Chief Investment Office

JPM –  CIO Assembly Update –Text Alt Script

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Opinions expressed are those of the speakers and may differ from those of other J.P. Morgan employees and affiliates.  Neither J.P. Morgan nor any of its affiliates can represent that the statements or opinions expressed today will materialize.

This is not an investment research video.  The views and strategies described may not be suitable for all investors. This video is not intended as personal investment advice or as a solicitation or recommendation. The information contained in this video should not be relied upon in isolation for the purpose of making an investment decision. Investors are urged to consider carefully whether the products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) and strategies discussed are suitable to their individual needs. Investors must also consider the objectives, risks, charges, and expenses associated with the investment product or strategy prior to making an investment decision.  More complete information is available from your J.P. Morgan representative, and you should be aware of the general and specific risks relevant to the matters discussed in the material. Past Performance is no guarantee of future results.

There can be no assurance that the professionals currently employed by JPMorgan Chase & Co., its subsidiaries and affiliates worldwide, (collectively JPMC) will continue to be employed by JPMC or that the past performance or success of any such professional serves as an indicator of such professional’s future performance or success. Please read important information at the end of the video.

INVESTMENT PRODUCTS ARE:

• NOT FDIC INSURED

• 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

On screen:

Titles appear, reading: “Chief Investment Office. Managing Your Wealth.”

Close-up of Richard Madigan, an executive with salt-and-pepper hair, standing by a window overlooking a city

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Richard Madigan. Chief Investment Officer, JP Morgan Private Bank.

Mr. Madigan:

I'm Richard Madigan, the Chief Investment Officer of J.P. Morgan's Private Bank, and I want to share with you today how we manage our clients' wealth. 

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LONG-TERM PERSPECTIVE

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A montage shows Mr. Madigan sitting in a large conference room, with over a dozen financial specialists. Each attendee has documents, charts, and notebooks.

Mr. Madigan:

We ground our investment philosophy on four anchor pillars. The first, and probably the most important, is being a long-term investor. The trick really to long-term investing is to stay invested, holding through those cycles over a longer period generates constructive and positive returns.

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An analyst reviews an economic line-graph on his tablet computer.

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TACTICAL FLEXIBILITY

Mr. Madigan:

The second pillar is tactical flexibility, and that's taking a long-term strategic view and then overlaying how to navigate a macro cycle, a geopolitical headline, and where we see the smartest risk and mix of risk in a portfolio. 

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A montage shows the Capitol Building; a massive cargo ship, leaving port; and an aerial view of a large farm.

Mr. Madigan:

It's not timing a market, it's navigating an investment cycle, and there's a critical difference between the two. 

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SPECIALIZATION

Mr. Madigan:

The third pillar is specialization, and we've made a significant shift on my team, not only in terms of bringing specialists in by asset class, but multi-asset class portfolio managers. 

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A montage shows a team of portfolio managers, collaborating, reviewing documents, and examining large computer monitors.

Mr. Madigan:

I think the industry is getting this wrong in still anchoring around a generalist role.  The world's a great deal more complicated.  I think the challenge is investing and the opportunities are demanding a degree of specialization that we really haven't seen in a generation.

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Asymmetric Approach

Mr. Madigan:

The fourth pillar is an asymmetric approach to risk, and in simple terms that really means focusing much more on trying to capture more of the upside in the market when it's going up and less of the downside in the market  when it's going down.  The critical path to doing that is making sure that we're getting the right strategic asset allocation so that diversification can help and play its part.

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A flashback shows Mr. Madigan, in his office, studying financial reports.

Mr. Madigan:

And I think much more importantly making sure that we compound that difference over the investment horizon of being a long-term investor. 

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Chief Investment Office. The CIO Team.

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Close-up of Mr. Madigan.

Mr. Madigan:

I want to focus on the CIO team.  We work with 100 investment professionals globally. We very much focus on an institutional approach to money management.  And we made a tremendous shift into specialization and specialists.

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Mr. Madigan and his team take notes and exchanging ideas during a video conference.

Mr. Madigan:

We've added asset class portfolio managers over the last year-to-year-and-a-half on my team as the complexity of what happens within a unique asset class becomes so much more important in driving not only the outcome of returns but how we take risk. Asset class portfolio managers help me analyze the opportunities within each asset class, so there's a lot of rigor and depth in terms of how we identify opportunities and try to identify things that make the most sense to be in a portfolio, and also not to be in a portfolio.

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Identify opportunities across asset classes.

Mr. Madigan:

My multi-asset class portfolio management team can help me take each of those individual ideas at an asset-class level and determine how it fits into a portfolio, not only in terms of how we right-size it, but how we actually implement that yield.

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A multi-asset class portfolio manager looks at multiple computer screens displaying financial data  - and a printed report entitled "Sector Allocation Analysis."

Mr. Madigan:

The other critical piece is focusing on portfolio analytics, portfolio construction, quantitative risk management.  That's the anchor or the pillar to everything we do.  We're able to size risks in portfolios and actually stress test those portfolios as well. 

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Construct Risk-Efficient Portfolios.

Mr. Madigan:

Another critical team that we work with is our manager selection and due diligence teams.  That's crucial because not all investment vehicles are created equally, whether that's an active manager or whether that's a passive strategy. 

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In an office with large windows overlooking a city, three portfolio managers review physical and digital documents.

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Search for and monitor strategies across asset classes.

Mr. Madigan:

Having a dedicated group of people who can understand not only how those managers generate returns with consistency, but also help negotiate the fees, so we’re paying the least possible with regard to implementation costs really is something that I’m path dependent on and my team is. The managed solutions part of our business is really focused on innovation and that involves portfolio specialists that help us drive not only innovation but also communication.

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A diverse group of financial specialists participate in a lively meeting at a spacious office.

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Drive innovation and enhance the client experience.

Mr. Madigan:

That way, my CIO team is focused full-time on managing your money.

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Chief Investment Office. Constructing a Portfolio's Foundation.

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Suzanne Wuebben, an executive with long dark hair, speaks to us from a comfortable office with gold-framed artwork.

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Suzanne Wuebben. Head of Portfolio Analytics, JP Morgan Private Bank.

Ms. Wuebben:

When we construct an investment portfolio, there are three key building blocks that serve as the foundation. Growth, Stability and Diversification. Each serves a different role.  We’d all like to grow the value of our assets, and we do this primarily through equity exposure. But while equities have the greatest potential to grow your assets, they also come with greater uncertainty and risk. To balance the higher growth potential and higher volatility of equities, we employ high-quality fixed income and cash to provide lower volatility and a more consistent income stream.

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A montage shows financial specialists analyzing stock market data on their computer monitors.

Ms. Wuebben:

This adds some stability to portfolios to help minimize significant drawdowns and to help keep you invested through the cycles.  While many investors can build well-diversified portfolios with simply cash, stocks, and bonds, we don't stop there.  Hedge funds and liquid alternatives are an additional element of diversification.  This gives the portfolio exposure to more opportunistic strategies and often lower volatility. 

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Hedge Funds & Liquid Alternatives diversify through uncorrelated returns and may be less liquid.

Ms. Wuebben:

It's another tool to use without being fully exposed to the risks in the market, therefore theoretically improving portfolio efficiency.

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A pie chart shows three segments, labeled:

Stability (fixed income & cash);

Growth (equities);

Diversification (Hedge Funds and Liquid Alternatives)

Ms. Wuebben:

We believe a well-diversified portfolio built for the long term needs all three components. When creating a strategic plan to appropriately allocate these components for each individual investor, your risk tolerance, time horizon, spending and liquidity needs, and other facts specific to you must be considered. Additionally, we need assumptions about what markets may do over the long term. Together with JPMorgan Asset Management, we create long-term, forward-looking assumptions for over 50 asset classes in multiple currencies. These include estimates for return, volatility, and correlation, which is a measure of the degree in which two markets move relative to one another. We don't think historical returns are indicative of future returns, so we use a different approach to create these forward-looking views. They are estimates of how the asset class will evolve over time and are independent as to how you choose to gain access to that asset class.

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Economic analysts study line-graphs, comparative data, and columns of numerical figures on computer screens.

Ms. Wuebben:

All of this work culminates into the foundation of each of the portfolios that we manage for our clients.

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Chief Investment Office. Our Tactical Flexibility.

On screen:

Jeff Gaffney, a bearded executive, walks through an open office Michael Gray, a colleague with short dark hair and glasses.

Next, a close-up of Jeff Gaffney, in an open office.

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Jeff Gaffney. Head of Multi-Asset Portfolio Management for the Americas, JP Morgan Private Bank.

Mr. Gaffney:

With the strategic allocation as the key reference point for long-term asset allocation and risk, our team evaluates the current market environment for investment opportunities across the shorter time horizon, which we expect to enhance the ability of our portfolios to deliver on client objectives. The first, and most essential question that we need to answer, is how much risk we wish to take relative to the risk budget that we have laid out for the portfolios. 

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A flashback shows Mr. Gaffney looking over financial documents in his office. Next, a close-up of Michael Gray.

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Michael Gray. Head of Fixed Income and Credit Portfolio Management, JP Morgan Private Bank.

Mr. Gray:

If we see signs of a slowdown in economic activity, deterioration in corporate earnings or negative trends in leverage or defaults that markets have not fully discounted, we may look to reduce risk to protect capital and buffer client portfolios from potential volatility.

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A meter indicating "Less Risk" appears, with the text:

 - SLOWING GROWTH;

 - DETERIORATION IN CORPORATE EARNINGS;

 - RISING UNEMPLOYMENT;

 - NEGATIVE TRENDS IN LEVERAGE;

 - INCREASING DEFAULTS;

 - DOVISH CENTRAL BANKS;

 - RISING RISK PREMIUM.

Mr. Gray:

Alternatively, if we see signs of improving growth, accelerating employment or investment levels, or more accommodative government policies, we may look to increase risk by targeting exposures that stand to benefit most. 

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A meter indicating "More Risk" appears, with the text:

 - ACCELERATING GROWTH;

 - IMPROVING CORPORATE EARNINGS;

 - RISING WAGES;

 - DECLINE IN DEFAULTS.

Mr. Gray:

Once we establish the short-term outlook, my team and I, use it to assess opportunities and risks across the global fixed income market. We perform comprehensive analysis of these opportunities, formalize recommendations and engage Jeff and the multi-asset portfolio management team to explore how they may fit into the overall portfolio.

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The segment of the three-sectioned pie chart, labeled "fixed income & cash" displays the text:

 - Governments;

 - High Yield;

 - Investment Grade Corporates;

 - Inflation-Linked;

 - Emerging Markets;

 - Cash.

Next, a montage shows Mr. Gaffney and Mr. Gray attending a meeting in a small conference room. Then, a close-up of Mr. Gaffney.

Mr. Gaffney:

Once Michael and the fixed income team make a recommendation we work closely with them and the other asset class teams to examine each opportunity available to us and to understand their potential contribution to portfolio risk and return.

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A pie chart with three sections labeled: Fixed Income and Cash, Equities, Hedge Funds and Liquid Alternatives.

Mr. Gaffney:

Do they improve the return potential of the overall portfolio?  Would they add or reduce our aggregate risk taking?  Do we expect them to provide enhanced diversification to economic and market exposures?  We perform extensive scenario analysis to test how the exposure may behave under various economic and market conditions beyond our base case expectations.  We complete the process by selecting how to most thoughtfully and efficiently implement these within each portfolio. 

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Chief Investment Office. The Investment Process.

On screen:

Close-up of Mr. Madigan from his office.

Mr. Madigan:

We use the phrase a 'disciplined investment approach' and I actually want to put some context around what we mean in that discipline.  I think first and foremost it's anchoring around your goals as the starting point; that's the strategic asset allocation discussion and really for me the North Star in making sure that we get the portfolio construct right, not only with regard to your return expectations, but also the amount of risk you're comfortable with.  Next comes the tactical flexibility in a portfolio and quite honestly how I feel about the world around us, and how we put apart a risk budget.  That's help not only in terms of the macro landscape and what we're seeing in markets, but valuations, central bank policy, and even geopolitics. 

On screen:

A flashback shows Mr. Gaffney and Mr. Gray walking through a company hallway to Mr. Madigan's office.

Mr. Madigan:

I rely heavily on our asset class portfolio managers to help me analyze the opportunities within an asset class.  That can mean things that we like and want to overweight; things that we want to avoid, either because of valuation or because we think something can do better in contributing return and risk to a portfolio. The multi-asset class portfolio managers help me determine how those ideas within an asset class fit into a portfolio and also determine how much we want across equities, across fixed income, and also across alternatives.

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In an airy office, a financial specialist analyses portfolio statistics on her large computer monitor.

Mr. Madigan:

Our portfolio analytics, portfolio construction, and quant and risk teams help me analyze the risk characteristics in our portfolios.  That starts with strategic asset allocation, but it also includes what we're doing tactically in a portfolio In the investment committee at the end of the day, the decision of what goes into a portfolio or doesn't is mine.

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Final Decision.

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A montage shows Mr. Madigan, in a large conference room, receiving input from his team.

Mr. Madigan:

But I can tell you I've been smart enough to surround myself with a lot of very smart people who create a very healthy debate in terms of getting to the right investment decisions for each of our portfolios

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Chief Investment Office. Designing Your Portfolio.

On screen:

Close-up of Nancy Rooney, an executive with straight blonde hair, speaking to us from a comfortable office with gold-framed artwork.

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Nancy Rooney Global Head of Managed Solutions, JP Morgan Private Bank.

Ms. Rooney:

While we know financial markets go up over time, we also know it’s not a straight line. And so, designing a portfolio with the level of risk that feels manageable is paramount to our process so that clients have the confidence and conviction to stay invested when markets go down as they inevitably do during any cycle. Our highest conviction idea at the end of the day is that markets go up over time.  But time is that key word.  And so, understanding the time frame over which a client is investing is a key ingredient for us in choosing that right mix of assets.  While volatility or risk is inherent in any financial market, that volatility is really greatest over short periods of time. 

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A chart appears labeled "Return Potential and Your Tolerance for Risk." It shows a low-risk/low-return graph labeled "stability," which advances to a high risk/high return graph labeled "growth."

Ms. Rooney:

The confidence to stay invested over the long term can really be the difference between reaching your financial goals or not. Once we’ve decided on the right risk level in a portfolio, we then have the ability to customize the allocation further as we incorporate a client’s preference. 

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Ms. Rooney and a client review International economic statistics. Then, a close-up of Ms. Rooney.

Ms. Rooney:

There are essentially four different decisions that we can make together to create a portfolio that’s customized for each client.

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RETURN OBJECTIVES

Markets-based or Cash-Based

Ms. Rooney:

First, we have the opportunity to choose between 2 sets of portfolios: the first set is based upon the overall returns of the market.  And the objective of these portfolios is to outperform an agreed upon mix of assets over time. We’ll be active in the way that we manage those portfolios – and will make changes to the allocation throughout the year as our CIO team sees opportunities to overweight and underweight certain markets and asset classes around the world.  Together with our clients, we will establish an appropriate benchmark – which effectively just acts as a point of reference – to evaluate our performance over time. And for those clients who seek a portfolio with a lower degree of volatility – where consistency of return is of prime importance to them – we’ve designed a portfolio that’s less reliant upon market returns.  

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Ms. Rooney and Mr. Madigan speak while walking through a corporate lobby, with a large piece of abstract art on the wall. Next, a close-up of Ms. Rooney.

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GEOGRAPHIC FOCUS - Global or Regional

Ms. Rooney:

The decision on where to invest a portfolio is an important one.  We manage portfolios that are invested across the globe as well as portfolios that are more regionally focused – like in the US and in Europe– for those clients who feel more comfortable having the bulk of their assets invested in their home market. Our recommendation lies in being global. 

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A montage shows major North American, European, and Asian cities, including: Toronto; London; and Hong Kong.

Ms. Rooney:

We want to essentially capitalize on the fact that markets go through periods of expansion and contraction at different rates and at different times.  And so, being global gives us the full flexibility to navigate that broader opportunity set. In choosing how to implement almost any type of portfolio, we have the ability to use both active and passive managers.

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IMPLEMENTATION PREFERENCE - Active & Passive or Primarily Passive

Ms. Rooney:

In fact, as the passive market has continued to evolve and deepen, we’ve shifted a considerable portion of our equity exposure to passive and passive factors–which means meaningfully lower costs.  Our recommendation is to use both.  By combining active and passive strategies together, I’m able to get precise exposure to efficient markets in a cost-effective way while also being able to use active managers in less efficient markets where they have the greater opportunity to add value. In any portfolio that we build, we also have a choice on whether we want to include alternatives.  And in this context, alternatives can be vehicles such as Hedge funds as well as liquid alternatives. 

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USE OF ALTERNATIVES - Hedge Funds and Liquid Alternatives

On screen:

A financial specialist reviews complex economic data on his desktop computer. Then, a close-up of Ms. Rooney.

Ms. Rooney:

While Hedge funds can bring some restrictions on liquidity, we look to Hedge Funds and Liquid Alternatives as important tools that can help us get access to markets that just are not as easily reached by traditional stock/bond managers – which also allows us to increase the level of diversification in a portfolio. Designing a portfolio for a client is a process that’s unique to each person.  As we consider their financial objectives as well as their tolerance for risk, we also aim to provide some level of choice. And choice to me is the ability to express preference within a circle of good advice which is our hallmark.  And so, we look forward to working with you to build the portfolio that is right for you and your families to reach your financial goals.

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Chief Investment Office. A Portfolio Example.

On screen:

Close-up of Jeff Gaffney.

Mr. Gaffney:

One way to illustrate our investment process is to walk through an actual example of an allocation change that we executed in portfolios. As we entered 2016, the global landscape reflected an environment of heightened economic uncertainty. GDP growth was decelerating across both developed and emerging markets.  Commodity prices were continuing to plummet.  And both equity and credit markets were reflecting increasingly divergent views of the business cycle conditions as well as corporate default risk. 

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2016 Market Environment:

 - Decelerating Growth;

 - Question of Recession;

 - Falling Commodity Prices;

 - Divergent Views on Business Cycle;

 - Corporate Default Risk.

Mr. Gaffney:

We have been monitoring these trends closely.  And as part of our on-going assessment of the near-term environment, the team evaluated the risks to global growth and the chances of recession. We engaged our Asset Class teams and Alternatives, Equities and Fixed Income, to produce a comprehensive view with respect to our outlook and investment strategy for this environment. The goal of the exercise was to use our investment conclusions, to stress test our existing portfolio positioning, and identify ways to reduce risk efficiently.

On screen:

Two groups of executives participate in a video conference. Then, a close-up of Mr. Gray.

Mr. Gray:

We leveraged our team’s expertise, as well as the full complement of resources available across the firm, and externally, to challenge our outlook for growth in key economies. Including China, the US, and across the Euro zone.  After extensive analysis and debate, we concluded that the slow-down in growth, while meaningful, was transitory.  And that in our view, the risk of global recession, remained relatively low. Once we reaffirmed our short-term outlook, we examined conditions and valuations within each asset class.  Global fixed income markets had priced in a much higher risk of recession than either equities or alternatives.  Particularly in the corporate bond market, where spreads had widened dramatically and now implied a sharp spike in defaults over the next twelve months. 

On screen:

A pie chart with three sections labeled: Fixed Income and Cash, Equities, Hedge Funds and Liquid Alternatives.

Mr. Gray:

While a large portion of this repricing was justified by the drop in commodity prices, our analysis indicated that credit valuations were reflecting a more negative outlook than even our most pessimistic estimates.  This was true across both developed and developing markets. But US investment grade and high yield actually had dislocated the most.  We completed our analysis in mid-February, shared and debated our conclusions, and determined it was an opportunity to add both an investment grade credit and high yield exposure to portfolios at highly attractive valuations.

On screen:

At large conference meeting, Mr. Madigan's asset class teams expound upon their findings and strategies. Then, a close-up of Mr. Gaffney.

Mr. Gaffney:

Together with the input, received from our partners across other asset class teams, we made a few decisions. The upside for high yield in particular, looked attractive, even in the context of potential equity market returns.  So, we decided to bring down our exposure to equities alongside our addition to high yield.  The net result was a reduction in the amount of risk that we were taking across portfolios.  Without a reduction in our expected returns. Positions were sized according to both the opportunity on offer in the credit markets, and the risk reduction that we sought to achieve in the trade. 

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Financial analysts examining their computer screens, which display economic data regarding sector breakdowns and relative sector weight. Then, a close-up of Mr. Gaffney.

Mr. Gaffney:

Finally, the implementation was thoughtfully executed through high conviction managers, which had extensive experience in credit markets, and who believed could successfully navigate those markets, applying such levers as sector exposure, and securities selection, to the benefit of our clients.

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IMPORTANT INFORMATION

Purpose of This Material

This material is for information purposes only. The information provided may inform you of certain investment products and services offered by J.P. Morgan’s private banking business, part of JPMorgan Chase & Co.  The views and strategies described in the material may not be suitable for all investors and are subject to investment risks. Please read this Important Information in its entirety.

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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. Investors may get back less than they invested, and past performance is not a reliable indicator of future results.

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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 I00 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.

GENERAL RISKS OF INVESTMENTS AND STRATEGIES

Investments in alternative investment strategies is speculative, often involves a greater degree of risk than traditional investments including limited liquidity and limited transparency, among other factors and should only be considered by sophisticated investors with the financial capability to accept the loss of all or part of the assets devoted to such strategies.

Private Equity. While investments in private equity funds provide potential for attractive returns, access to opportunities not available in the public markets and diversification, they also present significant risks including illiquidity, long-term time horizons, loss of capital and significant execution and operating risks that are not typically present in public equity markets. Private equity funds typically have a 10-15 year term and will begin to monetize investments after holding them for 4-5 years.

Hedge Funds. Hedge funds (or funds of hedge funds): often engage in leveraging and other speculative investment practices that may increase the risk of investment loss; can be highly illiquid; are not required to provide periodic pricing or valuation information to investors; may involve complex tax structures and delays in distributing important tax information; are not subject to the same regulatory requirements as mutual funds; and often charge high fees. Further, any number of conflicts of interest may exist in the context of the management and/or operation of any hedge fund.

Fixed income. Investing in fixed income products is subject to certain risks, including interest rate, credit, inflation, call, prepayment and reinvestment risk. Any fixed income security sold or redeemed prior to maturity may be subject to substantial gain or loss.

High Yield. High Yield bonds are speculative non-investment grade bonds that have higher risk of default or other adverse credit events which are appropriate for high risk investors only.

Asset Allocation. Asset allocation does not guarantee a profit or protect against loss.

Foreign. Holders of foreign securities can be subject to foreign exchange risk, exchange-rate risk and currency risk, as exchange rates fluctuate between an investment’s foreign currency and the investment holder’s domestic currency.  Conversely, it is possible to benefit from favorable foreign exchange fluctuations.

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There may be different or additional factors which are not reflected in this material, but which may impact on a client’s portfolio or investment decision. The information contained in this material is intended as general market commentary and  should not be relied upon in isolation for the purpose of making an investment decision. 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 is intended to constitute a representation that any investment strategy or product is suitable for you.  You should consider carefully whether any products and strategies discussed are suitable for your needs, and to obtain additional information prior to making an investment decision. 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.  Contact your J.P. Morgan representative for additional information concerning your personal investment goals. You should be aware of the general and specific risks relevant to the matters discussed in the material. You will independently, without any reliance on J.P. Morgan, make your own judgment and decision with respect to any investment referenced in this material.

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Regulatory Status

In the United States, 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. JPMCB and JPMS are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

In the United Kingdom, this material is issued by J.P. Morgan International Bank Limited (JPMIB) with the registered office located at 25 Bank Street, Canary Wharf, London E14 5JP, registered in England No. 03838766.  JPMIB is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. In addition, this material may be distributed by: JPMorgan Chase Bank, N.A. (“JPMCB”), Paris branch, which is regulated by the French banking authorities Autorité de Contrôle Prudentiel et de Résolution and Autorité des Marchés Financiers; J.P. Morgan (Suisse) SA, regulated by the Swiss Financial Market Supervisory Authority; JPMCB Dubai branch, regulated by the Dubai Financial Services Authority; JPMCB Bahrain branch, licensed as a conventional wholesale bank by the Central Bank of Bahrain (for professional clients only).   

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 JPMIB and/or 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.

With respect to countries in Latin America, the distribution of this material may be restricted in certain jurisdictions. Receipt of this material does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. 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.

© 2017 JPMorgan Chase & Co. All rights reserved.

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