1. For Professional Clients only – not for use by or distribution to retail investors Income: Clarity, Relevance and Solutions Stuart Podmore Head of Strategic Alliances and Academy Sales January 2013
2. Investment challenges: Clarity, Relevance, Solutions Starved for income: Low yields on traditional fixed income and cash necessitate a more diverse approach to generating income. A new era for bond investing: With interest rates in many countries at historic lows, fixed income investors must adopt a more sophisticated, flexible approach to buying bonds. Invest in companies, not economies: Investor attitudes have caused many to miss the opportunities presented by healthy companies. Diversification works: A well-balanced investor might have earned 100% over the most recent ten years despite a tumultuous market.
3. Why do ‘rejectors’ reject?Free information deters adviceQ: Why have you never used a professional financial adviser? (open response) % of non-users of financial advice 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Can get all the information I need myself for free 39% Never thought about it/never had the need to 26% Dont have sufficient savings to require advice 10% Deterred by cost of advice 8% Don’t trust the quality of advice available 8%Source: J.P. Morgan Asset Management/Ledbury Research. Base: All who have never used a professional financial adviser (498). 3
4. If it were just about information, it would be simple…Uncertainty has been a tax on the global economy… but for investors, uncertainty equals opportunity. CHINA EURO ? IRAN DEBT TAXES OIL
5. When you wait for certainty, you miss opportunityS&P 500 Index 30-Sep, 2012: US 1,600 6-May, 2012: Anti- loses Ryder Cup to 25-Jan, 2011: austerity party in Europe Egyptian revolution Greece wins begins 5-Aug, 2011: US 15-Sep, 2008: downgraded by 1,400 6-May, 2010: “Flash 21-Nov, 2010: Lehman S&P crash” EFSF package for Ireland 26-Oct, 2012: 20-Apr, 2010: Gulf oil Super-storm Sandy 3-Oct, 2008: spill 1,200 TARP 26-Jul, 2012: Draghi 2-May, 2011: Bin 15-Feb, 2012: bumble-bee speech Laden killed unemployment hits 27-Apr, 2009: S&P downgrades Greek 17-yr high in UK 11-Mar, 2011: Japan 1,000 debt tsunami 9-Jun, 2012: $125 bn Feb-27: 20-Aug, 2011: Kim Jul-21: Dodd- for Spanish banks Chile Kardashian marries 31-Oct, 2011: Kim Frank law earthquake Chris Humphreys Kardashian files for signed 800 divorce 23-Aug, 2011: 25-Nov, 2008: Gaddafi overthrown TALF 9-Mar, 2009: Market low Dec 08 Dec 09 Dec 10 Dec 11 QE, MEP, Twist, etc.Source: Standard & Poor’s, www.historyorb.com, J.P. Morgan Asset Management
6. How investors see the economy shapes the way they invest My home value is down The unemployment rate is high Petrol prices are high There is too much debt I don’t want to invest!
7. What’s on clients’ minds?Dominant financial planning concerns and aspirationsPercentage ‘concerned’ or ‘very concerned’ about the following financial planning issues Very concerned Concerned 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Enjoying a comfortable retirement 39% 39% Getting a decent return on savings 31% 44% Making the most of my investments 26% 45% Tax paid on savings & investments 18% 37% Getting the right insurance/protection 10% 29% Paying off the mortgage 11% 20% Affording a good education for my children 10% 14% Managing debt 7% 14%Source: J.P. Morgan Asset Management/Ledbury Research. Base: All respondents (2,028). 7
9. Handsome yields and low volatility9
11. Emerging Markets Income…Source: ZHEJIANG, China (REUTERS) - A road was built around a solitary house in China after an elderly couple refused to sign anagreement to allow their house to be demolished. They say that compensation offered is not enough to cover rebuilding costs,according to local media. Their house is the only building left standing on the road, which was paved through their village.
14. Helping you meet these Investment challenges for your clients Starved for income: Low yields on traditional fixed income and cash necessitate a more diverse approach to generating income. A new era for bond investing: With interest rates in many countries at historic lows, fixed income investors must adopt a more sophisticated, flexible approach to buying bonds. Invest in companies, not economies: Investor attitudes have caused many to miss the opportunities presented by healthy companies. Diversification works: A well-balanced investor might have earned 100% over the most recent ten years despite a tumultuous market. Client understanding, expertise and knowledge, with a strong focus on income, retirement planning, investments and taxation.
15. J.P. Morgan Asset ManagementStuart Podmore, Head of Strategic Alliances and UK Academy Sales +44 (0) 20 7742 9413 firstname.lastname@example.orgFor Professional Clients only – not for Retail use or distribution.This document has been produced for information purposes only and as such the views contained herein are not to be taken as an advice or recommendation to buy orsell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has beenobtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additionalinformation and do not necessarily reflect the views of J.P.Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends orinvestment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered tobe reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference ornotification to you. Both past performance and yield may not be a reliable guide to future performance and you should be aware that the value of securities and anyincome arising from them may fluctuate in accordance with market conditions. There is no guarantee that any forecast made will come to pass.J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its affiliates worldwide. You should note that if youcontact 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 thatinformation and data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA PrivacyPolicy which can be accessed through the following website http://www.jpmorgan.com/pages/privacy.Issued in Continental Europe by JPMorgan Asset Management (Europe) Société à responsabilité limitée, European Bank & Business Centre, 6 route de Trèves, L-2633Senningerberg, Grand Duchy of Luxembourg, R.C.S. Luxembourg B27900, corporate capital EUR 10.000.000.Issued in the UK by JPMorgan Asset Management (UK) Limited which is authorised and regulated by the Financial Services Authority. Registered in England No.01161446. Registered address: 25 Bank St, Canary Wharf, London E14 5JP, United Kingdom. 15