Investment Strategy

The climate opportunity: Getting ahead of Latin America’s net-zero transition

Apr 15, 2022
This article was written by Economist Impact, with support from J.P. Morgan

Latin American investors should anticipate shifting demands from high- to low-emission industries

Climate change is reshaping the global economy, affecting production in industries that are highly dependent on natural resources and changing consumer demands. As countries aim to curb greenhouse gas (GHG) emissions and consumers seek more sustainable products and services, demand is shifting away from high-emission industries toward more sustainable alternatives. Global investors are recognising this opportunity: Sustainable funds attracted a record US$69.2bn in net flows in 2021, a 35% increase over 2020, when the previous record was set.1

However, investors have yet to fully recognise the opportunity presented by the net-zero transition in Latin America. Currently, the region only contributes to 2% of global green bond issuance. 2

With immense natural capital and a growing urban population, Latin America stands to become a crucial player in the green economy. From sustainable agriculture to clean energy and transport, investment in low-emission industries and ecosystem services can become an avenue of long-term growth for Latin American investors. This article explores how the demand for low-carbon alternatives is creating investment opportunities in some of Latin America’s key economic sectors, which also capitalise on the region’s unique natural assets. Our research found that:

  • The net-zero transition could reduce the estimated oil and gas production by 2050, as reduced dependency on fossil fuels accelerates the adoption of renewable energies.
  • Issuance of green bonds in Latin America more than doubled in the last two years and is helping finance renewable energy, transportation and land-use projects.
  • Investment in agricultural technologies and sustainable practices could help the sector adapt to shifting demands by enhancing crop yields, address food waste and improve livestock farming.
  • The Amazon Basin, one of the few carbon sinks in the world, contributes to the region’s vast carbon sequestration potential, positioning it as a leader in the voluntary carbon credit markets.

Shifts in Demand and Geopolitical Risks in Energy Markets Create Opportunities for Renewables Energy

To limit climate change’s impacts, countries must pursue net-zero emissions, balancing the amount of GHGs produced and removed. Achieving net-zero will require countries to shift demand from carbon-intensive operations to lower-emission alternatives. In the energy sector, which is currently the source of 46% of Latin American emissions, this would require relying less on fossil fuels and increasing demand for renewable electricity generation, hydrogen and biofuels. 3,4

This shift would challenge the oil and gas industry, which historically has contributed a significant percentage of the region’s GDP. Estimates suggest that by 2050, oil and gas production volumes could be 55% and 70% lower than today.5  The region has already seen a steady decline in revenue from oil over the past decade. On average, oil rent6  in Latin America represents 1.7% of GDP compared with 3% in 2010. For countries such as Mexico, revenue from oil has more than halved in the past 10 years (see Figure 1).

 Source: World Bank (2019) World Economic Indicators.7
Figure 1 depicts the percentage of GDP from oil revenues for Mexico, Brazil, Colombia and the Latin America & Caribbean region between 2010 and 2019. The graph shows a decline of Mexico's oil rent from 4% in 2010 to 1.8 in 2019. For Brazil oil revenues have increased from 1.5% to 2% while Colombia has seen a decrease from 4.4% to 3.7%. Overall the region has seen a decline in oil rent from 2.9% to 1.7% between 2010 and 2019.

The sharp increase of oil and gas prices and the mounting geopolitical risks associated with dependency on fossil fuels could accelerate renewable energy adoption. Amid stock losses because of Russia’s invasion of Ukraine, renewables are outperforming, as power prices jump and investors seek energy alternatives.8 As industries phase out fossil fuels, Latin America will have to undergo an energy transformation. This shift will require sizable investments in renewable and clean energy sources, representing a long-term opportunity for investors.

Issuance of Green Bonds in Latin America has More than Doubled in Two Years, Enabling the Region’s Net-Zero Transition

Putting a number to this transformation, the International Finance Corporation (IFC) estimates that the cumulative investment opportunity for renewable energy infrastructure in the region amounts to US$555bn by 2030, more than 12% of the region’s current GDP.9

Major asset funds with ESG mandates, insurers and pension funds are contributing to the growth of burgeoning green bond market in the region. Green bonds, which are debt instruments created to fund projects that have positive environmental and/or climate benefits, have become a cornerstone of environmental, social and governance (ESG) investment. Issuance of green bonds in Latin America more than doubled in less than two years—from US$13.6bn in September 2019 to US$30.2bn at the end of June 2021.10  Half of these funds are dedicated to renewable energy projects (mainly solar and wind).

Brazil is the region’s largest green bond market, with US$10.3bn in cumulative issuance, followed by Chile (US$9.5bn) and Mexico (US$4bn). Several new countries have entered the green bond market over the past two years—Barbados, Bermuda, Ecuador and Panama—bringing the total number of green issuer countries in Latin America and the Caribbean (LAC) to 14.11  However, the market is still nascent. LAC only contributes to 2% of global green bond issuance, compared with 40% from Europe.12

While energy is the most funded sector in the green bond market, there are several other industries that present opportunities in the net-zero economy, including transport and land use (see Figure 2). In Chile, for example, most of the recently issued government bonds are for green transport, including Santiago’s Metropolitan Public Transport System’s new Metro subway lines.13 Land use, a significantly underfunded sector globally, represents over 10% of LAC issuance. The majority of these bonds fund certified agriculture, forestry and paper-related projects, especially from Brazil. However, there are other important sectors that remain unexplored. Buildings and water, two of the most funded sectors globally, are among the most lacking categories in Latin America.14

Climate bonds initiative 2020 15
Figure 2 depicts the breakdown of green bond issuing in Latin America by sector with 44% of bond issuance in the Energy sector, 28% in Transportation, 12% Land use, 6% Buildings, 5% Water, 2% for Water and Industry each, and 1% for ICT.

The Rise of Low-Emission Industries Creates New Opportunities for Investment in the Region

Shifts in energy demand could also impact the agricultural sector, as biofuels are quickly becoming a high-growth sector. A report on the region’s demand for biofuels illustrates this trajectory. While exports of basic agricultural products from Latin America, such as vegetable oil, sugar and cereals, grew at annual rates below 4.5% in the last decade, the bio-based sectors with the highest added-value—biofuels, bioplastics and biofertilisers, grew on average  25%, 20% and 14% annually in the past five years, respectively.16

Source: IIASA NGFS Climate Scenarios Database, REMIND-MagPIE model.17
Figure 3 shows how land cover would shift in a net zero scenario by 2050. Forests would go from a land cover of 3988 million acres in 2020 to 4152 in 2050, energy crops from 7.7 million acres to 178, pastures from 3198 to 3120 million acres and food crops from 1569 to 1462 million acres.

Increasing demand for biofuels might lead farmers to reduce cropland for food production and pasture land to give space to these profitable crops (see Figure 3).18 In order to maintain food production, the region would have to invest in sustainable agriculture to enhance crop yields, address food waste and food traceability, and adapt technology to livestock farming.19

New agricultural technologies (AgTech) could address a variety of problems across the sector, including new production systems, crop and animal protection and genetics, and food processing, logistics and distribution. AgTech also represents one of the most promising sectors for investors. In the United States, farm tech investing soared to US$7.9bn in 2020, topping 2019 investments by US$2.3bn, or 41%.20 Within this, agricultural biotech companies attracted particular interest from investors, with 173 deals closed, up by 58%.

This sector has remained under the radar for Latin American investors, but the region would greatly benefit as one of the world’s largest agricultural producers.21 Data from the Association for Private Capital Investment in Latin America show that there was US$35.4m in venture capital invested in AgTech across 15 disclosed rounds last year. The largest of these went to Colombia-based Frubana, a US$25m Series A round in early 2020.22  However, there are over 450 startups in the region’s AgTech sector. Most of these are concentrated in Brazil (51%), Argentina (23%) and the Andean Region (18%), which are also some of the food baskets of the region. These startups are concentrated in the development of local solutions in areas such as big data and precision agriculture, management software, and platforms for buying and selling services and funding.

Latin America’s Sequestration Potential Positions it as a Leader in the Carbon Credit Market

In addition to clean energy, demand for carbon offsets could impact land-use distribution in the region, as the value of forests increases due to their carbon sequestration potential. Carbon sinks are areas that store more CO2 than they release, and Latin America is home to one of the few remaining net carbon sinks in the world: the Amazon Basin, which stretches across eight countries23 and removes 1.2 Gt of CO2 a year.24

This is only part of the region’s potential. By simply allowing established forests to grow for another 40 years, Latin America would be able to potentially absorb up to 31 billion tons of CO2 out of the atmosphere—equivalent to the total carbon emissions from fossil fuel use and industrial processes in all of LAC from 1993 to 2014.25 26

The region’s large carbon sequestration potential has led it to becoming the world’s second-largest provider of voluntary carbon credits, with just fewer than 20% of the total global credit supply coming from the region in 2020–21 (see Figure 4).

Source: Ecosystem Marketplace.27 28
Figure 4 depicts the voluntary carbon offset volumen transacted by project region in from 2019 through August of 2021. Africa traded 16.1 MtCO2e in 2019 and 23.9 in 2021, Asia traded 45.6 MtCO2e in 2019 and 91.8 in 2021, Europe traded 1.1 MtCO2e in 2019 and 0.8 in 2021, Latin America & the Caribbean traded 15.3 MtCO2e in 2019 and 36.6 in 2021 and North America traded 15.5 MtCO2e and 10 in 2021.
The demand for carbon credits will continue to grow as countries tighten regulations to curb carbon emissions. In just the first half of 2021, the global voluntary carbon market saw a 60% increase compared with 2020, and by the end of 2021, the all-time market value for voluntary carbon is likely to reach US$6.7 bn. At this pace, recent analyses predict the voluntary carbon market demand will grow fivefold to tenfold over the next decade. This demand will be met in part through carbon credit issuances from Latin America–based projects. Europeans purchased 40% of their carbon offsets in 2019 from projects based in LAC.29,30

Latin American countries are sitting on some of the most valuable carbon deposits in the world. The total carbon stock of the region amounts to over 3.9 trillion tonnes, with a value of over US$14.5trn based on the 40$/tCO2e set in the Paris Agreement. At this price level, the value of Brazil’s carbon stock amounts to tenfold its current GDP, while Bolivia’s carbon value is twofold and Colombia’s 80% (see Figure 5).
Source: FAO Global Forest Resource Assessment 2020. 31
Figure 5 depicts the stored carbon value in selected Latin American countries at $40 per ton of CO2 emissions in 2020. Argentina has 25, 573,000 ha of forest area and 162.64 tons per acre of carbon stock, the value of its carbon stock would amount to $75 billions. Bolivia has 50,833,760 ha of forest with a 76.99 tons per acre, total carbon stock, the value of its carbon amounts to $70,5 billions. Brazil has 4,9660,196,000 of forest area with 153.57 tons per acre with a value of $13.7 trillions. Chile has 18,210,700 acres of fores and 211.17 tons per acre of total carbon stock, which amounts to $69.2 billions. Colombia has 59,141,910 acres of forest cover with a total carbon stock of 204.86 with a value of $218.1 billions. Costa Rica has 3,034,870 ha of forest cover with a carbon stock of 241.4 with a value of $13.2 billions. Ecuador has a forest cover of 12,497,830 acres of forest are with a carbon stock of 129.4 with a value of $29.1 billions. El Savador has 583,880 acres of forest area with a total carbon stock of 261.5 tons per acre valued at $2.8 billions. Peru has a forest area of 72,330,370 acres with a total carbon stock of 143.21 valued at $186.5 billions.

Conclusion: A Network Effect Toward Net-Zero

Climate change represents an existential threat and, if left unaddressed, will have devastating environmental and economic impacts in Latin America. However, the transition to a net-zero economy also represents an opportunity for investors looking for long-term returns. The changes in demand from high-emitting goods and services to low-carbon alternatives could have a network effect that shifts resources from one industry to the other. Demand for low-carbon energy sources will affect not only the energy sector, but might also cascade into agriculture and land-use considerations. Other sustainable alternatives might have similar effects on a variety of industries, from waste management to water conservation. Investors who are able to anticipate these effects and make strategic investments will be able to reap the rewards.

 

1 Morningstar (2022) “Sustainable funds landscape report.” https://www.morningstar.com/lp/sustainable-funds-landscape-report

2 EU-LAC Foundation (2020), “The potential of the Green Bond markets in Latin America and the Caribbean.” https://repository.eafit.edu.co/bitstream/handle/10784/24798/the_potential_of_the_green_bond_markets_in_latin_america_and_the_caribbean_con_vinculos_a_instituciones.pdf?sequence=2&isAllowed=y

3 McKinsey (2022), “The economic transformation: What would change in the net-zero transition.” https://www.mckinsey.com/business-functions/sustainability/our-insights/the-economic-transformation-what-would-change-in-the-net-zero-transition

4 Tania Miranda, “NDCs in the Americas: A Comparative Hemispheric Analysis,” Institute of the Americas, 2019. https://user-9sjqssx.cld.bz/Nationally-Determined-Contributions-Across-the-Americas/11/

5 McKinsey (2022), “The economic transformation: What would change in the net-zero transition.” https://www.mckinsey.com/business-functions/sustainability/our-insights/the-economic-transformation-what-would-change-in-the-net-zero-transition

6 Oil rents are the difference between the value of crude oil production at regional prices and total costs of production.

7  World Bank (2021), “World Development Indicators.” https://data.worldbank.org/indicator/NY.GDP.PETR.RT.ZS 

8  Bloomberg (2021), “Renewables Surge as Putin’s War Fuels Flight to Alternatives.” https://news.bloomberglaw.com/environment-and-energy/renewables-surge-as-putins-war-fuels-flight-to-alternatives?utm_source=rss&utm_medium=NEVE&utm_campaign=0000017f-2d83-d679-af7f-6db779220003 

9  International Finance Corporation (2016), “Climate-Smart Investment Potential in Latin America: A Trillion Dollar Opportunity.” https://www.ifc.org/wps/wcm/connect/3e794608-cc7d-4499-9b6f-5342d7b6ddbc/LAC+1Trillion+6-13-16+web+FINAL.pdf?MOD=AJPERES&CVID=lmsI-Rx

10 Climate Bonds Initiative (2020), “Latin America & Caribbean: State of the Market.”

https://www.climatebonds.net/files/reports/cbi_lac_2020_04e.pdf

11 Ibid.

12 EU-LAC Foundation (2020), “The potential of the Green Bond markets in Latin America and the Caribbean.” https://repository.eafit.edu.co/bitstream/handle/10784/24798/the_potential_of_the_green_bond_markets_in_latin_america_and_the_caribbean_con_vinculos_a_instituciones.pdf?sequence=2&isAllowed=y

13 Invest Chile (2020) Green bonds: Chile has allocated 24.8% of the US$2,373 million. https://blog.investchile.gob.cl/chile-has-already-allocated-24.8-of-the-us2373-million-issued-in-green-bonds-in-2019

14 Climate Bonds Initiative (2019), “Latin America & Caribbean: State of the Market.”

https://www.climatebonds.net/files/reports/cbi_lac_sotm_19_web_02.pdf

15 Climate Bonds Initiative (2020), “Latin America & Caribbean: State of the Market.” https://www.climatebonds.net/files/reports/cbi_lac_2020_04e.pdf

16 UN Economic Commission for Latin America and the Caribbean (2020), “The Outlook for Agriculture and Rural Development in the Americas: A Perspective on Latin America and the Caribbean 2021–2022(ECLAC).” https://repositorio.cepal.org/bitstream/handle/11362/47209/1/ECLAC-FAO21-22_en.pdf

17 Network for Greening the Financial System (2021), “NGFS Climate Scenarios for central banks and supervisors.” https://www.ngfs.net/sites/default/files/media/2021/08/27/ngfs_climate_scenarios_phase2_june2021.pdf

18 Ibid.

19 Fabian Gosselin (2021), “AgTech Innovation and Investment Opportunities in Latin America.” https://www.supplychangecapital.fund/blog2/agtech-innovation-and-investment-opportunities-in-latin-america

20 Louisa Burwood-Taylor (2021), “Farm Tech Investing Is Accelerating Faster Than Food Tech and General VC—New Report,” Forbes. https://www.forbes.com/sites/louisaburwoodtaylor/2021/07/29/farm-tech-investing-is-accelerating-faster-than-food-tech-and-general-vcnew-report/?sh=6dd9f8874cf0

21 Ibid.

22 Isabella Fleichsman, “Which startup will be the first LatAm agtech unicorn?” https://labsnews.com/en/articles/business/which-startup-will-be-the-first-latam-agtech-unicorn/

23 Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela.

24 Nancy Harris and David Gibbs (2021) “Forests Absorb Twice as Much Carbon as They Emit Each Year,” World Resources Institute. https://www.wri.org/insights/forests-absorb-twice-much-carbon-they-emit-each-year

25 Justin Gillis (2016), “In Latin America, Forests May Rise to Challenge of Carbon Dioxide,” The New York Times. https://www.nytimes.com/2016/05/17/science/forests-carbon-dioxide.html

26 Robin Chazdon, Eben Broadbent, Danaȅ Rozendaal, et al. (2016), “Carbon sequestration potential of second-growth forest regeneration in the Latin American tropics,” Science Advances, May 13, 2016. https://www.science.org/doi/10.1126/sciadv.1501639

27 Stephen Donofrio, Patrick Maguire, Kim Myers (2021), “Buyers of Voluntary Carbon Offsets, a Regional Analysis.” https://app.hubspot.com/documents/3298623/view/125182374?accessId=a759f9

28 Ecosystem Marketplace (2021), “EM Data Intelligence & Analytics Dashboard.” https://data.ecosystemmarketplace.com/

29 Stephen Donofrio, Patrick Maguire, Kim Myers (2021), “Buyers of Voluntary Carbon Offsets, a Regional Analysis.” https://app.hubspot.com/documents/3298623/view/125182374?accessId=a759f9; Ecosystem Marketplace, EM Data Intelligence & Analytics Dashboard, updated December 2, 2021.

30 Ecosystem Marketplace (2021), “EM Data Intelligence & Analytics Dashboard.” https://data.ecosystemmarketplace.com/

31 FAO (2020), “Global Forest Resource Assessment.” https://fra-data.fao.org/

Contact us to discuss how we can help you experience the full possibility of your wealth.

Please tell us about yourself, and our team will contact you. 

*Required Fields

Contact us to discuss how we can help you experience the full possibility of your wealth.

Please tell us about yourself, and our team will contact you. 

Enter your First Name

> or < are not allowed

Only 40 characters allowed

Enter your Last Name

> or < are not allowed

Only 40 characters allowed

Select your country of residence

Enter valid street address

> or < are not allowed

Only 150 characters allowed

Enter your city

> or < are not allowed

Only 35 characters allowed

Select your state

> or < are not allowed

Enter your ZIP code

Please enter a valid zipcode

> or < are not allowed

Only 10 characters allowed

Enter your postal code

Please enter a valid zipcode

> or < are not allowed

Only 10 characters allowed

Enter your phone number

Tell Us More About You

1000 Characters Maximum

Only 1000 characters allowed

Checkbox is not selected

Your Recent History

Important Information

KEY RISKS

Sustainable investing (“SI”) and investment approaches that incorporate environmental social and governance (“ESG”) objectives may include additional risks. SI strategies, including ESG SMAs, mutual funds and ETFs, may limit the types and number of investment opportunities and, as a result, could underperform other strategies that do not have an ESG or sustainable focus. Certain strategies focused on particular sectors may be more concentrated in particular industries that share common factors and can be subject to similar business risks and regulatory burdens. Investing on the basis of sustainability/ESG criteria can involve qualitative and subjective analysis and there can be no assurance that the methodology utilized, or determinations made, by the investment manager will align with the beliefs or values of the investor. Investment managers can have different approaches to ESG or sustainable investing and can offer strategies that differ from the strategies offered by other investment managers with respect to the same theme or topic. ESG or sustainable investing is not a uniformly defined concept and scores or ratings may vary across data providers that use similar or different screens based on their process for evaluating ESG characteristics. Additionally, when evaluating investments, an investment manager is dependent upon information and data that may be incomplete, inaccurate or unavailable, which could cause the manager to incorrectly assess an investment’s ESG/ SI performance.

J.P. Morgan takes a global approach to sustainable investing and the solutions offered through our sustainable investing platform meet our internally defined criteria for a sustainable investment. The evolving nature of sustainable finance regulations and the development of jurisdiction-specific legislation setting out the regulatory criteria for a “sustainable investment” or “ESG” investment mean that there is likely to be a degree of divergence as to the regulatory meaning of such terms. This is already the case in the European Union where, for example, under the Sustainable Finance Disclosure Regulation (EU) (2019/2088) certain criteria must be satisfied in order for a product to be classified as a “sustainable investment”. Any references to “sustainable investing”, “SI” or “ESG” in this material are intended as references to our internally defined criteria only and not to any jurisdiction-specific regulatory definition.

This material is for informational purposes only, and may inform you of certain products and services offered by private banking businesses of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at accessibility.support@jpmorgan.com for assistance. Please read all Important Information.

GENERAL RISKS & CONSIDERATIONS
Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g., equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan team.

NON-RELIANCE
Certain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.

IMPORTANT INFORMATION ABOUT YOUR INVESTMENTS AND POTENTIAL CONFLICTS OF INTEREST

Conflicts of interest will arise whenever JPMorgan Chase Bank, N.A. or any of its affiliates (together, “J.P. Morgan”) have an actual or perceived economic or other incentive in its management of our clients’ portfolios to act in a way that benefits J.P. Morgan. Conflicts will result, for example (to the extent the following activities are permitted in your account): (1) when J.P. Morgan invests in an investment product, such as a mutual fund, structured product, separately managed account or hedge fund issued or managed by JPMorgan Chase Bank, N.A. or an affiliate, such as J.P. Morgan Investment Management Inc.; (2) when a J.P. Morgan entity obtains services, including trade execution and trade clearing, from an affiliate; (3) when J.P. Morgan receives payment as a result of purchasing an investment product for a client’s account; or (4) when J.P. Morgan receives payment for providing services (including shareholder servicing, recordkeeping or custody) with respect to investment products purchased for a client’s portfolio. Other conflicts will result because of relationships that J.P. Morgan has with other clients or when J.P. Morgan acts for its own account.

Investment strategies are selected from both J.P. Morgan and third-party asset managers and are subject to a review process by our manager research teams. From this pool of strategies, our portfolio construction teams select those strategies we believe fit our asset allocation goals and forward-looking views in order to meet the portfolio’s investment objective.

As a general matter, we prefer J.P. Morgan managed strategies. We expect the proportion of J.P. Morgan managed strategies will be high (in fact, up to 100 percent) in strategies such as, for example, cash and high-quality fixed income, subject to applicable law and any account-specific considerations.

While our internally managed strategies generally align well with our forward-looking views, and we are familiar with the investment processes as well as the risk and compliance philosophy of the firm, it is important to note that J.P. Morgan receives more overall fees when internally managed strategies are included. We offer the option of choosing to exclude J.P. Morgan managed strategies (other than cash and liquidity products) in certain portfolios.

The Six Circles Funds are U.S.-registered mutual funds managed by J.P. Morgan and sub-advised by third parties. Although considered internally managed strategies, JPMC does not retain a fee for fund management or other fund services.

LEGAL ENTITY, BRAND & REGULATORY INFORMATION

In the United States, bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC.

JPMorgan Chase Bank, N.A. and its affiliates (collectively “JPMCB”) offer investment products, which may include bank-managed investment accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC (“JPMS”), a member of FINRA and SIPC. Annuities are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPM. Products not available in all states.

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, filial af 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 SEIn France, this material is distributed by JPMCB, Paris branch, which is regulated by the French banking authorities Autorité de Contrôle Prudentiel et de Résolution and Autorité des Marchés Financiers. In Switzerland, this material is distributed by J.P. Morgan (Suisse) SA, with registered address at rue de la Confédération, 8, 1211, Geneva, Switzerland, which is authorised and supervised by the Swiss Financial Market Supervisory Authority (FINMA), as a bank and a securities dealer in Switzerland. Please consult the following link to obtain information regarding J.P. Morgan’s EMEA data protection policy: https://www.jpmorgan.com/privacy.

This communication is an advertisement for the purposes of the Markets in Financial Instruments Directive (MIFID II) and the Swiss Financial Services Act (FINSA) and 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.

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 Singapore Branch. The contents of this document have not been reviewed by any regulatory authority in Hong Kong, Singapore or any other jurisdictions. You are advised to exercise caution in relation to this document. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. 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.

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. Public offering of any security, including the shares of the Fund, without previous registration at Brazilian Securities and Exchange Commission—CVM is completely prohibited. Some products or services contained in the materials might not be currently provided by the Brazilian and Mexican platforms.

JPMorgan Chase Bank, N.A. (JPMCBNA) (ABN 43 074 112 011/AFS Licence No: 238367) is regulated by the Australian Securities and Investment Commission and the Australian Prudential Regulation Authority. Material provided by JPMCBNA in Australia is to “wholesale clients” only. For the purposes of this paragraph the term “wholesale client” has the meaning given in section 761G of the Corporations Act 2001 (Cth). Please inform us if you are not a Wholesale Client now or if you cease to be a Wholesale Client at any time in the future.

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 J.P. Morgan Securities LLC (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 U.S. laws, which differ from Australian laws. 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.

This material has not been prepared specifically for Australian investors. It:

  • May contain references to dollar amounts which are not Australian dollars;
  • May contain financial information which is not prepared in accordance with Australian law or practices;
  • May not address risks associated with investment in foreign currency denominated investments; and
  • Does not address Australian tax issues.

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. 

© 2022 Economist Impact. All rights reserved.

LEARN MORE About Our Firm and Investment Professionals Through FINRA Brokercheck

To learn more about J.P. Morgan’s investment business, including our accounts, products and services, as well as our relationship with you, please review our J.P. Morgan Securities LLC Form CRS and Guide to Investment Services and Brokerage Products

 

JPMorgan Chase Bank, N.A. and its affiliates (collectively "JPMCB") offer investment products, which may include bank-managed accounts and custody, as part of its trust and fiduciary services. Other investment products and services, such as brokerage and advisory accounts, are offered through J.P. Morgan Securities LLC ("JPMS"), a member of FINRA and SIPC. Annuities are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMCB, JPMS and CIA are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states. Please read the Legal Disclaimer in conjunction with these pages.

INVESTMENT AND INSURANCE PRODUCTS ARE: • NOT FDIC INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF ITS AFFILIATES • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED

Equal Housing Lender Icon Bank deposit products, such as checking, savings and bank lending and related services are offered by JPMorgan Chase Bank, N.A. Member FDIC. Not a commitment to lend. All extensions of credit are subject to credit approval.