2026 Mid-Year Outlook

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Hi, good morning. Thank you for joining us today for our Mid-Year Outlook Webcast. I'm Wei-Heng Chen, Global Investment Strategist on the Investment Strategy Team here in Asia. And I'm joined by my colleagues, Yuxuan, who heads up Rates and FX Strategy in Asia, as well as Cameron, our Senior Equity Strategist based here in Asia as well. So we're going to walk through our Mid-Year Outlook, which is titled Promise and Pressure. You would see that it is similar to what we talked about at the start of the year, if you have been following our views. And what we'll do today is to recap on some of the themes and ideas we talked about at the start of the year, discuss where we see them going from here, and also investment ideas that you can take away with you in your portfolio.

And so we're going to talk through each of those themes and we will have a Q&A at the end. So if you do have questions throughout this presentation, do scan the QR code on the top right-hand corner of the presentation to submit your questions. We'll get to them at the end of the session. Now, before we jump into those themes and ideas in full, we always like to hold ourselves accountable for the recommendations that we gave at the start of the year. So over here, I have a chart of the year-to-date performance of various asset classes. So the ones in blue are the ones that we recommended. They did well and we're still positive. The ones in light blue, those work maybe a little less well, we're no longer positive. And the ones in orange are some ideas that may have seen some challenges at the start of the year, but we continue to see opportunities in those ideas and we'll walk through them throughout the presentation as well. But over there, I would just highlight a few of the ideas that did quite well on the left-hand side. At the start of the year, we were positive on US equities, especially technology and semiconductors in particular. We were very positive on their prospects for earnings growth and they have done very well. And we were also very positive on emerging markets, broad emerging markets with a lot of focus again on Asia, specifically technology and semiconductors as well. So those ideas have really been a key driver of equity market returns this year. So you could see that it's primarily an equity story, the blue bars on the left, equities have been a key driver of market returns year to date. A 60-40 would have done pretty well. You're up about 8% this year. So again, staying in a diversified portfolio would have netted you some pretty healthy returns so far. And we can now focus on the orange bars. So gold, it was the big outperformer in 2025. This year it hasn't done quite as well. It's seen a lot of volatility since the outbreak of the war. We'll talk through the reasons why and why we're still positive on that asset class. Defense technology, it's one of the themes that we liked. It surprisingly hasn't done well in light of all of the geopolitical news that's going on. And we'll talk through some of the reasons why and why we like it as well. On the right-hand side, you would see that alternative assets like infrastructure and hedge funds, they have outperformed fixed income. They're doing what they're meant to do, delivering steady uncorrelated returns to public markets. And they have served that purpose so far. But if you look at fixed income, clearly it's been a bit of a challenging year for fixed income so far. We focus on the short duration, really dialing back on duration risk and focusing on income. So we'll talk for our fixed income views as well. And finally, on the right-hand side, Chinese equities have been an underperformer this year. It's been a little disappointing, but we'll go through again the reasons why and where we see opportunities. So far, I would say it's a pretty decent scorecard, I would say for our recommendations this year. But definitely we want to continue focusing on what we see can deliver returns going forward.

Now, the free investment themes of our outlook are fragmentation, AI, and inflation. So these are the free themes that we see driving markets, not just for this year, but potentially for several years going forward. And really, we do see these as durable themes that we should prepare for, we should invest into, and also risks that we should hedge against. So we're gonna go through each one of these throughout the presentation, and we'll start off with fragmentation. Now, there is no shortage of headlines around the Middle East conflict, and clearly those headlines are changing every day. So unfortunately, whatever we say today might be different in 24 hours, depending on the political and geopolitical situation. But essentially what we want to do here is to try to anchor the outlook for the conflict around three broad scenarios. So I'll start off on the right-hand side. We have a more severe disruption scenario where the street remains closed for an extended period of time, further attacks happen, and they destroy a lot of the energy production facilities. We also have a scenario too where it's a persistent disruption. There's some destruction to these facilities, but essentially it remains partially closed, and there is a risk premium that keeps oil prices elevated. And we have the more optimistic scenario where this situation is resolved in weeks, oil supply comes back into the market, and there is a little bit of risk premium that keeps prices elevated, but it's largely a normalization of oil prices. So you can see those three colors, we've shown it on the chart on the left, and we are also showing the oil prices based on spot prices and futures prices as well. So what you'll see today is that markets are somewhere between scenarios one and two, and we are moving again from closer to scenario two, now to closer to scenario one. Obviously we saw some headlines over the past couple of days around a deal, a lower likelihood of a deal attacks elsewhere in the Middle East, which could change the situation, but really we see markets bouncing between scenarios one and two with a trend towards a gradual resolution over the next six to nine months. So I would say the risk is there for fragmentation, and there's a lot of volatility day to day, but really we should focus on how we should prepare portfolios for the longer term around the risk of fragmentation and trying to capture those opportunities. But before we get to that, I want to turn over to Yushuan and get a sense of this conflict and what's the macroeconomic impact of this conflict on global economy? 

Right, thank you, Weihan. Good morning. So divergence is the key word here, even though the energy disruption is de-acculationary for the entire world, but under the hood we do see some economies being more resilient than the others. For example, we think the US, Australia, China, some parts of the emerging markets would fare better than places say Europe, UK, and Japan. So now let's start from where we are positive on.

The US is 100% energy independent, but inflation is still a problem, which is a task on consumers. The US consumer came into this conflict in a relatively healthy shape. But retail sales data until last month is still pretty robust. And the ongoing cat-pack cycle is providing a strong support to the economy. And on the policy side, the Fed also has a little bit more bandwidth to stay put. So we think as long as the inflation impulse is not too sustained, the US economy should remain steady. And that recent downward revision to growth, I can say on the right-hand side, should be very stronger because that was very high expectation coming into the year, and we think that dark blue line could pick up from here. And moving on to China, which is interesting, because China is still an energy importer, but its self-sufficiency rate has gone up a lot over the recent years. It's now around 80%. And its energy mix is more diversified and less reliant on oil and gas.

The Chinese economy also came into the conflict with a deflationary backdrop. And the government has the ability to impose some price controls on energy so that inflation transmission to consumers is relatively low. And the fiscal burden for the government to do that is also quite limited.

We turn more constructive on the Chinese economy right before the war without knowing the world would happen. But since then, what happened did not change our view. So we are still constructive at this moment. And some other EMs, for example, Taiwan and Korea also show incredible resilience in this. Both economies are, even though they're highly reliant on energy imports, they are both export-oriented economies that have a very strong position on the semiconductor supply chain. And their pricing power is so strong that they can pass on any additional cost to whoever imports their products. So we think that very strong demand from the AI side is going to more than offset the negative impact from energy prices for these economies. And we actually think both of them can achieve high single-digit GDP growth this year. So we're also positive. But some of the other economies are not so lucky. For example, we think Europe and Japan were more exposed to the risk of energy shortage if the war prolongs. And thus, the inflationary pressure will be more sticky in these economies. And their central banks, in turn, will be forced to hike rates. And that will be another layer of pressure on the economy. And very expensive energy subsidies are going to impair their physical health as well. So we are more cautious on those parts of the world. And all of this means that we have a barbell preference on the global economy. So we prefer US and emerging markets over Europe and Japan. And that will have implications on how we position portfolios.

Great, thank you, Yuxuan. I think that's a really clear illustration of kind of the global macro view, what economies are faring worse, what could do a little bit better. And that also has implications for how we like those markets as well. So to kind of think about the global backdrop over here, what we are seeing is that the world has become much more fragmented and governments need to respond. So on the left, we have an index of geopolitical risk. And clearly, it has been much more elevated since 2022. We have no shortage of events and situations like Russia, Ukraine, Israel, Hamas, tariffs, and US Iran today. Clearly, we're dealing with a world where geopolitical risk and events have become the norm rather than the exception. And if you look at the chart on the right, that is showing military expenditure as a percentage of GDP for various economies. And they are clearly spending less or roughly the same as they did at the maximum levels of the past 30 years. So the point of view here is that the economies are starting to ramp up on spending. There is potential for them to grow spending to reach previous peaks or even surpass previous peaks given the new geopolitical reality that the world is dealing with. So there is room for governments to invest more, to increase resilience, and to boost areas of the economy where they see vulnerabilities in this much more fragmented and dangerous world. So how do we capture those opportunities? Where do we find areas to invest into? I'll hand it over to Cameron to take us through some of those opportunities. Thanks, Weihan. So yeah, as Weihan mentioned, I guess the obvious one has been on the defense front where it's become almost a regular occurrence in terms of having these geopolitical events happening. Traditional alliances are also being tested as well. And we've seen that with Europe in terms of a lot of the budgets that have been set for defense-related type spend, they've been ratcheted up. But in addition to that, in terms of what's happening in the Middle East, I think that a lot of the Middle Eastern countries were caught by surprise in terms of some of the attacks that they've seen from Iran over the last few months. And so I can totally foresee going forwards that that would be high on the agenda for a lot of these countries around the Middle East to think about increasing their defense spending as well in order to deter further attacks going forwards as well. So defense is clearly one area, but it's not the only area I think that is going to be a priority for governments around the world in terms of thinking about international security is one from a defense perspective, but also on the power front where we think that energy independence is going to continue to be one that is going to be high on the agenda. Yu Shuan talked about China, how over a number of years, if not the last decade, there's been a lot of efforts to reduce our reliance on imported oil and fossil fuels. You've seen a big move towards renewables. We're starting to see that in other places around the US as well. In terms of the big data center build out to supply these data centers, power is also a big area of focus as well. And in the US, there's a excess of gas. And so a lot of gas related type turbines are being used to power these data centers. But in addition to that, you're starting to see areas in terms of whether it's fuel cells, whether it's renewable energies, just doing things in a way to reduce reliance on imported oil and imported power so that they can become more sufficient. In addition to that, it all started with COVID. And since then, we've continued to see supply chain related type disruptions. And with the world becoming more fragmented and less integrated, countries around the world will feel that they need to be more self-sufficient in their own supply chain in order to reduce these related type risks. This means different things for different countries in China or back in this part of the world, is definitely gonna be more related to semiconductor self sufficiency. An area where they used to import over 80% of their semiconductors, we think that that continues to go down in the years ahead. In the US, it's going to be less reliance on rare earths and rare minerals, say for example, where a lot of efforts and a lot of money is going into increasing their own supply. And you can really see that on the right hand side of this chart, this is focused on the US, but I think it's representative around the world where governments are prioritizing these related type spend and you're seeing that spent happening as well. We have seen hyperscaler-related capex going up, but even excluding hyperscaler-related type capex, we are seeing a general increase in trend in terms of capital investment in the country. And this is also helped by government policy. And we do think that these are going to be areas that will continue to be front and center of government priorities, which means that these are not areas that are likely to be cut in terms of spending as well. Great, thanks, Cameron. So to summarize this section, really what we're seeing is fragmentation picking up in the world. Governments and businesses are having to respond with more spending and that creates risk, but also plenty of opportunities for investors to get invested into. So that rounds up the fragmentation theme. Now we're onto theme number two, which is AI. And clearly this has been a key driver of market returns this year. So before we jump into that, I would just take a quick look at the state of AI today. So what we're seeing is that models are improving. The chart on the left shows the time that AI take to complete tasks that humans can do at a certain level of accuracy. Again, it's not perfect, but what this shows is those dots are moving up and to the right, and that just means that AI model performance is improving at an exponential rate. Now that model improvement has led to a steady growth and adoption, so that's the chart in the middle. It shows the AI adoption rate for companies across the US and clearly that has grown very steadily from five to 10% a couple of years ago, now to around 20%. So again, it's not a dramatic growth, but it's a steady type of growth rate in adoption of these AI models. And all of that adoption, these companies and individuals are willing to spend. So that rise in adoption and increase in spending has boosted the revenues of AI companies. We're showing two over here, the two leading ones, and Froppig and OpenAI. They have clearly seen a huge rise in reported revenue over the past couple of years. So what we're seeing with AI is that yes, demand for AI continues to go up and money is being spent in this space. Now, what does that mean for equity markets? I'll hand it over to Cameron to take us what we see over there. Thanks, Bern. And so on this particular slide is really just giving a recap of what we've seen through the first quarter earning season in the US. And once again, for the sixth quarter in a row, we're seeing double digit earnings growth in the US. Clearly the star of the show at the moment is the technology sector, which generated over 50% earnings growth in the first quarter. But other than the technology sector, we would say that a number of other sectors also showing strong double digit related type earnings growth as well. We would highlight financials there, industrials as well. And more importantly is that valuations have actually not become unhinged. If anything, with the technology sector growing the way it is, technology valuations are below five-year averages at the moment. So we don't think that the market is particularly expensive. And we do think that what we're starting to see in terms of why the market's been particularly strong in the US is this continues to be an earnings driven related type story. We're expecting this to be another exceptional year of earnings growth in the US. We're expecting close to 20% earnings growth this year. And probably another double digit earnings growth next year as well. So this relatively strong purple period of earnings growth is why equity markets have been as resilient as they have been to this point in time.

And I think that this is not only a US story. And we're starting to see that in emerging markets as well. And so two regions that we're positive on from an equities perspective. One is on the S&P in the US. And the other is emerging Asia. And both of those we're seeing in a high single digit, low double digit type return over the next 12 months. And I think that what we really wanted to show on this particular slide is the red bar. The red bar is how much earnings revisions have gone up since the beginning of this year. And you can see both the regions that we're most positive on are the ones that we've seen the biggest earnings revisions. So we do continue to think that over the next 12 months, our focus continues to be on fundamentals. And fundamentals being where earnings revisions are the strongest. In the case of the US, we're starting-- we've seen that coming through first quarter earnings. And we're seeing something similar in Asia as well. You can see that in Korea, which has been the standout, we've seen over 100% positive revisions year to date because of a very strong memory related type cycle. So both of those regions continue to be areas that we think that clients should have exposure to. And if we maybe double click a little bit in terms of the-- Yeah. But then for Cameron, when I look at this chart and the returns for Asian markets, they have been impressive. 100% for Korea, over 50% for Taiwan. And coming from the point of view of an investor, I do wonder, can it still keep going up? It's up so much already. Is it too late to get into this trade? Sure. I think that if we just take a step and a deeper look at Korea.

From the end of March through to about a week or two ago, earnings revisions in Korea are up 40%. So in a very short period of time, we've seen continued strength and continued upside revisions in the Korean equity market. And I think that this is a particular interesting slide in terms of why we're positive on EM and really double clicking into that. And I would say that while we're positive on the US, what we're seeing in terms of some of the metrics, if we look at the top-down perspective on Asia, is we're expecting over 50% earnings growth this year in Asia and probably another close to 20% earnings growth next year for a market trading at around 12 and 1,500 times earnings. So we think that valuation's in the right place, and earnings growth continues to be exceptionally high. And if anything, seeing positive revisions as well on the back of that. So a number of these markets at the moment, we think, particularly given the earnings growth, remain relatively inexpensive. And a lot of the return-- and if we go back maybe to the previous slide, I think that what's really interesting is the returns this year, both for the US and also for EM, have all been driven from upward earnings revisions. We haven't really seen much multiple expansion, which is what keeps us relatively comfortable and constructive on equity markets. Great. So when I look at this chart, clearly semiconductors exports are up exponentially. They're really part of the whole AI trade. But one market stands out when I look at the left-hand chart and also the chart at the start of the presentation, China. China is a big part of Asia EM, but yet it has underperformed this year. So why is that happening? And why are we still positive on that market? Sure. I think that that's a great question and one that we're actually getting a lot from clients. And I think that if you look at the previous slide and you look at the earnings growth expectation for 2026 as an example, Korea is expecting 250% earnings growth. Taiwan's expecting close to 40%. But China is only expecting mid-teens. So the starting point is that capital is going for where the earnings growth is the strongest to start off with. So I think that that's been one area where I think money is chasing where earnings growth is the strongest. So that's probably been one of the reasons. And I think on the next slide is really when we think about what's happened to China is we haven't seen a meaningful revision in terms of earnings. Earnings, if anything, have been flattish in terms of expectations. And a lot of this has been due to an e-commerce price war that's been going on in China, which we think that we're getting towards the end of that. We think that that probably peaked in the third quarter of last year in terms of the subsidies in fighting for market share. And then into the first quarter of this year, things incrementally got better. We saw that with some of the results overnight from E-Twine as well. And we do think that as companies like Alibaba, say for example, are thinking about reinvesting in their business to grow the data center business, they will probably start taking their foot off the gas in terms of doubling down on subsidies and unprofitable ventures on the e-commerce front. So going forwards, we do think that earnings delivery will continue to get better each subsequent quarter from here. And I think that the starting point is interesting right now as well. The underperformance of China versus the rest of Asia is now at extreme levels on the right hand side of this chart. So the starting point is that the market's already underperformed quite significantly by about 40%, that we think that the risk reward's starting to look attractive at these levels. Great. Thanks, Cameron. So we talked a lot about these great opportunities in public markets. And clearly, this has been an equity market story. But what we would highlight to investors is don't forget to take a diversified approach to this AI fee. Clearly, these stocks are very attractive. But don't forget private markets, especially if you're looking for the next phase of growth in AI when it comes to the application layer. So a couple of interesting charts here. On the left, it's the number of US public companies. And over the past several years, you would see that the number has actually come down. So there are fewer publicly listed companies out there. And a key reason for that is that many companies are staying private for longer. So that's what the chart on the right is showing you. What we see here is that when tech companies, when IPO in the late 1990s, they tended to be much younger. They tended to be much smaller. And today, given the big names that potentially might be doing an IPO in the coming weeks and months, you see that those companies are much bigger. So essentially, they're skipping past the point of being a small mid-cap company and listing when they have become a large-cap company. So a lot more of that growth trajectory is happening while these companies are private rather than after they go IPO. So if you want to capture that period of growth, you need to get invested while they're in the private stage. So this is what we mean by taking a diversified approach. You can own many parts of the AI story on the public market. But for many parts of the AI story, you need to look into private markets as well. And this is what we are recommending investors to look into in the private market space when it comes to AI. So that wraps up our AI view. We are positive on the US, some of the sectors there, especially tech. We are positive on emerging markets. And that includes Korea, Taiwan, and China as well. And we're going to move on to the final theme over here. And this is something that might be quite existential. It covers inflation, preparing for inflation's structural shift. And what do I mean by that? What we're seeing today on the left-hand side is a move up in the inflation rate. So the current rate is in the blue. And the average rate of the previous two cycles are in the orange. So you would see that the current inflation rate is just a lot higher than the past couple of cycles. And on the forward-looking basis, when we consult our long-term capital market assumptions, and also forward pricing by the market, they expect inflation rates to stay above the previous cycles and above the 2% target for most central banks as well. So we are seeing potentially just stickier inflation for longer.

And similarly, we see an increase in debt for many economies around the world. So that's the chart on the right, showing government debt levels as a percentage of GDP.

We talked about earlier how governments are just spending more to counter all of these geopolitical risk and fragmentation forces. So we are seeing a global trend. This is not just a US phenomenon. It is a global phenomenon where governments are taking on more debt because they're spending more to bolster their economies. So given this backdrop-- high inflation, more spending-- central banks have a pretty challenging outlook. And we'll focus on the Fed and what they would do. So Yuxuan, I'll pass it over to you to talk us through, what's our outlook for the Fed? What are they going to do? They're dealing with a lot of challenges, a new chair as well. So what's going to happen? Yeah, you're right. The job is definitely not easy for the new Fed chair. If you look at the dual mandate of the Fed, it's a little bit of a mixed back on both fronts.

The US labor market has been cooling for a long time. But just over the recent months, it's showing a little bit of tightness. You can see the unemployment rate decline by a touch recently. So the Fed really needs to figure out whether that data is just backward looking or is really pointing to actual tightness. But at the same time, the world impact is really hitting the inflation data. We're seeing the headland gauges picking up. But our view on the inflation data is the impulse is still pretty concentrated in energy related categories. And more importantly, long term inflation expectation is still pretty anchored. And it's not showing the signs that the inflation impulse is going to broaden and sustain. So our base case for the Fed is we think the most likely outcome is for the Fed to stay on hold for the next 12 months. Now coming into the year, we expected one cut, which was at that time more hockish than market consensus. Now we are seeing a milk cut. It becomes a little bit more dovish than current market pricing.

But given how we see the inflation dynamics, we do think that the bar for the Fed to reverse into hiking is very high. So I think the Fed hiking risk is something that we are all very aware of. When we look back just a few years to 2022, it was high inflation, the Fed hike, markets did really badly in that year. So can we really avoid a repeat of 22? How should we think about positioning given the risk of that happening? Yeah, that's a pretty good question. There are two key difference with 22.

This time around, the inflation is largely still supply driven. It comes from one off energy supply shock. Usually this kind of inflation is less likely to be sustained and broadening out. Back in 22, that inflation was both supply and demand driven. It's actually turned out to be more demand driven as time goes by. And that's because consumers at that time was very strong. They're sitting on a lot of excess savings coming from the cash transfers during the pandemic. So it's really the loop of upward loop for inflation to be very sticky. And we don't have that today. The consumers are in very different shape today. And the second difference is in 2022, the Fed starts from zero and a QE. And so it's very, very easy accommodative policy stance. Today, the Fed is still at 375 for its policy rates. It's still slightly restrictive. It's higher than the usual. So I think that gives the Fed a lot more bandwidth to just wait and see. So we think the best way to describe the monetary policy environment right now is it's restrictive but stable monetary policy.

But having said that, for the yield curve, we do think there is a chance for it to get a little bit more steeper. And the reason for that is really a lot of things that Wei-Heng, you have been saying. It's structurally higher and more volatile inflation of the entire world that would result in the risk premium that's mostly working to the long end of the curve. And also, the fiscal practice around the world is becoming less disciplined. And you can see on the right-hand side, the long end yields going up is really a global phenomenon. And it seems to be more structural than just cyclical. So we do think the yield curve can be a little bit steeper. So what that means for how we position fixed income is we will stay firmly short duration. We think the risk reward for short duration fixed income is still pretty good. It gives you decent carry, stable income, liquidity and flexibility, and also very limited exposure to interest rate risk. We think right now that two to three year part of the curve is have the fat hiking expectation fully priced. And from a portfolio perspective, we want to stay like five years and in.

And briefly for equities, I think it's usually a stable monetary policy environment. And modestly, grant higher yields will not be a big impact on the overall risk sentiment. So that doesn't go against what Cameron has been saying. Great, thank you, Yuxuan. So really understanding this longer term yields might see a lot more risk and volatility given these big forces. We want to focus on shorter duration over here. Now, a very related topic and something that was really popular in the past couple of years has been the idea of dollar diversification or de-dollarization, right? This is a big theme in markets last year. And related to that has been a huge run up in gold as a top performing asset class in 2025.

So thinking about those two topics, right? And they're clearly related. What's going to happen with the dollar? Like do we still expect the dollar to weaken? Should we be getting out of it? And when it comes to gold, why hasn't it done well this year, right? And is it really like, is the gold story over? Is that trade over at this point of time? Yeah, I think over the short term, the dollar will stay supported, especially against Euro sterling and yen. So in the X, Y turns, he's going to be supported over the short term. But I think for longer term positioning, dollar diversification is still pretty necessary because the dollar right now is still very overvalued. And that overvaluation was financed by constant international inflows over the past 15 years. And, but going forward, as we move into a more fragmented and multi-polar world, I think a lot of sovereign practitioners like reserve managers, sovereign wealth funds, they are going to allocate their money in a more diversified way.

So it's not just a dollar. So I think for our clients, it's also the way that they should be looking at their portfolio as well. And on that front, allocating into gold is a good way to implement.

We have been pretty bullish on gold for three and a half years now. In recent months, so gold prices under a lot of pressure, especially since the war broke out. Because the war is not just geopolitics, right? It brings inflation, it's higher real yields, higher dollar, and some idiosyncratic for selling by central bank. So that's a perfect storm for gold prices to be under pressure. But as we move on ultimately from the immediate impact of the Iran war, right? The post Iran war landscape actually supports the central bank to further diversify their foreign reserves into gold. They want to reduce the reliance on any settlement system by a certain country. So that's actually still supports our medium term bullish view. And more importantly, from a portfolio construction perspective, it adds diversification benefits, right? Chart on the right, it's actually pretty interesting.

We can see that over the past 20 years, 5% allocation to gold would in 78% of the time increase the sharp ratio of a 60-40 balanced portfolio. Right, so that argues for why we want to have a small position for gold from a portfolio perspective. Right, so that just means that it improves the risk adjusted returns for a portfolio when you add a little bit of gold on top of what you already have. So when we think about kind of again, portfolio construction more broadly, how do we hedge against these types of risks? When you have higher inflation, higher inflation volatility, we want assets that can provide returns that are less correlated to public markets or even returns that are somewhat correlated to inflation. Actually, inflation protection is really hard to find in markets, which is why we need to turn to the alternatives world to find that. So the chart here shows correlation to inflation on the bottom axis and volatility on the vertical axis. So what this shows here is that on the left, but the bottom left, these are not volatile assets, but they have again, negative correlation to inflation. So they are quite weak at hedging against inflation risk. And these are your longer term type of fixed income type of product. What you see on the bottom right, these are assets that have low volatility, but also have slightly positive correlation to inflation. So these are assets that tend to do well when inflation is a little higher. And we've circled that out in green and we highlighted two of those types of assets, infrastructure and diversified hedge funds. Really, these are asset classes that provide returns that are quite independent of how global markets are moving. And they do provide some level of inflation protection given the slight positive correlation to inflation. So these are assets that are useful to have in a portfolio when you're thinking about the risk of higher, more volatile inflation over the longer term. And these again, are good long term positions to have in a portfolio to help hedge against those types of risks.

So we've talked through our three big themes and I'll leave this chart here for a while. Really, our view is that these forces will continue to drive economies and markets for the foreseeable future, fragmentation, inflation and AI. And really, there are many things that you can do about it to capture opportunities to reduce risks in your portfolio. So for fragmentation, we continue to like the US and emerging market barbell. We like security and defense investments. We like national champions and strategic industries. And for markets that might be a bit challenged by global fragmentation, we want to focus thematically on themes that we like in places like Europe and Japan. On inflation, we talked about core infrastructure, transportation and hedge funds. Gold can be a good addition, a diversifier to the portfolio. And we really want to focus on the short duration of fixed income, avoiding the long end. And on AI, we still love the story. We want to allocate the beneficiaries of AI spend. We like the energy and power story that's related to AI as well. And we want to use private markets to access the next generation of AI applications and the next part of the AI growth story. And we want to avoid vulnerable sectors and some legacy companies that might be impacted by that. So I'll leave this here, but I would encourage everyone here to submit your questions through the QR code on the top right. We already have a bunch of questions coming in, so we can jump straight into the Q&A for the next 10 to 15 minutes. So the first one we have is really, it goes back to one of the earlier points we made. Defense actually hasn't done all that well this year from equity market perspective. So why haven't they done so? When you think about what's going on in the world with war, with conflict, with increased spending, why hasn't defense companies performed amazingly? Sure, and I think that that's a really great question. And I think that how we're thinking about it at the moment is that actually a lot of the defense companies did well going into the risk. So as in the event, when there was heightened risk of the US potentially attacking Iran, that's actually when the defense companies did the best. But once the conflict actually started, you actually started to see these defense companies start to, the share prices not continue to move higher. And I do think that where you're starting to see is we had been on the view that we would likely need to be on a de-escalatory path. And with that sort of a de-escalatory path, a lot of the defense companies, I think, faced two things. One is that they started to be in a negative news cycle. So news was getting better in terms of their potentially being a deal. And this would naturally in the short term lead to a lot of these defense companies for people to reduce exposure to them and move to what would benefit in the event that a conflict was going to be resolved soon. I think that the fund flow side had been one of those areas that had been impacting them. And another thing is a lot of these defense-related type companies also have non-defense businesses as well. So they do have exposure to aerospace, say, for example, where travel-related type demand has been reducing. You've seen a few bankruptcies in the US in terms of airlines. So that's been a little bit of an impact as well in terms of their non-defense-related type business. But what's most important is what do we think going forwards? And we do think that as we start moving towards the market starting to price in or as we start moving to some sort of a negotiated deal between the US and Iran taking place, we do think that that starts to be a good opportunity to rebuild positions in the defense sector where we do think that going forwards, budgets around the world, even though we have some sort of a deal, whether with Ukraine and Russia when that eventually sees some sort of a stalemate and some sort of a deal, I think that European countries overall, as a starting point, will not feel any safer. And similarly in the Middle East as well. What you're seeing at the moment in terms of heightened uncertainty and security were likely to mean Saudi Arabia, UAE, a lot of-- all of these countries are likely to be increasing defense spending on the back of this. So if anything, I think that the outlook's gotten better. But it's just that we've been going through a negative news flow cycle. So I do think that with this sort of a pullback, over the next one to two months, we'll probably create an opportune moment to be adding exposure to defense-related type sectors. Great. Thanks, Cameron. And I think the other kind of theme that I'm seeing across the questions is concerns around, I would say, concentration risk in AI, the AI kind of space. And if you look at markets like Korea and Taiwan, really a few large companies make up a huge part of the index. So again, I think that the general fear out there that I'm hearing from clients is that, OK, we are very concentrated in a few large companies. It seems that everyone's owning these companies. Is it a bubble? Is there too much money flowing into these ideas? And why are we still positive on that going forward? Yeah, and I think that's why we really wanted to anchor the conversation today in terms of what's happening on the earnings delivery side.

And markets, all these markets, even though they've done well, whether Korea's up over 100%, Taiwan's done well, the US has done well. But overall, this has all been driven by positive earnings revisions. We saw how quickly anthropic revenues have been growing. They went from $9 billion in December in terms of annualized revenues to $45 billion back about three weeks ago, probably higher today. And that sort of increase in terms of revenues driven from the AI side is leading to companies not only increasing cap expense this year, but likely to mean that next year's going to see another significant increase. We heard overnight in terms of Google that they're going to be looking to raise $80 billion of equity capital of some sort because they're seeing that next year's going to be another big year in terms of cap expense increase. So what investors are starting to see is not only is 2026 going to have a strong year in terms of cap expense, but this visibility into 2027 and potentially into 2028 as well. So that keeps us relatively constructive. We do think that it's been healthy because a lot of this increase in share price has been because of earnings delivery, not because of valuation expansion. I think an important part is outside of these names, is there anything that's interesting as well within these? And I think that South Korea, while memory clearly is a very, very big part of the story, but below that there's a lot of other interesting facts as well. We think that excluding memory, the Korean earnings, ex-memory earnings growth is still around 40% to 50%.

So even excluding the memory companies, earnings delivery remains pretty strong. And there's a lot of very positive themes that are playing out. When you play about electrification in the US, a lot of Korean companies are supplying into that as well. On the defense side, they have defense companies as well. And also, they do have a value approach in terms of getting companies to be more accountable to shareholders as well. So we do think that there are a number of secondary factors that are positive in Korea. And we can see that this increase in demand for memory is actually making the economy grow faster. It's probably going to create a wealth effect as well. That's going to have a second order effect in terms of broadening out the companies that are going to benefit from this AI cycle.

Thanks, Cameron. So just one last one, follow up on Korea. Given the higher earnings growth, why is the valuation so low? Why hasn't it rerated more? Sure. Yeah, I think that that's naturally the tension that the market has at the moment, is how sustainable is this earnings growth. You're going to see 250 plus percent earnings growth this year, probably another 20% to 30%. But that is going to be a moderation versus this year. And so the question is, these memory cycles that we've had historically, they've always been cyclical. These cycles typically only last around 18 months before you go from peak to trough. So there's concern that things can't get any better than they are at the moment. But what we're seeing is that AI this time is making the memory cycle potentially a little bit different to the past.

What we're seeing is that there's three things that are a little bit different this time around. One is that you have high bandwidth memory, which is a new form of memory that's used for AI-related type chips. And in order to make those, what companies had to do was migrate old capacity towards this high end band. So conventional memory supply is down around 20% versus where we were before. Just as AI server demand is pulling on the conventional demand as well. And we have CPU demand starting to increase as well. That is very intensive on memory. So we think that this memory cycle is likely to be significantly longer than we've had in the past. And now they're also starting to talk about long term contracts where historically, long term contracts have not been particularly helpful in a down cycle. But this time around, companies have been learning from that. And they're trying to put in much more, I guess, legally binding contracts and wording so that there are minimums in terms of pricing, in terms of minimum volume related type qualifications. And so putting that all together, it means that companies are wanting to smoothen out the cycle themselves as well. So while the market at the moment is having this tension between how sustainable this earnings, that's what's keeping the multiple lower. But the longer this goes on, and as we start seeing visibility into 27, 20, 28, potentially we can see upside to these multiples. Great. Thanks, Cameron. So still a positive view there. I'll just take one on AI quickly before I hand over to you, Shun, for the next one, just around the question on the competitive dynamics amongst AI companies, especially for the large AI model companies, which are private.

Really, there could be a couple of winners, but we don't need that many AI models. I think it's inevitable that at some point of time, you'll see some consolidation in the AI model space. So you have a couple of winners, a few winners emerging from that. So when it comes to private market allocations, what we want to advise clients to do is to not be overly concentrated in those few names. What you really want to look for are those potential AI applications, the next layer of AI really going beyond the model into real world applications that customers are willing to pay for. And you need experienced managers to look for those opportunities, companies with real competitive advantage, with data advantages that they can leverage to provide a good, strong AI service. So really looking beyond the huge concentration in the model companies into the next phase of growth of AI. So the one question I do want to ask you, Shun, is that we did see here, going back to the earlier chart, a lot of economies are not very energy self-sufficient. And how should we hedge or protect against the risks of higher oil prices? Because right now, we are in kind of a relatively benign scenario one to two. But what if we get to a negative tail risk scenario, where oil prices go a lot higher? How would that affect those economies? How should we protect against that? Yeah, I think that's a great question. Because given the uncertainty, I think from an investor positioning perspective, he really argues for increasing the component in your portfolio that brings you, one, correlated returns, and two, inflation protection. So that goes back to a lot of things that two of us talked in the presentation, that some of the infrastructure, real asset-related things. And also, some of the directly commodity-linked stuffs, including energy names, and including commodity itself. I think that would provide some protection for inflation, particularly coming from geopolitics, and also a more fragmented world going forward. As we were saying, inflation in this cycle is just structurally higher than previous cycles, becoming more volatile. So it does make sense to have that part in the portfolio to balance that risk out. And I also think, to the question, specific economies having very low self-sufficiency rates, it will become more urgent for these economies to actually boost that self-sufficiency or increase their resilience against this kind of shocks. So that ties back to the national champions themes that we are going to see increasingly work hapax from states to these particular industries. And that could provide investment opportunities as well. Right, great. Thank you, Yuxuan. I think that is very important to think about when you think about building a portfolio that's resilient against these risks, and also being on the other side of governments and companies spending on resiliency to get those opportunities.

So I think one other question I would like to highlight is around Japan. We're getting a few here. So we didn't talk much about Japan. We did talk about the macroeconomic risks. But the market has actually done pretty well this year. So maybe, Cameron, I would like to pick your brain on Japan. Do we still see an opportunity there? Or are we backing off in light of these macro risks? Sure. I think that our view on Japan at the moment is that we do think that the market's fairly valued at these sort of levels. So it's really fairly balanced valuation. We talked about a lot of the markets trading in a relatively inexpensive valuations or in line with 5-year averages. Japan is trading above historical average in terms of valuation at the moment. And we talked about some of the risks in terms of higher oil prices. While we do think that we are on a de-escalatory path and that energy prices should start to moderate, but we do think that maybe some damage has probably done to the global growth. And Japan is a very export-oriented country. And so there could be a little bit of a slowdown on that particular front. So we think that that is one of the headwinds that's facing the country. And in addition to that, while the new PM, Takeichi, is pro-markets, she's fiscally-- she wants to spend more money to boost growth within Japan. But we do think that with yields moving higher in the longer term, yield of the yield curve, yen, that's also a little bit weaker as well. It really constrains her ability to do that. And with the Bank of Japan potentially needing to raise interest rates, that could further slow down the domestic economy there as well. So we think that the risks and rewards are a bit more balanced in Japan at these sort of levels. And we see that in terms of earnings revisions as well. We saw in EM, we've seen positive earnings revisions in a north of 30% to 40%.

In the US, it's been in the teens. In Japan, we've seen probably 2% to 3% positive earnings revisions. And so that's really just showing you that there's puts and takes overall, which keeps us somewhat on the sidelines in Japan at the moment. Just to add on that, I think the risk is very real for the Bank of Japan maybe for its to hike a bit faster than what market is pressing in right now. Over the past month, we're seeing some very sizable intervention by the BOJ to the FX market. And doesn't seem to be very effective. And it's also not sustainable for them to always do this kind of direct intervention. So from a macro stability perspective, to stabilize the currency and government bond markets, the best way forward is going to tighten a little bit more. Because the real rate of Japan is still very, very low, very deeply negative. So I think that's also a risk to risk assets. I understand. That's very helpful. And maybe we'll end off with this last question. And it's quite existential. When most clients look at their portfolios, they have a lot of US dollars. Because that's just a market that is dominated. And when we think about US government debt, just going up on an upward trend, and again, persistent concerns around the US dollar, around the long term safety of US treasuries. And maybe this is a question for Yuxuan. How should we think about the risk of allocating too much to the dollar and to US treasuries? Are there any alternatives that people can look for? Are we all just stuck with having to use the dollar and US treasuries as kind of the reserve asset?

Yeah, it is a tricky situation.

I think from a positioning perspective, especially for fixed income, that's exactly the reason why we want to stay short duration. Because the fiscal concerns will be mostly appear in market as term premium. And that might be structurally higher long-term yields. So we just don't see the risk rewards paying off for holding a lot of long-term or ultra-long-term US government bonds. So we'll be more comfortable finding value either in the credit world or in alternative assets, like real assets, infrastructure, these kind of things.

And as for dollar, I think dollar will remain as a reserve currency for a long time. There's just no alternative. But again, diversification is-- so if you are starting from like 100% or 95% dollar allocation, I think it does make sense to diversify some and to get a more balanced exposure to growth around the world. So we think about these alternatives. Anything come to mind? What about the RMB? Everyone talks about that as a potential alternative. Yeah, yeah, there could be. I mean, so beyond the G10-- so Europe, Japan, Australia-- Australia, I think, is a good one. EM is also a good exposure. We are positive on EM in China as one of them. So I think, yeah, just to get some balanced exposure. So to gauge that, actually, from a global market cap perspective, the US market accounts for about 70%. So in theory, you should have around 30 outside of the US to get exposed to a balanced growth profile of the world. So that's how we think of the allocation.

Great. Thank you, Yixuan. So I think we're coming up close to the end of the presentation. We still have plenty of questions here, but feel free to send them to your advisor. We will try to get back to you. But I'll just do a quick summary of the session that we had today. So we're still focused on three trends that we're seeing in the markets and the economy. We're focused on global fragmentation. We're focused on AI, artificial intelligence. And we're focused on the structural change in inflation. All of those trends present opportunities for your portfolio. You can invest into the beneficiaries of those trends. But those trends also present plenty of risks. So there are many things that you can do in your portfolio to build resiliency, to diversify, or hedge against those risks. And we would encourage you to read through all of the material and the content that we're putting out, and also to reach out to your advisor for a conversation on how these ideas can fit in a portfolio. I think the message that I want to leave with everyone here is that if you were not invested into the markets, you would have missed out on a lot of great returns and opportunities. Over the past five, 10 years, or many decades, there were always reasons to not invest into the market. There's almost this safety of feeling-- this feeling of safety when you sit in cash. But really, the cost of that safety is very high by missing out in all these great opportunities to generate yields, to capture returns. So we would encourage everyone to have a think through your goals, your investment plans, and have a conversation with us about how best we can set up and design your portfolio to achieve your goals in the long term. So with that, I will end this webcast today. Thank you, everyone, for taking the time to join us. And we look forward to speaking to you again very soon. Thank you.

Definitions

S&P 500 Index: market capitalization weighted index of the five hundred, largest, publicly traded companies in the United States

Stoxx Europe 600 Index: covering the 600 largest companies in Europe, reflects the exposure to a certain sector in terms of free-float market capitalization. 

TOPIX Index: It is a metric for stock prices on the Tokyo Stock Exchange (TSE). It is a capitalization-weighted index that lists all firms in the "first section" of the TSE, a section that organizes all large firms on the exchange into one group. The second section of the TSE pools all of the smaller remaining companies.

MSCI China Index: Captures large and mid-cap representation across China A shares, H shares, B shares, Red chips, P chips and foreign listings (e.g. ADRs). With 712 constituents, the index covers about 85% of this China equity universe. Currently, the index includes Large Cap A and Mid Cap A shares represented at 20% of their free float adjusted market capitalization

MSCI India Index: Measures the performance of the large and mid-cap segments of the Indian market. With 113 constituents, the index covers approximately 85% of the Indian equity universe.

CSI 300 Index: A capitalization-weighted stock market index designed to replicate the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange.

MSCI Asia ex-Japan Index: Captures large and mid-cap representation across 2 of 3 Developed Markets countries (excluding Japan) and 8 Emerging Markets countries in Asia. With 1,184 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. Developed Markets countries in the index include Hong Kong and Singapore. Emerging Markets countries include China, India, Indonesia, Korea, Malaysia, the Philippines, Taiwan and Thailand.

S&P 500 Index: It is a stock market index from S&P Dow Jones Indices. The index serves as a gauge for the US mid-cap equities sector and is the most widely followed mid-cap index.

Russell 2000 Index: It is a small-cap US stock market index that makes up the smallest 2,000 stocks in the Russell 3000 Index. 

CAC 40 Index: a broad-based index of common stocks composed of 40 of the 100 largest companies listed on the forward segment of the official list of the Paris Bourse

FTSE 100 Index: a market-capitalization weighted index designed to measure the performance of the 100 largest companies traded on the London Stock Exchange that pass screening for size and liquidity

FTSE MIB: the primary benchmark Index for the Italian equity markets. Capturing approximately 80% of the domestic market capitalization, the Index is comprised of highly liquid, leading companies across ICB sectors in Italy.

SMI Index: Switzerland's blue-chip stock market index, which makes it the most followed in the country. It is made up of 20 of the largest and most liquid Swiss Performance Index stocks.

IBEX Index: is the official index of the Spanish Continuous Exchange. The index is comprised of the 35 most liquid stocks traded on the Continuous market. 

Hang Seng Index: is a free float-adjusted market-capitalization-weighted stock-market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong.

MXIN index: has 86 constituents, covering approximately 85% of the Indian equity universe. The index measures the performance of the large and mid-cap segments of the Indian market. It is widely used as benchmarks for the Indian equity market by institutional investors.

MXSO index: captures large and mid cap representation across 4 Emerging Markets countries, 1 Developed Market country and 1 Frontier Market country. With 156 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.

The CFETS RMB Index mainly refers to CFETS (China Foreign Exchange Trade System) currency basket, including CNY versus FX currency pair listed on CFETS. The sample currency weight is calculated by international trade weight with adjustments of re-export trade factors. 

The MOVE Index measures U.S. bond market volatility by tracking a basket of OTC options on U.S. interest rate swaps. The Index tracks implied normally yield volatility of a yield curve weighted basket of at-the-money one month options on the 2-year, 5-year, 10-year and 30-year constant maturity interest rate swaps.

The VIX Index is a calculation designed to produce a measure of constant, 30-day expected volatility of the U.S. stock market, derived from real-time, mid-quote prices of S&P 500 Index (SPX) call and put options. 

The TOPIX is a metric for stock prices on the Tokyo Stock Exchange (TSE). TOPIX is a capitalization-weighted index that lists all firms in the "first section" of the TSE, a section that organizes all large firms on the exchange into one group.

The NIFTY 50 is a benchmark Indian stock market index that represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange. Nifty 50 is owned and managed by NSE Indices, which is a wholly owned subsidiary of the NSE Strategic Investment Corporation Limited.

The Nasdaq-100 is a stock market index made up of equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted index.

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In Germany, this material is issued by J.P. Morgan SE, with its registered office at  Taunustor 1 (TaunusTurm), 60310 Frankfurt am Main, Germany, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB).   In Luxembourg, this material is issued by J.P. Morgan SE – Luxembourg Branch, with registered office at European Bank and Business Centre, 6 route de Treves, L-2633, Senningerberg, Luxembourg, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Luxembourg Branch is also supervised by the Commission de Surveillance du    Secteur Financier (CSSF); registered under R.C.S Luxembourg B255938. In the United Kingdom, this material is issued by J.P. Morgan SE – London Branch, registered office     at 25 Bank Street, Canary Wharf, London E14 5JP, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – London Branch is also supervised by the Financial Conduct Authority and Prudential Regulation Authority. In Spain, this material is distributed by J.P. Morgan SE, Sucursal        en España, with registered office at Paseo de la Castellana, 31, 28046 Madrid, Spain, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE, Sucursal en España is also supervised by the Spanish Securities Market Commission (CNMV); registered with Bank of Spain as a branch of J.P. Morgan SE under code 1567. In Italy, this material is distributed by J.P. Morgan SE – Milan Branch, with its registered office at Via Cordusio, n.3, Milan 20123,  Italy, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Milan Branch is also supervised by Bank  of Italy and the Commissione Nazionale per le Società e la Borsa (CONSOB); registered with Bank of Italy as a branch of J.P. Morgan SE under code 8076; Milan Chamber of Commerce Registered Number: REA MI 2536325. In the Netherlands, this material is distributed by  J.P. Morgan SE – Amsterdam Branch, with registered office at World Trade Centre, Tower B, Strawinskylaan 1135, 1077 XX, Amsterdam, The Netherlands, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Amsterdam Branch is also supervised by De Nederlandsche Bank (DNB) and the Autoriteit Financiële Markten (AFM) in the Netherlands. Registered with the Kamer van Koophandel as a branch of J.P. Morgan SE under registration number 72610220.            

In Denmark, this material is distributed by J.P. Morgan SE – Copenhagen Branch, filialaf J.P. Morgan SE, Tyskland, with registered office at Kalvebod Brygge 39-41, 1560 København V, Denmark, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Copenhagen Branch, filial af J.P. Morgan SE, Tyskland is also supervised by Finanstilsynet (Danish FSA) and is registered with Finanstilsynet as a branch of J.P. Morgan SE under code 29010.             

In Sweden, this material is distributed by J.P. Morgan SE – Stockholm Bankfilial, with registered office at Hamngatan 15, Stockholm, 11147, Sweden, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Stockholm Bankfilial is also supervised by Finansinspektionen (Swedish FSA); registered with Finansinspektionen as a branch of J.P. Morgan SE. In Belgium, this material is distributed by J.P. Morgan SE – Brussels Branch with registered office at 35 Boulevard du Régent, 1000, Brussels, Belgium, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB);  J.P. Morgan SE Brussels Branch is also supervised by the National Bank of Belgium (NBB) and the Financial Services and Markets Authority (FSMA) in Belgium; registered with the NBB under registration number 0715.622.844. In Greece, this material is distributed by J.P. Morgan SE – Athens Branch, with its registered office at 3 Haritos Street, Athens, 10675, Greece, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB); J.P. Morgan SE – Athens Branch is also supervised by Bank of Greece; registered with Bank of Greece as a branch of J.P. Morgan SE under code 124; Athens Chamber of Commerce Registered Number 158683760001; VAT Number 99676577. In France, this material is distributed by J.P. Morgan SE – Paris Branch, with its registered office at 14, Place Vendome 75001 Paris, France, authorized by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and jointly supervised by the BaFin, the German Central Bank (Deutsche Bundesbank) and the European Central Bank (ECB) under code 842 422 972; J.P. Morgan SE – Paris Branch is also supervised by the French banking authorities the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the Autorité des Marchés Financiers (AMF). In Switzerland, this material is distributed by J.P. Morgan (Suisse) SA, with registered address at rue du Rhône, 35, 1204, Geneva, Switzerland, which is authorised and supervised by the Swiss Financial Market Supervisory Authority (FINMA) as a bank and a securities dealer in Switzerland.

This communication is an advertisement for the purposes of the Markets in Financial Instruments Directive (MIFID II) and the Swiss Financial Services Act (FINSA). Investors should not subscribe for or purchase any financial instruments referred to in this advertisement except on the basis of information contained in any applicable legal documentation, which is or shall be made available in the relevant jurisdictions (as required).

In Hong Kong, this material is distributed by JPMCB, Hong Kong branch. JPMCB, Hong Kong branch is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission of Hong Kong. In Hong Kong, we will cease to use your personal data for our marketing purposes without charge if you so request. In Singapore, this material is distributed by JPMCB, Singapore branch. JPMCB, Singapore branch is regulated by the Monetary Authority of Singapore. Dealing and advisory services and discretionary investment management services are provided to you by JPMCB, Hong Kong/Singapore branch (as notified to you). Banking and custody services are provided to you by JPMCB Hong Kong/ Singapore Branch (as notified to you). For materials which constitute product advertisement under the Securities and Futures Act and the Financial Advisers Act, this advertisement has not been reviewed by the Monetary Authority of Singapore. JPMorgan Chase Bank, N.A. is a national banking association chartered under the laws of the United States, and as a body corporate, its shareholder’s liability is limited. It is registered as a foreign company in Australia with the Australian Registered Body Number 074 112 011.

With respect to countries in Latin America, the distribution of this material may be restricted in certain jurisdictions. We may offer and/or sell to you securities or other financial instruments which may not be registered under, and are not the subject of a public offering under, the securities or other financial regulatory laws of your home country. Such securities or instruments are offered and/or sold to you on a private basis only. Any communication by us to you regarding such securities or instruments, including without limitation the delivery of a prospectus, term sheet or other offering document, is not intended by us as an offer to sell or a solicitation of an offer to buy any securities or instruments in any jurisdiction in which such an offer or a solicitation is unlawful. Furthermore, such securities or instruments may be subject to certain regulatory and/or contractual restrictions on subsequent transfer by you, and you are solely responsible for ascertaining and complying with such restrictions. To the extent this content makes reference to a fund, the Fund may not be publicly offered in any Latin American country, without previous registration of such fund´s securities in compliance with the laws of the corresponding jurisdiction. 

JPMorgan Chase Bank, N.A., a national banking association chartered under the laws of the United States, and as a body corporate, its shareholder’s liability is limited. It is registered as a foreign company in Australia with the Australian Registered Body Number 074 112 011. J.P. Morgan Securities LLC (JPMS) is a registered foreign company (overseas) (ARBN 109293610) incorporated in Delaware, U.S.A. Under Australian financial services licensing requirements, carrying on a financial services business in Australia requires a financial service provider, such as JPMS, to hold an Australian Financial Services Licence (AFSL), unless an exemption applies. JPMS is exempt from the requirement to hold an AFSL under the Corporations Act 2001 (Cth) (Act) in respect of financial services it provides to you, and is regulated by the SEC, FINRA and CFTC under US laws, and its shareholder’s liability is limited. Material provided by JPMS in Australia is to “wholesale clients” only. The information provided in this material is not intended to be, and must not be, distributed or passed on, directly or indirectly, to any other class of persons in Australia. For the purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Act. Please inform us immediately if you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.

References to “J.P. Morgan” are to JPM, its subsidiaries and affiliates worldwide. “J.P. Morgan Private Bank” is the brand name for the private banking business conducted by JPM. This material is intended for your personal use and should not be circulated to or used by any other person, or duplicated for non-personal use, without our permission. If you have any questions or no longer wish to receive these communications, please contact your J.P. Morgan team.

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