Paradigm Guide to the Markets

1. FOR PROFESSIONAL CLIENTS ONLY | NOT FOR RETAIL USE OR DISTRIBUTION 1Q | 2014 As at 31 December 2013 ParadigmGuide to the Markets

2. Guide to the Markets Guide to the Markets is:- • A collection of easy to use charts on global markets • Designed to help you explain market events and economic data to your clients supporting their investment decision making. • A comprehensive information source • The guide provides a “go-to” source for market and economic information that investors need to help them make more informed investment decisions • Timely and relevant • The guide is released at the beginning of each quarter • Easy to use: “Simplify the Complex” • The pages in the guide are easy to understand. Most people are visual learners and the guide charts help to simplify complex concepts

3. How will this help my clients? Guide to the Markets helps you to have more engaged in-depth conversations with clients helping to build stronger relationships with them: It generates messages that are simple without being simplistic It does not offer opinions by itself – it is an illustrative tool It provides clients with information to help them make more informed investment decisions It enhances advisers understanding of the implications of the wider economic backdrop and the influence this has on their clients portfolios It helps their clients avoid being too driven by short term market events Arms advisers with ideas and insights to be shared with their clients

4. 77 GTM - UK Life Expectancy and Pension Shortfall If you’re 65 today, the probability of living to a specific age Perceived retirement shortfall by country Expected savings shortfall (years) Savings expected to last (years) 11 % 7 10 8 10 Couple – at least one lives to specified age 8 10 8 8 10 5 6 Other Assets and Investor Behaviour Men Women UAE USA Brazil Mexico France China India UK Australia Singapore Canada Average Source: (Left) ‘Analysis of the 2007 Period Life Table for Social Security Area Population’. US Social Security Administration, J.P. Morgan Asset Management. (Right) ‘The Future of Retirement: A new reality’ study by HSBC, J.P. Morgan Asset Management. Figures represent the expected portion of retirement which will not be covered by retirement savings based on survey data. “Guide to the Markets - UK”. Data as at 31 December 2013.

5. Global Purchasing Managers’ Index (PMI) for Manufacturing 2012 2011 2013 Aug Jul Sep Oct Dec Jan Feb Mar Apr May Jun Nov Aug Nov Jnl Oct Sep Dec Jan Feb Mar Apr May Jun Nov Expansion Global Economy Eurozone France Germany Europe Italy Spain Ireland UK US Developed Japan Brazil Russia India Emerging China Korea Taiwan Lowest relative to 50 PMI 50 Highest relative to 50 PMI Source: Markit, J.P. Morgan Asset Management. Heatmap colours are based on PMI relative to 50, which indicates expansion or contraction of the sector, for the time period shown. Expansion is percentage of 35 country universe covered by Markit with a PMI greater than 50 or a six month increase in the index greater than or equal to four. “Guide to the Markets - UK”. Data as at 31 December 2013. 4

6. Europe Fiscal Drag Government deficit reduction % of GDP % Global Economy 2010-2013 2013-2016F Source: IMF World Economic Outlook October 2013, J.P. Morgan Asset Management. Chart shows the change in the government budget deficit (excluding debt interest) as a % of GDP between 2010 and 2013 and between 2013 to 2016. *Ireland uses the period 2009 to 2013 due to distorting impact of banking sector bailouts in 2010. “Guide to the Markets – UK”.Data as at 31 December 2013.

7. UK Consumer Finances Household debt % of GDP Lending to individuals: secured and unsecured lending Three month annualised growth rate UK Economy Inflation (y/y) Income % 3Q13: 88.5% Annual income generated by £100,000 investment in a one-year bank deposit % £ 2007: £5,745 Dec 2013: £860 Source: (Top left and right) Bank of England, FactSet, J.P. Morgan Asset Management. (Bottom) Bloomberg, ONS, J.P. Morgan Asset Management. Orange marker points represent year on year inflation for that year and illustrates how the value of income that would have been eroded due to inflation. Inflation is realised inflation from 2000-2006, expected annual inflation thereafter. “Guide to the Markets - UK”. Data as at 31 December 2013.

8. UK Housing Housing starts and surveys Housing starts, RICS Housing Market Survey Home prices Indexed to 100 at December 2002 UK Economy RICS Survey Housing starts (000s) Mortgage approvals Number of loans approved for house purchase, thousands, seasonally adjusted Oct 2013: 67.7 Dwelling price (ONS) Nationwide Halifax Source: (Left) Halifax, ONS, Nationwide, J.P. Morgan Asset Management. (Top right) FactSet, Royal Institute of Chartered Surveyors (RICS), J.P. Morgan Asset Management. (Bottom right) Bank of England, FactSet, J.P. Morgan Asset Management .“Guide to the Markets - UK”. Data as at 31 December 2013.

9. Bull Markets Magnitude of bull run Total return, cumulative S&P 500 earnings and performance Index level, analyst estimates of the next twelve months of earnings 582 S&P 500 index level $ S&P 500 profits % Average: 179% Equities Length of bull run Number of months Average: 67 months 57 Source: (All charts) Standard & Poor’s, FactSet, J.P. Morgan Asset Management. 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 bull run from 9 March 2003 through 31 December 2013. “Guide to the Markets – UK”. Data as at 31 December 2013.

10. Emerging Markets Auto Consumption Auto sales Millions of units, SAAR Global Economy Passenger cars per 1,000 people In 2010* United States China India* China Brazil* South Korea UK Germany France Japan Spain US Source: (Top) BEA, China Automotive Information Network, J.P. Morgan Asset Management. (Bottom) World Bank, J.P. Morgan Asset Management. *Brazil and India as at 2009. SAAR is seasonally adjusted annual rate. “Guide to the Markets - UK”. Data as at 31 December 2013.

11. Fixed Income Interest Rate Risk Source: (Both charts) Barclays, FactSet J.P. Morgan Asset Management. *Interest rate volatility is based on the absolute value of the daily change in a balanced fixed income portfolio. Fixed income sectors shown are provided by Barclays Capital and are represented by – Treasury UK: Barclays Sterling Aggregate Gilts Index; Floating Rate – Barclays US Floating Rate Notes (BBB); IG credit: Barclays Global Aggregate – Corporates Index; High yield: Barclays Global High Yield Index; EMD sovereign ($): Barclays Emerging Markets – Sovereigns index; EMD corporate ($): Barclays Emerging Markets – Corporates Index; EMD sovereign (LC): Barclays Emerging Market Local Currency Government Index. Change in bond price is calculated using both duration and convexity. “Guide to the Markets - UK”. Data as at 31 December 2013. Interest rate volatility* Three month moving average of daily absolute change % 10y Gilt 10y US Treasury Fixed Income Estimated impact of a 1% rise in local interest rates on selected indices % Price return Total return Floating rate Treasury: UK Investment grade credit EMD USD sovereign EMD USD corporate EMD LC sovereign 1-3 years 5-7 years 10+ years High yield

12. Annual Returns and Intra-year Declines FTSE AllShare Index intra-year declines vs calendar year returns Despite average intra-year drops of 16.0% (median 12.6%), annual returns are positive in 21 of 28 years Intra-year decline Calendar year return % Equities Source: FTSE, FactSet, J.P Morgan Asset Management. Returns are based on price only and do not include dividends. Intra-year decline refers to the largest market fall from peak to trough within a short-term period during the calendar year. Returns shown are calendar years from 1985 to 2013. “Guide to the Markets - UK”. Data as at 31 December 2013.

13. Asset Class Returns Ten-yr Ann. 4Q13 2012 2008 2011 2004 2005 2006 2007 2013 2009 2010 Other Assets and Investor Behaviour Source: FTSE, MSCI, Barclays, Dow Jones/UBS, FactSet, J.P. Morgan Asset Management. Returns are in base currency of the index. Annualised period covers 2004 to 2013. Govt bonds: Barclays Global Aggregate Government Treasuries; HY bonds: Barclays Global High Yield; EMD: Barclays Emerging Markets (USD); IG bonds: Barclays Global Aggregate – Corporates; Cmdty: DJ UBS Commodity; REITS: FTSE NAREIT All REITS; World ex UK: MSCI World ex UK; All share: FTSE All Share; Cash: JP Morgan Cash United Kingdom (3M). Portfolio; 20%: All Share; 10%: government bonds; 15%: IG bonds; 15%: EM equities; 10%: World ex UK equities; 10%: HY bonds; 5%: EMD; 5%: commodities; 5%: cash; and 5%: REITS. “Guide to the Markets - UK”. Data as at 31 December 2013.

14. Range of fund documents: equipping you for the client review • Interactive webconferences – details on how current market conditions are affecting the funds • Monthly commentary – the fund’s investment desks reflect on the previous month’s activity • Client brochure – providing in-depth focus on reasons for investing in fund • Sales Aids – updated with monthly performance, providing an overview of the fund • Client flyers – for use with your clients, providing an overview of the fund • Portfolio discussion documents – link market commentary focused on individual asset class or region to specific slides in the Guide to the Markets pack • Bi annual fund manager videos – for fund performance and views on future investment opportunities

15. A range of investment solutions catering to individual clients’ needs Single Strategy Funds - Morningstar OBSR rated Managed Solutions • JPM Europe Dynamic [ex-UK] Fund • JPM Emerging Market Income Fund • JPM Emerging Market Fund • JPM Global Consumer Trends Fund • JPM Natural Resources Fund • JPM Strategic Bond Fund • JPM UK Dynamic Fund • JPM US Equity Income Fund • JPM Multi-Asset Income Fund • JPM Fusion Income Fund • JPM Fusion Conservative Fund • JPM Fusion Balanced Fund • JPM Fusion Growth Fund • JPM Fusion Growth Plus Fund For more information relating to the Fund, please refer to the relevant Fund’s Key Investor Information Document (KIID) 14

16. For further information about the Market Insights Programme and range of support from J.P. Morgan Asset Management Visit jpmorgan.co.uk/adviseror call 0800 727 770

17. J.P. Morgan Asset Management FOR PROFESSIONAL CLIENTS ONLY – NOT FOR RETAIL USE OR DISTRIBUTION. This is a promotional document and as such the views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the product(s) or underlying overseas investments. Both past performance and yield may not be a reliable guide to future performance. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment product(s), there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its affiliates worldwide. You should note that if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also take note that information and data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA Privacy Policy which can be accessed through the following website http://www.jpmorgan.com/pages/privacy. Investment is subject to documentation (Prospectus, Key Investor Information (KIID) and Terms and Conditions), copies of which can be obtained free of charge from JPMorgan Asset Management Marketing Limited. Issued by JPMorgan Asset Management Marketing Limited which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 288553. Registered address: 25 Bank St, Canary Wharf, London E14 5JP. Unless otherwise stated, all data as at 31 December 2013.