The document is a financial market guide as of March 31, 2012, covering various aspects of equities, fixed income, and the economy. It includes detailed analysis of historical market performance, investment style valuations, and data on returns by sector and asset class. Key insights include the performance of U.S. equity indexes, trends in economic growth, and the implications of monetary policy on investment strategies.

1. 2Q | 2012
As of March 31, 2012
Guide to the Markets

2. Table of Contents
EQUITIES 4
ECONOMY 16
FIXED INCOME 32
INTERNATIONAL 40
ASSET CLASS 51
U.S. Market Strategy Team
Dr. David P. Kelly, CFA david.p.kelly@jpmorgan.com
Andrew D. Goldberg andrew.d.goldberg@jpmorgan.com
Joseph S. Tanious, CFA joseph.s.tanious@jpmorgan.com
Andrés Garcia-
Andr és Garcia-Amaya andres.d.garcia@jpmorgan.com
Brandon D. Odenath brandon.d.odenath@jpmorgan.com
David M. Lebovitz david.m.lebovitz@jpmorgan.com
www.jpmorganfunds.com/mi
Past performance is no guarantee of comparable future results.
2

3. Page Reference
Equities Fixed Income
4. Returns by Style 32. Fixed Income Sector Returns
5. Returns by Sector 33. Interest Rates and Inflation
6. U.S. Equity Indexes 34. Fixed Income Yields and Returns
7. S&P 500 Index at Inflection Points 35. The Fed and the Money Supply
8. Equity Scenarios: Bull, Bear and In-between 36. Credit Conditions
9. Investment Style Valuations 37. High Yield Bonds
10. Stock Valuation Measures: S&P 500 Index 38. Municipal Finance
11. Earnings Estimates and Multiples 39. Emerging Market Debt
12. Earnings Drivers and Shareholder Distributions
13. Broad Market Lagged Price to Earnings Ratio International
14. P/E Ratios and Equity Returns 40. Global Equity Markets: Returns and Composition
15. Equity Correlations and Volatility 41. Global Economic Growth
42. Global Monetary Policy
Economy
43. The Importance of Exports
16. Economic Growth and the Composition of GDP 44. The Impact of Global Consumers
17. Cyclical Sectors 45. European Crisis: Fiscal Challenges
18. Consumer Finances 46. European Crisis: Financial System Risks
19. Federal Finances 47. Chinese Growth and Economic Policy
20. Federal Revenues, Outlays and Tax Rates 48. Global Equity Valuations – Developed and Emerging Markets
21. Political Perception and Economic Reality 49. International Economic and Demographic Data
22. The Aftermath of the Housing Bubble 50. Current Account Deficit and U.S. Dollar
23. Employment
24. Employment by Sector and Education Asset Class
25. Corporate Profits 51. Asset Class Returns
26. Consumer Price Index 52. Correlations: 10-Years
27. Returns in Different Inflation Environments – 40 years 53. Mutual Fund Flows
28. Oil and the Economy 54. Dividend Income: Domestic and Global
29. Global Oil Supply 55. Global Commodities
30. Consumer Confidence and the Stock Market 56. Gold
31. Confidence and the Capital Markets 57. Historical Returns by Holding Period
58. Diversification and the Average Investor
59. Annual Returns and Intra-year Declines
60. Alternative Investment Returns
61. Cash Accounts
62. Corporate DB Plans and Endowments
3

4. Returns by Style
Charts reflect index levels (price change only). All returns and annotations reflect total return, including dividends.
1Q 2012 2011
S&P 500 Index
Value Blend Growth Value Blend Growth
1,450
Equities
Large
Large
1,400
11.1% 12.6% 14.7% 0.4% 2.1% 2.6%
1,350
1,300 1Q12:
+12.6%
Mid
Mid
1,250 2011: +2.1% 11.4% 12.9% 14.5% -1.4% -1.5% -1.7%
1,200
1,150
Small
Small
1,100 11.6% 12.4% 13.3% -5.5% -4.2% -2.9%
Dec-10 Apr-11 Jul-11 Sep-11 Dec-11 Mar-12
Since Market Peak (October 2007) Since Market Low (March 2009)
S&P 500 Index
Since 10/9/07 Peak: Value Blend Growth Value Blend Growth
1,600
-0.7% Large
Large
1,400 -10.6% -0.7% 12.1% 122.9% 122.0% 128.7%
1,200
Mid
Mid
1,000
3.4% 7.3% 10.4% 164.0% 159.0% 155.2%
Since 3/9/09
Low: +122.0%
800
Small
Small
-0.1% 4.6% 8.9% 146.9% 152.1% 156.9%
600
Dec-06 Jan-08 Feb-09 Feb-10 Mar-11 Mar-12
Source: Russell Investment Group, Standard & Poor’s, FactSet, J.P. Morgan Asset Management.
All calculations are cumulative total return, including dividends reinvested for the stated period. Since Market Peak represents period 10/9/07
– 12/31/11, illustrating market returns since the most recent S&P 500 Index high on 10/9/07. Since Market Low represents period 3/9/09 –
12/31/11, illustrating market returns since the S&P 500 Index low on 3/9/09. Returns are cumulative returns, not annualized. For all time
periods, total return is based on Russell-style indexes with the exception of the large blend category, which is reflected by the S&P 500 Index.
Past performance is not indicative of future returns.
Data are as of 3/31/12.
4

5. Returns by Sector
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Equities
S&P Weight 14.9% 20.5% 11.4% 10.6% 11.2% 10.9% 10.8% 2.8% 3.4% 3.5% 100.0%
Weight
Russell Growth Weight 4.3% 30.4% 10.5% 12.5% 10.0% 14.4% 11.9% 0.8% 0.1% 5.2% 100.0%
Russell Value Weight 26.8% 9.1% 12.3% 9.2% 11.6% 9.3% 7.7% 4.4% 6.9% 2.6% 100.0%
1Q 2012 22.0 21.5 9.1 11.3 3.9 16.0 5.5 2.1 -1.6 11.2 12.6
2011 -17.1 2.4 12.7 -0.6 4.7 6.1 14.0 6.3 20.0 -9.8 2.1
Return
Since Market Peak -51.3 22.5 14.1 -4.8 0.7 28.7 38.3 -8.0 2.4 -3.9 -0.7
(October 2007)
Since Market Low 166.0 156.6 84.0 161.6 84.3 197.8 93.9 75.8 79.2 129.0 122.0
(March 2009)
Beta to S&P 500 1.35 1.27 0.65 1.15 0.91 1.11 0.53 0.92 0.58 1.25 1.00
β
Forward P/E Ratio 11.4x 13.4x 12.4x 13.2x 10.6x 15.4x 15.2x 16.8x 14.3x 12.8x 13.0x
15-yr avg. 12.9x 24.0x 18.9x 17.1x 14.9x 18.6x 18.8x 17.4x 13.5x 16.1x 16.9x
P/E
Trailing P/E Ratio 14.5x 15.9x 17.0x 15.7x 11.1x 15.3x 17.8x 44.7x 14.7x 15.2x 15.4x
20-yr avg. 16.0x 27.0x 24.3x 20.4x 18.3x 19.8x 21.1x 18.7x 14.3x 19.8x 19.7x
Dividend Yield 1.8% 1.0% 2.3% 2.4% 1.9% 1.6% 3.0% 5.5% 4.3% 2.1% 2.1%
Div
20-yr avg. 2.2% 0.6% 1.4% 1.8% 1.9% 1.0% 2.1% 3.8% 4.5% 2.1% 1.7%
Source: Standard & Poor’s, Russell Investment Group, FactSet, J.P. Morgan Asset Management.
All calculations are cumulative total return, not annualized, including dividends for the stated period. Since Market Peak represents period 10/9/07 – 3/31/12.
Since Market Low represents period 3/9/09 – 3/31/12.
Forward P/E Ratio is a bottom-up calculation based on the most recent S&P 500 Index price, divided by consensus estimates for earnings in the next twelve
months (NTM), and is provided by FactSet Market Aggregates. Trailing P/E ratios are bottom-up values defined as month-end price divided by the last twelve
months of available reported earnings. Historical data can change as new information becomes available. Note that P/E ratios for the S&P 500 may differ
from estimates elsewhere in this book due to the use of a bottom-up calculation of constituent earnings (as described) rather than a top-down calculation.
This methodology is used to allow proper comparison of sector level data to broad index level data. Dividend yields are bottom-up values defined as the
annualized value of the most recent cash dividend as a percent of month-end price. Beta calculations are based on 10 years of monthly price returns for the
S&P 500 and its sub-indices.
Past performance is not indicative of future returns.
Data are as of 3/31/12.
5

6. U.S. Equity Indexes
Russell Indexes Growth (585) S&P Indexes Dow Jones
Russell Industrials (30)
Top 200 S&P 500 Industrials
Russell Russell
Russell
1000 1000
1000
Russell
Equities
S&P S&P Mid
Mid Cap (800) Cap 400
1500
Russell Russell Value (654)
3000 S&P Small
2000
Cap 600
Mark et Cap W eight Size (Lipper*) Valuation
Index W td Av g T otal T op 10 Bottom 100 Large Mid Small Div Yld Fwd P/ E
S&P 500 111.6 bn 12,730 bn 20.5% 3.0% 91.3% 8.2% 0.4% 2.1% 13.0x
Russell 1000 99.6 14,452 18.3 0.8 82.3 14.2 3.5 2.0 13.5
Large
Dow Jones 147.3 3,984 57.0 43.0 100.0 0.0 0.0 2.4 12.6
Russell 1000 Value 79.0 7,112 24.3 0.7 81.6 14.2 4.3 2.5 12.2
Russell 1000 Growth 119.5 7,340 29.2 0.9 83.0 14.2 2.8 1.5 15.1
S&P Mid Cap 400 4.0 1,189 6.6 10.7 1.5 56.5 42.0 1.4 15.6
Mid
Russell Mid Cap 8.8 4,201 4.5 2.7 39.4 48.6 12.0 1.7 15.1
All Sm
Russell 2000 1.4 1,220 2.5 0.4 0.0 1.2 98.8 1.4 19.0
Russell 3000 91.9 15,672 16.8 0.0 75.9 13.2 10.9 2.0 13.8
Market Cap is a bottom-up weighted average based on share information from Compustat and price information from FactSet's pricing database as provided by Standard &
Poor's and Russell Investment Group, respectively. Dividend Yield is calculated based on the trailing 12 months of dividends and is provided by FactSet’s pricing database for
S&P and Dow Indexes and Russell for the Russell Indexes. Forward P/E is a bottom-up calculation based on the most recent S&P 500 price, divided by consensus estimates for
earnings in the next twelve months (NTM), and is provided by FactSet Market Aggregates. Top 10 represents summed benchmark weight of ten largest stocks in respective
index. Bottom 100 represents summed benchmark weight of 100 smallest stocks in respective index. *Lipper mutual fund size parameters are used for
illustrative purposes only and are hypothetical distributions based on Lipper mutual fund categories. As of November 2011, Lipper defines large as
market cap over $11.7 billion, small as less than $4.1 billion and mid as all values in between. The number of holdings as of 3/31/12 are –
Russell 1000: 977; Russell Mid Cap: 779; Russell 2000: 1,941; Russell 3000: 2,918.
6 Data are as of 3/31/12.

7. S&P 500 Index at Inflection Points
S&P 500 Index Characteristic Mar-2000 Oct-2007 Mar-2012
Oct. 9, 2007
Mar. 24, 2000 Index level 1,527 1,565 1,408 P/E (fwd) = 15.2x
1,600 P/E (fwd) = 25.6x P/E ratio (fwd) 25.6x 15.2x 13.0x 1,565
1,527 Dividend yield 1.1% 1.8% 2.1%
Equities
10-yr. Treasury 6.2% 4.7% 2.2% Mar. 31, 2012
P/E (fwd) = 13.0x
1,408
1,400
+101%
1,200
+106%
-57%
-49%
1,000 +108%
800
Dec. 31, 1996 Oct. 9, 2002
P/E (fwd) = 16.0x Mar. 9, 2009
P/E (fwd) = 14.1x
741 P/E (fwd) = 10.3x
777
677
600
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12
Source: Standard & Poor’s, First Call, Compustat, FactSet, J.P. Morgan Asset Management.
Dividend yield is calculated as the annualized dividend rate divided by price, as provided by Compustat. Forward Price to Earnings Ratio is a bottom-up calculation based
on the most recent S&P 500 Index price, divided by consensus estimates for earnings in the next twelve months (NTM), and is provided by FactSet Market Aggregates.
Returns are cumulative and based on S&P 500 Index price movement only, and do not include the reinvestment of dividends. Past performance is not indicative of future
results.
Data are as of 3/31/12.
7

8. Equity Scenarios: Bull, Bear and In-between
S&P 500 Index: Return Needed to Reach 2007 Peak Bear Market Cycles vs. Subsequent Bull Runs
Analysis as of Mar. 31, 2012. Index has risen 108.0% since low of 677. Bear Yrs to
Market Market Length of Length
Market Bull Run Reach Old
Peak Low Decline of Run
1 Yrs 13.1% 13.1% Return Peak
Equities
5/29/46 5/19/47 -28.6% 12 257.6% 122 3.1 yrs
2 Yrs 7.4% 15.4%
7/15/57 10/22/57 -20.7% 3 86.4% 50 0.9 yrs
3 Yrs 5.6% 17.7%
12/12/61 6/26/62 -28.0% 6 79.8% 44 1.2 yrs
4 Yrs 4.7% 20.0% 10/9/07 Peak 1,565 2/9/66 10/7/66 -22.2% 8 48.0% 26 0.6 yrs
3/9/09 Trough 677
5 Yrs 4.1% 22.4% 3/31/12 Level 1,408 11/29/68 5/26/70 -36.1% 18 74.2% 31 1.8 yrs
Decline Peak to Trough 888
6 Yrs 3.8% 24.9% 1/5/73 10/3/74 -48.4% 21 125.6% 74 5.8 yrs
Recovery So Far 731
Distance Left to Peak 157 11/28/80 8/12/82 -27.1% 20 228.8% 60 0.2 yrs
7 Yrs 3.5% 27.4%
8/25/87 12/4/87 -33.5% 3 582.1% 148 1.6 yrs
8 Yrs 3.3% 29.9%
X% Implied avg. annualized total return
3/24/00 10/9/02 -49.1% 31 101.5% 60 4.6 yrs
9 Yrs 3.2% 32.5% X% Implied cumulative total return
10/9/07 3/9/09 -56.8% 17 108.0% 37*
10 Yrs 3.1% 35.2%
Average: -35.0% 14 mo's 176.0% 68 mo's 2.2 yrs
Source: Standard & Poor’s, FactSet, J.P. Morgan Asset Management.
(Left) Data assume 2.0% annualized dividend yield. Implied values reflect the average geometric total returns required for the S&P 500 to reach its
10/9/07 peak of 1,565 over each stated time period. Chart is for illustrative purposes only. Past performance does not guarantee future results.
(Right) A bear market is defined as a peak-to-trough decline in the S&P 500 Index (price only) of 20% or more. The bull run data reflect the market
expansion from the bear market low to the subsequent market peak. All returns are S&P 500 Index returns and do not include dividends. *Current
8 bull run from 3/9/09 through 3/31/12. Data are as of 3/31/12.

9. Investment Style Valuations
Russell 1000 Growth P/E divided by Russell 1000 Value P/E Current P/E vs. 20-year avg. P/E
3.5x
Value Blend Growth
11.9 13.2 14.7
Large
3.0x Most recent:
Equities
R1000 Growth 14.7 14.0 16.7 21.0
2.5x R1000 Value 11.9
Growth / Value 1.2x* 13.4 15.0 16.9
Mid
2.0x 14.0 16.3 21.9
13.7 15.4 17.2
Small
1.5x
20-yr. average: 1.5x
14.2 17.1 21.3
1.0x
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Current P/E as % of 20-year avg. P/E
Russell 2000 P/E divided by Russell 1000 P/E E.g.: Large Cap Blend stocks are 21.1%
1.3x cheaper than their historical average.
Value Blend Growth
1.2x
20-yr. average: 1.0x
Large
1.1x 85.1% 78.9% 69.9%
1.0x
Most recent:
Mid
95.3% 91.7% 77.3%
0.9x R2000 15.4
R1000 13.2
0.8x
Small
Small / Large 1.2x*
96.4% 89.9% 80.8%
0.7x
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: Russell Investment Group, IBES, FactSet, J.P. Morgan Asset Management.
P/E ratios are calculated and provided by Russell based on IBES consensus estimates of earnings over the next twelve months. *Represents the
Russell 1000 Growth Index P/E ratio divided by the Russell 1000 Value Index P/E ratio (top) and Russell 2000 Index P/E ratio divided by the Russell
1000 Index P/E ratio (bottom). Data reflect P/Es as provided by Russell based on IBES estimates of next twelve months’ earnings.
Data are as of 3/31/12.
9

10. Stock Valuation Measures: S&P 500 Index
S&P 500 Index: Valuation Measures Historical Averages
Valuation 1-year 3-year 5-year 10-year 15-year
Latest
Measure Description ago avg. avg. avg. avg.
P/E Price to Earnings 13.0x 13.2x 13.0x 13.1x 14.5x 16.9x
Equities
P/B Price to Book 2.3 2.3 2.1 2.3 2.5 3.1
P/CF Price to Cash Flow 8.9 8.8 8.4 8.7 9.9 11.1
P/S Price to Sales 1.3 1.3 1.1 1.2 1.3 1.5
PEG Price/Earnings to Growth 1.6 0.9 1.0 1.2 1.2 1.2
Div. Yield Dividend Yield 2.1% 2.0% 2.2% 2.2% 2.0% 1.9%
Q-Ratio: Stock Price Relative to Company Assets S&P 500 Earnings Yield vs. Baa Bond Yield
Price to net asset value, all U.S. non-financial corporations
Less Attractive
10%
200% S&P 500 Earnings Yield:
9%
(Inverse of fwd. P/E) 7.7%
8%
150%
7%
1Q12*: 96.0%
100% More Attractive
6%
40-yr. avg. = 75.3%
5%
50% Moody’s Baa Yield: 5.2%
4%
0% 3%
1970 1975 1980 1985 1990 1995 2000 2005 2010 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: (Top) Standard & Poor’s, FactSet, J.P. Morgan Asset Management.
Price to Earnings is price divided by consensus analyst estimates of earnings per share for the next twelve months. Price to Book is price divided by book value per share. Data
post-1992 include intangibles and are provided by Standard & Poor’s. Price to Cash Flow is price divided by consensus analyst estimates of cash flow per share for the next
twelve months. Price to Sales is calculated as price divided by consensus analyst estimates of sales per share for the next twelve months. PEG Ratio is calculated as NTM P/E
divided by NTM earnings growth. Dividend Yield is calculated as consensus analyst estimates of dividends for the next twelve months divided by price. All consensus analyst
estimates are provided by FactSet. (Bottom left) Q-Ratio based on data from the Federal Reserve, table B.102. *1Q12 is an estimate provided by
J.P. Morgan Asset Management as of 3/31/12. (Bottom right) Standard & Poor’s, Moody’s, FactSet, J.P. Morgan Asset Management.
Data are as of 3/31/12.
10

11. Earnings Estimates and Multiples
S&P 500 Index: Forward P/E Ratio S&P 500 Operating Earnings Estimates
28x Consensus estimates of the next twelve months’ rolling earnings
$120 1Q12: $108.51
24x
Equities
$100
20x $80
Average: 16.2x $60
16x
$40
12x
$20
Mar. 2012: 13.0x
8x $0
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Forward P/E Ratios by Sector
Averages and ranges based on monthly data from April 2002 to March 2012 Example
35x
30x
25x
10-yr.
Average
20x range
Current
15x
10x
5x
Con. Disc Con. Energy Financials Health Industrials Tech Materials Telecom Utilties
Staples Care
Source: (Top left) Standard & Poor’s, Compustat, FactSet, J.P. Morgan Asset Management. (Top right) Standard & Poor’s, Compustat, FactSet, J.P.
Morgan Asset Management. Earnings estimates are for calendar years and taken at quarter end dates throughout the year. (Bottom) Standard &
Poor’s, FactSet, J.P. Morgan Asset Management. Forward Price to Earnings is price divided by consensus analyst estimates of earnings per share for
the next twelve months.
11 Data are as of 3/31/12.

12. Earnings Drivers and Shareholder Distributions
Year-Over-Year EPS Growth Nominal GDP and S&P 500 Sales Growth
S&P 500, quarterly, broken into revenue growth and margin expansion Year-over-year growth, 2000 – 2011
60% 20%
84.9% 15%
Sales per share
Equities
10%
50% 5%
Margin Share of EPS Growth Nominal GDP
0%
Revenue Share of EPS Growth
-5%
-10%
40%
-15% Correlation Coefficient: 0.82
-20%
'00 '02 '04 '06 '08 '10
30% 44.0% Cash Returned to Shareholders
Rolling 4-quarter averages, S&P 500, billions USD
$30 $160
Dividends per share
29.8% $140
20% $27
20.0% $120
7.3% $24
6.5% $100
8.1%
10% $21 $80
0.2%
$60
11.6% 10.8%
7.8% 8.3% 7.9% $18
6.8% 7.3% 6.8% $40
Share buybacks
0% $15 $20
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12
Source: Standard & Poor’s, Compustat, BEA, FactSet, J.P. Morgan Asset Management.
Data are as of 3/31/12.
12

13. Broad Market Lagged Price to Earnings Ratio
Lagged P/E Ratio – All U.S. Corporations
Ratio of Market Value of All U.S. Corporations to Adjusted After-Tax Corporate Profits for Prior Four Quarters
35x
Equities
30x
P/E Ratios
Avg. During Recessions 12.6x
25x Avg. During Expansions 13.9x
March 31, 2012 12.5x
20x
15x Average: 13.7x
10x Mar. 31, 2012: 12.5x
5x
0x
'52 '55 '58 '61 '64 '67 '70 '73 '76 '79 '82 '85 '88 '91 '94 '97 '00 '03 '06 '09 '12
Source: BEA, Federal Reserve Board, Wilshire Associates, J.P. Morgan Asset Management.
Data are as of 3/31/12.
13

14. P/E Ratios and Equity Returns
P/E and Total Return Over 1-yr. Periods P/E and Total Return Over 10-yr. Annualized Periods
Quarterly, 1Q 1952 to 1Q 2011 Quarterly, 1Q 1952 to 1Q 2002
60% 60%
Current P/E: 12.5 Current P/E: 12.5
Equities
40% 40%
20% 20%
0% 0%
5x 10x 15x 20x 25x 30x 5x 10x 15x 20x 25x 30x
-20% -20%
-40% -40%
Source: BEA, FRB, J.P. Morgan Asset Management. Prices are based on the market value of all US corporations and include quarterly
dividends. Valuation based on long-term PE ratio.
Note: Orange line denote results of linear regression with R-squared of 0.15 for 1-yr. returns (LHS) and 0.50 for 10-yr. returns (RHS).
Data are as of 3/31/12.
14

15. Equity Correlations and Volatility
Large Cap Stocks Sovereign Debt
Correlations Among Stocks Crisis
70%
Great Depression / Lehman
60% World War II Bankruptcy
1987 Crash
Equities
50% Cuban Missile Crisis OPEC Oil
40%
Crisis Tech Bust & 9/11
30%
20%
10% Average: 26.7% Mar. 2012: 33.2%
0%
'26 '32 '38 '44 '50 '56 '62 '68 '74 '80 '86 '92 '98 '04 '10
Daily Volatility of DJIA Volatility Level ’08 Peak Latest
3.5%
DJIA 3.30% 0.40%
Chart shown
3.0% in 3-month
moving average
2.5%
2.0%
1.5%
1.0% Average: 0.72%
0.5%
0.0%
'26 '32 '38 '44 '50 '56 '62 '69 '75 '81 '87 '93 '99 '06 '12
Source: (Top) Empirical Research Partners LLC, Standard & Poor’s, J.P. Morgan Asset Management. Capitalization weighted correlation of
top 750 stocks by market capitalization, daily returns, 1926 – Mar. 29, 2011. (Bottom) Dow Jones, J.P. Morgan Asset Management. Data are
represented as three-month moving averages of the daily absolute percentage change in the Dow Jones Industrial Average.
15 Charts shown for illustrative purposes only. Data are as of 3/31/12.

16. Economic Growth and the Composition of GDP
Real GDP Components of GDP
% chg at annual rate 4Q11 nominal GDP, billions, USD
10% 20-yr avg. 4Q11 2.3% Housing
$16,000
Real GDP: 2.6% 3.0%
8% 10.8% Investment ex-housing
$14,000
6% 19.7%
$685 bn of $12,000 Gov’t Spending
Economy
4% output lost
$10,000
2%
$8,000
0%
-2% $6,000 71.0%
$788 bn of
output Consumption
-4% recovered
$4,000
-6% $2,000
-8%
$0
-10% - 3.8% Net Exports
'02 '04 '06 '08 '10 -$2,000
Source: BEA, FactSet, J.P. Morgan Asset Management.
GDP values shown in legend are % change vs. prior quarter annualized and reflect revised 4Q11 GDP.
Data reflect most recently available as of 3/31/12.
16

17. Cyclical Sectors
Light Vehicle Sales Manufacturing and Trade Inventories
Millions, seasonally adjusted annual rate Days of sales, seasonally adjusted
24 47
46 Jan. 2012: 38.6
22
45
20
44
18 43
Feb. 2012:
16 15.0 42
Average: 15.1 41
Economy
14
40
12
39
10 38
8 37
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Housing Starts Real Capital Goods Orders
Thousands, seasonally adjusted annual rate Non-defense capital goods orders ex. aircraft, $ bn, seasonally adjusted
2,400 75
70
2,000 Feb. 2012: 59.6
65
1,600
60 Average: 57.7
1,200
Average: 1,446
55
800
50
400 45
Feb. 2012: 698
0 40
'75 '80 '85 '90 '95 '00 '05 '10 '98 '00 '02 '04 '06 '08 '10 '12
Source: (Top left) BEA, FactSet, J.P. Morgan Asset Management. (Top right) Census Bureau, FactSet, J.P. Morgan Asset Management. (Bottom left) Census Bureau,
FactSet, J.P. Morgan Asset Management. (Bottom right) Census Bureau, FactSet, J.P. Morgan Asset Management.
Capital goods orders deflated using the producer price index for capital goods.
Data reflect most recently available as of 3/31/12.
17

18. Consumer Finances
Consumer Balance Sheet Personal Savings Rate
Trillions of dollars outstanding, not seasonally adjusted Annual, % of disposable income
12%
$80
10%
2Q-’07 Peak: $80.7tn
Total Assets: $72.2 tn YTD 2012:
1Q-’09 Low: $64.5tn 8%
$70 4.0%
6%
Homes: 25%
Economy
$60 4%
2%
Other tangible: 7%
$50 0%
'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10
Deposits: 11%
Household Debt Service Ratio
$40
Debt payments as % of disposable personal income, seasonally adjusted
15%
Pension funds: 18% 3Q07:
$30 14.0%
Revolving (e.g.: credit cards): 6% 14%
Non-revolving: 12%
Other Liabilities: 10% 13%
$20
Other financial Total Liabilities: $13.8 tn 12% 1Q80:
assets: 38% 11.2%
$10 11%
1Q12*:
Mortgages: 71% 10.8%
10%
$0 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: (Left) FRB, J.P. Morgan Asset Management. Data includes households and nonprofit organizations. (Right) BEA, FRB, J.P. Morgan Asset
Management. Personal savings rate is calculated as personal savings (after-tax income – personal outlays) divided by after-tax income. Employer and
employee contributions to retirement funds are included in after-tax income but not in personal outlays, and thus are implicitly included in personal
savings. Savings rate data as of February 2012. *1Q12 Household Debt Service Ratio is J.P. Morgan Asset Management estimate. All other data are
as of 4Q11.
Data reflect most recently available as of 3/31/12.
18

19. Federal Finances
The 2012 Federal Budget Federal Budget Surplus/Deficit
CBO Baseline forecast, trillions USD % of GDP, 1990 – 2022* Forecast
$4.0 4%
2011 actual: -8.7%
2%
Total Spending: $3.6tn
0%
$3.5 Other
-2%
$504bn (14%)
-4%
Borrowing:
$3.0 Net Int.: $224bn (6%) $1,171bn (32%) -6%
Economy
CBO Baseline Alt. Scenario
Non-defense -8%
2012 -7.6% -7.7%
Discretionary: Baseline
$2.5 -10% 2013 -3.8% -6.3%
$630bn (17%) Alternative
-12%
1990 1994 1998 2002 2006 2010 2014 2018 2022
$2.0 Defense: Federal Debt (Accumulated Deficits)
$673bn (19%) Net debt % of GDP, 1990 – 2022* Forecast
100%
$1.5
Revenues: 80% 2022*: 93.2%
Social Security: 2011 actual: 67.7%
$2,456bn (68%)
$769bn (21%)
$1.0 60%
2022: 61.3%
40%
$0.5 Medicare & Medicaid: CBO Baseline Alt. Scenario
$827bn (23%) 20% Baseline
2012 73.2% 73.3%
Alternative
2013 75.8% 78.4%
$0.0 0%
Total Government Spending Sources of Financing 1990 1994 1998 2002 2006 2010 2014 2018 2022
Source: U.S. Treasury, BEA, CBO, J.P. Morgan Asset Management.
2011 numbers are actuals. 2012 Federal Budget is based on the CBO’s March 2012 Baseline Scenario. *The CBO’s Alternative Scenario as shown in
the deficit and debt charts assumes that expiring tax provisions (other than the payroll tax cut) are extended, the AMT is indexed for inflation after 2011,
Medicare’s payment rates for physicians’ services are held constant at their current level and the automatic spending cuts required by the Budget
Control Act, which are set to take effect in January 2013, do not occur (but discretionary appropriation caps stay in place).
Note: Years shown are fiscal years (Oct. 1 through Sep. 30). Top right chart displays federal surplus/deficit (revenues – outlays).
19 Data reflect most recently available as of 3/31/12.

20. Federal Revenues, Outlays and Tax Rates
Federal Revenues Federal Outlays
1960 – 2012, % of GDP 1960 – 2012, % of GDP
26% 26% 2012*: 23.4%
22% 22%
Average: 20.5%
Economy
18% 18%
Average: 17.9%
2012*: 15.7%
14% 14%
1960 1970 1980 1990 2000 2010 1960 1970 1980 1990 2000 2010
Average Maximum Tax Rate on Dividends and Capital Gains Tax Rate 40-yr. avg. Current
100%
Dividends 44.6% 15.0%
Capital Gains 24.7% 15.0%
80%
Ordinary Income 47.9% 35.0%
60%
40%
20%
0%
1930's 1940's 1950's 1960's 1970's 1980's 1990's 2000's Current
Source: (Top Charts) CBO, White House, J.P. Morgan Asset Management. (Bottom) The Tax Foundation, J.P. Morgan Asset Management. Tax rates
based on maximum U.S. individual income tax.
*2012 revenues and outlays are estimates based on the CBO’s Alternative Scenario, which was re-estimated on March 13, 2012. This scenario assumes
that all expiring tax provisions (excluding the payroll tax cut) are extended, the AMT is indexed for inflation after 2011, Medicare payments are held
constant at current levels and the automatic enforcement procedures specified by the Budget Control Act of 2011 do not take effect.
20 Data are as of 3/31/12.

21. Political Perception and Economic Reality
Presidential and Congressional Approval Ratings S&P 500 Return by Political Control
88% 1940 to 2011
78% 16%
Presidential Approval 15.3%
68%
12%
58%
48% 8%
7.7%
38%
Economy
4% 5.0%
28%
3.3%
18% 0%
Congressional Approval Dem. President Rep. President
8%
1974 1987 1995 1997 2000 2002 2003 2005 2006 2008 2010 2011 Dem. Congress Split Congress Rep. Congress Split Congress
Political Polarization Real GDP Growth by Political Control
% of Representatives voting with the majority of their party* 1940 to 2011
100% 7%
Senate 6% 6.3%
95%
House 5%
90%
4%
85% 3%
3.1%
2% 2.7%
80%
1% 1.4%
75% 0%
Dem. President Rep. President
70%
1901 1921 1941 1961 1981 2001 Dem. Congress Split Congress Rep. Congress Split Congress
Source: (Top) Gallup Inc., J.P. Morgan Asset Management. (Bottom left) Gallup Inc., J.P. Morgan Asset Management. (Bottom right) Keith T.
Poole, J.P. Morgan Asset Management.
*In roll call votes where the majority in one party voted the opposite way to the majority in the other. Data compiled by Professors Keith T. Poole
and Howard Rosenthal available at www.voteview.com.
21 Data are most recent as of 3/31/12.

22. The Aftermath of the Housing Bubble
Median Existing Home Prices Monthly Rent vs. Monthly Mortgage Payment
$ thousands, seasonally adjusted Vacant properties
240 $1,100
Nov. 2005: $227K Peak to
220 Monthly
current: $950
Mortgage
200 -26.9% 1Q12*:
$800 Payment
180
$706
160 $650
140
Feb. 2012: $166K
Economy
$500
120 1Q12*: $518
$350 Monthly Rent
100
80 $200
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Home Sales and Inventories Affordability: Mortgage Payment on Average New Home
Millions, annual rate, seasonally adjusted % of average household personal income
6 Home Sales 9 40%
Inventories
8 35%
5
Feb. 2012: 7 30%
4
2.7
6 25%
3 Feb. 2012:
5 20% 10.5%
2
4 15%
Feb. 2012: 4.9
1 3
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 10%
'75 '80 '85 '90 '95 '00 '05 '10
Sources: (Top left) National Association of Realtors, FactSet, J.P. Morgan Asset Management. (Top right) Census Bureau, J.P. Morgan Asset Management. Monthly mortgage
payment assumes a 20% down payment at prevailing 30-year fixed-rate mortgage rates; analysis based on median asking rent and median mortgage payment based on asking
price. *1Q12 estimates provided by J.P. Morgan Asset Management. (Bottom left) Census Bureau, National Association of Realtors, J.P. Morgan Asset Management. Home sales
include both new and existing home sales. Existing home sales include single-family, townhouses, condominiums and co-ops.
(Bottom right) Census Bureau, FRB, BEA, J.P. Morgan Asset Management. Calculation assumes a 20% down payment, a 30-year fixed-rate mortgage,
excludes property tax and homeowners’ insurance and is expressed as a % of pre-tax income. Data reflect most recently available as of 3/31/12.
22

23. Employment
Civilian Unemployment Rate Employment – Total Private Payroll
Seasonally adjusted Total job gain/loss (thousands)
12% 600
11% 400
10%
200
Economy
8.8mm jobs lost
9%
0
Feb. 2012: 8.3%
8%
3.9mm
-200 jobs
gained
7%
-400
6%
-600
5% 50-yr. avg.: 6.1%
4% -800
3% -1,000
'70 '80 '90 '00 '10 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Source: BLS, FactSet, J.P. Morgan Asset Management. Source: BLS, FactSet, J.P. Morgan Asset Management.
Data reflect most recently available as of 3/31/12.
23

24. Employment by Sector and Education
20 Years – Net Job Creation Unemployment Rate by Education Level
Net change in millions of payroll jobs, sa 18%
Fin. & Bus. Services 6.9 16%
Other Separations: 3.9mm
Health Care 6.9 14%
Feb. 2012:
Economy
Leisure & Hospitality 4.2 12.9%
12%
Feb. 2012:
8.3%
Education 4.0
10% Less than HS degree
Trade & Retailing 3.3
8%
Other Services 1.2 Feb. 2012:
6% HS No College 7.3%
Mining & Construction 1.1
4% Some
College Feb. 2012:
Government 0.9 4.2%
2%
Manufacturing -4.9 College or greater
0%
-6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: BLS, FactSet, J.P. Morgan Asset Management. Source: BLS, FactSet, J.P. Morgan Asset Management.
Data reflect most recently available as of 3/31/12.
24

25. Corporate Profits
S&P 500 Earnings Per Share Most recent: Adjusted After-Tax Corporate Profits (% of GDP)
Operating basis, quarterly Includes inventory and capital consumption adjustments
2Q07: $24.06 $23.73
$26
11% 4Q11:
10.3%
$23
10%
$20
9%
Economy
$17
8%
$14
7%
$11
50-yr. avg.: 6.2%
6%
$8
5%
$5
4%
$2
-$1 3%
'01 '03 '05 '07 '09 '11 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10
Source: Standard & Poor’s, J.P. Morgan Asset Management. Source: BEA, FactSet, J.P. Morgan Asset Management.
EPS levels are based on operating earnings per share.
Most recently available is a 4Q11 99% complete estimate.
Data reflect most recently available as of 3/31/12.
25

26. Consumer Price Index
CPI and Core CPI CPI Weight in 12-month
% chg vs. prior year, seasonally adjusted 50-yr. Avg. Feb. 2012 Components CPI Change
15%
Headline CPI: 4.2% 2.9% Food & Bev. 15.3% 3.8%
Core CPI: 4.1% 2.2%
Housing 41.0% 1.8%
12%
Apparel 3.6% 4.2%
Transportation 16.9% 5.8%
Economy
9% Medical Care 7.1% 3.4%
Recreation 6.0% 1.0%
6% Educ. & Comm. 6.8% 1.9%
Other 3.4% 1.5%
3%
Headline CPI 100.0% 2.9%
Less:
0% Energy 9.7% 7.0%
Food 13.7% 3.9%
-3%
'65 '70 '75 '80 '85 '90 '95 '00 '05 '10 Core CPI 76.6% 2.2%
Source: BLS, FactSet, J.P. Morgan Asset Management.
CPI values shown are % change vs. 1 year ago and reflect February 2012 CPI data. CPI component weights are as
of December 2011 and 12-month change reflects non-seasonally adjusted data through February 2012. Core CPI is
defined as CPI excluding food and energy prices.
Data reflect most recently available as of 3/31/12.
26

27. Returns in Different Inflation Environments – 40 years
Rising inflation scenarios Falling inflation scenarios
High and Rising Inflation High and Falling Inflation
Occurred 14 times since 1972 Occurred 6 times since 1972
25% 25% 23%
20% 20% 18%
Above median
15% 13% 15%
10% 7% 8%
5% 10%
Economy
5% 2% 5%
0% 0%
-5% -5%
-10% -10%
-15%
-15% -15%
Bonds Equities Cash Commodities Bonds Equities Cash Commodities Median
Inflation:
Low and Rising Inflation Low and Falling Inflation 3.3%
Occurred 7 times since 1972 Occurred 13 times since 1972
Below median
25% 25%
20%
20% 17% 20%
15% 15% 12%
10% 8% 6%
10% 6% 4%
5% 3% 5%
0% 0%
-5% -5%
-10% -10%
-15% -15%
Bonds Equities Cash Commodities Bonds Equities Cash Commodities
Source: BLS, Barclays Capital, Robert Shiller, Federal Reserve, Strategas/Ibbotson, Standard and Poor’s, FactSet, J.P. Morgan Asset Management.
High or low inflation distinction is relative to median CPI-U inflation for the period 19712to 2011. Rising or falling inflation distinction is relative to
previous year CPI-U inflation rate. Bond returns are based on the Barclays U.S. Aggregate index since its inception in 1976 and a composite bond
index prior to that. Equity returns based on S&P 500 price return and annual dividend yield. Cash returns are based on the Barclays 1-3 Month T-Bill
index since its inception in 1992 and 3-month T-Bill rates prior to that. Commodities returns based on GSCI.
For illustrative purposes only. Past performance is not indicative of comparable future returns.
27 Data reflect most recently available as of 3/31/12.

28. Oil and the Economy
WTI Crude Oil & Retail Gasoline Prices Economic Drag From Oil Prices
$4.50 $160 U.S. Petroleum Imports as a % of GDP 1Q12*: 3.2%
Gas 12/31/2000 3/31/2012 Oil 4%
Oil $26.72 $103.02 3Q08: 3.8%
Gas $1.41 $3.92
$4.00 $140
3%
$3.50 $120
2%
Economy
$3.00 $100
1%
$2.50 $80 0%
'70 '75 '80 '85 '90 '95 '00 '05 '10
Energy Spending by Income Level
$2.00 $60 % of after-tax income
Lowest 20% 2nd Middle 20% 4th Top 20%
$1.50 $40 Natural Gas 2.4% 1.4% 0.9% 0.7% 0.5%
Electricity 9.5% 4.6% 3.1% 2.2% 1.2%
$1.00 $20 Fuel Oil & Other Fuels 0.9% 0.4% 0.3% 0.2% 0.2%
Gasoline & Motor Oil 10.1% 5.9% 4.8% 3.7% 2.2%
$0.50 $0 Total Energy 22.9% 12.3% 9.1% 6.8% 4.0%
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: U.S. Department of Energy, FactSet, J.P. Morgan Asset Management. Price of Source: (Top) BEA, FactSet, J.P. Morgan Asset Management. (Bottom) BLS, J.P.
gas based on U.S. retail national average of all formulations and WTI for crude. Morgan Asset Management.
Data reflect most recently available as of 3/31/12. *1Q12 drag from oil prices is a J.P. Morgan Asset
Management estimate.
28

29. Global Oil Supply
Middle East Energy Production & Chokepoints U.S. Commercial & Strategic Oil Stocks
Feb. 2012:
Percent of global liquid fuel production, 2010 Days of net imports 224 days
250
Kuwait
Syria
2.9% 200
0.5% Oct. 2005:
Suez Canal 129 days
2.1%
150
Iraq Iran
2.8% 4.9%
100
Economy
U.S. Commercial Oil Stocks
Libya Egypt 50
2.1% 0.8% Saudi Arabia U.S. Strategic Petroleum Reserve
11.7% 0
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Strait of
Hormuz
Sudan 18.0%
OPEC Surplus Production Capacity
0.6% Millions of barrels per day
UAE 6
3.3% EIA
5 forecast
4
Bab el-Mandeb
3.7% 3 Average: 2.7mm bbl/day
Major Producers Major Consum ers 2
Percent of global total, 2010 Percent of global total, 2010
1
Saudi Arabia 12% China 5% United States 22% India 4%
Russia 12% Iran 5% China 11% Russia 3% 0
United States 11% Canada 4% Japan 5% Saudi Arabia 3% '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Source: EIA, J.P. Morgan Asset Management.
Forecast from the March EIA Short Term Energy Outlook.
Data are as of 3/31/12.
29

30. Consumer Confidence and the Stock Market
Consumer Sentiment Index – University of Michigan
130
Average 12-month S&P 500 index return… Sentiment Cycle Peak/Trough and subsequent
After a peak: +1.1% After a trough: +23.3% Total period: +6.6% 12-month S&P 500 Index return
120
Jan. 2000
-2.0%
110
Jan. 2004
Economy
+4.4%
Aug. 1972 Mar. 1984
100 Jan. 2007
-6.2% +13.5%
May 1977 -4.2%
+1.2%
90
Average: 85.3
80
Mar. 2003
70 +32.8% Oct. 2005
+14.2%
60 Oct. 1990
+29.1%
Feb. 1975
Nov. 2008 Aug. 2011
+22.2%
50 +22.3% ?
May 1980
+19.2%
40
'72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: University of Michigan, FactSet, J.P. Morgan Asset Management.
Peak is defined as the highest index value before a series of lower lows, while a trough is defined as the lowest index value before a series
of higher highs. Subsequent 12-month S&P 500 returns are price returns only, which excludes dividends.
Data reflect most recently available as of 3/31/12.
30

31. Confidence and the Capital Markets
Multiple Expansion and Contraction Est. impact of a 10pt. rise in sentiment: +2.0 multiple points*
S&P 500 forward P/E based on consensus EPS estimates
26x Forward P/E Consumer Sentiment 120
24x 110
22x 100
20x
90
18x
80
Economy
16x
14x 70
12x 60
10x 50
'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Sentiment & Real Yields Est. impact of a 10pt. rise in sentiment: +54 basis points*
Real yield based on nominal 10-yr. yield minus year over year core CPI
6% Real 10-year Yield Consumer Sentiment 120
5% 110
4% 100
3% 90
2% 80
1% 70
0% 60
-1% 50
'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Source: (Top) Standard & Poor’s, FactSet, J.P. Morgan Asset Management. (Bottom) U.S. Treasury, BLS, University of Michigan, J.P. Morgan
Asset Management. Price to Earnings is price divided by consensus analyst estimates of earnings per share for the next twelve months. Real 10-
year Treasury yields are calculated as the daily Treasury yield less year-over-year core inflation for that month. *Estimated impact based on
31 coefficients from regression analysis. Data are as of 3/31/12.

32. Fixed Income Sector Returns
10-yrs
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1Q12 '02 - '11
EMD Corp. TIPS High Yield EMD EMD High Yield TIPS Treas. High Yield High Yield TIPS EMD EMD
13.7% 10.3% 16.7% 29.0% 11.9% 12.3% 11.8% 11.6% 13.7% 58.2% 15.1% 13.6% 5.5% 185.6%
Barclays Asset
Treas. EMD EMD High Yield EMD Treas. MBS EMD EMD Muni High Yield High Yield
Agg Alloc.
13.5% 8.4% 12.2% 26.9% 11.1% 3.6% 10.0% 9.0% 8.3% 34.2% 12.8% 10.7% 5.3% 133.6%
Barclays Barclays
TIPS MBS Treas. TIPS TIPS Muni MBS Corp. Corp. Treas. Corp. TIPS
Agg Agg
13.2% 8.2% 11.8% 10.6% 6.3% 3.5% 5.2% 7.0% 5.2% 18.7% 9.0% 9.8% 2.1% 107.5%
Barclays Asset Asset Asset Asset Asset Asset Asset Asset
Muni TIPS TIPS MBS Muni
Agg Alloc. Alloc. Alloc. Alloc. Alloc. Alloc. Alloc. Alloc.
11.7% 7.9% 10.3% 10.0% 6.0% 2.8% 5.1% 6.9% -1.4% 15.8% 7.6% 8.9% 1.8% 96.0%
Fixed Income
Barclays Asset Asset Barclays Asset
Corp. Corp. Corp. Treas. Muni TIPS Muni Corp. Corp.
Agg Alloc. Alloc. Agg Alloc.
11.6% 6.8% 10.1% 8.2% 5.4% 2.8% 4.8% 6.2% -2.4% 12.9% 6.5% 8.2% 1.6% 85.2%
Asset Barclays Barclays Barclays
MBS Treas. Muni MBS High Yield EMD Muni TIPS TIPS TIPS
Alloc. Agg Agg Agg
11.2% 6.7% 10.0% 5.3% 4.7% 2.7% 4.3% 5.2% -2.5% 11.4% 6.3% 7.8% 0.9% 75.4%
Asset Barclays Barclays
High Yield Muni Muni MBS Corp. Corp. Corp. Treas. EMD MBS Treas.
Alloc. Agg Agg
10.2% 5.3% 9.6% 4.1% 4.5% 2.6% 4.3% 4.6% -4.9% 5.9% 5.9% 7.0% 0.6% 74.3%
Barclays Barclays Barclays
Corp. Muni MBS MBS Treas. Muni EMD MBS MBS MBS MBS
Agg Agg Agg
9.1% 5.1% 8.7% 3.1% 4.3% 2.4% 3.1% 3.4% -14.7% 5.9% 5.4% 6.2% 0.3% 73.9%
High Yield EMD High Yield Treas. Treas. Corp. TIPS High Yield High Yield Treas. Muni High Yield Treas. Muni
-5.9% 1.5% -1.4% 2.2% 3.5% 1.7% 0.4% 1.9% -26.2% -3.6% 2.4% 5.0% -1.3% 68.8%
Source: Barclays Capital, FactSet, J.P. Morgan Asset Management.
Past performance is not indicative of future returns. Fixed income sectors shown above are provided by Barclays Capital and are represented by: Barclays Capital U.S. Aggregate
Index; MBS: Fixed Rate MBS Index; Corporate: U.S. Corporates; Municipals: Muni Bond Index; Emerging Debt: Emerging Markets Index; High Yield: Corporate High Yield Index;
Treasuries: Barclays Capital U.S. Treasury; TIPS: Barclays Capital TIPS. The “Asset Allocation” portfolio assumes the following weights:
10% in MBS, 20% in Corporate, 15% in Municipals, 10% in Emerging Debt, 10% in High Yield, 25% in Treasuries, 10% in TIPS.
Asset allocation portfolio assumes annual rebalancing.
32 Data are as of 3/31/12.

33. Interest Rates and Inflation
Nominal and Real 10-year Treasury Yields
20%
Sep. 30, 1981: 15.84%
15% Average 3/31/12
Nominal Yields 6.50% 2.23%
Real Yields 2.61% 0.06%
10% Nominal 10-year
Treasury Yield
Fixed Income
Mar. 31, 2012: 2.23%
5%
0%
Mar. 31, 2012: 0.06%
-5%
Real 10-year
Treasury Yield
-10%
'58 '60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: Federal Reserve, BLS, J.P. Morgan Asset Management.
Real 10-year Treasury yields are calculated as the daily Treasury yield less year-over-year core inflation for that month except for March 2012, where
real yields are calculated by subtracting out February 2012 year-over-year core inflation.
Data are as of 3/31/12.
33

34. Fixed Income Yields and Returns
Source: U.S. Treasury, Barclays
Yield Return Capital, FactSet, J.P. Morgan Asset
Management.
Fixed income sectors shown above are
U.S. Treasuries # of issues Mkt. Value Avg. Maturity 12/31/2010 3/31/2012 2011 1Q12
provided by Barclays Capital and are
2-Year 2 years 0.61% 0.33% 1.53% -0.08% represented by – Broad Market: US
Barclays Capital Index; MBS: Fixed
5-Year # of issues: 142 5 2.01 1.04 9.36 -0.48 Rate MBS Index; Corporate: U.S.
Corporates; Municipals: Muni Bond
10-Year Total value: $4.687 tn 10 3.30 2.23 17.18 -2.25 Index; Emerging Debt: Emerging
30-Year 30 4.34 3.35 35.60 -7.71 Markets Index; High Yield: Corporate
High Yield Index. TIPS: Treasury
Sector Inflation Protection Securities (TIPS).
Treasury securities data for # of issues
Broad Market 7,887 $16,113 bn 7.1 years 2.97% 2.22% 7.84% 0.30% and market value based on U.S.
Treasury benchmarks from Barclays
MBS 945 5,044 5.3 3.67 2.74 6.23 0.57 Capital. Yield and return information
based on Bellwethers for Treasury
Fixed Income
Corporates 4,061 3,280 10.4 4.02 3.40 8.15 2.08
securities.
Municipals 46,081 1,308 13.5 3.80 2.62 10.70 1.75
Change in bond price is calculated
Emerging Debt 480 704 11.1 5.76 5.35 6.97 5.51 using both duration and convexity
High Yield 1,893 1,030 6.8 7.51 7.23 4.98 5.34 according to the following formula:
New Price = (Price + (Price * -Duration *
TIPS 33 753 9.1 2.78 1.93 13.56 0.86 Change in Interest Rates))+(0.5 * Price
* Convexity * (Change in Interest
Rates)^2)
Price Impact of a 1% Rise/Fall in Interest Rates +1%
19.0%
20% *Calculation assumes 2-year Treasury
-1% interest rate falls 0.80% to 0.00% as
15%
8.9% interest rates can only fall to 0.00%.
10% 6.2% 6.6% 6.8% 7.6%
4.9% 4.2% 5.0%
3.3%
5% 0.7% Chart is for illustrative purposes only.
0%
Past performance is not indicative of
comparable future results.
-5% -2.0%
-4.9% -3.3% -4.2% Data are as of 3/31/12.
-5.0% -6.2%
-10% -6.6% -6.8% -7.6%
-8.9%
-15%
-20%
-19.0%
-25%
2-Year 5-Year 10-Year 30-Year Sector MBS High Yield Broad Mkt TIPS EMD Corp. Munis
34

35. The Fed and the Money Supply
Federal Funds Rate FOMC Projected Pace of Policy Firming
10% Target Federal Funds Rate at Year-End
9% 5.0%
FOMC member Fed Funds Rate
8%
projection as of January 25, 2012
Mar. 31, 2012: 4.0%
7%
6% 0-0.25%
3.0%
5%
4% 2.0%
3%
2% 1.0%
1%
0% 0.0%
Fixed Income
'86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 2012 2013 2014 Longer run
Excess Reserves, Monetary Base and Multiplier Money Supply Growth
$ trillions Year-over-year growth in M2
$3.0 Monetary Base & Reserves M2 Money Multiplier 10x 14%
9x 12%
$2.5
Feb. 2012: 9.9%
8x
10%
$2.0
7x
Monetary Base 8%
$1.5 6x
Excess Reserves 6%
5x
$1.0
4%
4x
$0.5 2%
3x
$0.0 2x 0%
'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '85 '90 '95 '00 '05 '10
Source: Federal Reserve, FactSet, J.P. Morgan Asset Management.
Monetary base is defined as the total amount of a currency that is either circulated in the hands of the public or in the commercial bank deposits held in
the central bank's reserves. Money multiplier defined as M2 divided by the monetary base.
Data are as of 3/31/12.
35

36. Credit Conditions
Lending Standards Consumer & Industrial Loan Demand
Net percent of banks reporting tighter lending standards Net percent of banks reporting stronger demand
100% 60%
Consumer Loans 84%
80% Commercial and Industrial Loans 40%
20%
(Medium & Large Firms) 67%
60% 20%
40% 0%
20% 5% -20%
0% -40% 15%
Small Firms
-20% -60% Large & Medium Firms
-3%
-40% -80%
Fixed Income
'98 '00 '02 '04 '06 '08 '10 '12 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Delinquency Rates U.S. Corporate Issuance
All banks, seasonally adjusted $ trillions
12% $3.5
Residential Mortgages $3.0
10% Consumer Loans
$2.5 Total Equity
Commercial and Industrial Loans 9.9% Total Debt
8%
$2.0
6% $1.5
$1.0
4% 3.1%
$0.5
2%
1.6% $0.0
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 1990 1993 1996 1999 2002 2005 2008 2011
Source: (Top left) Federal Reserve, FactSet, J.P. Morgan Asset Management. (Top right) Federal Reserve, FactSet, J.P. Morgan Asset Management. (Bottom left): Federal
Reserve, FactSet, J.P. Morgan Asset Management. (Bottom right) SIFMA, J.P. Morgan Asset Management.
All data reflect most recently available releases. 2Q11 – 1Q12 estimates of lending standards on consumer loans are J.P. Morgan Asset Management
estimates. 2011 corporate issuance is through February 2012.
Data are as of 3/31/12.
36

37. High Yield Bonds
High Yield Spreads and Defaults
20%
Average Latest
HY Spreads 6.0% 6.3%
HY Defaults 4.3% 1.9%
15% Spreads
Default Rates
10%
5%
0%
'88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Fixed Income
Historical High Yield Recovery Rates Annual High Yield Bond Issuance
High yield bonds, cents on the dollar Billions USD
70¢ $350
60¢ $300
50¢ $250
Average: 38.5¢
40¢ $200
30¢ $150
20¢ $100
10¢ $50
0¢ $0
'88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source (Top chart): U.S. Treasury, J.P. Morgan, 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. (Bottom left): J.P Morgan, Moody’s, J.P. Morgan Asset Management.
(Bottom right): J.P. Morgan Asset Management. Yield to worst is defined as the lowest potential yield that can be received on a bond without the
issuer actually defaulting and reflects the possibility of the bond being called at an unfavorable time for the holder. Spreads indicated are benchmark
yields less comparable maturity Treasury yields. Past performance is not indicative of comparable future results. 2011 issuance and recovery rates
are as of March 30, 2012.
37 Data are as of 3/31/12.

38. Municipal Finance
Muni/Treasury Ratio State & Local Government Debt Service
Ratio of Barclays 10-year Municipal Bond yield to 10-year Treasury Percent of current expenditures
8%
240%
7%
220%
4Q11: 5.6%
6%
200%
5%
180%
4%
Fixed Income
160% '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10
Municipal Bond Issuance*
140% Billions USD, revenue and GO issues
$500
120% $400
$300
100%
$200
80%
Mar. 31, 2012: 111% $100
60% $0
'98 '00 '02 '04 '06 '08 '10 '12 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12
Source (Left chart): Barclays Capital, U.S. Treasury, FactSet, J.P. Morgan Asset Management. (Top right) BEA, J.P. Morgan Asset Management. (Bottom Right) SIFMA,
J.P. Morgan Asset Management.
*Excludes maturities of 13 months or less and private placements. 2012 issuance data is as of February 2012.
Data are as of 3/31/12.
38

39. Emerging Market Debt
EM & DM Gross Debt to GDP Emerging Markets Bond Index Global Spreads
120% Sovereign and quasi-sovereign issues, USD-denominated bonds
10%
Developed
100%
Emerging 8%
80%
6%
60%
Average: 3.8%
4%
40%
20% 2% Mar. 31, 2012:
3.4%
0% 0%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Fixed Income
Corporate Emerging Markets Bond Spreads Local Emerging Market Bond Yields
Corporate issues, USD-denominated bonds Sovereign issues, local currency-denominated bonds
12% 9%
10%
8%
8%
Mar. 31, 2012: Mar. 31, 2012:
3.8% Average: 6.8% 6.4%
6% 7%
4% Average: 3.2%
6%
2%
0% 5%
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Source: J.P. Morgan, IMF, MorganMarkets, FactSet, J.P. Morgan Asset Management.
Spreads measure the credit risk premium over comparable maturity U.S. Treasury bonds. The J.P. Morgan EMBI Global (EMBIG) Index is a USD-denominated external debt
index tracking bonds issued by sovereigns and quasi-sovereigns in developing nations. The J.P. Morgan Corporate Emerging Bond Index (CEMBI)
is a USD-denominated external debt index tracking bonds issued by corporations. The J.P. Morgan GBI-EM index is a local
currency-denominated index tracking bonds issued by emerging market governments. Debt to GDP ratios use IMF definition
and data for developed and emerging countries; 2012 ratios are IMF estimates. Past performance is not indicative of comparable future results.
39 Data are as of 3/31/12.

40. Global Equity Markets: Returns and Composition
World Market Returns – 1Q12, Percent
25%
Local currency returns
20% 21.1
USD returns 20.1
19.1 18.6
18.0
15%
15.2
14.1 13.9
12.6 12.6 12.6 12.3
10% 11.3 11.3 11.4
10.3 11.0 10.0
10.8
9.9 9.9 10.1
9.4 9.5
7.6
5%
4.7
0%
USA EAFE Europe ex- Pacific ex- Emerging United France Germany Japan China India Brazil Russia
(S&P 500) U.K. Japan Markets Kingdom
Weights in MSCI All Country World Index Share of Global GDP
% global market capitalization Based on purchasing power parity
Europe
ex-U.K.: United
16% States: Canada:
International
19% 2%
United U.K.: 8% Emerging Japan:
States: Markets: 6%
Emerging 49%
46%
Markets: Other
13% Developed:
Europe
Japan: ex-U.K.: 6%
8% United 15%
Canada: Pacific: Kingdom:
4% 5% 3%
Source: Standard & Poor’s, MSCI, IMF, FactSet, J.P. Morgan Asset Management.
All return values are MSCI Gross Index (official) data. Share of global GDP based on purchasing power parity (PPP) as calculated by the IMF for 2011.
Definition of emerging markets is based on MSCI and IMF data sources, respectively.
40 Data as of 3/31/12.

41. Global Economic Growth
Emerging Market Country Real GDP Growth
Historical JPMSI Forecast
Year-over-year % chg. – forecasts from JPMSI
10%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
8%
6%
4%
2%
0%
-2%
Emerging Markets China India Mexico Russia Korea South Africa Brazil
Developed Market Country Real GDP Growth
Year-over-year % chg. – forecasts from JPMSI Historical JPMSI Forecast
10%
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12
8%
International
6%
4%
2%
0%
-2%
Developed U.S. Canada Japan Germany U.K. France Italy
Countries
Source: J.P. Morgan Global Economic Research, J.P. Morgan Asset Management.
Forecast and aggregate data come from J.P. Morgan Global Economic Research.
Data reflect most recently available as of 3/31/12.
41

42. Global Monetary Policy
Central Bank Assets – Percent of Nominal GDP Real Policy Rates – Monthly
35% 4%
30% 3%
25% 2%
Bank of Japan
20% 1%
15% European Central Bank 0%
10% -1%
Emerging Markets
-2%
5% U.S. Federal Reserve Developed Markets
-3%
0% '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Country Level Monetary Policy and Inflation
14.0% Target Policy Rate Inflation Rate Real Policy Rate
10.5%
7.0%
3.5%
International
0.0%
-3.5%
-7.0%
China
South Africa
Indonesia
Russia
Thailand
Poland
India
Colombia
Hong Kong
Canada
Australia
Turkey
Mexico
Korea
Taiwan
Euro area
U.K.
U.S.
Japan
Brazil
Developed Markets Emerging Markets
Source: J.P. Morgan Global Economics Research, J.P. Morgan Asset Management.
(Top charts) Emerging and Developed Economy GDP growth and real policy rates represent GDP weighted aggregates estimated by J.P. Morgan
Global Economics Research. (Bottom chart) Target policy rates are the short-term target interest rates set by central banks. Inflation rates shown
represent year-over-year quarterly rates for 4Q11. Real policy rates are short-term target interest rates set by central banks minus year-over-year
inflation.
42 Data are as of 3/31/12.

43. The Importance of Exports
Exports as a % of GDP – 2010
Goods exports only
Brazil 0.9% 2.1% 1.9% 4.7% 9.7% U.S. Eurozone BRIC Other Total
India 1.5% 2.4% 2.0% 7.8% 13.7%
Russia 0.8% 10.1% 1.9% 12.5% 25.3%
China 4.8% 4.8% 1.6% 15.7% 26.9%
U.S. 1.4% 1.2% 6.1% 8.8%
Japan 2.2% 1.6% 3.9% 6.4% 14.1%
U.K. 1.9% 9.3% 1.1% 4.3% 16.6%
France 1.0% 12.0% 1.4% 5.5% 19.9%
International
Italy 1.2% 11.6% 1.7% 6.9% 21.4%
Canada 18.4% 2.3% 1.3% 2.6% 24.5%
Germany 2.0% 20.9% 3.7% 10.1% 36.7%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Source: IMF, J.P. Morgan Asset Management.
Numbers represent exports of goods only, and would be higher if services were included.
Data reflect most recently available as of 3/31/12.
43

44. The Impact of Global Consumers
Share of Global Nominal Consumption Foreign Sales, % of Total Sales
40% 35%
35% 30% Mega Cap (Russell 200)
30% 25%
Large Cap (Russell 1000)
25% 20%
20% U.S. Consumption % of Global 15%
International
EM Consumption % of Global
Small Cap (Russell 2000)
15% 10%
1990 1994 1998 2002 2006 2010 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10
Source: FactSet, Compustat, Russell, J.P. Morgan Global Economics Research, J.P. Morgan Asset Management.
Estimates of global consumption for 2010 and 2011 provided by J.P. Morgan Global Economics Research.
Foreign sales as a percentage of total sales is calculated as an unweighted average of individual index constituent companies’ reported sales figures
and does not capture all index members due to differences in reporting practices.
Data are as of 3/31/12.
44

45. European Crisis: Fiscal Challenges
GDP Growth, Debt to GDP and Borrowing Costs
Example of Fiscal Redistribution in the U.S.
Bubble size = 10-year
8%
government bond yield
EM = 10%
6%
= 5%
Real GDP Growth (2010 – 2012)
4%
Germany
U.S.
2% France
E.U.
Italy The E.U. Lacks a Similar Fiscal Mechanism
Spain Ireland
0%
Portugal
-2% Greece
International
-4%
-6%
20% 40% 60% 80% 100% 120% 140% 160%
Net Debt-to-GDP Ratio (2011 est.)
Source: IMF, BLS, J.P. Morgan Asset Management.
Maps are for illustrative purposes only and are intended to show the current sources of stress in each region. The U.S. state colors are based on level
of unemployment rate. European country colors are based on levels of sovereign stress, including but not exclusively the measure shown in the
above chart on the left. Growth and debt data based on the September 2011 World Economic Outlook. Bond yields as of 3/31/12.
Data are as of 3/31/12.
45

46. European Crisis: Financial System Risks
European Bank Exposure – $ Billions European Sovereign Funding Costs
$400 10-year benchmark bond yields, daily
Derivative claims 18% 1st LTRO
$300 Sovereign debt claims
and bank claims
16%
$200 Country Yield (3/31/12)
Portugal 11.20%
$100 14% Ireland 6.79%
Spain 5.35%
Italy 5.12%
$0
Greek Portugese Irish Spanish Italian U.S. banks 12%
exposure to
Exposure of all European banks to each country’s
all GIIPS
public sector, banking sector and derivative claims
European Central Bank Balance Sheet 10%
Trillions of Euros
€3.0 Feb. 2012: €2.7tn
8%
International
€2.5
6%
€2.0 4%
€1.5
2%
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11
Source: FactSet, BIS, ECB, J.P. Morgan Asset Management.
Bank exposure based on 4Q11 data. LTRO refers to the ECB’s December Long-Term Refinancing Operation.
Data are as of 3/31/12.
46

47. Chinese Growth and Economic Policy
China & U.S. Contribution to Global GDP Growth Chinese Inflation and the Money Supply
Share of year-over-year change in nominal global GDP Year-over-year % change
40% 10% 30%
China Most Recent
35% United States 8% CPI (LHS) 3.2%
30% M2 (RHS) 13.0% 25%
6%
25%
20% 4% 20%
15% 2%
10% 15%
0%
5%
0% * -2% 10%
'81 '84 '87 '90 '93 '96 '99 '02 '05 '08 '11 '14 '00 '02 '04 '06 '08 '10 '12
Components of Chinese Nominal GDP Chinese Currency
100%
Net Exports: 3% Net Exports: 2% Chinese Renminbi per USD, inverted
6.0
Government: 13% Government 13% Mar. '12: 6.30
80%
Investment 6.5
International
Spending Investment
60% 35% Spending
7.0 May '10 – Mar. ‘12:
51% Jun. '05 – Jul. '08:
+5.9%
40%
7.5
+17.5%
Consumption
20% 49% Consumption 8.0
34%
0% 8.5
1990 2010 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Source: (Top left) IMF, J.P. Morgan Asset Management. (Top right) National Bureau of Statistics, J.P. Morgan Economics, J.P. Morgan Asset Management. (Bottom left)
IMF, J.P. Morgan Asset Management. (Bottom right) FactSet, J.P. Morgan Asset Management.
*In 2009, global growth was negligible, while Chinese growth was robust, which resulted in China contributing over 1200% to global growth.
Calculations based on PPP exchange rates and 2012 – 2016 growth forecasts are from the IMF.
Data reflect most recently available as of 3/31/12.
47

48. Global Equity Valuations – Developed and Emerging Markets
Developed Market Countries Example
+6 Std Dev
Std Dev from Global Average
+5 Std Dev Expensive
+4 Std Dev relative to
+3 Std Dev world
+2 Std Dev
+1 Std Dev Expensive
relative to own Current
Average
history
-1 Std Dev Average
-2 Std Dev Cheap relative to
-3 Std Dev own history Cheap
-4 Std Dev
relative to
-5 Std Dev
world
World EAFE France Germany U.K. Australia Japan Canada Switzerland United
(ACWI) States
Emerging Market Countries
+6 Std Dev
Note: Each valuation index
shows an equally weighted
Std Dev from Global Average
+5 Std Dev
+4 Std Dev composite of four metrics:
+3 Std Dev price to forward earnings
+2 Std Dev (Fwd. P/E), price to current
+1 Std Dev
book (P/B), price to last 12
International
Average
months’ cash flow (P/CF) and
-1 Std Dev
-2 Std Dev
price to last 12 months’
-3 Std Dev
dividends normalized using
-4 Std Dev means and average
-5 Std Dev variability over the last 10
World EM Russia China Brazil Taiwan South Korea Mexico India years.
(ACWI) Index Africa
Source: MSCI, FactSet, J.P. Morgan Asset Management.
Note: Each valuation index shows an equally weighted composite of four metrics: price to forward earnings (Fwd. P/E), price to current book
(P/B), price to last 12 months’ cash flow (P/CF) and price to last 12 months’ dividends. Results are then normalized using means and average
variability over the last 10 years. The grey bars represent valuation index variability relative to that of the All Country World Index (ACWI). See
disclosures page at the end for metric definitions.
48 Data are as of 3/31/12.

49. International Economic and Demographic Data
Economics Demographics
GDP USD GDP Per GDP Unempl. Inflation Population Percent Median Migration
(CPI)
Population
(B$s) Capita Growth Rate Growth Age >65 Age per 1000
Developed
U.S. $15,094 $48,147 3.0% 8.3% 2.9% 314 mm 0.9% 13.1% 36.9 yrs +3.6
Canada 1,759 51,147 1.8 7.4 2.6 34 0.8 15.9 41.0 +5.7
U.K. 2,481 39,604 -0.8 8.3 3.4 63 0.6 16.5 40.0 +2.6
Germany 3,629 44,556 -0.7 5.8 2.4 81 -0.2 20.6 44.9 +.7
France 2,808 44,401 0.9 10.0 2.3 66 0.5 16.8 39.9 +1.1
Japan 5,855 45,774 -0.7 4.6 0.1 127 -0.1 22.9 44.8 -
Italy 2,246 37,046 -2.9 9.2 3.3 61 0.4 20.3 43.5 +4.7
Emerging
Russia 1,885 13,236 7.0 6.5 3.7 138 -0.5 13.0 38.7 +0.3
Mexico 1,185 10,803 1.7 5.2 3.9 115 1.1 6.6 27.1 -3.1
Brazil 2,518 12,917 1.3 5.7 5.8 206 1.1 6.7 29.3 -0.1
International
China 6,988 5,184 9.2 4.1 3.2 1,343 0.5 8.9 35.5 -0.3
India 1,843 1,527 3.8 9.8 5.2 1,205 1.3 5.5 26.2 -0.1
Source: FactSet, Eurostat, CIA, J.P. Morgan Securities, J.P. Morgan Asset Management.
GDP levels represent 2011 data and are from the September 2011 World Economic Outlook published by the IMF, except for the U.S. levels, which come directly from the
BEA. All GDP Growth data are from J.P. Morgan Economics and expressed as % change versus prior quarter annualized. All GDP Growth data are for 4Q11. India
unemployment is from CIA estimates and is as of 2011, and Italy unemployment is as of 1/31/12. CPI Inflation is shown as % change versus a year ago and all data are for
February 2012, except for India and Japan, which are as of January 2012. Unemployment rate for developed countries refers to February 2012 and comes from FactSet
Economics, Eurostat and Statistics Canada. Demographic data provided by CIA World Factbook at CIA.gov.
Data are as of 3/31/12.
49

50. Current Account Deficit and U.S. Dollar
Current Account Balance, % of GDP U.S. Dollar Index
Nominal trade-weighted exchange index: major currencies
-8%
115
4Q05:
110
-6.5%
-6% 105
100
95
-4% 4Q11:
-3.2%
90
Mar. 2009:
85 84.0
-2%
80
International
75
0%
70 Mar. 2008: 70.3
Mar. 2012: 72.9
65
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: BEA, FactSet, J.P. Morgan Asset Management. Source: Federal Reserve, FactSet, J.P. Morgan Asset Management.
Data are as of 3/31/12 and are reported quarterly. Data are as of 3/31/12.
50

51. Asset Class Returns
10-yrs
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 . 1Q '12 '02 - '11
DJ UBS M SCI M SCI M SCI Barclays M SCI M SCI M SCI
REITs REITs REITs REITs REITs REITs
Cmdty EM E EM E EM E Agg EM E EM E EM E
26.4% 13.9% 23.9% 56.3% 31.6% 34.5% 35.1% 39.8% 5.2% 79.0% 28.0% 8.3% 14.1% 277.2%
DJ UBS M arket Barclays Russell M SCI DJ UBS M SCI M SCI M arket M SCI Russell Barclays S&P
REITs
Cmdty Neutral Agg 2000 EM E Cmdty EM E EAFE Neutral EAFE 2000 Agg 500
24.2% 9.3% 10.3% 47.3% 26.0% 17.6% 32.6% 11.6% 1.1%* 32.5% 26.9% 7.8% 12.6% 164.2%
M arket Barclays M arket M SCI M SCI M SCI M SCI DJ UBS Asset M SCI M arket Russell Barclays
REITs
Neutral Agg Neutral EAFE EAFE EAFE EAFE Cmdty Alloc. EM E Neutral 2000 Agg
15.0% 8.4% 7.4% 39.2% 20.7% 14.0% 26.9% 11.1% -23.8% 28.0% 19.2% 4.5% 12.4% 75.4%
Barclays Russell Russell Russell M arket Russell Russell DJ UBS S&P M SCI Asset
REITs REITs REITs
Agg 2000 2000 2000 Neutral 2000 2000 Cmdty 500 EAFE Alloc.
11.6% 2.5% 3.8% 37.1% 18.3% 12.2% 18.4% 9.3% -33.8% 27.2% 16.7% 2.1% 11.0% 73.5%
Asset M SCI Asset S&P Asset Asset S&P Asset DJ UBS S&P S&P Asset Russell
REITs
Alloc. EM E Alloc. 500 Alloc. Alloc. 500 Alloc. Cmdty 500 500 Alloc. 2000
0.6% -2.4% -5.4% 28.7% 12.5% 8.0% 15.8% 7.3% -36.6% 26.5% 15.1% -0.2% 10.5% 72.8%
Russell Asset M SCI Asset S&P M arket Asset Barclays S&P Asset Asset Russell Asset M arket
2000 Alloc. EM E Alloc. 500 Neutral Alloc. Agg 500 Alloc. Alloc. 2000 Alloc. Neutral
-3.0% -3.4% -6.0% 25.2% 10.9% 6.1% 14.9% 7.0% -37.0% 22.5% 12.7% -4.2% 7.5% 72.7%
S&P S&P M SCI DJ UBS DJ UBS S&P M arket S&P DJ UBS M SCI M SCI M arket M SCI
REITs
500 500 EAFE Cmdty Cmdty 500 Neutral 500 Cmdty EAFE EAFE Neutral EAFE
-9.1% -11.9% -15.7% 22.7% 7.6% 4.9% 11.2% 5.5% -37.7% 18.7% 8.2% -11.7% 1.5% 64.8%
M SCI M SCI Russell M arket M arket Russell Barclays Russell M SCI Barclays Barclays DJ UBS DJ UBS DJ UBS
EAFE EAFE 2000 Neutral Neutral 2000 Agg 2000 EAFE Agg Agg Cmdty Cmdty Cmdty
Asset Class
-14.0% -21.2% -20.5% 7.1% 6.5% 4.6% 4.3% -1.6% -43.1% 5.9% 6.5% -13.4% 0.9% 58.0%
M SCI DJ UBS S&P Barclays Barclays Barclays DJ UBS M SCI M arket M arket M SCI Barclays S&P
REITs
EM E Cmdty 500 Agg Agg Agg Cmdty EM E Neutral Neutral EM E Agg 500
-30.6% -22.3% -22.1% 4.1% 4.3% 2.4% -2.7% -15.7% -53.2% 4.1% -2.5% -18.2% 0.3% 33.4%
Source: Russell, MSCI, Dow Jones, Standard and Poor’s, Credit Suisse, Barclays Capital, NAREIT, FactSet, J.P. Morgan Asset Management.
The “Asset Allocation” portfolio assumes the following weights: 25% in the S&P 500, 10% in the Russell 2000, 15% in the MSCI EAFE, 5% in the MSCI EMI,
30% in the Barclays Capital Aggregate, 5% in the CS/Tremont Equity Market Neutral Index, 5% in the DJ UBS Commodity Index and 5% in the NAREIT Equity
REIT Index. Balanced portfolio assumes annual rebalancing. All data except commodities represent total return for stated period. Past performance is not
indicative of future returns. Data are as of 3/31/12, except for the CS/Tremont Equity Market Neutral Index, which reflects data through
2/29/12. “10-yrs” returns represent cumulative total return and are not annualized. These returns reflect the period from 1/1/02 – 12/31/11.
Please see disclosure page at end for index definitions. *Market Neutral returns include estimates found in disclosures.
51 Data are as of 3/31/12.

52. Correlations: 10-Years
Eq
Large Small Core Corp. Hedge Market
Cap Cap EAFE EME Bonds HY EMD Cmdty. REITs Funds Neutral*
Large Cap 1.00 0.95 0.91 0.85 -0.31 0.79 0.68 0.45 0.76 0.77 0.50
Small Cap 1.00 0.88 0.81 -0.35 0.73 0.61 0.40 0.82 0.74 0.48
EAFE 1.00 0.92 -0.22 0.74 0.64 0.52 0.73 0.85 0.66
EME 1.00 -0.18 0.80 0.75 0.59 0.65 0.88 0.54
Core Bonds 1.00 -0.11 0.15 -0.25 -0.04 -0.22 -0.02
Corp. HY 1.00 0.86 0.52 0.69 0.77 0.40
EMD 1.00 0.41 0.60 0.64 0.35
Commodities 1.00 0.39 0.70 0.49
REITs 1.00 0.59 0.50
Hedge Funds 1.00 0.57
Asset Class
Eq Market Neutral* 1.00
Source: Standard & Poor’s, Russell, Barclays Capital Inc., MSCI Inc., Credit Suisse/Tremont, NCREIF, DJ UBS, J.P. Morgan Asset Management.
Indexes used – Large Cap: S&P 500 Index; Small Cap: Russell 2000; EAFE: MSCI EAFE; EME: MSCI Emerging Markets; Bonds: Barclays
Capital Aggregate; Corp HY: Barclays Capital Corporate High Yield; EMD: Barclays Capital Emerging Market; Cmdty.: DJ UBS Commodity Index;
Real Estate: NAREIT Equity REIT Index; Hedge Funds: CS/Tremont Multi-Strategy Index; Equity Market Neutral: CS/Tremont Equity Market
Neutral Index. *Market Neutral returns include estimates found in disclosures.
All correlation coefficients calculated based on quarterly total return data for period 12/31/01 to 12/31/11.
This chart is for illustrative purposes only.
52

53. Mutual Fund Flows
Fund Flows
Billions, USD AUM YTD 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000
Domestic Equity 4,254 (5) (135) (95) (28) (148) (65) (0) 18 101 120 (26) 55 261
World Equity 1,535 4 5 58 28 (80) 139 149 106 71 24 (3) (22) 53
Taxable Bond 2,525 49 136 230 311 22 97 45 26 5 40 125 76 (36)
Tax-exempt Bond 522 13 (12) 11 69 8 11 15 5 (15) (7) 17 11 (14)
Hybrid 903 16 30 24 10 (26) 42 18 37 49 38 9 9 (36)
Money Market 2,653 (39) (124) (525) (539) 637 654 245 62 (157) (263) (46) 375 159
U.S. Equity Fund Flows and Market Performance Difference Between Flows Into Stock and Bond Funds
Billions USD, U.S. equity funds, quarterly Billions, USD, U.S. and international funds, monthly
$120 Equity Flows S&P 500 1600 $40
Bond flows exceeded equity flows
$100
1400 by $35 billion in February 2012
$80 $20
$60 1200
$40 $0
1000
$20
800 -$20
$0
Asset Class
-$20 600
-$40
-$40
400
-$60
-$60
-$80 200
Mar '08 Sep '08 Mar '09 Sep '09 Mar '10 Sep '10 Mar '11 Sep '11
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: Investment Company Institute, J.P. Morgan Asset Management.
Data include flows through February 2012 and exclude ETFs. ICI data are subject to periodic revisions. World equity flows are inclusive of
emerging market, global equity and regional equity flows. Hybrid flows include asset allocation, balanced fund, flexible portfolio and mixed
income flows.
53 Data are as of 3/31/12.

54. Dividend Income: Domestic and Global
S&P 500 Total Return: Dividends vs. Capital Appreciation
Average annualized returns Capital appreciation
20% Dividends
15%
13.9% 13.6%
10% 12.6% 15.3%
3.0% 1.6% 5.5%
5% 4.4%
5.4% 6.0% 5.1% 1.8%
4.7% 3.3% 4.2% 4.4% 4.1%
2.5%
0%
-2.7%
-5.3%
-5%
-10%
1926 - 1929 1930's 1940's 1950's 1960's 1970's 1980's 1990's 2000's 1926 to 2011
REIT Dividend Yields Equity Dividend Yields
Major world markets by capitalization Major world markets by capitalization
10-year government 6% 10-year government
7% 6.4%
6.2% bond yield bond yield
4.8%
6% 5.4% 5%
5.3% 4.4%
5.1%
5% 3.7%
4.3% 4.2% 4%
3.5%
4% 3.5%
2.7% 2.8%
3%
2.3%
Asset Class
3%
2%
2% 2.0%
1%
1%
0% 0%
U.S. Singapore Australia France Canada Japan Global U.K. U.S. Australia France U.K. Switzerland ACWI Canada Japan
Source: (Top chart) Standard & Poor’s, Ibbotson, J.P. Morgan Asset Management. (Bottom left) FactSet, NAREIT, J.P. Morgan Asset Management.
Yields shown are that of the appropriate FTSE NAREIT REIT index, which excludes property development companies. (Bottom right) FactSet, MSCI,
J.P. Morgan Asset Management. Yields shown are that of the appropriate MSCI index.
Data are as of 3/31/12.
54

55. Global Commodities
Commodity Prices Oil Demand: Emerging Markets Share
Weekly index prices rebased to 100 Emerging markets as % of total global oil consumption
40%
600
Precious metals 38%
36%
500
34%
Industrial metals
32%
400
30%
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Energy
300 Commodity Prices and Inflation
Year over year % chg.
8%
DJ-UBS Commodity Index (Y/Y % chg.) 80%
6% 60%
200
4% 40%
Grains
2% 20%
Asset Class
100 0% 0%
-2% -20%
Livestock -4% Headline CPI (Y/Y % chg.) -40%
0 -6% -60%
'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12
Source: Dow Jones/UBS, FactSet, J.P. Morgan Asset Management. Source: (Top) USDA, BP Statistical Review of World
Energy, J.P. Morgan Asset Management. (Bottom) BLS,
Commodity prices represented by the appropriate DJ/UBS Commodity sub-index. DJ/UBS, FactSet, J.P. Morgan Asset Management
Data reflect most recently available as of 3/31/12.
55 Data are as of 3/31/12.

56. Gold
Gold Prices World Gold Production
$ / oz Year Troy Ounces Total Value
$2,000
2000 83.3 mm $23 bn
$1,800 Gold
2001 83.6 mm $23 bn
Gold, Inflation adjusted
Mar. 2012:
$1,600
$1,662.50 2002 82.0 mm $25 bn
$1,400
2003 81.7 mm $30 bn
$1,200
2004 77.8 mm $32 bn
$1,000 Jan. 1980:
$850.00 2005 79.4 mm $35 bn
$800 2006 76.2 mm $46 bn
$600 2007 75.9 mm $53 bn
Jan. 1980:
$433.72 Mar. 2012:
$400 $318.46 2008 73.6 mm $64 bn
Asset Class
$200 2009 78.8 mm $86 bn
$0 2010 80.4 mm $113 bn
'75 '80 '85 '90 '95 '00 '05 '10
Source: (Left chart) EcoWin, BLS, U.S. Department of Energy, FactSet, J.P. Morgan Asset Management. (Right table) U.S. Geological Survey, World
Gold Council, J.P. Morgan Asset Management. CPI adjusted gold values are calculated using month averages of gold spot prices divided by the CPI
value for that month. CPI is rebased to 100 at the start of the chart.
Data reflect most recently available as of 3/31/12.
56

57. Historical Returns by Holding Period
Range of Stock, Bond and Blended Total Returns
Annual total returns, 1950 – 2011
60% Annual Avg. Growth of $100,000
Total Return over 20 years
50% Stocks 10.8% $771,337
51%
Bonds 6.3% $337,713
40% 43% 50/50 Portfolio 8.9% $552,853
30% 32%
28%
20% 23%
21% 19%
16% 17% 18%
10% 14%
12%
6% 5%
0% -2% -2% 1% 2%
-1% 1% 1%
-8%
-10% -15%
Stocks
-20% Bonds
Asset Class
50/50 Portfolio
-30%
-37%
-40%
1-yr. 5-yr. rolling 10-yr. rolling 20-yr. rolling
Sources: Barclays Capital, FactSet, Robert Shiller, Strategas/Ibbotson, Federal Reserve, J.P. Morgan Asset Management.
Data are as of 3/31/12.
57

58. Diversification and the Average Investor
(Top) Indexes and weights of the
Maximizing the Power of Diversification (1994 – 2011) traditional portfolio are as follows:
Traditional Portfolio More Diversified Portfolio U.S. stocks: 55% S&P 500, U.S.
bonds: 30% Barclays Capital
Equity Mkt. Neutral Aggregate. International stocks:
15% MSCI EAFE. Portfolio with 25%
Commodities in alternatives is as follows: U.S.
8% stocks: 22.2% S&P 500, 8.8%
REIT Russell 2000; International Stocks:
S&P 500 26% 8% 4.4% MSCI EM, 13.2% MSCI EAFE;
30%
8% S&P 500 U.S. Bonds: 26.5% Barclays Capital
55% MSCI EAFE Aggregate; Alternatives: 8.3%
Russell 2000 CS/Tremont Equity Market Neutral,
4% 8.3% DJ/UBS Commodities, 8.3%
Barclays Agg. 22% NAREIT Equity REIT Index. Return
15% 13% MSCI EAFE
and standard deviation calculated
9% using Morningstar Direct.
MSCI EM
Charts are shown for illustrative
purposes only. Past returns are no
Barclays Agg. guarantee of future results.
Diversification does not guarantee
Return: 6.75% Return: 7.09% investment returns and does not
Standard Deviation: 10.94% Standard Deviation: 9.97% eliminate risk of loss. Data are as of
12/31/11.
20-year Annualized Returns by Asset Class (1992 – 2011) (Bottom) Indexes used are as
follows: REITS: NAREIT Equity REIT
12% Index, EAFE: MSCI EAFE, Oil: WTI
10.9%
Index, Bonds: Barclays Capital U.S.
Aggregate Index, Homes: median
10% sale price of existing single-family
8.6% homes, Gold: USD/troy oz, Inflation:
7.8% 7.6% CPI. Average asset allocation
8% investor return is based on an
6.5% analysis by Dalbar Inc., which utilizes
Asset Class
the net of aggregate mutual fund
6% sales, redemptions and exchanges
each month as a measure of investor
4.0%
behavior. Returns are annualized
4%
(and total return where applicable)
2.5% 2.5% and represent the 20-year period
2.1%
2% ending 12/31/11 to match Dalbar’s
most recent analysis.
0%
REITs Oil S&P 500 Gold Bonds EAFE Inflation Homes Average
Investor
58

59. Annual Returns and Intra-year Declines
Intra-year Declines vs. Calendar Year Returns
Despite average intra-year drops of 14.5%, annual returns positive in 25 of 32 years
50%
34
35% 31
26 26 27 26 27 26
23
20 20
20% 17
15 15 14
12 13
9
-10 -7 7 -2
4 -10 -13 -23
3 4
5% 1 2
-38 0
-3
-10% -6 -6 -5
-7 -8 -8 -8 -8 -8 -7 -8
-9 -9 -10
-12 -11 -12
-14 -14
-17 -17 -17 -16
-20 -19 -19
-25%
-26 -28
-32
-34
-40%
Asset Class
-47
-55%
'80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Source: Standard and Poor’s, FactSet, J.P. Morgan Asset Management.
Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops over periods of 6 months or
less. For illustrative purposes only.
Data are as of 3/31/12.
59

60. Alternative Investment Returns
Hedge Funds (as of 12/31/11) 1 year 3 year 5 year 10 year
CSFB/Tremont HF Index -2.5% 8.6% 3.2% 6.4%
Multi-Strategy 1.8% 11.5% 3.1% 6.6%
Distressed -4.2% 8.5% 1.9% 7.4%
Convertible Arbitrage 1.1% 18.2% 3.5% 4.7%
Equity Market Neutral* 4.5% 2.5% 3.6% 5.6%
Risk Arbitrage** 0.8% 5.2% 4.2% 4.2%
Fixed Income Arbitrage** 4.7% 14.5% 2.1% 4.0%
Global Macro 6.4% 10.4% 8.6% 10.6%
Real Estate (as of 12/31/11) 1 year 3 year 5 year 10 year
NCREIF Property Index 14.3% 2.4% 3.1% 8.1%
Apartment 15.5% 4.0% 3.1% 8.0%
Industrial 14.6% 1.0% 2.2% 7.3%
Office 13.8% 0.9% 2.8% 7.1%
Retail 13.8% 4.5% 4.4% 10.7%
Private Equity (as of 9/30/11) 1 year 3 year 5 year 10 year
U.S. Venture Capital Index 20.9% 4.9% 6.7% 2.6%
U.S. Private Equity Index 13.8% 7.3% 8.1% 11.6%
Asset Class
Source: Cambridge Associates LLC, NCREIF, CS/Tremont, J.P. Morgan Asset Management. Cambridge PE and VC data provided at
no charge. Other indexes shown are unmanaged and are for illustrative purposes only. Past performance is no guarantee of future
results. Returns for all periods are as of 12/31/11 with the exception of Private Equity and Venture Capital returns, which are as of
9/30/11. All returns are annualized for periods greater than 1 year. Investing in alternative assets involves higher risks than traditional
investments and is suitable only for the long term. They may not be tax efficient and have higher fees than traditional investments. They
may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or
gain.
*Market Neutral returns include estimates found in disclosures.
**Arbitrage is the simultaneous purchase and sale of an asset in order to profit from a difference in the price.
Data are as of 3/31/12.
60

61. Cash Accounts
Annual Income Generated by $100,000 Investment in a 6-month CD Weight in
$10,000 Money Supply
$ Billions Money
Component
Supply
$8,000
2006: $5,240
$6,000 M2-M1 7,565 76.2%
$4,000
2011:
$419 Retail MMMFs 661 6.7%
$2,000
$0 Savings deposits 6,167 62.1%
1986 1990 1994 1998 2002 2006 2010
Cash Accounts Total Household Financial Assets
Cash as a % of Small time deposits 738 7.4%
28%
6-month CD rate vs. Core CPI
Mar. ’09 S&P 500 low
24% Oct. ’02 S&P 500 low Institutional MMMFs 1,721 17.3%
20% Cash in IRA & Keogh
639 6.4%
accounts
16%
Asset Class
12% Total 9,924 100.0%
'98 '00 '02 '04 '06 '08 '10
Source: Federal Reserve, St. Louis Fed, Bankrate.com, J.P. Morgan Asset Management. All cash measures obtained from the Federal Reserve are
seasonally adjusted monthly numbers. All numbers are in billions of U.S. dollars.
Small-denomination time deposits are those issued in amounts of less than $100,000. All IRA and Keogh account balances at commercial banks
and thrift institutions are subtracted from small time deposits.
Annual income is for illustrative purposes and is calculated based on the 6-month CD yield on average during each year and $100,000 invested.
IRA and Keogh account balances at money market mutual funds are subtracted from retail money funds.
Past performance is not indicative of comparable future results.
Data are as of 3/31/12.
61

62. Corporate DB Plans and Endowments
Asset Allocation: Corporate DB Plans vs. Endowments Defined Benefit Plans – Funded Status: S&P 500 companies
Endowments overfunded underfunded
Corporate Defined Benefit Plans 8%
32.0%
22%
Equities
45.3%
Fixed Income
13.0%
78% 92%
35.5%
21.9%
Hedge Funds
2.7% 1999 2010
10.7% Pension Return Assumptions: S&P 500 companies
Private Equity 40% 1999: Average 9.2%
4.7%
33% 2010: Average 7.4%
29%
6.1% 30% 27% 27%
Real Estate
3.1%
% of companies
20%
20%
16% 16%
12.2%
Other
Asset Class
4.1% 9%
10% 8% 7%
5%
4.0% 2% 1% 0% 0% 0%
Cash
4.7% 0%
% of total < 7% 7 to 7.5 to 8 to 8.5 to 9 to 9.5 to > 10%
7.5% 8% 8.5% 9% 9.5% 10%
0% 10% 20% 30% 40% 50% return assumption
Source: NACUBO (National Association of College and University Business Officers), Towers Watson, Compustat/FactSet, J.P. Morgan Asset
Management. Endowments represents dollar-weighted average data of 842 colleges and universities. Pension Return Assumptions based on all
available and reported data from S&P 500 Index companies. Funded Status based on 351 companies reporting pension funding status as of
3/31/11. Return assumption bands are inclusive of upper range. All information is shown for illustrative purposes only. Data are as of 12/31/10.
62

63. J.P. Morgan Asset Management – Index Definitions
All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not The MSCI ACWI (All Country World Index) Index is a free float-adjusted market capitalization weighted index
include fees or expenses. 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 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 The MSCI Small Cap IndicesSM target 40% of the eligible Small Cap universe within each industry group, within
of U.S. equities, it is also an ideal proxy for the total market. An investor cannot invest directly in an index. 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 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 MSCI Value and Growth IndicesSM cover the full range of developed, emerging and All Country MSCI Equity
The Russell 3000 Index® measures the performance of the 3,000 largest U.S. companies based on total market indexes. As of the close of May 30, 2003, MSCI implemented an enhanced methodology for the MSCI Global
capitalization. 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-
The Russell 1000 Index ® measures the performance of the 1,000 largest companies in the Russell 3000. 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
The Russell 1000 Growth Index ® measures the performance of those Russell 1000 companies with higher capitalization of the underlying country index. Country Value/Growth indices are then aggregated into regional
price-to-book ratios and higher forecasted growth values. Value/Growth indices. Prior to May 30, 2003, the indices used Price/Book Value (P/BV) ratios to divide the
The Russell 1000 Value Index ® measures the performance of those Russell 1000 companies with lower price- standard MSCI country indices into value and growth indices. All securities were classified as either "value"
to-book ratios and lower forecasted growth values. securities (low P/BV securities) or "growth" securities (high P/BV securities), relative to each MSCI country index.
The Russell Midcap Index ® measures the performance of the 800 smallest companies in the Russell 1000 The following MSCI Total Return IndicesSM are calculated with gross dividends:
Index. This series approximates the maximum possible dividend reinvestment. The amount reinvested is the dividend
The Russell Midcap Growth Index ® measures the performance of those Russell Midcap companies with higher distributed to individuals resident in the country of the company, but does not include tax credits.
price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000
Growth index. 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
The Russell Midcap Value Index ® measures the performance of those Russell Midcap companies with lower following 16 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece,
price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
index.
The Russell 2000 Index ® measures the performance of the 2,000 smallest companies in the Russell 3000 The MSCI Pacific IndexSM is a free float-adjusted market capitalization index that is designed to measure equity
Index. 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.
The Russell 2000 Growth Index ® measures the performance of those Russell 2000 companies with higher
price-to-book ratios and higher forecasted growth values. Credit Suisse/Tremont Hedge Fund Index is compiled by Credit Suisse Tremont Index, LLC. It is an asset-
The Russell 2000 Value Index ® measures the performance of those Russell 2000 companies with lower price- weighted hedge fund index and includes only funds, as opposed to separate accounts. The Index uses the Credit
to-book ratios and lower forecasted growth values. 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
The MSCI® EAFE (Europe, Australia, Far East) Net Index is recognized as the pre-eminent benchmark in the Credit Suisse Tremont Index, LLC.
United States to measure international equity performance. It comprises 21 MSCI country indexes, representing
the developed markets outside of North America.
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
The MSCI Emerging Markets IndexSM is a free float-adjusted market capitalization index that is designed to investment purposes only. All properties in the NPI have been acquired, at least in part, on behalf of tax-exempt
measure equity market performance in the global emerging markets. As of June 2007, the MSCI Emerging institutional investors - the great majority being pension funds. As such, all properties are held in a fiduciary
Markets Index consisted of the following 25 emerging market country indices: Argentina, Brazil, Chile, China, environment.
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 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.
63

64. J.P. Morgan Asset Management – Index Definitions
All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not The Barclays Capital Taxable Municipal Bond Index is a rules-based, market-value weighted index engineered
include fees or expenses. for the long-term taxable bond market. To be included in the index, bonds must be rated investment-grade
(Baa3/BBB- or higher) by at least two of the following ratings agencies if all three rate the bond: Moody's, S&P,
The Dow Jones-UBS Commodity Index is composed of futures contracts on physical commodities and Fitch. If only two of the three agencies rate the security, the lower rating is used to determine index eligibility. If
represents nineteen separate commodities traded on U.S. exchanges, with the exception of aluminum, nickel, and only one of the three agencies rates a security, the rating must be investment-grade. They must have an
zinc. outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds
must be fixed rate and must be at least one year from their maturity date. Remarketed issues (unless coverted to
The S&P GSCI Index is a composite index of commodity sector returns representing an unleveraged, long-only fixed rate), bonds with floating rates, and derivatives, are excluded from the benchmark.
investment in commodity futures that is broadly diversified across the spectrum of commodities. The returns are Municipal Bond Index: To be included in the index, bonds must be rated investment-grade (Baa3/BBB- or higher)
calculated on a fully collateralized basis with full reinvestment. Individual components qualify for inclusion in the by at least two of the following ratings agencies: Moody's, S&P, Fitch. If only two of the three agencies rate the
index on the basis of liquidity and are weighted by their respective world production quantities. security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the
rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued as
The Barclays Capital U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31,
denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for 1990, and must be at least one year from their maturity date. Remarketed issues, taxable municipal bonds, bonds
government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major with floating rates, and derivatives are excluded from the benchmark.
sectors are subdivided into more specific indexes that are calculated and reported on a regular basis.
This U.S. Treasury Index is a component of the U.S. Government index. 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
West Texas Intermediate (WTI) is the underlying commodity for the New York Mercantile Exchange's oil futures provided by Barclays Capital, the index is rules-based, which allows for an unbiased view of the marketplace and
contracts. easy replicability.
The Barclays Capital MBS Index covers the mortgage-backed pass-through securities of Ginnie Mae, Fannie
The Barclays Capital High Yield Index covers the universe of fixed rate, non-investment grade debt. Pay-in-kind Mae, and Freddie Mac. Aggregate components must have a weighted average maturity of at least one year, must
(PIK) bonds, Eurobonds, and debt issues from countries designated as emerging markets (e.g., Argentina, Brazil, have $250 million par amount outstanding, and must be fixed rate mortgages.
Venezuela, etc.) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries
are included. Original issue zeroes, step-up coupon structures, and 144-As are also included. The Barclays Capital 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 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 The J.P. Morgan EMBI Global Index includes U.S. dollar denominated Brady bonds, Eurobonds, traded loans
have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. and local market debt instruments issued by sovereign and quasi-sovereign entities.
dollars and must be fixed rate and non convertible.
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 Barclays Capital General Obligation Bond Index is a component of the Barclays Capital Municipal Bond
Index. To be included in the index, bonds must be general obligation bonds rated investment-grade (Baa3/BBB- or The CS/Tremont Equity Market Neutral Index takes both long and short positions in stocks with the aim of
higher) by at least two of the following ratings agencies: Moody's, S&P, Fitch. If only two of the three agencies rate minimizing exposure to the systematic risk of the market (i.e., a beta of zero).
the security, the lower rating is used to determine index eligibility. If only one of the three agencies rates a security,
the rating must be investment-grade. They must have an outstanding par value of at least $7 million and be issued The CS/Tremont Multi-Strategy Index consists of funds that allocate capital based on perceived opportunities
as part of a transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December among several hedge fund strategies. Strategies adopted in a multi-strategy fund may include, but are not limited
31, 1990, and must be at least one year from their maturity date. Remarketed issues, taxable municipal bonds, to, convertible bond arbitrage, equity long/short, statistical arbitrage and merger arbitrage.
bonds with floating rates, and derivatives, are excluded from the benchmark. *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
The Barclays Capital Revenue Bond Index is a component of the Barclays Capital Municipal Bond Index. To
be included in the index, bonds must be revenue bonds rated investment-grade (Baa3/BBB- or higher) by at least returns were estimated to be +0.85% (with 69% of all CS/Tremont constituents having reported return data).
two of the following ratings agencies: Moody's, S&P, Fitch. If only two of the three agencies rate the security, the Presumed to be excluded from the November return are three funds, which were later marked to $0 by
lower rating is used to determine index eligibility. If only one of the three agencies rates a security, the rating must CS/Tremont in connection with the Bernard Madoff scandal. J.P. Morgan Funds believes this distortion is not an
be investment-grade. They must have an outstanding par value of at least $7 million and be issued as part of a accurate representation of returns in the category. CS/Tremont later published a finalized November return of -
transaction of at least $75 million. The bonds must be fixed rate, have a dated-date after December 31, 1990, and 40.56% for the month, reflecting this mark-down. CS/Tremont assumes no responsibility for these estimates.
must be at least one year from their maturity date. Remarketed issues, taxable municipal bonds, bonds with
floating rates, and derivatives, are excluded from the benchmark.
The Barclays High Yield Municipal Index includes bonds rated Ba1 or lower or non-rated bonds using the middle
rating of Moody’s, S&P and Fitch.
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65. J.P. Morgan Asset Management – Definitions, Risks & Disclosures
Derivatives may be riskier than other types of investments because they may be more sensitive to changes in
Past performance is no guarantee of comparable future results. economic or market conditions than other types of investments and could result in losses that significantly
exceed the original investment. The use of derivatives may not be successful, resulting in investment losses,
Diversification does not guarantee investment returns and does not eliminate the risk of loss. and the cost of such strategies may reduce investment returns.
Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise. Price to forward earnings is a measure of the price-to-earnings ratio (P/E) using forecasted earnings. Price to
The price of equity securities may rise, or fall because of changes in the broad market or changes in a company’s book value compares a stock's market value to its book value. Price to cash flow is a measure of the
financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting market's expectations of a firm's future financial health. Price to dividends is the ratio of the price of a share
individual companies, sectors or industries, or the securities market as a whole, such as changes in economic or on a stock exchange to the dividends per share paid in the previous year, used as a measure of a company's
political conditions. Equity securities are subject to “stock market risk” meaning that stock prices in general may potential as an investment.
decline over short or extended periods of time.
There is no guarantee that the use of long and short positions will succeed in limiting an investor's exposure
Small-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies to domestic stock market movements, capitalization, sector swings or other risk factors. Investing using long
since smaller companies generally have a higher risk of failure. Historically, smaller companies' stock has and short selling strategies may have higher portfolio turnover rates. Short selling involves certain risks,
experienced a greater degree of market volatility than the average stock. including additional costs associated with covering short positions and a possibility of unlimited loss on certain
short sale positions.
Mid-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies.
Historically, mid-cap companies' stock has experienced a greater degree of market volatility than the average Opinions and estimates offered constitute our judgment and are subject to change without notice, as are
stock. statements of financial market trends, which are based on current market conditions. We believe the
information provided here is reliable, but do not warrant its accuracy or completeness. This material is not
Real estate investments may be subject to a higher degree of market risk because of concentration in a specific intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies
industry, sector or geographical sector. Real estate investments may be subject to risks including, but not limited described may not be suitable for all investors. This material has been prepared for informational purposes
to, declines in the value of real estate, risks related to general and economic conditions, changes in the value of only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. References
the underlying property owned by the trust and defaults by borrower. to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any
forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or
International investing involves a greater degree of risk and increased volatility. Changes in currency exchange interpreted as a recommendation.
rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Also, some
overseas markets may not be as politically and economically stable as the United States and other nations. The views expressed are those of J.P. Morgan Asset Management. They are subject to change at any time.
Investments in emerging markets can be more volatile. As mentioned above, the normal risks of investing in These views do not necessarily reflect the opinions of any other firm.
foreign countries are heightened when investing in emerging markets. In addition, the small size of securities
markets and the low trading volume may lead to a lack of liquidity, which leads to increased volatility. Also, Contact JPMorgan Distribution Services, Inc. at 1-800-480-4111 for a fund prospectus. You
emerging markets may not provide adequate legal protection for private or foreign investment or private property. can also visit us at www.jpmorganfunds.com. Investors should carefully consider the
investment objectives and risks as well as charges and expenses of the mutual fund before
Investments in commodities may have greater volatility than investments in traditional securities, particularly if investing. The prospectus contains this and other information about the mutual fund. Read
the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by
changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a the prospectus carefully before investing.
particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan
international economic, political and regulatory developments. Use of leveraged commodity-linked derivatives Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc.,
creates an opportunity for increased return but, at the same time, creates the possibility for greater loss. Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc.
JPMorgan Distribution Services, Inc., member FINRA/SIPC.
Can’t find a slide?
© JPMorgan Chase & Co., April 2012.
Please visit www.jpmorganfunds.com/bench
Unless otherwise stated, all data are as of March 31, 2012 or most recently available.
to access slides from previous editions that are
now “on the bench”. Prepared by:
Andrew D. Goldberg, Joseph S. Tanious, Andrés Garcia-Amaya, David M. Lebovitz, Brandon D. Odenath and
David Kelly.
NOT FDIC INSURED ı NO BANK GUARANTEE ı MAY LOSE VALUE JP-LITTLEBOOK
65