, in our judgment, markets began pricing the first rate hike through the date of the second rate hike. The
subsequent market reaction is the period from the second rate hike to a point determined to be the end of the rate hiking cycle. The total reaction is the market
movement across the full rate hiking cycle. Guide to the Markets - Europe. Data as of 30 June 2015.
38
16
Japanese equities
GTM Europe
Equities earnings momentum
Japanese pension fund asset allocation**
Earnings revisions, three-month moving average

0,6
%
0,4
Japan
Europe
US
Latest
allocation
(Dec 2014)
0,2
International
bonds
20%
25%
-0,2
43%
35%
15%
20%
-0,6
Equities
-0,8
'02
'04
'06
'08
'10
'12
Listed companies' cash and cash equivalents holdings*
TOPIX dividends per share
% of market capitalisation, average between 2004 and 2012

50
44
%
40
35
30
27
30
Short-term
assets
13%
'14
30 Jun 2015:
30,2
25
20
25
21
20
20
18
15
15
10
10
5
0
Japan
Germany
Italy
France
UK
US
Canada
'00
'02
'04
'06
'08
Source: (Top left) FactSet, Standard & Poors, STOXX, TOPIX, J.P. Morgan Asset Management. (Bottom left) IMF, J.P. Morgan Asset Management. (Top right)
FactSet, Government Pension Investment Fund, Japanese Cabinet Office, Japan Investment Trust Association, Pension Fund Association,
J.P. Morgan Asset Management. (Bottom right) FactSet, TOPIX, J.P. Morgan Asset Management. *Cash and cash equivalent holdings derived from "Unstash the
Cash! Corporate Governance Reform in Japan, Chie Aoyagi and Giovanni Ganelli, IMF, August 2014. **The Japanese Government Pension Investment Fund
(GPIF) has JPY 137 trillion of assets under management as of 31 December 2014. Guide to the Markets - Europe. Data as of 30 June 2015.
39
Domestic
stocks
International
stocks
25%
Target
allocation
-0,4
Domestic
bonds
4%
0,0
'00
| 39
'10
'12
'14
Developed markets equity valuations by country
GTM Europe
| 40
Developed markets
How to interpret this chart
+6 Std dev
Std dev from global average
+5 Std dev
+4 Std dev
Expensive
relative to
world
+3 Std dev
Expensive
relative to
own history
+2 Std dev
+1 Std dev
Current
Average
-1 Std dev
Cheap relative
to own history
-2 Std dev
-3 Std dev
Equities
-4 Std dev
-5 Std dev
Spain
Italy
UK
Germany
France
ACWI
Japan DM Index Switzerland
Current
US
10-year average
Current composite
index
Forward P/E
P/B
P/CF
Dividend yield
Forward P/E
P/B
P/CF
Dividend yield
Spain
Italy
UK
Germany
France
ACWI
Japan
DM Index
Switzerland
-1,47
-1,46
-0,33
-0,30
-0,21
0,85
0,89
1,16
1,88
14,3x
15,1
15,1
13,5
15,4
15,5
15,4
16,1
16,9
1,4x
1,1
1,8
1,7
1,6
2,1
1,5
2,2
2,5
7,2x
5,2
9,3
8,7
9,1
10,2
8,7
10,6
14,2
4,6%
3,0
4,0
2,8
3,2
2,5
1,7
2,4
3,2
11,3x
11,4
11,8
11,7
11,8
13,4
16,3
13,7
14,1
1,5x
1,1
1,9
1,7
1,5
2,1
1,4
2,1
2,6
4,4x
3,6
7,1
5,5
6,0
7,4
6,5
7,5
10,3
5,1%
3,5
3,7
2,9
3,3
2,5
1,8
2,5
3,1
US
2,40
16,7
2,8
11,6
2,0
14,3
2,7
8,8
1,9
Source: FactSet, MSCI, J.P. Morgan Asset Management. Each valuation index shows an equally weighted composite of four metrics: price to forward earnings
(forward 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 normalised using means
and average variability over the last 10 years. The grey bars represent valuation index variability relative to that of the All Country World Index (ACWI).
40
Average
Cheap
relative to
world
Emerging markets equity valuations by country
| 41
GTM Europe
Emerging markets
How to interpret this chart
+6 Std dev
Equities
Std dev from global average
+5 Std dev
+4 Std dev
+3 Std dev
Expensive
relative to
own history
+2 Std dev
+1 Std dev
Average
Current
Average
-1 Std dev
-2 Std dev
Cheap relative
to own history
-3 Std dev
-4 Std dev
-5 Std dev
Cheap
relative to
world
-6 Std dev
Russia
Russia
Brazil
China
EM Index
Taiwan
Korea
ACWI
S. Africa
Mexico
India
Brazil
China
EM Index
Taiwan
S. Korea
ACWI
S. Africa
Mexico
Current
India
10-year average
Current composite
index
Forward P/E
P/B
P/CF
Dividend yield
Forward P/E
P/B
P/CF
Dividend yield
-4,75
-1,94
-1,21
-1,15
-1,02
-0,96
0,85
1,31
3,04
3,81
5,3x
12,7
10,6
11,7
12,4
9,5
15,5
16,1
18,7
18,2
0,5x
1,2
1,5
1,5
1,8
1,0
2,1
2,6
2,7
3,1
3,0x
6,4
7,9
7,2
7,6
4,9
10,2
11,5
10,2
12,0
4,9%
4,1
2,8
2,7
3,3
1,5
2,5
2,9
1,5
1,5
7,2x
10,3
11,8
11,3
14,5
9,7
13,4
12,3
15,3
16,0
1,2x
1,9
2,1
1,9
1,9
1,4
2,1
2,6
2,9
3,2
6,2x
5,9
4,5
6,2
6,4
5,5
7,4
8,9
6,5
12,5
2,9%
3,4
2,8
2,7
3,7
1,6
2,5
3,2
1,9
1,3
Source: FactSet, MSCI, J.P. Morgan Asset Management. Each valuation index shows an equally weighted composite of four metrics: price to forward earnings
(forward 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 normalised using means
and average variability over the last 10 years. The grey bars represent valuation index variability relative to that of the All Country World Index (ACWI).
41
Expensive
relative to
world
Emerging markets valuations and returns

MSCI Emerging Markets Index: Price to book
GTM Europe
| 42
MSCI Emerging Markets Index: Price to book and returns

Price to book ratio and next 12 months price return
3,00
80
Current level
2,75
+2,0 std. dev.
60
2,50
40
Equities
2,25
20
2,00
1,75
Average: 1,80x
1,50
30 Jun 2015:
1,59x
-20
1,25
-40
1,00
-2,0 std. dev.
0,75
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
-60
0,75
1,00
1,25
1,50
1,75
2,00
2,25
Source: (All charts) FactSet, MSCI, J.P. Morgan Asset Management. Linear regression of price to book ratios on next 12 months price return from September 1995
through June 2015. Guide to the Markets - Europe. Data as of 30 June 2015.
42
2,50
2,75
3,00 x 3,25
Emerging markets: Dividends and valuations
GTM Europe
MSCI EM Index: Long-term growth in dividends per share

(DPS) and earnings per share (EPS)
Valuation vs. long-term average, three-month moving average
130
500
Relative valuation of high dividend yielding equities

US
Europe
Emerging markets
120
EM DPS
450
EM EPS (fwd)
110
400
DM DPS
100
DM EPS (fwd)
| 43
90
350
Equities
80
'00
300
'02
'04
'06
'08
'10
'12
'14
Number of companies yielding greater than 2% by region
250
200
Constituents of the MSCI All Country World Index

600
485
150
400
100
314
303
200
86
50
0
0
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
Emerging
markets
US
Source: (Left) FactSet, IBES, MSCI, J.P. Morgan Asset Management. (Top and bottom right) FactSet, MSCI, J.P. Morgan Asset Management.
43
Europe
Japan
Equity income
GTM Europe
S&P 500 total return index: Dividends and capital appreciation
| 44
Capital appreciation
Average annualised returns

25
%
20
Dividends
15
10
3,0%
5
0
4,7%
Equities
5,4%
6,0%
5,1%
12,6%
1,6%
4,4%
3,3%
1926-1929
1930s
4,4%
2,5%
1940s
1950s
1960s
1970s
2,7%
4,0%
1980s
1990s
2000s
2010-2014
1926-2014
Sources of income
+125%
Total return
Price return
1,8%
-2,7%

250
High dividend yield total return
8
%
6
Eurozone average CPI inflation: 0,1%

(12 months to May 2015)
+58%
2,5
-4%
6,2
6,2
High
yield
EM
Debt
4,0
4
150
100
5,9%
4,2%
MSCI Europe indices: Price vs. total return*
200
16,6%
15,3%
-5,3%
-5
-10
13,6%
13,9%
3,0
3,2
1,4
2
0,8
0,1
50
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Cash
Bunds
Euro
corp
EM Converts MSCI Global

equity
Europe REITs
Source: (Top) Ibbotson, Standard & Poors, J.P. Morgan Asset Management. (Bottom left) FactSet, FTSE, J.P. Morgan Asset Management. High dividend yield is the
FTSE 350 Higher Yield Index. (Bottom right) Barclays, BofA/Merrill Lynch, FactSet, FTSE, Tullett Prebon, J.P. Morgan Asset Management. Euro corporate: Barclays
Euro Aggregate Credit - Corporate; EM debt: J.P. Morgan EMBI Global; High yield: BofA/Merrill Lynch Developed Markets High Yield Constrained; Global REITs:
FTSE NAREIT Index; Converts: Barclays Global Convertibles; EM equity; MSCI EM. Yields for the bond indices are yield to worst and dividend yields for the equity
indices. *Returns in local currency. Guide to the Markets - Europe. Data as of 30 June 2015.
44
Annual returns and intra-year declines
GTM Europe
MSCI Europe Index intra-year declines vs. calendar-year returns
Calendar-year return
Despite average intra-year drops of 15,6% (median 11,9%), annual returns are positive in 27 of 35 years
39
40
35
34
34
%
28
30
20
13
17
13
23
22
20
20
16
15
Intra-year decline
28
22
21
18
16
12
12
9
10
6
4
Equities
| 45
0
-10
-4
-3
-4
-7
-11
-11
-10
-15
-20
-4
-6
-8
-11
-6
-5
-6
-8
-9
-11
-16
-18
-19
-12
-12 -12
-12
-12
-18
-18
-22
-24
-25
-26
-30
-31
-31
-35
-40
-12 -12
-15
-15
-35
-37
-41
-50
-48
'80
'82
'84
'86
'88
'90
'92
'94
'96
'98
'00
'02
'04
'06
'08
Source: FactSet, MSCI, J.P Morgan Asset Management. Returns are based on price only and do not include dividends. Intra-year decline refers to the largest market
fall from peak to trough within a short time period during the calendar year. Returns shown are calendar years from 1980 to 2014. Guide to the Markets - Europe.
45
'10
'12
'14
Fixed income sector returns
Fixed income
Local
46
GTM Europe
| 46
2014
YTD
2Q15
Ten-yr
Ann.
8,8%
Euro HY
8,8%
22,4%
US IG
7,5%
11,3%
US HY
2,5%
-0,9%
Euro HY
-0,9%
9,0%
EM Debt
7,7%
16,2%
EM Debt
18,0%
2,8%
US HY
7,4%
20,9%
EM Debt
6,2%
9,7%
EM Debt
1,0%
-1,4%
Linkers
-1,4%
8,9%
US HY
7,6%
11,8%
US IG
8,1%
13,8%
US HY
15,5%
2,4%
Euro IG
2,4%
19,6%
US Treas.
5,1%
8,6%
US Treas.
0,0%
-2,9%
Euro IG
-2,9%
7,4%
Euro HY
7,4%
14,3%
Euro HY
14,3%
7,9%
US HY
4,4%
13,6%
Euro IG
13,6%
2,1%
Euro Gov
2,2%
16,7%
US HY
2,5%
7,6%
US IG
-0,9%
-3,7%
US HY
-0,0%
6,8%
US IG
5,5%
15,7%
Euro IG
15,7%
13,2%
US Treas.
5,9%
7,4%
Portfolio
5,4%
10,6%
Portfolio
11,6%
-2,7%
Portfolio
-0,3%
14,9%
Portfolio
6,6%
4,8%
Portfolio
0,1%
-4,3%
Portfolio
-2,2%
6,6%
Portfolio
5,5%
-3,8%
Euro IG
-3,8%
15,0%
US IG
18,7%
11,4%
Portfolio
7,3%
3,5%
Euro Gov
3,2%
10,5%
Euro Gov
11,2%
-3,0%
Linkers
-3,0%
12,4%
Euro Gov
11,1%
2,3%
Euro HY
2,3%
-4,5%
EM Debt
-0,9%
5,6%
US Treas.
4,4%
-4,0%
EM Debt
6,5%
-5,0%
EM Debt
-9,7%
7,0%
Linkers
7,0%
4,7%
Euro IG
4,7%
1,5%
Euro IG
1,5%
8,4%
Linkers
8,4%
-5,8%
US IG
-1,5%
8,4%
Euro IG
8,4%
0,8%
Linkers
0,8%
-5,0%
Euro Gov
-4,3%
5,0%
Euro Gov
4,9%
-6,7%
US IG
4,3%
-5,7%
US IG
4,6%
-22,3%
US HY
-26,1%
4,5%
Euro Gov
6,9%
2,1%
Linkers
2,1%
1,3%
Linkers
1,3%
8,1%
US IG
9,8%
-7,0%
US Treas.
-2,7%
5,5%
Euro HY
5,5%
-1,3%
Euro Gov
-1,2%
-5,1%
US Treas.
-1,6%
4,5%
Euro IG
4,5%
-7,8%
US Treas.
3,1%
-7,5%
US HY
2,6%
-32,8%
Euro HY
-32,8%
-6,6%
US Treas.
-3,6%
1,5%
Euro Gov
2,2%
-1,1%
Euro HY
-1,1%
0,4%
US Treas.
2,0%
-12,3%
EM Debt
-8,3%
2,2%
Linkers
2,2%
-1,6%
Euro IG
-1,6%
-6,7%
US IG
-3,2%
3,0%
Linkers
3,0%
2005
2006
2007
2008
2009
2010
2011
2012
2013
28,9%
EM Debt
11,9%
9,0%
Euro HY
9,0%
3,7%
Linkers
3,7%
19,6%
US Treas.
13,7%
66,1%
Euro HY
66,1%
23,1%
US HY
15,1%
13,5%
US Treas.
9,8%
23,3%
Euro HY
23,3%
18,5%
US Treas.
2,8%
0,5%
Euro IG
0,5%
1,7%
Euro Gov
1,4%
9,1%
Euro Gov
6,2%
53,2%
US HY
58,1%
19,6%
EM Debt
11,8%
12,9%
EM Debt
9,2%
18,4%
US HY
2,8%
-0,0%
Euro Gov
-0,0%
0,0%
Euro IG
0,0%
5,3%
Linkers
5,3%
22,0%
EM Debt
25,9%
16,6%
US IG
9,0%
17,2%
US IG
1,7%
-0,5%
Linkers
-0,5%
-1,6%
Euro HY
-1,6%
0,3%
Portfolio
-3,0%
16,4%
Portfolio
18,9%
13,6%
Portfolio
4,8%
-0,9%
US HY
10,7%
-1,7%
US Treas.
9,0%
-0,0%
US IG
-4,9%
6,8%
Euro HY
6,8%
-1,2%
EM Debt
10,5%
-1,8%
Portfolio
3,8%
4,8%
Euro Gov
4,8%
-2,0%
Portfolio
4,2%
4,0%
Euro IG
4,0%
3,7%
Linkers
3,7%
Source: Barclays Capital, BofA/Merrill Lynch, FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management. Annualised return covers period 2005 to
2014. Euro Gov.: Barclays Euro Agg. Government; US Treasuries: Barclays US Agg. Gov. Treasury; Linkers: Barclays Euro Gov. Inflation-Linked; US IG: Barclays
US Agg. Corporate Investment Grade; Euro IG: Barclays Euro Agg. Credit Corporate; US HY: BofA/Merrill Lynch US High Yield Constrained; Euro HY:
BofA/Merrill Lynch Euro Non-Financial High Yield Constrained; EM Debt: J.P. Morgan EMBI+. Hypothetical portfolio (for illustrative purposes only and should not be
taken as a recommendation): 20% Euro Gov.; 15% US Treasuries; 10% Linkers; 15% US IG; 10% Euro IG; 10% US HY; 5% Euro HY; 15% EM Debt. Returns are
unhedged in euro and local currencies. Guide to the Markets - Europe. Data as of 30 June 2015.
Fixed income market data
GTM Europe
Yield
# of issues
Mkt. value
($ billions)
1-3 years
1.280
3.109
2,0 years
0,34%
5-7 years
968
2.285
6,0
10+ years
938
3.581
1-3 years
95
5-7 years
10-20 years
Return*
| 47
10-year correlation
2Q15
YTD
10-year
Bund
10-year
Treasury
0,22%
0,11%
1,83%
0,44
0,17
1,10
0,62
-1,91
0,96
0,83
0,58
20,4
2,37
1,55
-9,42
0,83
0,83
0,67
2.451
1,9 years
0,63%
0,56%
0,14%
0,68%
0,47
0,65
37
1.001
6,0
1,89
1,58
-1,10
1,01
0,74
0,96
13
119
13,0
2,50
2,11
-3,28
-0,70
0,79
1,00
387
5.040
7,1 years
2,78%
2,40%
-0,74%
0,31%
0,64
0,80
IG credit
9.288
7.657
8,9
2,83
2,39
-1,55
-2,71
0,09
0,26
High yield
3.447
2.253
6,4
6,54
6,27
1,28
1,94
-0,28
-0,21
Floating rate
520
364
2,0
0,74
0,70
0,18
0,42
-0,24
-0,20
Convertibles
795
359
0,0
3,02
3,04
1,44
3,35
-0,46
-0,46
EMD USD sovereign
490
687
11,3
5,79
5,56
-0,26
2,26
0,09
0,11
EMD USD corporate
1.199
299
7,8
5,22
5,20
1,32
3,70
0,05
0,05
264
1.570
4,9
6,79
6,34
0,19
2,44
-0,04
0,03
Avg. maturity 30/06/2015 31/03/2015
Europe Treasuries
Fixed income
US Treasuries
Sector
MBS
EMD LC sovereign
47
Source: Barclays Capital, FactSet, J.P. Morgan Asset Management. Fixed income sectors shown are represented by the following indices: Europe Treasuries:
Barclays Pan-European Aggregate Treasuries indices; US Treasuries: Barclays US Treasury indices; MBS: Barclays US Aggregate Securitized-MBS; IG Credit:
Barclays Global Aggregate-Corporates; High yield: Barclays Global High Yield; Floating rate: Barclays US Floating Rate Notes; Convertibles: Barclays Global
Convertibles Composite; EMD USD sovereign: J.P. Morgan EMBIG; EMD USD Corporate: J.P. Morgan CEMBI; EMD LC sovereign: J.P. Morgan GBI-EM. Credit
yields are yield to worst. *Return is in local currency of the index and unhedged. Guide to the Markets - Europe. Data as of 30 June 2015.
Central bank policy
GTM Europe
Real rates
Central bank balance sheets
Policy rate minus core inflation*

5
%
% of nominal GDP
80
Central bank policy rates

Bank of Japan
0,10%
Bank of England
0,50
European Central Bank 0,05
US Federal Reserve
0,25
| 48
Projections
Japan
%
Eurozone
US
UK
60
2
1
Fixed income
40
0
-1
20
-2
-3
-4
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
0
'06
'07
'08
'09
'10
'11
'12
Source: (Both charts) Bank of England, Bank of Japan, ECB, US Federal Reserve, J.P. Morgan Economic Research, J.P. Morgan Asset Management. *Core
consumer price index inflation is the benchmark core CPI for each country, except Japan which is CPI less food and consumer tax. Guide to the Markets - Europe.
48
'13
'14
'15
Government interest rates
GTM Europe
Sovereign funding costs

10-year benchmark bond yield
8
Country
Greece
Portugal
US
Italy
Spain
UK
Ireland
France
Netherlands
Germany
Switzerland
Portugal
US
UK
Spain
Ireland
France
Germany
Japan
4
Fixed income
Yield (%)
Current
14,98%
2,94
2,35
2,30
2,27
2,03
1,62
1,19
1,04
0,77
0,10
Change (bps)
2Q15
From Dec 2013
351bps
672bps
127
-317
43
-68
107
-181
106
-191
43
-99
98
-181
72
-119
78
-120
61
-118
16
-117
Correlation between government bonds

Correlation* between US Treasury and German Bund yields
1,0
0,8
10 yr bonds
0,6
2
0,4
0,2
0,0
-0,2
0
Jun 13
2 yr bonds
-0,4
Dec 13
Jun 14
Dec 14
Jun 15
'10
'11
'12
'13
Source: (All charts) FactSet, Tullett Prebon, J.P. Morgan Asset Management. *Rolling six-month correlation of weekly change in yield. Guide to the Markets - Europe.
49
| 49
'14
Fixed income interest rate risk
GTM Europe
Source: (Both charts)

Barclays, FactSet, J.P.
Morgan Asset Management.
Current and historical yields for selected indices

Last 10 years*
25
%
20
How to
interpret this
chart
Max
15
10
Average
Current
Min
Fixed income
Treasury:
Europe
1-3 years
5-7 years
10+ years
| 50
Floating Investmentrate
grade credit
High
yield
EMD USD EMD USD EMD LC

sovereign corporate sovereign
Illustration of the impact a 1% rise in local interest rates may have on selected indices
Assumes a parallel shift in the yield curve and spreads are maintained
0
Price return
Total return
*Historical spread analysis is

based on the last 10 years
of data, with the exception of
local currency emerging
markets debt, which are
based on six years of data,
due to data availability.
Fixed income sectors shown
are provided by Barclays
Capital and are represented
by: Treasury Europe:
Barclays Pan-European
Aggregate Government
Treasury; Floating rate:
Barclays US Floating Rate
Notes (BBB); IG credit:
Barclays Global Aggregate
Corporates; High yield:
Barclays Global High Yield;
EMD sovereign USD:
Barclays Emerging Markets
Sovereigns; EMD
corporate ($): Barclays
Emerging Markets
Corporates; EMD sovereign
(LC): Barclays Emerging
Market Local Currency
Government.
For illustrative purposes
only.
-5
Change in bond price is

calculated using both
duration and convexity.
-10
-15
50
Guide to the Markets Europe. Data as of 30 June

2015.
Treasury:
Europe
1-3 years
5-7 years
10+ years
Floating
rate
Investmentgrade credit
High
yield
EMD USD EMD USD EMD LC

sovereign corporate sovereign
Liquidity and duration risks
GTM Europe
US corporate debt market liquidity
Mark to market: Interest rate risks
$ billions
600
Estimated amount of yield increase to wipe out next years income

900
bps
Current yield
12.000
Dealer inventories
US corporate debt
outstanding*
500
800
10.000
A 89 bps increase in yield

wipes out income earned for
the next year
152
700
400
8.000
| 51
600
98
89
500
Fixed income
300
6.000
400
59
48
300
200
29
4.000
26
200
17
100
2.000
100
0
0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14
Global
HY
EMD
Sovereign
EMD
USD
Global IG
US IG
Euro
US
UK Gilts
Aggregate
Treasuries
Govt
Source: (Left) Barclays, Federal Reserve Bank of New York, J.P. Morgan Asset Management. (Right) Barclays, FactSet, J.P. Morgan Asset Management. *US
corporate debt outstanding is the Barclays US Corporate Investment Grade. Interest rate risks chart assumes that all investments are issued at par and are made on
30 June 2015, with no reinvestment of income and with no consideration to convexity characteristics. Fixed income sectors shown are provided by Barclays Capital
and are represented by Barclays Global High Yield, Barclays Emerging Market Local Currency Government, Barclays Emerging Markets USD Aggregate, Barclays
Global Credit Corporate, Barclays US Aggregate Credit Corporate Investment Grade, Barclays US Aggregate Government Treasury (7-10 Y), Barclays UK
Gilt (7-10 Y), Barclays Euro Aggregate Government Treasury (7-10 Y). Guide to the Markets - Europe. Data as of 30 June 2015.
51
Government bonds
GTM Europe
10-year bond yields

16
Britain
leaves ERM
1992
Black Friday
1987
ECB QE
2015
US
UK
12
Eurozone
Dot com bubble

Feb 2000
Asian currency
crisis
1997
Fall of Berlin
Wall 1989
0
'79
'84
'89
10
15
Germany
Finland
Years
20
30
BoJ QE
2013
Fed QE3
2012
Fed QE
2008
9/11 attacks
2001
'94
European government bonds by maturity
Fixed income
Fed QE2
2010
BoE QE
2009
8
Oil shock
1981
| 52
'99
'04
'09
'14
Euro area government bonds with a negative yield

BofA/ML euro area bond index
50
Euro area bonds
Jun 2015
%
with <1% yields
40
Total value
2,6tn
France
30
% of total outstanding
30 June 2015:
16,4%
55%
Sweden
Ireland
20
Italy
10
Spain
Negative yields
Negative in April 2015

and now positive*
Positive yields
0
Aug 14
Oct 14
Dec 14
Feb 15
Source: (Top and bottom left) FactSet, Tullett Prebon, J.P. Morgan Asset Management. (Bottom right) BofA/Merrill Lynch, Bloomberg,
J.P. Morgan Asset Management. *The lowest yield reached for each country during April 2015. Guide to the Markets - Europe. Data as of 30 June 2015.
52
Apr 15
Jun 15
Investment-grade bonds
| 53
GTM Europe
Corporate bond spreads by currency
European corporate issuance
Option-adjusted spreads*
billions
750
600
UK
US
Eurozone
bps
500
Gross issuance
Net issuance
500
YTD:
255bn
400
250
300
200
100
Fixed income
0
'06
-250
'07
'08
'09
'10
'11
'12
'13
'08
'14
'09
'10
US corporate bond spreads by sector
US corporate issuance
Option-adjusted spreads*
350
bps
300
$ billions
1.200
$
1.000
Energy
Industrials ex-energy
'11
'12
'14
Net issuance
Financials
250
200
600
150
400
100
200
50
0
'10
'11
'12
'13
YTD:
658bn
800
Utilities
'14
'15
'15
Gross issuance
'10
'11
'12
'13
Source: (Top and bottom left) Barclays, FactSet, J.P. Morgan Asset Management. (Top and bottom right) J.P. Morgan Securities, J.P. Morgan Asset Management.
*Option-adjusted spread is the spread of a fixed income security rate over the risk-free rate, adjusted to take into account any embedded options.
53
'13
'14
'15
US high yield bonds
| 54
GTM Europe
US high yield spreads and defaults
Average
since 1986
Asset class
20
%
HY defaults (lhs)
15
Latest
4,0%
1,9%
HY spread bps (rhs)
576
549
Lev. loan spread bps (rhs)
439
508
2.000
bps
1.500
10
1.000
500
Fixed income
'94
'96
'98
'00
'02
'04
'06
'08
'10
US historical high yield recovery rates
High yield issuance
High yield bonds, cents on the dollar

70
$ billions
400
$
60
Average: 41,5 cents
'14
YTD:
$185,4bn
Refinancing
General*
300
50
'12
Acquisition/LBO
40
200
30
20
100
10
0
0
'82
'85
'88
'91
'94
'97
'00
'03
'06
'09
'12
'15
'05
'06
'07
'08
'09
'10
'11
Source: (Top) Credit Suisse, J.P. Morgan Economic Research, US Treasury, 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. Leveraged loan spread is
the discount margin to maturity. (Bottom left and right) J.P. Morgan Economic Research, J.P. Morgan Asset Management. *General issuance includes issuance for
the purpose of paying dividends. Guide to the Markets - Europe. Data as of 30 June 2015.
54
'12
'13
'14
'15
European high yield bonds
GTM Europe
European high yield: Spread to worst and default rates

20
Asset class
Default rate 2002:

34%
Average
HY spread bps (rhs)

HY defaults (lhs)
Latest
| 55
654
396
2.500
bps
5,2%
0,7%
2.000
15
1.500
10
1.000
500
N/A
0
'98
'99
'00
'01
'02
'03
'04
'05
'06
Fixed income
European high yield issuance by credit rating

Unrated
CCC
60
'08
'09
'10
'11
'12
'13
'14
% of index
100
%
80
60
Other 17%
Energy 18%
Industrial 19%
BB
40
30
20
0
Other 7%
Energy 2%
Industrial 29%
Telecom 17%
Telecom 10%
Financial 7%
Financial 13%
Consumer 28%
Consumer 31%
US HY
Euro HY
0
'03
'04
'05
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
Source: (Top) BofA/Merrill Lynch, Credit Suisse, FactSet, J.P. Morgan Asset Management. (Bottom left) FactSet, J.P. Morgan Economic Research,
J.P. Morgan Asset Management. (Bottom right) Barclays, FactSet, J.P. Morgan Asset Management. Spread to worst is BofA/Merrill Lynch Euro Non-Financial High Yield
Constrained. US HY is the J.P. Morgan Domestic HY index and Euro HY is the J.P. Morgan Euro HY index. Guide to the Markets - Europe. Data as of 30 June 2015.
55
'15
High yield sector weights

YTD:
50,4bn
billions
90
'07
Emerging markets debt
GTM Europe
Emerging markets debt yields
Real policy rates
14
%
EM sovereign
(local currency)
13
EM sovereign (USD)
12
EM corporate (USD)
11
6
%
4
Developed markets
Emerging markets
2
0
-2
-4
-6
-8
10
Fixed income
EM sovereign debt and Baa corporate bond yields

7,0
%
6,5
EM sovereign (USD)
7
6,0
5,5
5,0
4,5
4
'01
'03
'05
'07
'09
'11
'13
4,0
'09
Baa corporate
bond (USD)
'10
'11
'12
Source: (Left and top right) FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management. (Bottom right) Moodys, J.P. Morgan Economic Research,
FactSet, J.P. Morgan Asset Management. EM sovereign (local currency) is the J.P. Morgan GBI-EM; EM sovereign (USD) is the J.P. Morgan EMBI+; EM corporate
(USD) is the J.P. Morgan CEMBI. 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. Guide to the Markets - Europe. Data as of 30 June 2015.
56
'13
'14
| 56
Emerging markets debt composition
GTM Europe
Emerging markets investable debt universe
Sovereign local currency index breakdown
$ trillions
3,5
GBI-EM by region
$
3,0
9%
EM corporate (USD)
| 57
Asia
22%
Europe
EM sovereign (USD)
EM sovereign (local currency)
Latin America
40%
29%
2,5
Other
2,0
Fixed income
Sovereign USD credit rating breakdown

% of EMBI Global Index
100
%
80
1,5
1,0
60
0,5
40
BB
20
IG
0,0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
1994-97 1998-01 2002-05 2006-09 2010-13 2014-15
Source: (All charts) J.P. Morgan Economic Research, J.P. Morgan Asset Management. 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. EM corporate (USD) is the CEMBI; EM sovereign (USD) is the
J.P. Morgan EMBI Global; EM sovereign (local currency) is the Global Bond Index Emerging Market Broad Diversified Index (GBI-EM). Guide to the Markets - Europe.
57
Unrated
Other assets and

investor behaviour
Asset class returns
58
GTM Europe
| 58
2009
2010
2011
2012
2013
2014
YTD
2Q15
Ten-yr
Ann.
G ovt bonds
10 , 2 %
EME
62 ,8 %
REITS
27 ,6 %
REITS
7 ,3 %
REITS
2 0 , 1%
DM Equitie s
29,6%
REITS
2 7 , 1%
EME
5 ,8 %
Cmdty
4,7%
EME
10 , 3 %
Cmdty
16 , 2 %
Ca sh
5,7%
HY bonds
59 ,4 %
Cmdty
16 , 8 %
EMD
7 ,0 %
HY bonds
19 , 6 %
He dge
Funds
9,7%
DM Equitie s
10 , 4 %
DM Equitie s
4,5%
HY bonds
1, 3 %
HY bonds
8,0%
DM Equitie s
16 , 1%
He dge
Funds
12 , 6 %
IG bonds
- 8,6%
EMD
34 ,2 %
HY bonds
14 , 8 %
G ovt bonds
6 ,3 %
EMD
17 , 9 %
Portfolio
9,3%
EME
5 ,6 %
EMD
2 ,8 %
He dge
Funds
0,8%
EMD
7,8%
EMD
12 , 3 %
He dge
Funds
13 , 9 %
G ovt bonds
10 , 6 %
EMD
- 14 , 7 %
REITS
27 ,4 %
EME
14 , 4 %
IG bonds
4 ,3 %
EME
17 , 4 %
HY bonds
7 ,3 %
P ortfolio
5 ,0 %
HY bonds
1, 9 %
EME
0,8%
REITS
7,5%
P ortfolio
10 , 0 %
P ortfolio
13 , 8 %
P ortfolio
8,5%
He dge
Funds
- 19 , 1%
P ortfolio
27 ,0 %
EMD
12 , 8 %
HY bonds
3 , 1%
DM Equitie s
16 , 4 %
EME
3 ,8 %
EMD
4 ,8 %
P ortfolio
1, 0 %
EMD
0,4%
DM Equitie s
6,9%
REITS
8,3%
HY bonds
13 , 7 %
IG bonds
6,7%
P ortfolio
- 23 ,2 %
DM Equitie s
26 ,5 %
He dge
Funds
10 , 9 %
Ca sh
1, 7 %
P ortfolio
12 , 3 %
REITS
3 ,2 %
He dge
Funds
4 , 1%
Ca sh
0 , 1%
Ca sh
0,0%
P ortfolio
6,5%
He dge
Funds
7,6%
EMD
10 , 0 %
DM Equitie s
5 ,2 %
HY bonds
- 26 ,9 %
IG bonds
19 , 2 %
P ortfolio
10 , 8 %
P ortfolio
- 1, 1%
IG bonds
11, 2 %
IG bonds
0 ,3 %
IG bonds
3 , 1%
He dge
Funds
0,0%
DM Equitie s
- 0 ,5 %
He dge
Funds
5,8%
HY bonds
3,6%
IG bonds
7,2%
EMD
5,2%
Cmdty
- 35 ,6 %
Cmdty
18 , 9 %
DM Equitie s
10 , 6 %
He dge
Funds
- 2 ,5 %
He dge
Funds
7,7%
Ca sh
0 ,2 %
Ca sh
0 ,3 %
Cmdty
- 1, 6 %
P ortfolio
- 0,5%
IG bonds
4,3%
Ca sh
2,2%
G ovt bonds
6,4%
Ca sh
4,4%
REITS
- 37 ,3 %
He dge
Funds
18 , 6 %
G ovt bonds
5 ,9 %
DM Equitie s
- 5,0%
G ovt bonds
1, 8 %
EMD
- 4 , 1%
HY bonds
0 ,0 %
IG bonds
- 2,7%
G ovt bonds
- 1, 5 %
G ovt bonds
3 , 1%
IG bonds
- 3,6%
Ca sh
3,0%
HY bonds
3,2%
DM Equitie s
- 38 ,3 %
G ovt bonds
2,6%
IG bonds
5 ,8 %
EME
- 12 , 5 %
Ca sh
1, 2 %
G ovt bonds
- 4 ,3 %
G ovt bonds
- 0 ,8 %
G ovt bonds
- 3,7%
IG bonds
- 1, 6 %
Ca sh
2,2%
G ovt bonds
- 6,7%
Cmdty
2 , 1%
REITS
- 17 , 8 %
EME
- 45 ,7 %
Ca sh
2,3%
Ca sh
1, 1%
Cmdty
- 13 , 3 %
Cmdty
- 1, 1%
Cmdty
- 9 ,5 %
Cmdty
- 17 , 0 %
REITS
- 5,2%
REITS
- 8,9%
Cmdty
- 1, 9 %
2005
2006
2007
EME
3 5 ,8 %
REITS
34 ,4 %
EME
33 ,6 %
Cmdty
2 1, 4 %
EME
28 ,8 %
DM Equitie s
16 , 3 %
2008
Source: Barclays Capital, Bloomberg, Credit Suisse/Tremont, MSCI, FactSet, J.P. Morgan Economic Research, NAREIT, J.P. Morgan Asset Management. Annualised return
covers the period from 2005 to 2014. EME: MSCI EM Emerging Market; Govt bonds: Barclays Global Aggregate Government Treasuries; HY bonds: Barclays Global High Yield;
EMD: Barclays Emerging Markets (USD); IG bonds: Barclays Global Aggregate Corporates; Cmdty: Bloomberg Commodity; REITS: FTSE NAREIT All REITS; DM equities:
MSCI World; Hedge funds: Credit Suisse/Tremont Hedge Fund; Cash: JP Morgan Cash Index ECU (3M). Hypothetical portfolio (for illustrative purposes only and shouldnt be
taken as a recommendation): 30% DM equities; 10% EM equities; 15% IG bonds; 12.5% government bonds; 7.5% HY bonds; 5% EMD; 5% commodities; 5% cash; 5% REITS
and 5% hedge funds. Returns are unhedged. Guide to the Markets - Europe. Data as of 30 June 2015.
Correlation of returns (EUR)
GTM Europe
| 59
Other assets and

investor behaviour
10-year correlations
MSCI
Europe
S&P 500
MSCI EM
MSCI Asia
ex-Japan
Pan Europe
bonds
EM debt
High yield
bonds
Global
bonds
Cmdty
Hedge
funds
Leveraged
loans
Real
estate
MSCI
Europe
1,00
0,79
0,86
0,84
-0,08
0,63
0,77
-0,22
0,45
0,81
0,74
-0,11
S&P 500
0,47
1,00
0,67
0,71
0,05
0,35
0,50
0,11
0,39
0,57
0,60
-0,08
MSCI EM
0,79
0,49
1,00
0,96
-0,10
0,68
0,76
-0,15
0,58
0,83
0,77
-0,26
MSCI Asia
ex-Japan
0,76
0,62
0,97
1,00
0,02
0,62
0,71
-0,03
0,44
0,74
0,72
-0,28
Pan Europe
bonds
0,56
0,49
0,71
0,76
1,00
0,19
-0,16
0,70
-0,30
-0,33
-0,22
-0,12
EM debt
0,42
-0,13
0,61
0,48
0,48
1,00
0,81
-0,10
0,40
0,62
0,69
-0,34
High yield
bonds
Global
bonds
0,35
-0,33
0,11
-0,04
0,02
0,69
1,00
-0,39
0,48
0,84
0,92
-0,47
0,58
0,72
0,81
0,87
0,82
0,26
-0,31
1,00
-0,13
-0,47
-0,30
-0,13
Cmdty
0,49
0,22
0,54
0,44
0,28
0,63
0,39
0,45
1,00
0,61
0,59
-0,03
Hedge
funds
0,68
0,38
0,42
0,38
0,33
0,36
0,55
0,17
0,35
1,00
0,87
-0,18
Leveraged
loans
0,62
0,09
0,40
0,29
0,09
0,60
0,80
0,04
0,67
0,67
1,00
-0,42
Real
estate
0,15
-0,18
-0,05
-0,06
-0,09
-0,06
-0,01
-0,07
-0,03
0,13
-0,22
1,00
Three-year correlations
59
Source: Barclays, Bloomberg, Citigroup, Credit Suisse, J.P. Morgan Economic Research, MSCI, NCREIF, Standard & Poors, US Federal Reserve, J.P. Morgan Asset Management.
Pan Europe bonds: Citigroup Europe Government Bond; EM debt: JP Morgan EMBI Global; High yield bonds: JP Morgan Domestic High Yield; Global bonds: Barclays Global Aggregate; Lev.
Loans: Credit Suisse Leveraged Loans; Cmdty: Bloomberg Commodity; Hedge Funds: CS/Tremont Multi-Strategy; Real estate: blended index, which includes NCREIF Property Index data
and Federal Reserve estimates of changes in capital value. Ten-year correlation values are calculated for period June 2005 to June 2015. All indices except Real Assets are total return
based on quarterly return data in euros; real asset correlations are based on quarterly data and are as at 31 March 2015. Guide to the Markets - Europe. Data as at 31 March 2015.
Asset volatility
GTM Europe
| 60
Relative volatility of key assets

Volatility measures (index level)
Crude oil (OVX)
US Treasuries (MOVE)
S&P 500 (VIX)
Rebased to 100 at June 2010

180
140
Average
31
78
18
Latest
32
92
18
100
60
20
Other assets and

investor behaviour
'10
'11
'12
'13
'14
Movements in US and German 30-year bond yields
Relative volatility of US and German equities
Six-month change in yields

100
%
Rebased to 100 at June 2010

180
Germany
US
+2.0 std. dev.
50
Germany (VDAX)
S&P 500 (VIX)
140
100
0
-50
60
-2.0 std. dev.
-100
'07
'08
'09
'10
'11
'12
'13
'14
'15
20
'10
'11
'12
'13
Source: (Top and bottom right) CBOE, Deutsche Boerse, BofA/Merrill Lynch, Thomson Reuters Datastream, J.P. Morgan Asset Management. (Bottom left) FactSet,
60
'15
'14
'15
Commodity returns
Other assets and

investor behaviour
2005
2006
2007
GTM Europe
2008
2009
2010
2011
2012
2013
2014
2Q15
Ten-yr
Ann.
Copper
56,1%
Nickel
167,2%
Wheat
52,1%
Gold
2,4%
Copper
129,6%
Silver
81,6%
Gold
9,6%
Corn
18,9%
Crude Oil
6,8%
Coffee
37,7%
Wheat
3,5%
Wheat
19,3%
Gold
8,0%
Nat. gas
52,8%
Copper
45,1%
Crude Oil
40,1%
Corn
-23,1%
Nickel
54,6%
Coffee
66,8%
Corn
1,1%
Wheat
9,7%
Nat. gas
5,0%
Nickel
7,3%
Corn
0,0%
Crude Oil
17,5%
Copper
6,9%
Silver
25,0%
Corn
40,0%
Gold
24,2%
Silver
-26,6%
Silver
47,4%
Nickel
32,0%
Crude Oil
-3,7%
Silver
7,0%
Copper
-8,8%
Gold
-1,8%
Crude Oil
0,0%
Corn
7,8%
Silver
6,0%
Crude Oil
21,9%
Silver
37,8%
Silver
9,1%
Coffee
-27,3%
Alum inium
33,6%
Corn
30,5%
Silver
-10,2%
Gold
6,0%
Nickel
-20,1%
Alum inium
-3,1%
Silver
-0,9%
Nat. gas
1,9%
Nickel
0,4%
Alum inium
15,5%
Wheat
20,0%
Copper
4,1%
Nat. gas
-38,0%
Gold
22,7%
Copper
29,4%
Coffee
-11,2%
Copper
4,9%
Alum inium
-20,8%
Wheat
-9,5%
Gold
-1,3%
Gold
-1,0%
Corn
-3,1%
Gold
13,8%
Alum inium
19,4%
Corn
-2,3%
Wheat
-39,4%
Coffee
10,1%
Gold
28,5%
Alum inium
-21,7%
Alum inium
-4,1%
Wheat
-27,2%
Corn
-13,3%
Copper
-7,7%
Nickel
-3,7%
Coffee
-5,8%
Nickel
-8,1%
Gold
16,0%
Coffee
-6,4%
Alum inium
-41,0%
Crude Oil
4,2%
Wheat
21,0%
Copper
-24,5%
Nickel
-10,3%
Gold
-28,7%
Copper
-16,6%
Nat. gas
-9,4%
Coffee
-3,9%
Alum inium
-6,1%
Wheat
-8,8%
Coffee
1,0%
Nickel
-16,9%
Copper
-53,8%
Corn
-10,3%
Alum inium
5,2%
Nickel
-24,7%
Crude Oil
-11,8%
Corn
-30,3%
Silver
-20,5%
Alum inium
-11,1%
Copper
-4,8%
Wheat
-8,1%
Coffee
-11,7%
Crude Oil
-16,7%
Alum inium
-18,9%
Crude Oil
-53,9%
Wheat
-26,1%
Crude Oil
3,7%
Wheat
-34,0%
Nat. gas
-30,7%
Coffee
-30,6%
Nat. gas
-30,8%
Nickel
-21,5%
Silver
-6,6%
Crude Oil
-9,4%
Corn
-18,4%
Nat. gas
-72,1%
Nat. gas
-22,9%
Nickel
-56,8%
Nat. gas
-51,6%
Nat. gas
-40,7%
Nat. gas
-47,1%
Coffee
-41,6%
Silver
-36,7%
Crude Oil
-41,7%
Coffee
-24,6%
Alum inium
-7,3%
Nat. gas
-34,1%
Source: Bloomberg, FactSet, J.P. Morgan Asset Management. Returns are in base currency of the index. Annualised period covers 2005 to 2014.
61
YTD
| 61
Commodities
GTM Europe
Commodity volatility
Gold price
Standard deviation of weekly returns, 10 years
2.500
Inflation-adjusted gold price
5,9
Natural gas
Grains
3,6
Industrial metals
3,6
Precious metals
Bloomberg Cmdty
Index
Gold price
$/oz.
4,4
Crude oil
| 62
31 Jan 1980:
$2.086
2.000
3,2
2,5
2,4
ACWI
Livestock
1.500
2,0
0
Commodity prices and US inflation

Change year on year
Other assets and

investor behaviour
8
%
6
Bloomberg
Commodity Index
Headline CPI*
80
%
60
40
20
-2
-20
-4
-40
-6
-60
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
30 Jun
2015:
$1.175
1.000
500
0
'69
'74
'79
'84
'89
'94
Source: (Top and bottom left) Bloomberg, MSCI, J.P. Morgan Asset Management. (Right) BLS, FactSet, J.P. Morgan Asset Management. *CPI is the Consumer
Price Index. Guide to the Markets - Europe. Data as of 30 June 2015.
62
'99
'04
'09
'14
Oil consumption and production

Oil production by country
GTM Europe
Oil importers and exporters
US
Saudi Arabia
Russia
Millions of barrels per day

16
| 63
Net imports as % of GDP, 2013

-3,6
Canada
14
Norway
12
UK
-1,1
0,9
1,6
US
10
2,2
Italy
8
6
'01
'03
'05
'07
'09
'11
'13
Crude oil prices
'15
YTD change
$ per barrel
Brent Crude
WTI
150
6,7%
11,1%
Other assets and

investor behaviour
125
2,4
Germany
2,4
3,6
Japan
Russia
-14,0
0,5
Brazil
100
2,4
China
75
3,2
Turkey
50
5,1
South Africa
25
0
France
5,3
India
'91
'93
'95
'97
'99
'01
'03
'05
'07
'09
'11
'13
-8
-14
-6
-4
-2
Source: (Top left) EIA, J.P. Morgan Asset Management. (Bottom left) FactSet, J.P. Morgan Asset Management. (Right) EIA, IMF, J.P. Morgan Asset Management.
63
% 6
Life expectancy and pension shortfall

If you are 65 today, the probability of living to a specific age
Perceived retirement shortfall by country
100
25
94
Men
Expected savings
shortfall (years)
yrs
Savings expected
to last (years)
Women
78
80
Couple at least one

lives to specified age
| 64
GTM Europe
20
7
70
11
66
10
15
60
10
10
10
8
6
47
10
40
36
14
9
UAE
10
20
Brazil
Canada
US
Singapore
90 years
Australia
80 years
France
UK
Source: (Left) ONS 2010-2012 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.
64
10
Mexico
India
12
11
China
11
10
Average
Other assets and

investor behaviour
Consumer confidence and the stock market

Eurozone consumer confidence
Aug 2000:
-23,8%
5
Average 12-month MSCI Europe Index return:
After a peak: -3,4%
After a trough: +27,4%
Jun 2007:
-22,5%
Total period: +8,1%
-5
Jul 1989:
+4,4%
May 1986:
+12,1%
| 65
GTM Europe
Jun 2015
Jun 1995:
+17,7%
Nov 2010:
-8,3%
-10
-15
Feb 1988:
+19,6%
Other assets and

investor behaviour
-20
Nov 1996:
+30,1%
Mar 2003:
+32,5%
-25
-30
Dec 2012:
+18,1%
Mar 1993:
+19,4%
Mar 2009:
+44,7%
-35
'85
'87
'89
'91
'93
'95
'97
'99
'01
'03
'05
'07
'09
Source: European Commission, 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 MSCI Europe Index returns are price returns only, which excludes dividends.
Total period return is the average 12-month rolling return. Guide to the Markets - Europe. Data as of 30 June 2015.
65
'11
'13
Industry fund flows
GTM Europe
Cumulative mutual fund flows
Cumulative flows into US equity funds
US-domiciled funds, $ billions

1.200
$1.175 bn
Equity funds
| 66
Includes both mutual funds and ETFs, $ billions

800
$
400
Bond funds
Institutional
+$654 billion
1.000
0
Retail
-$707 billion
$837 bn
-400
800
-800
'07
600
'09
'11
'12
'13
Net new cash flow to US mutual funds, $ billions

80
$
'14
'15
Equity funds
Bond funds
40
0
200
$107 bn
$64 bn
0
-40
-80
1997-2000
2009-2012
'10
'11
Source: (Left) FactSet, Strategic Insight, J.P. Morgan Asset Management. (Top and bottom right) FactSet, Investment Company Institute,
66
'10
Monthly mutual fund flows
400
Other assets and

investor behaviour
'08
'12
'13
'14
US asset returns by holding period
GTM Europe
Range of equity and bond total returns

Annualised total returns, 1950-2015
75
Large cap equity
%
Bonds
61%
50/50 portfolio
50
48%
49%
30%
25
24%
24%
21%
17%
17%
18%
13%
1%
Other assets and

investor behaviour
-7%
-3%
-1%
-3%
4%
4%
0%
-18%
-24%
-25
-43%
-50
1-yr rolling
5-yr rolling
10-yr rolling
Source: Strategas/Ibbotson, J.P. Morgan Asset Management. Returns shown are per annum and are calculated based on monthly returns from 1950 to May 2015
and include dividends. Guide to the Markets - Europe. Data as of 30 June 2015.
67
1%
15%
20-yr rolling
| 67
Alternative asset class returns
Other assets and

investor behaviour
2005
GTM Europe
YTD
2Q15
Ten-yr Ten-yr
Ann.
Ann.
Return Volatility
2006
2007
2008
2009
2010
2011
2012
2013
2014
Real Estate
21,4%
Private
Equity
29,9%
Private
Equity
22,9%
Glbl. Macro
4,7%
Rel. Val.
23,0%
Private
Equity
18,2%
Real Estate
16,0%
Private
Equity
13,1%
Private
Equity
19,8%
Real Estate
12,5%
Mrgr. Arb.
4,3%
Distressed
2,2%
Private
Equity
11,8%
Private
Equity
10,4%
Private
Equity
21,3%
Real Estate
16,3%
Real Estate
16,0%
Eq. Mkt.
Ntrl.
-3,0%
Distressed
20,2%
Real Estate
16,4%
Private
Equity
7,4%
Real Estate
10,9%
Distressed
15,1%
Private
Equity
7,3%
HF Agg.
3,6%
Mrgr. Arb.
2,1%
Real Estate
7,1%
Distressed
9,2%
Distressed
10,4%
Distressed
15,3%
Glbl. Macro
11,4%
Mrgr. Arb.
-6,7%
HF Agg.
18,6%
Rel. Val.
12,5%
Mrgr. Arb.
2,3%
Rel. Val.
9,7%
Real Estate
13,9%
Glbl. Macro
5,8%
Real Estate
3,4%*
HF Agg.
2,0%
Rel. Val.
6,4%
Real Estate
8,9%
HF Agg.
9,1%
Mrgr. Arb.
14,6%
HF Agg.
11,0%
Real Estate
-10,0%
Private
Equity
15,3%
Distressed
12,2%
Rel. Val.
0,8%
Distressed
8,5%
HF Agg.
9,6%
Rel. Val.
5,3%
Rel. Val.
2,9%
Rel. Val.
1,9%
Distressed
6,0%
HF Agg.
8,0%
Eq. Mkt.
Ntrl.
6,1%
HF Agg.
13,3%
Rel. Val.
10,0%
Rel. Val.
-17,3%
Mrgr. Arb.
11,9%
HF Agg.
8,5%
Distressed
-0,0%
HF Agg.
4,4%
Rel. Val.
7,5%
HF Agg.
4,3%
Eq. Mkt.
Ntrl.
2,3%
Eq. Mkt.
Ntrl.
1,1%
HF Agg.
5,3%
Rel. Val.
7,2%
Glbl. Macro
6,1%
Rel. Val.
12,2%
Mrgr. Arb.
8,9%
HF Agg.
-18,7%
Glbl. Macro
6,9%
Mrgr. Arb.
4,6%
Glbl. Macro
-0,7%
Eq. Mkt.
Ntrl.
3,1%
Eq. Mkt.
Ntrl.
6,4%
Eq. Mkt.
Ntrl.
3,2%
Glbl. Macro
2,3%
Glbl. Macro
-0,7%
Mrgr. Arb.
4,9%
Glbl. Macro
4,6%
Mrgr. Arb.
5,5%
Glbl. Macro
8,2%
Distressed
6,8%
Distressed
-22,3%
Eq. Mkt.
Ntrl.
-1,7%
Glbl. Macro
3,2%
Eq. Mkt.
Ntrl.
-1,5%
Mrgr. Arb.
1,8%
Mrgr. Arb.
5,3%
Mrgr. Arb.
1,9%
Distressed
1,3%
Real Estate
-
Glbl. Macro
4,4%
Mrgr. Arb.
4,0%
Rel. Val.
5,3%
Eq. Mkt.
Ntrl.
7,0%
Eq. Mkt.
Ntrl.
5,7%
Private
Equity
-25,8%
Real Estate
-29,8%
Eq. Mkt.
Ntrl.
2,5%
HF Agg.
-2,0%
Glbl. Macro
-1,3%
Glbl. Macro
0,1%
Distressed
1,2%
Private
Equity
-
Private
Equity
-
Eq. Mkt.
Ntrl.
2,7%
Eq. Mkt.
Ntrl.
3,0%
Source: FactSet, HFRI, NCREIF, The Burgiss Group, J.P. Morgan Asset Management. Hedge fund indices include distressed and restructuring (Distressed), relative
value (Rel. Val.), global macro (Glbl. Macro), merger arbitrage (Mrgr. Arb.), equity market neutral (Eq. Mkt. Ntrl.), and the aggregate (HF Agg.). Annualised volatility
and returns cover the period from 2005 to 2014. *YTD Real Estate returns are 1Q15 returns as no further data is available for 2015 yet. Private Equity 2015 returns
are also unavailable due to a lag in data. Returns may fluctuate as hedge fund reporting occurs on a lag. Guide to the Markets - Europe. Data as of 30 June 2015.
68
| 68
Risk/return characteristics of alternatives
GTM Europe
| 69
The effects of adding alternatives to a portfolio, 1990 - 2014

10
60% Stocks
20% Bonds
20% Alternatives
40% Stocks
40% Bonds
20% Alternatives
Other assets and

investor behaviour
Annualised return %
20% Stocks
60% Bonds
20% Alternatives
100% Stocks
0% Bonds
70% Stocks
30% Bonds
Alternatives sub-portfolio*
50% Stocks
50% Bonds
8
Real
estate
30% Stocks
70% Bonds
Hedge
funds
Private
equity
0% Stocks
100% Bonds
6
3
11
13
15
Annualised volatility %
Source: Barclays, Bloomberg, Hedge Fund Research, NCREIF, S&P, The Burgiss Group, J.P. Morgan Asset Management. Data period from January 1990 to
December 2014, utilising annual rebalancing. Stocks represents the S&P 500 Index, and Bonds represents the Barclays U.S. Aggregate Bond Index.
*Alternatives represents a hypothetical sub-portfolio chosen to replicate investors preferred exposure from Global Alternatives Survey 2013 by Towers Watson. All
portfolios are for illustrative purposes only and should not be taken as a recommendation. Burgiss Index Pooled return for 4Q14 is not yet available so 3Q14 Pooled
Return is used as a proxy. Past performance may not be indicative of future results. Indices are shown for illustrative purposes. Guide to the Markets - Europe. Data
as of 30 June 2015.
69
17
19
Alternative strategies
GTM Europe
Allowed return on equity over cost of debt
Hedge fund returns in different stock market environments
OECD Infrastructure
16
Average return based on total return performance 1995-2014

4
3,1
S&P 500
%
HFRI FW
1,4
2
Recession
%
14
Electric
12
-1,0
-2
10
Utility bond
Natural gas
-3,9
S&P up months
S&P down months
Average return based on bond market performance 1995-2014

2
US bonds
%
HFRI FW
1,0
1
0,6
0,3
Other assets and

investor behaviour
-4
Hedge fund returns in different bond market environments
10 yr US
Treasury
0
'70
'76
'82
'88
'94
'00
'06
'12
-1
Bond up months
-0,7
Bond down months
Source: (Left) Bloomberg, Regulatory Research Associates, J.P. Morgan Asset Management. (Top right) FactSet, Hedge Fund Research, Standard and Poors,
J.P. Morgan Asset Management. (Bottom right) Barclays Capital, FactSet, Hedge Fund Research, J.P. Morgan Asset Management. S&P 500 is total return
performance. HFRI FW is Hedge Fund Research Index Fund Weighted. US bonds is the Barclays Capital US Aggregate Bond Index. Guide to the Markets - Europe.
70
| 70
J.P. Morgan Asset Management: Risks and disclosures

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.
The S&P 400 Mid Cap Index is representative of 400 stocks in the mid-range sector of the domestic stock 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-tobook ratios and higher forecasted growth values.
The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book
ratios and lower forecasted growth values.
The Russell 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 priceto-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-tobook 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-tobook ratios and higher forecasted growth values.
The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book
ratios and lower forecasted growth values.
The Russell Top 200 Index measures the performance of the largest cap segment of the U.S. equity universe. It
includes approximately 200 of the largest securities based on a combination of their market cap and current 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.
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 All Country Asia Pacific ex-Japan Index is a free float-adjusted market capitalization weighted index that is
designed to measure the equity market performance of the developed and emerging markets in the Pacific region. The
MSCI All Country Asia Pacific ex-Japan Index consists of the following 11 developed and emerging market countries:
Australia, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, and
Thailand.
The MSCI China Index is an unmanaged index considered representative of stocks of China.
The MSCI KOKUSAI Index is a free float-adjusted market capitalization index that is designed to measure the equity
market performance of developed markets excluding Japan. The MSCI KOKUSAI Index consists of the following 23
developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece,
Hong Kong, Ireland, Israel, Italy, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland,
the United Kingdom, and the United States*.
The Nikkei 225 Index is a price-weighted average of the 225 top-rated Japanese companies listed in the first section of
the Tokyo Stock Exchange.
The Tokyo Price Index (TOPIX) is a capitalization-weighted index lists all firms that are considered to be under the 'first
section' on the TSE, which groups all of the large firms on the exchange into one pool. The second section groups all of
the remaining smaller firms.
The FTSE 100 Index is an index of the 100 largest companies (by market capitalization) in the United Kingdom.
The FTSE All Share Index is an index of the 630 largest companies (by market capitalization) in the United Kingdom.
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, but does not include tax 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.
Credit Suisse/Tremont Hedge Fund Index is compiled by Credit Suisse Tremont Index, LLC. It is an asset-weighted
hedge fund index and includes only funds, as opposed to separate accounts. The Index uses the Credit Suisse/Tremont
database, which tracks over 4500 funds, and consists only of funds with a minimum of US$50 million under
management, a 12-month track record, and audited financial statements. It is calculated and rebalanced on a monthly
basis, and shown net of all performance fees and expenses. It is the exclusive property of Credit Suisse Tremont Index,
LLC.
The 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.
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 Dow Jones-UBS 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.
West Texas Intermediate (WTI) is underlying commodity in the New York Mercantile Exchange's oil futures contracts.
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.
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.
This U.S. Treasury Index is a component of the U.S. Government index.
The Barclays Capital High Yield Index covers the universe of fixed rate, non-investment grade debt. Pay-in-kind (PIK)
bonds, Eurobonds, and debt issues from countries designated as emerging markets (e.g., Argentina, Brazil, Venezuela,
etc.) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries are 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.
The Barclays Euro-Aggregate Index consists of bond issued in the euro or the legacy currencies of the sovereign
countries participating the European Monetary Union (EMU).
The Global Bond Index Emerging Market Broad Diversified Index (GBI-EM) is a comprehensive global local
emerging markets index, and consists of liquid, fixed-rate, domestic currency government bonds.
The Barclays Global Aggregate Corporate Index consists of corporate issues in Europe, the US and Asia-pacific
regions.
The Barclays Capital Global High Yield Index is an unmanaged index considered representative of fixed rate,
noninvestment-grade debt of companies in the U.S., developed markets and emerging markets.
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 Li Keqiang Index is a composite measure composed of Chinas electricity production, financial institution loans and
railway freight.
The Euro Stoxx 600 Index represents large, mid and small capitalisation companies across 18 European countries.
The JPMorgan GBI-EM Global Diversified consists of regularly traded, liquid fixed-rate, domestic currency government
bonds to which international investors can gain exposure. The weightings among the countries are more evenly
distributed within this index.
The JPMorgan Corporate Emerging Markets Bond Index (CEMBI): The CEMBI tracks total returns of US
dollar-denominated debt instruments issued by corporate entities in Emerging Markets countries, and consists of an
investable universe of corporate bonds. Both indices are also available in Diversified version.
The JPMorgan CEMBI Index is a USD denominated external debt index tracking bond issued by sovereigns and
quasi-sovereigns in the developing nations.
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).
The CS/Tremont Multi-Strategy Index consists of funds that allocate capital based on perceived opportunities 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.
The Office of National Statistics (ONS) Index is a mix-adjusted average housing price index. The index is calculated
monthly using mortgage financed transactions from the Regulated Mortgage Survey by the Council of Mortgage
Lenders.
The Nationwide House Price Index is a mix adjusted index constructed from Nationwide lending data across the UK.
The Halifax House Price Index is constructed from mortgage data derived from Halifax lending data across the UK.
The MSCI AC World High Dividend Yield Index is composed of those securities that have higher-than-average
dividend yield within its parent index, a track record of consistent dividend payments and the capacity to sustain future
dividend payments.
The Hedge Fund Research Distressed /Restructuring Index is composed of funds whose investment process focus
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.
The Hedge Fund Research Macro Index is composed of funds which employ an investment process that analyses
underlying economic variables and the impact these have on a range of asset markets.
The Hedge Fund Research Equity Market Neutral Index is composed of funds which employ sophisticated
quantitative techniques for analysing price data to ascertain information about future price movements and relationships
between securities.
The Hedge Fund Research Merger Arbitrage Index is composed of funds 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
The Hedge Fund Research Relative Value Index is composed of funds which look for valuation discrepancies in the
relationship between different securities.
The HFRI Fund Weighted Composite Index is a global, equal-weighted index of over 2,000 single-manager funds that
report to HFR Database
The Burgiss Pooled Return Index is an index of private equity fund level cash flows that includes buyout funds and
venture capital funds.
The Merrill lynch Option Volatility Estimate (MOVE) Index is a yield curve weighted index of the normalized implied
volatility on 1-month Treasury options which are weighted on the 2, 5, 10, and 30 year contracts.
The VDAX volatility index is an indication of the expected volatility (i.e. range) of the DAX stock index for the next
thirty days.

The Market Insights programme provides comprehensive data and commentary on global markets without reference to products. Designed as a tool to help clients understand the markets and support investment
decision-making, the programme 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 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 by you in
evaluating the merits of investing in any securities or products. In addition, the Investor should make an independent assessment of the legal, regulatory, tax, credit, and accounting and determine, together with 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 which is 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 by the Financial Services Agency (registration number Kanto Local Finance Bureau (Financial Instruments
Firm) No. 330); in Korea by JPMorgan Asset Management (Korea) Company Limited which is regulated by the 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
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Past performance is no guarantee of comparable future results.
Diversification does not guarantee investment returns and does not eliminate the risk of loss
0903c02a80a12b1c
Brazilian recipients:
Prepared by: Stephanie Flanders, David Stubbs, Vincent Juvyns, Maria Paola Toschi, Kerry Craig,
Alexander Dryden, Nandini Ramakrishnan.
Unless otherwise stated, all data as of 30 June 2015 or most recently available.
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MARKET INSIGHTS

Guide to the Markets

Global Market Insights Strategy Team

Dr. David P. Kelly, CFA

Manuel Arroyo Ozores, CFA

Anastasia V. Amoroso, CFA

Tilmann Galler, CFA

Grace Tam, CFA

Kerry Craig, CFA

James C. Liu, CFA

Dr. David Stubbs

Maria Paola Toschi

Anthony Tsoi, CFA

Europe: GDP and inflation

Interest rates and equities

Global Purchasing Managers Index (PMI) for manufacturing

World stock market returns

Fixed income sector returns

Other assets and investor behaviour

Asset class returns

Europe: GDP and inflation

EU28, change quarter on quarter

EU28, change year on year

Eurozone cyclical indicators

New auto registrations

Retail sales growth

EU19, millions of new passenger cars, seasonally adjusted

EU19, excluding motor vehicles, change year on year

Gross fixed capital formation*

Industrial production and money supply

Rebased to 100 at March 2008

EU19, change year on year, three-month moving average

Eurozone recovery monitor

Manufacturing purchasing managers indices

Eurozone credit conditions

Credit demand and eurozone GDP growth

Bank loans to households and non-financial corporations

Net % of banks reporting positive loan demand, GDP growth

billions, net lending flow, three-month moving average

Overall corporate (lhs)

Housing loans (lhs)

Eurozone GDP growth

Corporate lending rates

Consumer credit (lhs)

European Central Bank (ECB) policies

ECB balance sheet: Assets

Central bank quantitative easing purchases

% of net issuance over

Changes in equities and exchange rates

Europe cash accounts

Euro area deposits

Income generated by 100.000 investment in a one-year

Aug 2012: 3,3tn

Europe corporate finances

MSCI Europe Index: Geographical sources of revenue

MSCI Europe, ratio of total debt to total equity, quarterly

Interest coverage ratio (EBIT / net interest)

MSCI Europe, quarterly

Real GDP growth

Unemployment rate and consumer confidence

Rebased to 100 at 1Q08

Change year on year

Current account balance