Investment Strategy

Looking for diamonds in the rough? Consider a ‘preferred’ approach.

Jul 15, 2022

Preferred equities have been pressured to the point where they now seem attractive. Here’s why.



Jacob Manoukian, U.S. Head of Investment Strategy

Xavier Vegas, Head of Global Credit Strategy

 

Our Top Market Takeaways for July 15, 2022

Markets in a minute

Inflation: Still hot, still broad

 

The latest inflation data put a dent in the idea that price pressures could deteriorate faster than the labor market. The June CPI report showed that prices rose 9.1% relative to last year and 1.3% relative to last month. Both were well above Wall Street consensus estimates, and will likely ensure that the Federal Reserve raises rates aggressively at their next meeting at the end of the month. The fact that the Fed (and other global central banks) could still accelerate the pace of rate hikes increases the chance that the labor market will crack under the pressure.

Sure, food and energy prices drove an outsized share of the print, but the breadth of price increases across categories does not offer evidence of relief elsewhere. Important categories such as rents and healthcare services accelerated between May and June, and durable goods categories such as motor vehicles and furniture remained very elevated. We could do a nuanced breakdown of the individual drivers, but there isn’t much utility in that. The Fed is solely focused on bending inflation back to target and this showed that it’s still far from that goal.

The bond market reaction fits with what you would probably expect. Fed funds futures now imply that a 100 basis point hike at the next meeting is on the table. Two-year yields rose, while 10-year yields actually fell, and the 2s10s yield curve moved to its most inverted level since 2000. In fact, markets are now suggesting that short rates will decline by ~80 basis points (bps) in 2023. The market thinks this year’s aggressive tightening will abruptly become easing next year.

This chart shows the federal funds rate from 2019 to June 2022 and the market’s expectations to October 2023. It began at 2.38% and dipped to 1.63% by October 2019 before falling to 0.13% in March 2020. It remained at this level until February 2022, when it started picking up. It rose to 1.63% by June 2022. From there, the market expects it to rise to a high of 3.7% by year-end 2022 and then fall to 3.19% by September 2023.

 

In all, this latest data point makes us incrementally more pessimistic on the near-term economic outlook. But we should also note that risk assets are already well on their way to pricing in this more negative news. Despite the objectively bad inflation data, the equities that have been most harmed by higher inflation and interest rates outperformed this week. While we are probably not at the bottom yet, pockets of opportunity are starting to emerge. 

Spotlight

Finding value in preferred equities

 

The only good thing about bear markets is that they eventually provide attractive entry points for risk assets. Right now, we think there is an attractive entry point in preferred equities.

Preferred equities are securities that have some bond-like characteristics (they pay a consistent cash flow stream to the holder), and some equity-like characteristics (subordination to other forms of debt, but the potential for capital appreciation). The most common type of preferred equity is issued by banks, which use the capital to meet regulatory requirements, but companies in other industries can be issuers as well. Importantly, the income that preferred equities pay U.S. investors is typically taxed at qualified dividend rates, which are less onerous than ordinary income rates.

So far this year, preferred equities have been under pressure because of both higher interest rates (like bonds, they suffer when interest rates rise) and the growth slowdown that is underway (like equities, lower potential earnings put the cash flows at risk). But now we think they have reached a level where it makes sense to consider adding to the asset class. There are three reasons why.

The first is valuation. Similar to other areas of fixed income, we value preferred equities by looking at the difference between their yield and the yield on risk-free rates. When the spread is wider, markets are more skeptical about actually receiving future cash flows. Right now, with all-in yields over 7%, and spreads over 400 bps, we think investors are being compensated fairly for the risk that preferred dividends will stop getting paid. In the other two periods over the last 10 years when spreads rose above 400 bps, the median 12-month forward return was over 20%.   

This chart shows the breakdown of preferred equities yield from 2013 to 2022, specifically the risk-free rate and credit spread over that time period. The risk-free rate began around 2.75% in February 2013. It remained relatively flat (between 2% and 3%) until October 2018 when it began to fall. It reached a low of 0.6% in March 2020 before rallying to 3.2% in early July 2022. Meanwhile, the credit spread began at 2.4% and remained rangebound between 1.8% and 3% until October 2014. It then rose to 4.2% in January of the next year, dipped then rose again dramatically to 6.9% in March 2020. It fell to 2.3% by November 2021 and rose again to 4.1% by early July 2022.

 

Next, the risk of default across the asset class is low. Preferred equity issuers are typically investment-grade companies with solid balance sheets. This differentiates preferred equities from high yield bonds, where losses from defaults will likely eat into the headline yield that an investor could otherwise receive. This is true for the banking system in particular. Today, U.S. banks are highly regulated, systemically important entities with historically conservative balance sheets. The loan-to-deposit ratio for U.S. banks (one of the more basic measures of leverage) has dropped from almost 100% in October 2008 to near 60% today. Bank earnings may be lower as the economy slows, but we do not think the banking sector is likely to stop common equity dividend payments (barring a severe recession or a Fed mandate), which would happen before preferred dividends would be at risk.

This chart shows the loan-to-deposit ratio for all commercial banks from 1975 to 2022. It began at 73% and dipped before rising to 81% in August 1979 and 89% in September 1989. It dipped to 81% in December 1992 and rose to a series high of 100% by November 2000. It then began its descent, reaching 89% in June 2004, rallying to 98% in November 2008, and then falling to 72% in April 2014. It then rallied slightly and fell to 62% by May 2022.

 

Finally, given the rise in interest rates so far this year, preferred equity issuance has been extremely limited. Well below $10 billion in new supply has hit the market this year. Last year, total issuance was around $45 billion. This limited supply should provide a technical support to prices.

 

The risk of course is that preferred equities could continue to fall if the economic environment deteriorates beyond the mild recession that seems to be reflected in current prices, or if equity and high yield market volatility remains elevated. However, we think that for a one-year time horizon or longer, the entry point is tilting the odds in investors’ favor.    

Investment takeaways

Perception vs. reality

 

While the June inflation report has dominated headlines this week, it is also important for investors to maintain a longer-run mindset. The outlook may seem bleak now, but most tend to be overly pessimistic about the future of stocks no matter what.

The New York Fed conducts an ongoing survey of U.S. consumers that asks if they expect stock prices to be higher a year from now. On average, over the past eight years, only four out of every 10 respondents have thought so. However, the reality based on the historical S&P 500 is that the likelihood of achieving a positive return over a one-year time horizon is 80%, roughly double that of consumer perception.

Blind optimism can hurt portfolio performance in the short term, but allowing pessimism to derail your long-term plan can be even more detrimental to reaching your goals.

This chart shows two bars: • The percentage of consumers who responded “yes” to the New York Federal Reserve’s survey that asks “Will stock prices be higher a year from now?”: 41% • The historical reality, or probability of positive one-year rolling S&P 500 returns back to 1950: 79%

Get Top Market Takeaways delivered to your inbox.

Our Top Market Takeaways for July 15, 2022.

All market and economic data as of July 2022 and sourced from Bloomberg and FactSet unless otherwise stated.

We believe the information contained in this material to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice.

RISK CONSIDERATIONS

  • Past performance is not indicative of future results. You may not invest directly in an index.
  • The prices and rates of return are indicative, as they may vary over time based on market conditions.
  • Additional risk considerations exist for all strategies.
  • The information provided herein is not intended as a recommendation of or an offer or solicitation to purchase or sell any investment product or service.
  • Opinions expressed herein may differ from the opinions expressed by other areas of J.P. Morgan. This material should not be regarded as investment research or a J.P. Morgan investment research report.

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

0/1000

Only 1000 characters allowed

Checkbox is not selected

Your Recent History

Important Information

All companies referenced are shown for illustrative purposes only, and are not intended as a recommendation or endorsement by J.P. Morgan in this context.

All market and economic data as of July 2022 and sourced from Bloomberg and FactSet unless otherwise stated.

The information presented is not intended to be making value judgments on the preferred outcome of any government decision.


Preferred investments share characteristics of both stocks and bonds. Preferred securities are typically long dated securities with call protection that fall in between debt and equity in the capital structure. Preferred securities carry various risks and considerations which include: concentration risk; interest rate risk; lower credit ratings than individual bonds; a lower claim to assets than a firm's individual bonds; higher yields due to these risk characteristics; and “callable” implications meaning the issuing company may redeem the stock at a certain price after a certain date.

KEY RISKS. This material is for information purposes only, and may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part 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 SE. In 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 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 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 JPMorgan Chase & Co. 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.