guide to the markets - j.p. morgan asset management13. global growth 14. global purchasing...
TRANSCRIPT
Guide to the Markets
MARKET INSIGHTS
Asia | 3Q 2018 | As of June 30, 2018
| 2GTM – AsiaGlobal Market Insights Strategy Team
Hannah AndersonHong Kong
Manuel Arroyo Ozores, CFAMadrid
Lucia Gutierrez MelladoMadrid
Vincent JuvynsLuxembourg
Tilmann Galler, CFAFrankfurt
Maria Paola ToschiMilan
Tai HuiHong Kong
Ian HuiHong Kong
Marcella ChowHong Kong
Dr. Jasslyn Yeo, CFASingapore
Kerry Craig, CFAMelbourne
Chaoping Zhu, CFAShanghai
Yoshinori ShigemiTokyo
Shogo MaekawaTokyo
Nandini RamakrishnanLondon
Michael Bell, CFALondon
Jai MalhiLondon
Ambrose CroftonLondon
Karen WardLondon
Agnes LinTaipei
Alex Dryden, CFANew York
Dr. David Kelly, CFANew York
Samantha AzzarelloNew York
Gabriela SantosNew York
David LebovitzNew York
Jordan JacksonNew York
John ManleyNew York
Tyler VoigtNew York
Dr. Cecelia MundtNew York
3
| 3GTM – Asia
Fixed income44. Global fixed income: Yields and returns45. Global fixed income: Interest rate risk46. Global fixed income: Valuations47. Global fixed income: Return composition48. Global fixed income: U.S. business cycles and yield curve49. U.S. real yields50. U.S. corporate credit51. U.S. high yield bonds52. Asia fixed income markets
Other asset classes53. Asset class returns54. Volatility55. Correlations56. Treasury yield and asset class performance57. U.S. dollar drivers58. Currencies59. Emerging market external positions60. Oil: Short-term market dynamics61. Commodities62. Alternative sources of income
Investing principles63. Real return on cash and yields64. Investors’ market timing65. Annual returns and intra-year declines66. The compounding effect67. Portfolio construction, asset class returns and volatility68. The benefits of diversification and long-term investing69. The benefits of saving and investing early70. Environmental, social and governance investing
Regional and local economy4. Asia: Economic snapshot5. ASEAN: Economic snapshot6. China: Economic snapshot7. China: Cyclical indicators8. China: Monetary policy9. China: Credit and leverage10. China: Investment and industrial capacity11. China: Exchange rate and foreign reserves12. Japan: Economic snapshot
Global economy13. Global growth14. Global Purchasing Managers’ Index (PMI): Manufacturing 15. Global trade16. Inflation and policy rates17. Central bank policy rates18. Central bank balance sheets 19. Political calendar20. United States: Economic growth and the composition of GDP21. United States: Cyclical indicators22. United States: Employment and wages23. United States: Inflation24. United States: Monetary policy25. United States: Leverage26. Eurozone: Economic snapshot27. Eurozone: Inflation and lending
Equities28. Global and Asia equity market returns29. Global equities: Earnings expectations and returns30. Global equities: Valuations31. Global equities: Profit margins32. Global equities: High dividend33. Emerging market equities: Performance drivers34. APAC ex-Japan and U.S. equities35. APAC ex-Japan: Equities snapshot36. APAC ex-Japan: Cyclicals versus defensive equities37. APAC ex-Japan: Sector returns and valuations38. China: A-shares versus H-shares39. Japan: Earnings, currency and equities40. United States: Earnings and returns41. United States: Bear markets and subsequent bull returns42. United States: Interest rates and equities43. Europe: Earnings and currencies
Page reference
|GTM – Asia 4
4
Regi
onal
and
loca
l eco
nom
y
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
'01 '03 '05 '07 '09 '11 '13 '15 '17
Asia: Economic snapshot
EM Asia* contribution to real GDP growthYear-over-year growth
Investment and exportsEM Asia* nominal investment, export volumes, y/y change, 3MMA
Source: CEIC, J.P. Morgan Economic Research, National Statistics Agencies, J.P. Morgan Asset Management; (Right) Netherlands Bureau of Policy Analysis.*EM Asia includes China, Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand. **Consumption includes both private/household and public/government consumption.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Investment
Export volumes
InvestmentConsumption**
Net exportsGDP
-4%
-2%
0%
2%
4%
6%
8%
10%
'12 '13 '14 '15 '16 '17 '18
|GTM – Asia 5
5
Regi
onal
and
loca
l eco
nom
y
-3%
0%
3%
6%
9%
12%
15%
18%
'12 '13 '14 '15 '16 '17 '18
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
'12 '13 '14 '15 '16 '17 '180%
1%
2%
3%
4%
5%
6%
7%
Indonesia Malaysia Philippines Singapore Thailand
ASEAN: Economic snapshot
ExportsYear-over-year change, 6-month moving average
Consumption growthYear-over-year change
Infrastructure spending as % of GDP
Source: National Statistics Agencies, J.P. Morgan Asset Management; (Left) FactSet; (Top right) CEIC; (Bottom right) HSBC.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Singapore
Thailand
IndonesiaPhilippines
MalaysiaThailand
Indonesia
Philippines
Malaysia
Singapore
2018 forecast
2010
|GTM – Asia 6
6
Regi
onal
and
loca
l eco
nom
y
46
48
50
52
54
56
'11 '12 '13 '14 '15 '16 '17 '18
-6%
-3%
0%
3%
6%
9%
12%
15%
18%
21%
'11 '12 '13 '14 '15 '16 '17 '18-8%
-4%
0%
4%
8%
12%
16%
20%
'80 '85 '90 '95 '00 '05 '10 '15
China: Economic snapshot
Contribution to real GDP growthYear-over-year change
Caixin/Markit Purchasing Managers’ IndicesLevel
Electricity consumptionYear-to-date, year-over-year change
Source: J.P. Morgan Asset Management; (Left) CEIC, FactSet, National Bureau of Statistics of China; (Top right) Caixin/Markit; (Bottom right) China Electricity Council, WIND.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Manufacturing
Services
Net exports
Gross capital formation (investment) Consumption
GDP
Secondary
Tertiary
2017: 6.9%6/2018: 51.0
6/2018: 53.9
5/2018: 15.1%
5/2018: 7.8%
|GTM – Asia 7
7
Regi
onal
and
loca
l eco
nom
y
|
-45%
-30%
-15%
0%
15%
30%
45%
60%
75%
90%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
'10 '11 '12 '13 '14 '15 '16 '17 '18
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
'06 '08 '10 '12 '14 '16 '1825%
30%
35%
40%
45%
50%
9%
10%
11%
12%
'16 '17 '18
China: Cyclical indicators
China inflationYear-over-year change
Industrial profits and PPI inflationYear-to-date, year-over-year change Year-over-year change
Property prices and land salesYear-to-date, year-over-year change
Source: CEIC, National Bureau of Statistics of China, J.P. Morgan Asset Management.*Land area sold is adjusted in 2011 to maintain chart scale, as growth in area sold well exceeded 30% year-over-year.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
CPI-Services
Consumer Price Index (CPI)
CPI-Goods
Industrial profits Producer Price Index (PPI)
Retail and online salesYear-over-year change, 3-month moving average
Retail sales
Online sales
Residential property prices (lagged 12m)
Land area sold*
-6%
-3%
0%
3%
6%
9%
-10%
0%
10%
20%
30%
40%
'11 '12 '13 '14 '15 '16 '17 '18
|GTM – Asia 8
8
Regi
onal
and
loca
l eco
nom
y
0.0%
1.5%
3.0%
4.5%
6.0%
7.5%
'15 '16 '17 '18 01/16 07/16 01/17 07/17 01/18 07/182.0%
2.2%
2.4%
2.6%
2.8%
3.0%
3.2%
3.4%
3.6%
3.8%
4.0%
4.2%
China: Monetary policy
Key policy ratesPer annum
Chinese government bond yields
Source: People’s Bank of China, J.P. Morgan Asset Management; (Left) CEIC; (Right) FactSet. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Lending rate (1-year)
Interbank repo (7-day)
Standing lending facility (7-day)
Deposit rate (1-year)
10-year
1-year
5-year
Interest on excess reserves
|GTM – Asia 9
9
Regi
onal
and
loca
l eco
nom
y
0.0x0.5x1.0x1.5x2.0x2.5x3.0x3.5x4.0x4.5x
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
China: Credit and leverage
Credit growthYear-over-year change
Debt level by sector% of GDP
Credit growth to GDP growthBroad credit measure*, ratio, year-over-year growth, 3-month moving average
Source: J.P. Morgan Asset Management; (Top and bottom left) CEIC, China Central Depository & Clearing Co., People’s Bank of China, Shanghai Clearing House; (Bottom right) BIS. Credit growth to GDP growth ratio utilizes rolling 12-month nominal GDP and broad credit. *The broad credit measure consists of all reported bank claims on the domestic economy, plus bankers’ acceptances, entrusted loans, trust loans, new net corporate bond and non-financial equity financing, issuance of asset-backed securities and interbank loans. **Wenzhou SME crisis refers to the wave of bankruptcies and funding problems faced by a large number of SMEs in Wenzhou in 2011. ***LGFV refers to local government financing vehicle. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Total social financing Broad credit*
RMB bank lending
Global Financial Crisis
Loosening: 216bp rate cuts, 4tn stimulus
Tightening: 125bp rate hikes, BASEL III adoption
Wenzhou small and medium enterprise (SME) crisis**
Interbank liquidity crunchLoosening: 56bp
rate cuts, trust boom
Tightening: shadow banking tightening
Loosening: 165bp rate cuts, LGFV debt swap***
A-share market crash
Tightening
Rate cut
Rapid rebound in CPI & PPI
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '1870%
90%
110%
130%
150%
170%
190%
0%
10%
20%
30%
40%
50%
60% Government
Non-financial corporations
Households
0%
5%
10%
15%
20%
25%
30%
35%
40%
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
|GTM – Asia 10
10
Regi
onal
and
loca
l eco
nom
y
China: Investment and industrial capacity
Fixed asset investment Year-to-date, year-over-year change
Source: CEIC, FactSet, National Bureau of Statistics, J.P. Morgan Asset Management. *Industrial capacity utilization rate is defined as the percent of total available production capacity being used to produce finished goods.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Private
Total
Capacity utilizationIndustrial capacity utilization rate*
State-owned enterprises
0%
10%
20%
30%
40%
'11 '12 '13 '14 '15 '16 '17 '1872%
73%
74%
75%
76%
77%
78%
79%
'13 '14 '15 '16 '17 '18
|GTM – Asia 11
11
Regi
onal
and
loca
l eco
nom
y
'16 '17 '1890
92
94
96
98
100
102
104
106
'13 '14 '15 '16 '17 '18-120
-90
-60
-30
0
30
60
90
120 6.0
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
6.9
7.0
China: Exchange rate and foreign reserves
Chinese yuan exchange rate: CFETS RMB* vs. USDIndex, Jan. 2016 = 100
USD / CNY and change in FX reserves
Source: FactSet, J.P. Morgan Asset Management; (Left) China Foreign Exchange Trade Center, J.P. Morgan Economic Research; (Right) People’s Bank of China.*CFETS RMB index is the China Foreign Exchange Trade System basket of 24 currencies traded against the Chinese renminbi. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Weaker yuan
Stronger yuan
USD / CNY
Change in monthly FX reserves (USD billions)
USD / CNY (inverted)
CFETS RMB index
|GTM – Asia 12
12
Regi
onal
and
loca
l eco
nom
y
|
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
'11 '12 '13 '14 '15 '16 '17 '180.4%
0.8%
1.2%
1.6%
2.0%
'14 '15 '16 '17 '18
-40%
-20%
0%
20%
40%
60%
80%
'11 '12 '13 '14 '15 '16 '17 '18 '80 '85 '90 '95 '00 '05 '10 '15-6%
-4%
-2%
0%
2%
4%
6%
8% 1%
2%
3%
4%
5%
6%
Japan: Economic snapshot
Corporate inflation expectations*Tankan business conditionsDiffusion Index, all enterprises
Operating profitsYear-over-year change
Real wage growth and labor marketYear-over-year change, 6-month moving average Inverted scale
Source: J.P. Morgan Asset Management; (Top left and right) Bank of Japan; (Bottom left and right) FactSet; (Bottom left) Ministry of Finance; (Bottom right) Japanese Statistics Bureau and Statistics Center, Ministry of Health, Labor and Welfare. *Inflation expectations are calculated from the responses to the Bank of Japan’s all firm survey of business expectations and are for inflation expectations 1, 3 and 5 years from each point in time. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Non-manufacturing
Manufacturing
Non-manufacturing
Manufacturing
3 years ahead
1 year ahead
5 years ahead
Latest5 years ahead 1.1%3 years ahead 1.1%1 year ahead 0.9%
Total real cash earnings Unemployment rate
|GTM – Asia 13
13
Glob
al e
cono
my
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
Forecast
Global growth
Source: J.P. Morgan Economics Research, J.P. Morgan Asset Management.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Real GDP growthYear-over-year change
DM growth outperforms EM
EM growth outperforms DM
Developed market (DM) GDP growthEmerging market (EM) GDP growth
EM less DM growth
|GTM – Asia 14
14
Glob
al e
cono
my
30
35
40
45
50
55
60
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Global Purchasing Managers’ Index (PMI): Manufacturing
Source: Australian Industry Group, J.P. Morgan Economic Research, Markit, J.P. Morgan Asset Management.PMIs are relative to 50, which indicates contraction (below 50) or expansion (above 50) of the sector. *% of countries available with a manufacturing PMI above 50.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Developed and emerging market manufacturing PMI Global manufacturing activity% of markets in expansionary territory*
DM PMI
EM PMI
0%
20%
40%
60%
80%
100%
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
15
-800 -600 -400 -200 0 200 400 600 800
Overall
China
EU
Mexico
Germany
Japan
India
Taiwan
Korea
Canada
UK
Exports as a share of GDP – 2017Goods exports
8.0%
12.5%
14.3%
25.5%
10.5%
12.1%
19.1%
24.2%
35.8%
16.5%
36.7%
47.7%
52.8%
0% 10% 20% 30% 40% 50% 60%
U.S.
EU*
Japan
Canada
Brazil
India
China
Russia
Mexico
Australia
Korea
ASEAN
Taiwan
Source: FactSet, J.P. Morgan Asset Management; (Left) IMF; (Right) U.S. Bureau of Economic Analysis. *EU exports as a percentage of GDP excludes intra-EU trade as the European Union is considered one regional economy.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
U.S. trade balance with key partners – 2017Goods and services, USD billions
U.S.
EU
China
Other
Japan
Trade balance
Exports
Imports
-3,000 3,000
|GTM – Asia 16
16
Glob
al e
cono
my
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May2017 2017 2017 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018
China 1.5 1.5 1.4 1.8 1.6 1.9 1.7 1.8 1.5 2.9 2.1 1.8 1.8 3.0 4.35 ( 10/2015)
India 2.2 1.5 2.4 3.3 3.3 3.6 4.9 5.2 5.1 4.4 4.3 4.6 4.9 2.0 – 6.0 6.25 ( 6/2018)
Indonesia 4.3 4.4 3.9 3.8 3.7 3.6 3.3 3.6 3.3 3.2 3.4 3.4 3.2 3.0 – 5.0 5.25 ( 6/2018)
Japan 0.4 0.4 0.4 0.7 0.7 0.2 0.6 1.0 1.4 1.5 1.1 0.6 0.7 2.0 -0.1 – 0.0 ( 2/2016)
Korea 2.0 1.9 2.2 2.6 2.1 1.8 1.3 1.5 1.0 1.4 1.3 1.6 1.5 2.0 1.5 ( 11/2017)
Malaysia 3.8 3.4 3.1 3.6 4.2 3.7 3.3 3.4 2.7 1.4 1.3 1.4 1.8 2.0 – 3.0 3.25 ( 1/2018)
Taiwan 0.6 1.0 0.8 1.0 0.5 -0.3 0.3 1.2 0.9 2.2 1.6 2.0 1.6 2.0 1.375 ( 6/2016)
Thailand 0.0 0.0 0.2 0.3 0.9 0.9 1.0 0.8 0.7 0.4 0.8 1.1 1.5 1.0 – 4.0 1.5 ( 4/2015)
U.S. 1.9 1.6 1.7 1.9 2.2 2.0 2.2 2.1 2.1 2.2 2.4 2.5 2.8 2.0 1.75 – 2.0 ( 6/2018)
Eurozone 1.4 1.3 1.3 1.5 1.5 1.4 1.5 1.4 1.3 1.1 1.3 1.3 1.9 2.0 0.00 ( 3/2016)
UK 2.9 2.6 2.6 2.9 3.0 3.0 3.1 3.0 3.0 2.7 2.5 2.4 2.4 2.0 0.5 ( 11/2017)
Central bank target ( easing, tightening)
Key policy rate*Market
Inflation and policy rates
Source: FactSet, various central banks, J.P. Morgan Economic Research, J.P. Morgan Asset Management.All inflation numbers refer to headline CPI inflation. *Arrows and dates indicate the direction and date of last change, respectively. The central bank’s policy rates used are: the one-year benchmark lending rate (China), Reserve Bank of India policy repo rate (India), Bank Indonesia 7-day reverse repo rate (Indonesia), the Bank of Japan’s (BoJ) policy rate on the aggregate balance of all financial institutions’ current accounts at the BoJ (Japan), Bank of Korea base rate (Korea), overnight policy rate (Malaysia), discount rate (Taiwan), one-day repurchase rate (Thailand), fed funds rate (U.S.), eurozone main refinancing operations rate (eurozone) and Bank of England official bank rate (UK). Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Monthly inflation trendYear-over-year change Below target by more than
0.5% or below range Within +/- 0.5% of target or within range
Above target by more than 0.5% or above range
|GTM – Asia 17
17
Glob
al e
cono
my
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18-1%
0%
1%
2%
3%
4%
5%
6%
7%
Central bank policy rates
Source: Bloomberg Finance L.P., J.P. Morgan Asset Management; (Left) FactSet. G4 are the Bank of England, the Bank of Japan, the European Central Bank and the U.S. Federal Reserve. *Key deposit rates that central banks charge commercial banks on their excess reserves. **The BoJ is adopting a three-tier system in which a negative interest rate of -0.1% will be applied to the policy rate balance of the aggregate amount of all financial institutions that have current accounts at the BoJ. ***Diffusion index covers 24 central banks weighted by each market’s share of global debt securities outstanding on an ultimate issuer basis. A rate hike is considered tightening, a rate cut loosening and no change neutral; 1 = all banks tightening, 0 = all banks on hold, -1 = all banks loosening. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
G4 central bank key policy rates Global central bank policyCentral bank policy rate diffusion index***, 6-month moving average
Policy rate Deposit rate*
Eurozone 0.0% -0.4%Japan** -0.1 to 0.0% -0.1%UK 0.5% 0.0%U.S. 1.75 to 2.0% 1.95%
Policy tightening globally
Policy easing globally
-0.8
-0.7
-0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
'00 '02 '04 '06 '08 '10 '12 '14 '16
|GTM – Asia 18
18
Glob
al e
cono
my
-1000
-500
0
500
1000
1500
2000
'16 '17 '18 '19
Central bank balance sheets
Source: Bloomberg Finance L.P., J.P. Morgan Asset Management.*New purchases of assets are based on monthly holdings as reported by each respective G4 central bank (the Bank of England, the Bank of Japan, the European Central Bank and the U.S. Federal Reserve) and announced purchase plans of these central banks and J.P. Morgan Asset Management projections. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Central bank asset purchases 12-month rolling bond purchases by G4 central banks*, USD billions
Projections U.S.Eurozone
JapanNet
UK
|GTM – Asia 19
19
Glob
al e
cono
my
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Emerging markets political timeline
Developed markets political timeline
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
7 & 28 October BrazilGeneral election
October/NovemberChina 4th Party Plenum
1 July MexicoGeneral election
October Ireland Presidential election
Source: Bloomberg, J.P. Morgan Asset Management.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Political calendar
6 November U.S.Midterm elections
March China Annual session of the National People’s Congress (NPC)
September JapanLiberal Democratic Party presidential election
29 March UKUK officially leaves the EU
2019
2019
17 April IndonesiaGeneral election
May IndiaGeneral election
9 September SwedenGeneral election
23-26 May EuropeEU Parliament election
13 May PhilippinesHouse of Representatives elections
6 July U.S.First round of tariffs on Chinese imports go into effect
|GTM – Asia 20
20
Glob
al e
cono
my
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
'18'13'08'03'98'93'88'83'78'73'68 -1
1
3
5
7
9
11
13
15
17
19
21
United States: Economic growth and the composition of GDP
Source: Bureau of Economic Analysis, FactSet, J.P. Morgan Asset Management.*SAAR stands for the seasonally adjusted annualized rate.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Real GDPYear-over-year change
Components of GDP1Q18 nominal GDP, USD trillions
13.0% Investment ex-housing
69.0% Consumption
17.3% Gov’t spending
3.9% Housing
-3.2% Net exports
Average: 2.7%
Average post-Global Financial Crisis: 2.2%
Real GDP 1Q18
Year-over-year change: 2.8%
Quarter-over-quarter SAAR* change: 2.0%
|GTM – Asia 21
21
Glob
al e
cono
my
8
10
12
14
16
18
20
22
24
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
United States: Cyclical indicators
Investment and demand for creditYear-over-year change % reporting stronger demand*
Light vehicle salesMillions, seasonally adjusted annualized rate
Housing starts Thousands, seasonally adjusted annualized rate
Savings and sentimentQuarterly change Index
5/2018: 16.8
Average: 15.7
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '180
500
1,000
1,500
2,000
2,500
5/2018: 1,350Average: 1,324
'00 '02 '04 '06 '08 '10 '12 '14 '16 '1850
60
70
80
90
100
110
120
0
2
4
6
8
10
12 Personal savings rate Consumer sentiment
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18-80%
-60%
-40%
-20%
0%
20%
40%
60%
-20%
-15%
-10%
-5%
0%
5%
10%
15%Investment** Demand for business loans
Source: J.P. Morgan Asset Management; (Top left) U.S. Bureau of Economic Analysis; (Top right, bottom left and right) FactSet; (Bottom left and right) U.S. Census Bureau. *Net percent of participants in the Senior Loan Officer Survey. **Private investment in non-residential fixed assets in real terms. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
|GTM – Asia 22
22
Glob
al e
cono
my
Unemployment rate and average hourly earnings*Percent of labor force, year-over-year change, seasonally adjusted
'85 '90 '95 '00 '05 '10 '150%
2%
4%
6%
8%
10%
12%
United States: Employment and wages
Source: FactSet, U.S. Bureau of Labor Statistics, J.P. Morgan Asset Management.*Average hourly earnings are calculated from the wages of production and non-supervisory workers.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Average hourly earnings
Unemployment rate
Recessions
5/2018: 3.8%
5/2018: 2.8%
|GTM – Asia 23
23
Glob
al e
cono
my
United States: Inflation
Source: FactSet, U.S. Bureau of Labor Statistics, J.P. Morgan Asset Management; (Left) U.S. Bureau of Economic Analysis.*Core CPI and core PCE are the Consumer Price Index (CPI) and Personal Consumption Expenditure (PCE) deflator ex-food and energy.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Core inflationYear-over-year change, seasonally adjusted
CPI contributionContribution to latest year-over-year headline CPI
Avg. since 1985
Avg. since 2000 5/2018
Core CPI* 2.7% 2.0% 2.2%Core PCE* 2.2% 1.7% 2.0%
0.0% 0.4% 0.8% 1.2% 1.6% 2.0% 2.4% 2.8%
Headline
Food & Beverage
Energy
Core CPI
Shelter
Healthcare
Transportation
Others
'85 '90 '95 '00 '05 '10 '150.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
|GTM – Asia 24
24
Glob
al e
cono
my
2.17%
2.60% 2.65%2.38%
3.13%
3.38%
2.90%
0%
1%
2%
3%
4%
5%
6%
'05 '07 '09 '11 '13 '15 '17 '19 '21
United States: Monetary policy
Source: Bloomberg, FactSet, Federal Reserve, J.P. Morgan Asset Management.Market expectations are the federal funds rates priced into the Fed Fund futures market as of 30/6/18. Federal Reserve projections shown are median estimates of FOMC participants.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Longrun
FOMC June 2018 forecasts Percent
2018 2019 2020 Long run
Change in real GDP, 4Q to 4Q 2.8 2.4 2.0 1.8
Unemployment rate, 4Q 3.6 3.5 3.5 4.5
PCE inflation, 4Q to 4Q 2.1 2.1 2.1 2.0
Federal funds rate expectationsFOMC and market expectations for the fed funds rate
Federal funds rate
FOMC long-run projection
FOMC year-end estimatesMarket expectations on 30/6/18
25
25%
30%
35%
40%
45%
50%
55%
6%
8%
10%
12%
14%
16%
18%
20%
'80 '90 '00 '10
Source: FactSet, J.P. Morgan Asset Management; (Left) Bank for International Settlements; (Right) Federal Reserve, United States Department of the Treasury.Debt refers to gross debt. *Government debt affordability is measured by the ratio of federal government net interest payments to revenue collected in the same period. **Household debt affordability is measured by the debt service ratio, which is calculated as household debt payments as a % of disposable income in the same period. ***Non-financial corporates debt affordability is measured by the ratio of total outstanding credit market debt to total market value net worth, which includes revenues, real assets and securities held.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
U.S. debt to GDP ratios% of nominal GDP
Debt affordability
Households
Non-financial
corporates
Government
Non-financial corporates***
Households**
Government*
|GTM – Asia 26
26
Glob
al e
cono
my
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18-4%
-3%
-2%
-1%
0%
1%
2%
-15%
-10%
-5%
0%
5%
10%
Unemployment rateHarmonized rate, seasonally adjusted
'01 '03 '05 '07 '09 '11 '13 '15 '177%
8%
9%
10%
11%
12%
13%
Businesses and investmentBusiness confidence y/y change fixed asset investment lagged 1Q
'09 '10 '11 '12 '13 '14 '15 '16 '17 '18-4%-3%-2%-1%0%1%2%3%4%5%
-40-35-30-25-20-15-10
-505
Consumer confidence* and retail salesYear-over-year change, 3-month moving average
Eurozone: Economic snapshot
Source: Eurostat, FactSet, J.P. Morgan Asset Management; (Top and bottom right) European Commission.*Eurozone consumer confidence as reported by the European Commission, which measures the level of optimism that consumers have about the economy. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
5/2018: 8.4%
Eurozone business confidence
Fixed investment
Retail sales
Consumer confidence
Recession
|GTM – Asia 27
27
Glob
al e
cono
my
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
'12 '13 '14 '15 '16 '17 '18
Eurozone bank lendingYear-over-year change
'06 '08 '10 '12 '14 '16 '181%
2%
3%
4%
5%
6%
7%
'06 '08 '10 '12 '14 '16 '18-5%
0%
5%
10%
15%
Eurozone: Inflation and lending
Source: ECB, FactSet, J.P. Morgan Asset Management; (Left) Eurostat.*Core rate is CPI inflation (HICP) excluding energy, food, alcohol and tobacco. **Interest on new business lending up to 1 million euro, on a 1-5 year maturity.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Eurozone CPI inflationContribution to headline inflation, year-over-year change
Corporate lending rates to smaller companiesInterest rate**, non-financial corporations
Household
Corporate
Food, alcohol, tobaccoCore rate*EnergyCPI
ItalyGermany
Spain
France
ECB inflation target: 2%
|GTM – Asia 28
28
Equi
ties
Global and Asia equity market returns
Source: FactSet, MSCI, J.P. Morgan Asset Management.Returns are total returns based on MSCI indices and CSI 300 index in U.S. dollar terms. China A returns are based on the CSI300 Index while China return is based on the MSCI China index. 10-yr total (gross) return data is used to calculate annualized returns (Ann. Ret.) and annualized volatility (Ann. Vol.) and reflect the period 30/6/08 – 30/6/18. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2Q '18 YTD '18 Ann. Ret. Ann. Vol.
Japan India ASEAN U.S. India U.S. China A Japan Taiwan China U.S. U.S. U.S. China A
-29.1% 102.8% 32.4% 2.0% 26.0% 32.6% 52.1% 9.9% 19.6% 54.3% 3.5% 2.9% 10.1% 29.4%
U.S. China A Korea ASEAN China Japan India China A U.S. Korea India Taiwan Taiwan India
-37.1% 98.5% 27.2% -6.1% 23.1% 27.3% 23.9% 2.4% 11.6% 47.8% -0.6% -0.7% 7.0% 29.0%
Taiwan Taiwan Taiwan Europe ASEAN Europe U.S. U.S. Korea India Europe China China Korea
-45.9% 80.2% 22.7% -10.5% 22.8% 26.0% 13.4% 1.3% 9.2% 38.8% -0.9% -1.7% 6.2% 26.9%
Europe ASEAN India Korea APAC ex-JP
Taiwan Taiwan Europe APAC ex-JP
APAC ex-JP
Japan Japan APAC ex-JP
China
-46.1% 75.0% 20.9% -11.8% 22.6% 9.8% 10.1% -2.3% 7.1% 37.3% -2.8% -1.8% 5.5% 23.8%
ASEAN APAC ex-JP
APAC ex-JP
Japan Korea Korea China India ASEAN China A China Europe Korea Taiwan
-47.6% 73.7% 18.4% -14.2% 21.5% 4.2% 8.3% -6.1% 6.2% 32.6% -3.4% -2.7% 5.2% 21.6%
China Korea Japan APAC ex-JP
Europe China ASEAN Korea Japan ASEAN APAC ex-JP
APAC ex-JP
ASEAN APAC ex-JP
-50.8% 72.1% 15.6% -15.4% 19.9% 4.0% 6.4% -6.3% 2.7% 30.1% -3.5% -4.1% 5.2% 21.2%APAC ex-JP
China U.S. China Taiwan APAC ex-JP
APAC ex-JP
China China Taiwan Taiwan India India ASEAN
-51.6% 62.6% 15.4% -18.2% 17.7% 3.7% 3.1% -7.6% 1.1% 28.5% -6.1% -7.5% 5.2% 20.3%
Korea Europe China Taiwan U.S. China A Japan APAC ex-JP
Europe Europe Korea ASEAN China A Europe
-55.1% 36.8% 4.8% -20.2% 16.1% -2.6% -3.7% -9.1% 0.2% 26.2% -9.1% -9.4% 4.5% 20.2%
China A U.S. Europe China A China A India Europe Taiwan India Japan ASEAN Korea Japan Japan
-63.2% 27.1% 4.5% -20.5% 10.9% -3.8% -5.7% -11.0% -1.4% 24.4% -11.0% -9.4% 3.8% 15.5%
India Japan China A India Japan ASEAN Korea ASEAN China A U.S. China A China A Europe U.S.
-64.6% 6.4% -8.4% -37.2% 8.4% -4.5% -10.7% -18.4% -15.2% 21.9% -13.6% -13.5% 3.0% 15.0%
10-yrs ('08 - '18)
|GTM – Asia 29
29
Equi
ties
Forward earnings per shareIndex, U.S. dollar, Jan. 2008 = 100
14%
11%10%
9%
6%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
U.S. World Asia Pacificex-Japan
EM Europe'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '1820
40
60
80
100
120
140
160
180
Global equities: Earnings expectations and returns
Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management. *EPS growth outlook is based on next 12 month aggregate (NTMA) earnings estimates. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Return compositionLast 12 months, U.S. dollar
Asia Pacific ex-Japan
Europe
Japan
U.S.
EM
Multiple expansion
Total return EPS growth outlook*Currency return Dividend yield
|GTM – Asia 30
30
Equi
ties
Global equities: Valuations
Source: Bloomberg Finance L.P., China Securities Index, FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management.Price-to-earnings (P/E) and price-to-book (P/B) ratios are in local currency terms. China A valuations based on the CSI300 Index and use 10 years of data due to availability. China valuation is based on the MSCI China. 15-year range for P/E and P/B ratios are cut off to maintain a more reasonable scale for some indexes. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Equity market valuations – Price to bookTrailing P/B ratios
Equity market valuations – Price to earningsForward P/E ratios
15-yr. averageLatest
15-yr. range38.3 35.830.8
15-yr. averageLatest
15-yr. range5.2
14.712.8 12.5 13.9
11.113.3 13.8
13.711.7
15.6 15.8 16.1
9.3
13.9
7.2
14.9
10.4 9.6
16.2 13.912.5
12.611.3
13.4 15.5
11.811.9 15.4
18.3
12.8
8.0
13.4
5.8
15.8
10.5
6.1
0x
10x
20x
30x
S&P 500 Europeex-UK
Asia Pacex-Japan
AsiaPacific
Emergingmarkets
ASEAN Australia China A(CSI 300)
China HongKong
India Japan Korea Taiwan Russia Mexico Brazil Turkey
2.6
1.81.9
1.7 1.8 2.0 2.2 2.11.6 1.4
3.0
1.4 1.3
1.9
1.0
2.7
1.7 1.6
3.2
1.81.7
1.5 1.7 1.8 2.0 1.71.9
1.3
3.0
1.3 1.11.9
0.8
2.2 1.8
1.2
0x
1x
2x
3x
4x
5x
S&P 500 Europeex-UK
Asia Pacex-Japan
AsiaPacific
Emergingmarkets
ASEAN Australia China A(CSI 300)
China HongKong
India Japan Korea Taiwan Russia Mexico Brazil Turkey
|GTM – Asia 31
31
Equi
ties
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '186%
7%
8%
9%
10%
11%
12%
U.S. labor share of income and profit margins**
Global equities: Profit margins
Source: FactSet, J.P. Morgan Asset Management; (Left) J.P. Morgan Economic Research; (Top right) U.S. Bureau of Economic Analysis; (Bottom right) Standard & Poor’s. (Left and bottom right) MSCI. *PPI is producer price index. **Employee compensation % nominal GDP, after-tax corporate profits with inventory & valuation adjustment % nominal GDP, seasonally adjusted annualized rate.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
MSCI World EPS and developed market inflationYear-over-year change
Europe vs. U.S. operating profit margins%, earnings per share / sales per share
MSCI Europe
S&P 500
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '1850%
51%
52%
53%
54%
55%
56%
57%
58%
59%
3%
4%
5%
6%
7%
8%
9%
10%
11%Profit marginRecessionPPI Inflation* Earnings per share
Labor share
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
-12%
-8%
-4%
0%
4%
8%
12%
'99 '01 '03 '05 '07 '09 '11 '13 '15 '17
|GTM – Asia 32
32
Equi
ties
Global equities: High dividend
Source: FactSet, MSCI, J.P. Morgan Asset Management; (Top) CLSA.*Total returns based on MSCI indices in U.S. dollar terms. **Sector weight data as of 30/5/18. Cyclical sectors include Consumer Discretionary, Information Technology, Industrials, Financials, REITs and Materials. Defensive sectors include Telecommunications, Health Care, Utilities, Energy and Consumer Staples. Positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Composition of MSCI High Dividend Equity Indices** Number of companies yielding greater than 3% by regionConstituents of MSCI AC World Index
MSCI AC Asia Pacific ex-Japan: Performance by dividend yield*USD cumulative total return by tertile with quarterly rebalancing (Jan. 2000 = 100)
2nd tertile
Bottom tertileAll stocks
Top tertile
Defensives Cyclicals Financials
MSCI AC World 49.0% 35.6% 15.4%
MSCI World (DM) 52.2% 34.6% 13.3%
MSCI EM 34.2% 33.7% 32.1%
MSCI AC AsiaPacific ex-Japan 37.0% 29.6% 33.4%
331
208
138 125
64
0
50
100
150
200
250
300
350
Asia Pac. ex-Japan
Europe EM ex-Asia U.S. Japan
0
100
200
300
400
500
600
700
800
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18
|GTM – Asia 33
33
Equi
ties
'97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '170
50
100
150
200
250 90
100
110
120
130
'97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '1740
80
120
160
200
240
280
100
200
300
400
500
EM equity relative performance and commoditiesRelative index level, Dec. 1997 = 100 Index level
Source: FactSet, MSCI, J.P. Morgan Asset Management; (Left) J.P. Morgan Economic Research; (Top right) Bloomberg Finance L.P.*REER is the real effective exchange rate. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
EM vs. DM growth and equity performance%, next 12 months’ growth estimates Index level
Relative EM / DM equity performance and USD REERRelative index level, Dec. 1997 = 100 Index levelEq
uitie
s
EM growth & equity outperformance
EM growth & equity underperformance
EM minus DM GDP growth
MSCI EM / MSCI DM
MSCI EM / MSCI DM
Bloomberg Commodity Index
USD REER (inverted)*
MSCI EM / MSCI DM
Emerging market equities: Performance drivers
0
20
40
60
80
100
120
140
160
-1%
0%
1%
2%
3%
4%
5%
'95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17
|GTM – Asia 34
34
Equi
ties
0
50
100
150
200
250
300
350
400
'97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17
APAC ex-Japan and U.S. equities
Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management.Forward price-to-earnings ratio is a bottom-up calculation based on the most recent index price, divided by consensus estimates for earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates. Returns are cumulative and based on price movement only, and do not include the reinvestment of dividends.Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
MSCI AC Asia Pacific ex-Japan and S&P 500 IndexJanuary 1997 = 100, U.S. dollar, price return
P/E 15-yr avg. Div. yield 15-yr. avg.
S&P 500 16.2x 14.7x 1.9% 2.0%
MSCI AC APxJ 12.5x 12.5x 2.9% 3.2%
+94%
+111%
31/3/00P/E (fwd.) = 24.4x
-49%
29/2/00P/E (fwd.) = 16.2x
31/10/07P/E (fwd.) = 15.1x
31/10/07P/E (fwd.) = 17.0x
+101%
+359%-65%
-51%
+302%
30/6/18P/E (fwd.) = 16.2x
30/6/18P/E (fwd.) = 12.5x
+163%
-57%
|GTM – Asia 35
35
Equi
ties
'11 '12 '13 '14 '15 '16 '17 '180
20
40
60
80
100
120
140
160
180
200
Earnings by sectorNext 12-month consensus earnings per share, USD, Jan. 2011 = 100
Telecom
MSCI AC Asia Pacific ex-Japan P/B ratioTrailing P/B ratio
APAC ex-Japan: Equities snapshot
Source: FactSet, MSCI, J.P. Morgan Asset Management; (Bottom right) CEIC, national statistics agencies. Earnings per share (EPS) used is next 12 months’ aggregate estimate. *EM Asia ex-China includes Hong Kong, Korea, Malaysia, Singapore, Taiwan, Thailand and Vietnam. Overall exports aggregate is GDP-weighted. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Growth in nominal exports and earnings per shareUSD, year-over-year change
Discr.
Financials
Tech
MSCI AC Asia Pacific ex-JP EPS
EM Asia ex-China exports*
MaterialsEnergy
Indust.
Staples
Utilities
Health care
'00 '02 '04 '06 '08 '10 '12 '14 '16 '181.0x
1.5x
2.0x
2.5x
3.0x
6/2018: 1.7x
+1 SD: 2.0x
-1 SD: 1.5x
Average: 1.8x
-60%
-40%
-20%
0%
20%
40%
60%
80%
'01 '03 '05 '07 '09 '11 '13 '15 '17
|GTM – Asia 36
36
Equi
ties
-2
-1
0
1
2
3
4
5
'01 '03 '05 '07 '09 '11 '13 '15 '17 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '181.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
0.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
APAC ex-Japan: Cyclicals versus defensive equities
Source: FactSet, MSCI, J.P. Morgan Asset Management.*Cyclical sectors include Consumer Discretionary, Information Technology, Industrials, Financials and Materials. REITs are excluded from this analysis. It is more appropriate to value a REIT by looking at its price relative to its funds from operations (FFO), an income measure that excludes depreciation. Price-to-earnings (P/E) ratios look at price relative to net income, a measure that includes depreciation, making the comparison of valuations across sectors inappropriate. Defensive sectors include Telecommunications, Health Care, Utilities and Consumer Staples. Sector valuations are equal weighted. **Cyclicals represent the MSCI AC Asia Pacific ex-Japan Cyclical Sector index and defensives represent the MSCI AC Asia Pacific ex-Japan Defensive Sector index. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Cyclicals vs. defensives ex-energy valuations*MSCI AC APxJ cyclicals / defensives ex-energy fwd. P/E ratio, z-score
Cyclicals vs. defensives relative performance and rates**MSCI AC APxJ cyclical / defensive performance 10-year U.S. Treasury yield
Cyclicals vs. defensives 10-year UST
Current: -1.77
Cyclicals expensive relative to defensives
Cyclicals cheap relative to defensives
|GTM – Asia 37
37
Equi
ties
APAC ex-Japan: Sector returns and valuations
Source: FactSet, MSCI, J.P. Morgan Asset Management. *Correlation to interest rates is calculated using daily sector returns and daily 10-year U.S. Treasury yield over the last 10 years. Returns are total (gross) returns in U.S. dollar terms. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Finan
cials
Real E
state
Health
Care
Cons.
Staples
Cons.
Discr.
Industr
ials
Materia
ls
Energ
y
Telec
om
Utilitie
s
Tech
nolog
y
APAC ex-JP
APAC ex-JPWeights 25.5% 6.2% 4.4% 5.7% 7.7% 6.3% 7.1% 4.7% 3.3% 3.0% 26.1% 100%
Wei
ghts
YTD return -5.9 -4.5 10.5 2.0 -10.2 -9.6 -3.0 3.3 -12.9 1.2 -2.8 -4.1
2017 return 30.1 39.6 39.5 29.9 41.1 22.6 33.9 33.0 11.7 18.4 61.5 37.3
From peak (October 2007)
26.7 7.3 187.8 72.3 35.3 -36.8 -13.5 -21.8 -7.0 53.2 154.9 28.2
From trough (March 2009)
293.2 265.9 403.6 241.5 255.0 129.8 149.9 125.9 94.7 144.2 489.2 250.0
Beta to APAC ex-JP 1.08x 1.09x 0.49x 0.58x 0.95x 1.06x 1.13x 1.23x 0.73x 0.59x 1.00x 1.00x β
Correl to int rates* 0.14 0.12 0.08 0.09 0.17 0.17 0.12 0.16 0.12 0.11 0.14 0.16 ρ
Forward P/E Ratio 9.9x 10.5x 31.0x 22.5x 15.0x 12.4x 12.0x 11.0x 14.2x 14.1x 13.5x 12.5x
10-yr avg. 11.0x 12.2x 21.3x 17.6x 11.8x 13.8x 12.7x 12.0x 13.8x 14.2x 14.1x 12.4x
Trailing P/B Ratio 1.3x 0.9x 5.4x 3.2x 1.9x 1.3x 1.6x 1.3x 1.7x 1.4x 2.8x 1.7x
10-yr avg. 1.4x 0.9x 4.3x 2.6x 1.8x 1.4x 1.7x 1.5x 2.1x 1.5x 2.2x 1.6x
Dividend Yield 3.9% 3.8% 1.1% 2.5% 1.9% 2.7% 3.5% 3.5% 5.1% 4.0% 1.7% 2.9%
10-yr avg. 3.9% 3.8% 1.3% 2.7% 2.0% 2.6% 3.2% 3.1% 4.7% 3.8% 1.7% 2.9%
Ret
urn
Div
P/E
P/B
|GTM – Asia 38
38
Equi
ties
-40-30-20-100102030405060
-20-10
01020304050607080
Dec '14 Jun '15 Dec '15 Jun '16 Dec '16 Jun '17 Dec '17 Jun '18
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
'13 '14 '15 '16 '17'13 '14 '15 '16 '17 '1870
80
90
100
110
120
130
140
China: A-shares versus H-shares
Source: J.P. Morgan Asset Management; (Top and bottom left) FactSet, MSCI; (Top right) People’s Bank of China, WIND; (Bottom right) CEIC, Hong Kong Exchanges and Clearing Limited. The CSI 300 represents onshore Chinese A-share large cap equities. MSCI China represents primarily offshore listed Chinese equities and the onshore equities included in MSCI benchmarks.Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Foreign investors’ holdings of onshore Chinese equitiesRMB trillions
Corporate earningsNext 12-month consensus earnings per share, USD, Jan. 2013 = 100
Chinese equities correlation with U.S. equity marketRolling 6-month correlation, daily returns
Stock Connect monthly net flowsHKD billions RMB billions
CSI 300
MSCI China
CSI 300
MSCI China
Foreign investor holdingsTotal as a % of domestic market cap
Northbound (Hong Kong to China)
Southbound (China to Hong Kong)
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
0.6
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
|GTM – Asia 39
39
Equi
ties '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
3%
4%
5%
6%
7%
8%
9%
10%
11%
2%
4%
6%
8%
10%
12%
14%
16%
1/15 7/15 1/16 7/16 1/17 7/17 1/18 7/1814,000
16,000
18,000
20,000
22,000
24,000
26,000
95
100
105
110
115
120
125
130
Japan: Earnings, currency and equities
Source: FactSet, J.P. Morgan Asset Management; (Top Left) Japan Cabinet Office, MSCI; (Bottom Left) Economic and Social Research Institute, Ministry of Finance; (Right) Nikkei.*Correlation based on the daily change between the currency and the Nikkei 225 index. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Nikkei 225 and Japanese yen Index USD / JPY
Domestic demand and corporate profitsJPY trillions
Corporate profits and return on equity
Weaker yen
Stronger yen
1/15 - 6/18
Correlation*: 0.17
Nikkei 225 USD / JPYCorporate profits % of nominal GDP
MSCI Japan ROE
Domestic demand Ordinary profits
0
2
4
6
8
10
12
100
200
300
400
500
600
700
800
'80 '84 '88 '92 '96 '00 '04 '08 '12 '16
|GTM – Asia 40
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Equi
ties
United States: Earnings and returns
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management; (Top left) Compustat.EPS levels are based on operating earnings per share. *1Q earnings estimates are Standard & Poor’s consensus analyst expectations, based on actual earnings for the 98% of Standard & Poor’s companies that have reported and earnings estimates for the remaining 2% of companies. **Real estate sector return is not included due to data availability. Trigger to count returns is if the 10-year yield rose more than 25bps in prior 3 months. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Total return in a rising yield environment**Annualized average of rolling 3-month total return (USD), 1994-2018
S&P 500 cash returned to shareholdersUSD, rolling 4-quarter averages USD billions, rolling 4-quarter averages
S&P 500 earnings per share*Quarterly operating earnings, USD
Forecast
-0.5%
4.4%
5.8%
8.4%
22.2%
22.6%
23.0%
26.0%
26.4%
30.3%
-6% 4% 14% 24% 34%
Utilities
Consumer Staples
Telecom svs
Healthcare
Financials
Industrials
Consumer Discretionary
Materials
Energy
I.T.
Cyclical sectors
Defensive sectors
20
40
60
80
100
120
140
160
15
19
23
27
31
35
39
43
47
51
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18
05
1015202530354045
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18
Dividends per share
Share buybacks
|GTM – Asia 41
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Equi
ties
-100%
-80%
-60%
-40%
-20%
0%
1926 1931 1936 1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016
10
Characteristics of bull and bear markets
Market corrections
Bear markets Macro environment Bull markets
Mkt. Peak Bear return
Duration (months) Recession Commodity
spikeAggressive
FedExtreme
valuationsBull begin
dateBull
returnDuration (months)
1 Crash of 1929 - excessive leverage, irrational exuberance Sep 1929 -86% 32 Jul 1926 152% 37 2 1937 Fed tightening - premature monetary tightening Mar 1937 -60 61 Mar 1935 129 23 3 Post WWII crash - post-war demobilisation, recession fears May 1946 -30 36 Apr 1942 158 49 4 Flash crash of 1962 - flash crash, Cuban Missile Crisis Dec 1961 -28 6 Oct 1960 39 13 5 Tech crash of 1970 - economic overheating, civil unrest Nov 1968 -36 17 Oct 1962 103 73 6 Stagflation - OPEC oil embargo Jan 1973 -48 20 May 1970 74 31 7 Volcker tightening - whip inflation now Nov 1980 -27 20 Mar 1978 62 32 8 1987 crash - programme trading, overheating markets Aug 1987 -34 3 Aug 1982 229 60 9 Tech bubble - extreme valuations, dotcom boom/bust Mar 2000 -49 30 Oct 1990 417 113
10 Global financial crisis - leverage/housing, Lehman collapse Oct 2007 -57 17 Oct 2002 101 60 Current cycle Mar 2009 302 111
Averages - -45% 25 - 160% 55
United States: Bear markets and subsequent bull returns
Source: FactSet, NBER, Robert Shiller, Standard & Poor’s, J.P. Morgan Asset Management. *A bear market represents a 20% or more decline from the previous market high using a monthly frequency. Periods of recession are defined using the NBER’s business cycle dates. Commodity spike is defined by a significant upward movement in oil prices. Periods of extreme valuation are defined as periods where the forward P/E multiple on the S&P 500 were approximately two standard deviations above the long-run average. Aggressive Fed tightening is defined as Federal Reserve monetary tightening that was unexpected and/or significant in magnitude. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
S&P 500 Composite declines from all-time highs
20% market decline*
Recession
Equi
ties
3
2
1
6
5
4 78
9
|GTM – Asia 42
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Equi
ties
Source: FactSet, Federal Reserve System, Standard & Poor’s, J.P. Morgan Asset Management.Returns are based on price index only and do not include dividends. Markers represent monthly 2-year correlations only.Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Correlations between weekly stock returns and interest rate movements Weekly S&P 500 returns, 10-year Treasury yield, rolling 2-year correlation, May 1963 – June 2018
United States: Interest rates and equities
Positive relationship between yield movements and stock returns
Negative relationship between yield movements and stock returns
10-year Treasury yield
Cor
rela
tion
coef
ficie
nt
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
0% 2% 4% 6% 8% 10% 12% 14% 16%
|GTM – Asia 43
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Equi
ties
Europe: Earnings and currencies
Source: MSCI, J.P. Morgan Asset Management; (Left) Thomson Reuters; (Right) FactSet.*Euro area is represented by the MSCI EMU index. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Euro area yearly earnings trend*Earnings per share, January of each year = 100
Euro area earnings vs. the euroLast 12 months’ earnings per share EUR / USD
EUR / USD20172014
20162013 2015
2018
'00 '02 '04 '06 '08 '10 '12 '14 '16 '180.8
0.9
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
0
5
10
15
20
25MSCI EMU EPS EUR / USD
84
88
92
96
100
104
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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Global fixed income: Yields and returns
Source: Bloomberg Finance L.P., FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management. Based on Bloomberg Barclays U.S. Aggregate Credit - Corporate High Yield Index (U.S. Corporate HY), Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index (U.S. Corporate IG), J.P. Morgan Government Bond Index – EM Global (GBI-EM) (Local EMD), J.P. Morgan Emerging Market Bond Index Global (EMBIG) (USD EMD), J.P. Morgan Asia Credit Index (JACI) (USD Asian), Bloomberg Barclays Pan European High Yield (Europe HY), J.P. Morgan Government Bond Index – Global Traded (DM Gov’t), J.P. Morgan Asia Credit Non-investment Grade Corporate Index (Asia Corporate HY), Bloomberg Barclays Global U.S. Treasury – Bills (3-5 years) (U.S. Treasury) and Bloomberg Barclays U.S. Treasury – Bills (1-3 months) (Cash). 5-year data is used to calculate annualized returns (Ann. Ret.). Returns are in USD and reflect the period from 30/6/13 – 30/6/18. *Duration is a measure of the sensitivity of the price (the value of the principal) of a fixed-income investment to a change in interest rates and is expressed as number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices. **Correlation to the 10-year U.S. Treasury is a measure over 10 years of data. Positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
U.S. Corporate HY
Global bond opportunities
Asia Corporate HY
U.S. Corporate IG
USD Asian Bond
Cash
Local EMD
U.S. Treasury
DM Government Bond
Fixed income sector returns
USD EMD
Europe HY
YTM Duration* (years)
Correl. to 10-yearUST**
8.3% 4.6 -0.05
7.4% 4.5 0.07
6.7% 6.8 0.25
6.7% 3.9 -0.21
5.5% 5.2 0.27
4.2% 3.8 -0.24
4.0% 7.3 0.47
2.7% 6.1 0.99
1.9% 0.2 -0.01
1.6% 8.0 0.61
5-yrs2013 2014 2015 2016 2017 2Q '18 YTD '18 Ann. Ret.
EuropeHY
USDAsian Asia HY U.S. HY
EuropeHY U.S. HY Cash Asia HY
14.9% 8.3% 5.8% 17.1% 21.0% 1.0% 0.8% 6.1%
U.S. HY U.S. IGUSD
AsianLocalEMD
LocalEMD Cash U.S. HY U.S. HY
7.4% 7.5% 2.8% 11.4% 15.4% 0.4% 0.2% 5.5%
Asia HY Asia HYUSDEMD Asia HY
USDEMD
U.S.Treas DM Gov 't
USDAsian
4.3% 5.5% 1.2% 11.4% 9.3% 0.1% -0.9% 4.6%
CashUSDEMD
U.S.Treas
USDEMD U.S. HY U.S. IG
U.S.Treas
USDEMD
0.0% 5.5% 0.8% 10.2% 7.5% -1.0% -1.1% 4.4%USD
AsianU.S.
Treas Cash U.S. IG DM Gov 'tUSD
AsianUSD
AsianEurope
HY-1.4% 5.1% 0.0% 6.1% 6.8% -1.2% -2.5% 3.6%
U.S. IG U.S. HY U.S. IGUSD
Asian U.S. IG DM Gov 't U.S. IG U.S. IG
-1.5% 2.5% -0.7% 5.8% 6.4% -3.0% -3.3% 3.5%U.S.
Treas DM Gov 't DM Gov 'tEurope
HY Asia HY Asia HYEurope
HYU.S.
Treas-2.7% 0.7% -2.6% 3.4% 6.2% -3.4% -4.2% 1.5%
DM Gov 't Cash U.S. HY DM Gov 'tUSD
AsianUSDEMD Asia HY DM Gov 't
-4.5% 0.0% -4.5% 1.6% 5.8% -3.5% -4.3% 1.3%LocalEMD
EuropeHY
EuropeHY
U.S.Treas
U.S.Treas
EuropeHY
USDEMD Cash
-5.5% -6.0% -7.6% 1.0% 2.3% -6.2% -5.2% 0.4%USDEMD
LocalEMD
LocalEMD Cash Cash
LocalEMD
LocalEMD
LocalEMD
-6.6% -6.1% -18.0% 0.3% 0.8% -12.3% -7.7% -1.6%
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Global fixed income: Interest rate risk
Source: Barclays, Bloomberg Finance L.P., FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management.Based on Bloomberg Barclays U.S. Treasury indices (U.S. Treasury, 1-3 years, 5-7 years, 7-20 years), J.P. Morgan Asia Credit Index (JACI) (USD Asia Credit), Barclays Global Aggregate – Corporates (Global Investment-grade credit), Barclays Global High Yield (Global High Yield), Barclays Emerging Markets – Sovereign (EMD USD sovereign), Barclays Emerging Markets – Corporate (EMD USD corporate), Barclays Emerging Markets Local Currency Government (EMD local cur. sovereign). For illustrative purposes only. Change in bond price is calculated using both duration and convexity. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Illustration of the impact a 1% rise in interest rates may have on selected indices Assumes a parallel shift in the yield curve and spreads are maintained
Price return + couponPrice return
-12%
-8%
-4%
0%
4%
EMD local cur.sovereign
EMD USDcorporate
EMD USDsovereign
Global highyield
Globalinvestmentgrade credit
USD Asiancredit
7-20 years5-7 years1-3 yearsU.S. Treasury
|GTM – Asia 46
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Fixe
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com
e
643
197
643
134
272
460
353 386
512
406
154
454
80
224
501
408
307
470
372
111
299
43157
274 239 217
401
0
500
1,000
1,500
U.S. highyield
U.S.investment
grade
Euro highyield
Euroinvestment
grade
USDAsiancredit
USD Asianhigh yield
EMD USDsovereign
EMD USDcorporate
EMD local cur.sovereign
Global fixed income: Valuations
Source: BofA/Merrill Lynch, iBoxx, J.P. Morgan Economic Research, J.P. Morgan Asset Management.Based on J.P. Morgan Domestic High Yield Index (U.S. High Yield), J.P. Morgan U.S. Liquid Index (JULI) (U.S. Investment Grade), BofA/Merrill Lynch Euro Non-Financial High Yield Constrained (Euro High Yield), iBoxx EUR corporates (Euro Investment Grade), J.P. Morgan Asia Credit Index (JACI) (USD Asian Credit), J.P. Morgan Asia Credit High Yield Index (USD Asian High Yield), J.P. Morgan EMBI+ (EMD USD Sovereign), J.P. Morgan Corporate Emerging Markets Bond Index – CEMBI (EMD USD Corporate), J.P. Morgan GBI-EM (EMD Local Cur. Sovereign). Positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Spread to worst across fixed income sub-sectorsBasis points
10-yr. averageLatest
10-yr. range2,200
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Global fixed income: Return composition
Source: J.P. Morgan Economic Research, J.P. Morgan Asset Management.Based on J.P. Morgan Developed Market HY (DM USD high yield), J.P. Morgan Domestic High Yield (U.S. USD High Yield), J.P. Morgan EMBI+ (EM USD sovereigns), J.P. Morgan CEMBI (EM USD corporates), J.P. Morgan Asia Credit High Yield Index (Asian USD high yield), J.P. Morgan GBI-EM (EM local cur. sovereigns), J.P. Morgan Asia Credit Corporates Index (Asian USD corporates), J.P. Morgan GBI-DM (DM local cur. sovereigns). Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Debt return compositionLast 12 months
Income returnPrice returnCurrency return
Total return
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
DM sovereigns(Local)
U.S. high yield(USD)
DM highyield (USD)
EM sovereigns(Local)
EM corporates(USD)
Asia corporates(USD)
EM sovereigns(USD)
Asia high yield(USD)
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Yield curve inversion
date
From curve
inversion to S&P 500
peak
From S&P 500 peak to start of recession
From curve
inversion to
recession
Jan '69 4 8 12
Mar '73 0 9 9
Oct '78 15 0 15
Oct '80 1 8 9
Jan '89 19 1 19
Feb '00 2 12 14
Jun '06 16 3 19
Average 8 6 14'65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
Global fixed income: U.S. business cycles and yield curve
Source: FactSet, Federal Reserve, J.P. Morgan Asset Management; (Right) Standard & Poor’s. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Yield curve spreadThe spread between the 2-year and 10-year U.S. Treasury yields
Yield curve inversions and recessionsNumber of months
Recessions
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-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
'62 '67 '72 '77 '82 '87 '92 '97 '02 '07 '12 '17
Real 10-year and 2-year U.S. Treasury yields
U.S. real yields
Source: FactSet, Federal Reserve, J.P. Morgan Asset Management.Real 10-year and 2-year Treasury yields are calculated as the daily Treasury yields less year-over-year core CPI inflation for that month except for June 2018, where real yields are calculated by subtracting out May 2018 year-over-year core inflation.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
10-year Treasury
2-year Treasury
Recession
Real Yields & Recessions
Rec. start: Dec '69 Nov '73 Jan '80 Jul '81 Jul '90 Mar '01 Dec '07 Average 29/6/18
10-year 2.0% 2.0% -0.8% 3.5% 3.2% 2.3% 1.6% 2.0% 0.6%
2-year 2.2% 2.1% -0.8% 3.8% 2.8% 1.6% 0.7% 1.8% 0.3%
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0
300
600
900
1,200
1,500
1,800
2,100
0
100
200
300
400
500
600
700
'89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17
Interest coverage ratioEBITDA / interest expense
U.S. corporate credit
Source: J.P. Morgan Asset Management; (Left) Bloomberg Barclays, FactSet; (Left and top right) J.P. Morgan Economic Research; (Bottom right) BofA/ML, FactSet.*Investment grade is Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index; high yield is J.P. Morgan Domestic High Yield Index. Spreads indicated are benchmark yield-to-worst less comparable maturity Treasury yields. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Corporate bond spreadsSpread over comparable government bond, basis points*
U.S. credit maturity profileUSD billions
Investment gradeHigh yield
Average Latest
Investment grade 133bps 123bpsHigh yield 588bps 406bps
Investment grade High yield
Investment grade High yieldRecessions
3.0
3.5
4.0
4.5
5.0
8
9
10
11
12
13
14
15
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
0
100
200
300
400
500
600
700
800
900
'19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30
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0
50
100
150
200
250
300
350
'19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30
0
400
800
1,200
1,600
2,000
0%
4%
8%
12%
16%
20%
'90 '95 '00 '05 '10 '15
Maturity profileUSD billions
U.S. high yield bonds
Source: J.P. Morgan Asset Management; (Top and bottom right) J.P. Morgan Economic Research; (Bottom right) BofA/ML, FactSet.*Default rate is defined as the percentage of the total market trading at or below 50% of par value and includes any Chapter 11 filing, pre-packaged filing or missed interest payments. Spreads indicated are benchmark yield-to-worst less comparable maturity Treasury yields. **EBITDA is earnings before interest, tax, depreciation and amortisation. U.S. corporate high yield is represented by the J.P. Morgan Domestic High Yield Index.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
EBITDA growth**Year-over-year change, %
High yield spread and default rate*Default rate Spread to worst
10-yr average Latest
HY spread to worst 642bps 406bpsHY default rate 2.6% 2.0%
BBBCCC and below
Recessions
Average issuance: 2013 – 2017
-10%
-5%
0%
5%
10%
15%
20%
'12 '13 '14 '15 '16 '17 '18
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25.5
11.7 11.6
1.7 1.20.4 0.4 0.4 0.3 0.3
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
0
5
10
15
20
25
30
U.S
.
Japa
n
Chi
na
Kor
ea
Aus
tralia
Thai
land
Mal
aysi
a
Sin
gapo
re
Indo
nesi
a
Taiw
an
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
'15 '16 '17 '18
Bond market comparisonsUSD trillions Ratio
Annualized returns**Daily data from the period July 2008 through June 2018
Asia fixed income markets
Source: J.P. Morgan Asset Management; (Left) IMF; (Left and bottom right) Bloomberg Finance L.P.; (Left and top right) FactSet; (Top and bottom right) J.P. Morgan Economic Research. *Bond market outstanding refers to the total U.S. dollar value of bonds (corporate and government) in the market and does not reflect mandatory prepayment. **Based on total returns of the MSCI All Country Asia ex-Japan Index (AC Asia ex-JP), S&P 500 Index (S&P 500), J.P. Morgan Asia Credit Investment Grade Index (JACI IG), J.P. Morgan Asia Credit High Yield Index (JACI HY) and J.P. Morgan Asia Credit China Index (JACI China (USD)). ***ChinaBond Inter-bank fixed-rate corporate bond (AA) 5-year used as a proxy for onshore corporate bond yield while J.P. Morgan Corporate Emerging Markets Subindex – China is used as a proxy for offshore corporate bond yield. Positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
China’s bond market: Onshore vs. offshoreYield-to-worst
Onshore corporate bond yield***
Offshore corporate bond yield***
Bond market outstanding* Bond market to GDP
5.4%6.1% 6.5%
8.5%
10.2%
0%
2%
4%
6%
8%
10%
12%
JACI IG AC Asia ex-JP JACI China (USD) JACI HY S&P 500
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asse
t cla
sses
Asset class returns
Source: Bloomberg Finance L.P., Dow Jones, FactSet, J.P. Morgan Economic Research, MSCI, J.P. Morgan Asset Management. The “Diversified” portfolio assumes the following weights: 20% in the MSCI The World Index (DM Equities), 20% in the MSCI AC Asia Pacific ex-Japan (APAC ex-JP), 5% in the average of the MSCI EM Latin America and MSCI EM EMEA Indices (EM ex-Asia), 10% in the J.P. Morgan EMBIG Index (EMD), 10% in the Bloomberg Barclays Aggregate (Global Bonds), 10% in the Bloomberg Barclays Global Corporate High Yield Index (Global Corporate High Yield), 15% in J.P. Morgan Asia Credit Index (Asian Bonds), 5% in MSCI U.S. REITs Index (U.S. REITs) and 5% in Bloomberg Barclays U.S. Treasury – Bills (1-3 months) (Cash). Diversified portfolio assumes annual rebalancing. All data represent total return in U.S. dollar terms for the stated period. 10-year total return data is used to calculate annualized returns (Ann. Ret.) and 10-year price return data is used to calculate annualized volatility (Ann. Vol.) and reflects the period 30/6/08 – 30/6/18. Please see disclosure page at end for index definitions. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2Q '18 YTD '18 Ann. Ret. Ann. Vol.Global Bonds
EM ex-Asia U.S. REITs U.S. REITs
APAC ex-JP
DM Equities U.S. REITs
Asian Bonds
EM ex-Asia
APAC ex-JP U.S. REITs U.S. REITs U.S. REITs
EM ex-Asia
4.8% 91.3% 28.5% 8.7% 22.6% 27.4% 30.4% 2.8% 27.1% 37.3% 10.1% 1.2% 8.0% 26.3%
CashAPAC ex-JP
APAC ex-JP EMD
Global Corp HY
Global Corp HY
Asian Bonds U.S. REITs
Global Corp HY
DM Equities
DM Equities Cash
Global Corp HY U.S. REITs
1.8% 73.7% 18.4% 8.5% 18.9% 8.4% 8.3% 2.5% 14.0% 23.1% 1.9% 0.8% 7.8% 25.0%Asian Bonds
Global Corp HY
EM ex-Asia
Global Bonds EMD Diversified EMD EMD EMD
EM ex-Asia Cash
DM Equities
DM Equities
APAC ex-JP
-9.8% 63.9% 16.6% 5.6% 18.5% 5.6% 5.5% 1.2% 10.2% 20.3% 0.4% 0.8% 6.9% 21.0%
EMD DiversifiedGlobal
Corp HYAsian Bonds U.S. REITs
APAC ex-JP
DM Equities Cash U.S. REITs Diversified
Global Corp HY
Global Corp HY EMD
DM Equities
-10.9% 41.0% 13.8% 4.1% 17.8% 3.7% 5.5% 0.0% 8.6% 17.0% -1.0% -1.2% 6.5% 16.0%Global
Corp HYDM
Equities DiversifiedGlobal
Corp HYEM ex-
Asia U.S. REITs DiversifiedDM
Equities DiversifiedGlobal
Corp HYAsian Bonds
Global Bonds
Asian Bonds Diversified
-27.9% 30.8% 13.1% 2.6% 17.0% 2.5% 4.1% -0.3% 8.3% 10.3% -1.2% -1.5% 6.3% 12.2%
Diversified U.S. REITsDM
Equities CashDM
Equities CashAPAC ex-JP
Global Bonds
DM Equities EMD Diversified Diversified Diversified
Global Corp HY
-27.9% 28.6% 12.3% 0.1% 16.5% 0.0% 3.1% -3.2% 8.2% 9.3% -1.4% -2.2% 5.6% 11.5%
U.S. REITsAsian Bonds EMD Diversified Diversified
Asian Bonds
Global Bonds Diversified
APAC ex-JP
Global Bonds
Global Bonds
Asian Bonds
APAC ex-JP EMD
-38.0% 28.3% 12.0% -2.4% 15.9% -1.4% 0.6% -3.2% 7.1% 7.4% -2.8% -2.5% 5.5% 8.9%DM
Equities EMDAsian Bonds
DM Equities
Asian Bonds
Global Bonds
Global Corp HY
Global Corp HY
Asian Bonds
Asian Bonds EMD
APAC ex-JP
Global Bonds
Asian Bonds
-40.3% 28.2% 10.6% -5.0% 14.3% -2.6% 0.2% -4.9% 5.8% 5.8% -3.5% -4.1% 2.6% 7.4%APAC ex-JP
Global Bonds
Global Bonds
APAC ex-JP
Global Bonds EMD Cash
APAC ex-JP
Global Bonds U.S. REITs
APAC ex-JP EMD Cash
Global Bonds
-51.6% 6.9% 5.5% -15.4% 4.3% -6.6% 0.0% -9.1% 2.1% 5.1% -3.5% -5.2% 0.3% 5.7%EM ex-
Asia Cash CashEM ex-
Asia CashEM ex-
AsiaEM ex-
AsiaEM ex-
Asia Cash CashEM ex-
AsiaEM ex-
AsiaEM ex-
Asia Cash
-57.2% 0.1% 0.1% -21.2% 0.1% -8.5% -20.2% -22.7% 0.3% 0.8% -13.1% -8.9% -4.0% 0.1%
10-yrs ('08 - '18)
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Volatility
Source: FactSet, J.P. Morgan Asset Management.*The VIX-CBOE Volatility Index measures market expectations of near-term volatility conveyed by S&P 500 Index (SPX) option prices. **First day when VIX breaks 35; subsequent spikes above 35 within the next six months are not included. ***Number of days for VIX to return to its long-term average of 19.3 after initial VIX spikes above 35. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
VIX index*
VIX index*
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '180
10
20
30
40
50
60
70
80
90
1 2
3 4 5
6
7 89 10
Recession
VIX breaks 35 in six months** Related event
S&P 500 Performance VIX returns to long-term average***
(days)On the day After 1 month After 3 months After 12 months
1 6-Aug-90 Recession - oil price shock, central banks tightening -3.0% -4.2% -5.9% 16.8% 2182 30-Oct-97 Asian crisis -1.7% 7.5% 9.1% 21.6% 1133 27-Aug-98 Long-Term Capital Management -3.8% 0.6% 13.8% 29.3% 3094 17-Sep-01 Recession - collapse of the dot-com bubble, 9/11 attack -4.9% 2.9% 9.2% -15.9% 1725 15-Jul-02 Enron accounting scandal -0.4% 1.3% -8.3% 9.0% 3046 17-Sep-08 Recession - Lehman crisis, Global financial crisis -4.7% -14.8% -21.8% -7.9% 4767 7-May-10 Greek government debt crisis -1.5% -5.0% 1.0% 21.2% 1578 8-Aug-11 Fears of contagion of European sovereign debt crisis -6.7% 5.9% 12.7% 25.2% 1659 24-Aug-15 Chinese yuan devaluation -3.9% 2.1% 10.2% 15.5% 4410 5-Feb-18 Worries about rising inflation and pace of interest rate hikes -4.1% 3.4% 0.9% N/A 9
Median -3.9% 1.7% 5.0% 16.8%Average -3.5% 0.0% 2.1% 12.8%Median ex-recession -3.8% 2.1% 9.1% 21.4%Average ex-recession -3.2% 2.3% 5.6% 20.3%
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0.2
0.3
0.4
0.5
0.6
0.7
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
Correlations between global equity marketsDaily rolling six-month equity markets correlation**
Correlations
Source: FactSet, MSCI, J.P. Morgan Asset Management; (Top) Barclays, Standard & Poor’s.*Rolling six-month pairwise correlations between weekly returns in equity (S&P 500 and MSCI All Country World Index price indexes) and bond (Bloomberg Barclays U.S. Aggregate Government and Bloomberg Barclays Global Aggregate Government price indexes) markets. **Rolling six-month pairwise correlation between daily price returns in USD of the MSCI Australia, Canada, China, France, Germany, Hong Kong, Japan, Korea, Netherlands, Spain, Sweden, Switzerland, Taiwan, UK, and U.S. equity indices which represent over 90% of the market capitalization of the MSCI AC World Index. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Correlations between stocks and sovereign bondsWeekly rolling six-month correlation of equities and sovereign bond yields*
Stocks and bonds moving in the same direction
Stocks and bonds moving in the opposite direction
MSCI AC World / Global government bonds*
S&P 500 / U.S. government bonds*
Average: 0.44
30/6/18: 0.51
-1.0-0.8-0.6-0.4-0.20.00.20.40.60.8
'01 '03 '05 '07 '09 '11 '13 '15 '17
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USD rising and U.S. 10-year yield rising**
Treasury yield and asset class performance
Source: Barclays, Bloomberg Finance L.P., FactSet, MSCI, J.P. Morgan Asset Management. Based on MSCI World Index (DM Equity), MSCI World High Dividend Index (High div. DM Equity), MSCI Emerging Market Index (EM Equity), MSCI Emerging Market High Dividend Index (High div. EM Equity), MSCI AC Asia Pacific ex-Japan Index (Asia Pac. ex-JP), MSCI AC Asia Pacific Index (Asia Pac.), MSCI U.S. REIT Index (U.S. REITs), Bloomberg Barclays U.S. Aggregate Index (U.S. Agg.), Bloomberg Barclays U.S. Aggregate Credit High Yield Corporate Index (U.S. HY), Bloomberg Barclays U.S. Aggregate Credit Investment Grade Index (IG corporate), J.P. Morgan Government Bond Index – EM Global (GBI-EM) (EMD LLC), J.P. Morgan Emerging Market Bond Index Global (EMBIG) (EMD USD), Gold NYM $/ozt (Gold). *Trigger to count returns is if the 10-year yield rose more than 25bps in prior 3 months. **Trigger to count returns if the U.S. dollar real effective exchange rate rose more than 2% in the prior 12 months and the 10-year yield rose more than 50bps in the prior 12 months. Returns are based on monthly returns from 31/1/94 – 30/6/18. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Total return in a rising yield environment*Annualized average of rolling 3-month total return (USD), 1994-2018*
USD flat/falling and U.S. 10-year yield rising**
12-month rolling return3-month rolling return annualized
12-month rolling return3-month rolling return annualized
-13.7%
-3.4%
-3.2%
3.1%
3.9%
9.3%
9.5%
16.3%
16.8%
19.0%
23.7%
26.2%
26.4%
32.3%
34.0%
-25% -5% 15% 35%
U.S. 10-year Treasury
U.S. aggregate
IG corporate
EMD (LLC)
EMD (USD)
U.S. high yield
U.S. REITs
Convertible bonds
High div. DM equities
DM equities
Asia Pac. equities
Asia Pac. ex-JP equities
High div. Asia Pac. ex-JP equities
EM equities
High div. EM equities
0%
5%
10%
15%
20%
25%
30%
35%
DM equity EM equity U.S. aggregate U.S. high yield Gold
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
DM equity EM equity U.S. aggregate U.S. high yield Gold
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85
90
95
100
105
110
115
120
125
130
135
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
'95 '98 '01 '04 '07 '10 '13 '16
U.S. dollar drivers
Source: FactSet, Federal Reserve, J.P. Morgan Asset Management; (Left) U.S. Bureau of Economic Analysis; (Right) BIS, Federal Reserve, Tullett Prebon.*Interest rate differential is the difference between the 10-year U.S. Treasury yield and a basket of the 10-year yields of each of the markets included in the Federal Reserve’s Broad Nominal Trade-Weighted Index (except Chile, Saudi Arabia and Venezuela due to data limitations), weighted by each market’s share of total global debt securities outstanding. Europe is defined as the 19 countries in the euro area. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Dollar supplyCurrent account balance, % of nominal GDP USD broad nominal index
Dollar demandU.S. minus international 10-year yields* USD broad nominal index
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '1885
90
95
100
105
110
115
120
125
130
135
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0% Yield difference USDCurrent account balance USD
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sses -2.7
-1.9-1.5
-1.2 -1.1-0.9 -0.8 -0.8 -0.8 -0.7
-0.4 -0.4
0.9 0.91.2 1.3 1.3 1.5
1.0
-4
-2
0
2
4
Currencies
Source: FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management.*The real trade-weighted exchange rate index is the weighted average of a market’s currency relative to a basket of other major currencies adjusted for the effects of inflation. The weights are determined by comparing the relative trade balances, in terms of one market’s currency, with other markets within the basket. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Currency deviation from 10-year average in real effective exchange rate* termsNumber of standard deviations away from average
FX above long-term average
FX belowlong-term average
Current
Max
Min
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Turkey
Indonesia
Mexico
Korea
Argentina
India
Russia
Brazil
China Thailand
South Africa
Malaysia
PhilippinesChile
Poland
Colombia
-45%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
-8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12%
Emerging market external positions
Source: FactSet, IMF, J.P. Morgan Asset Management.*Adequate reserves are stocks of a country’s foreign exchange reserves which can cover 3-months of imports (the amount of times available reserves can cover 3 months’ worth of imports) and cover short-term debt due in the next year (the amount of times available reserves can pay off debt maturing in the next 12 months and any payments on longer term debt due in the next 12 months). The larger the bubble, the larger the amount of reserve coverage.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Current account positions, currency movements and reserve adequacy
Loca
l cur
renc
y vs
. USD
cha
nge,
YTD
Current account as % of GDP, 2017
Weaker position
Stronger position
Adequate reserves*=
Key: Asia EM ex-Asia
Currency appreciation
vs. USD
Currency depreciation
vs. USD
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-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
'15 '16 '17 '18'13 '14 '15 '16 '17 '1820
40
60
80
100
120
140 80
85
90
95
100
105
110
'09 '10 '11 '12 '13 '14 '15 '16 '17 '180
400
800
1,200
1,600
2,000
2,400
0.95
1.00
1.05
1.10
1.15
1.20
1.25
U.S. oil inventory and rig count* Number of rigs Billion barrels
Oil: Short-term market dynamics
Source: FactSet, J.P. Morgan Asset Management; (Top right) Baker Hughes, U.S. Department of Energy; (Bottom right) U.S. Energy Information Administration.*Weekly U.S. crude oil and petroleum ending inventory includes strategic petroleum reserve, and active rig count represents both natural gas and oil rigs. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Brent crude and USD real effective exchange rate (REER)USD / bbl Index
Crude oil production growthYear-over-year change, million barrels per day
USD depreciation
USD appreciation
Brent crude oil USD REER (inverted) Rig count U.S. oil inventory
Forecast
OPEC + RussiaU.S.
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0.5
1.5
2.5
3.5
4.5
5.5
6.5
7.5
8.5
9.5
-4 -3 -2 -1 0 1 2 3 4
Commodity Index
Agriculture
Precious Metals
Natural Gas
Gold
Oil
Industrial Metals
Example
Commodities
Source: Bloomberg Finance L.P., FactSet, J.P. Morgan Asset Management; (Left) CME; (Right) Barclays, J.P. Morgan Economic Research, MSCI. Commodities are represented by the appropriate Bloomberg Commodity sub-index priced in U.S. dollars. Crude oil shown is West Texas Instrument (WTI) crude. Other commodity prices are represented by futures contracts. Z-scores are calculated using daily prices over the past five years. Based on Bloomberg Commodity Index (Comdty.); MSCI ACWI Select – Energy Producers IMI, Metals & Mining Producers ex Gold & Silver IMI, Gold Miners IMI, Agriculture Producers IMI (Energy (E), M&M (E), Gold (E), Agri. (E)); Bloomberg Barclays Global Aggregate Credit – Corporate Energy Index (Energy (FI)); Bloomberg Barclays U.S. Aggregate Credit – Corporate High Yield Metals & Mining Index (U.S. M&M (FI)); Bloomberg Barclays Euro Aggregate Credit – Corporate Metals & Mining Index (Euro M&M (FI)); J.P. Morgan Emerging Market Corporate Credit – Corporate Metals & Mining Index (EM M&M (FI)).Five-year total return data is used to calculate annualized returns (Ann. Ret.) and 5-year price return data is used to calculate annualized volatility (Ann. Vol.) and reflects the period 30/6/13 – 30/6/18. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Commodity pricesCommodity price z-scores, USD per unit
Returns
High levelCurrent
Low level
$164
$44
$130
$1,255
$144 $212
$84
$144
$1,420$1,050
$84
$44
$6.1$1.6$2.9
$111$26$74
$139$73$87
2013 2014 2015 2016 2017 YTD '18 Ann. Ret. Ann. Vol.
Energy (E) Euro M&M (FI)
Energy (FI)
Gold (E) M&M (E) Energy (E) EM M&M (FI)
Gold (E)
13.8% 8.6% -7.3% 62.9% 37.5% 8.2% 6.0% 35.1%
US M&M (FI)
Energy (FI)
EM M&M (FI)
M&M (E) Agri. (E) Comdty. M&M (E) M&M (E)
7.5% 2.1% -10.9% 57.8% 20.3% 0.0% 4.8% 23.9%
Agri. (E) Agri. (E) Agri. (E) US M&M (FI)
EM M&M (FI)
Euro M&M (FI)
Agri. (E) Energy (E)
5.1% -0.2% -13.7% 45.5% 14.7% -0.2% 4.5% 17.2%
Euro M&M (FI)
EM M&M (FI)
Euro M&M (FI)
EM M&M (FI)
US M&M (FI)
US M&M (FI)
US M&M (FI)
Comdty.
1.1% -0.8% -16.1% 32.4% 9.9% -1.0% 4.4% 13.8%
Energy (FI)
US M&M (FI)
Energy (E) Energy (E) Gold (E) Agri. (E) Euro M&M (FI)
US M&M (FI)
-1.0% -4.4% -20.6% 29.2% 9.4% -2.6% 3.4% 13.1%
EM M&M (FI)
Energy (E) US M&M (FI)
Euro M&M (FI)
Energy (E) Energy (FI)
Energy (E) Agri. (E)
-3.5% -15.1% -23.7% 21.9% 9.1% -2.9% 3.2% 10.9%
M&M (E) Gold (E) Comdty. Agri. (E) Energy (FI)
M&M (E) Energy (FI)
EM M&M (FI)
-7.3% -16.4% -24.7% 15.7% 9.0% -3.4% 2.8% 10.8%
Comdty. Comdty. Gold (E) Comdty. Euro M&M (FI)
EM M&M (FI)
Gold (E) Euro M&M (FI)
-9.5% -17.0% -26.3% 11.8% 3.9% -6.0% -0.9% 8.4%
Gold (E) M&M (E) M&M (E) Energy (FI)
Comdty. Gold (E) Comdty. Energy (FI)
-52.0% -19.0% -40.1% 11.1% 1.7% -6.4% -6.4% 5.3%
2013 - 2018
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Alternative sources of income
Source: Alerian, Bank of America, Bloomberg Finance L.P., Clarkson, Drewry Maritime Consultants, FactSet, Federal Reserve, FTSE, MSCI, NCREIF, Standard & Poor’s, J.P. Morgan Asset Management. Global Transport: Levered yields for transport assets are calculated as the difference between charter rates (rental income), operating expenses, debt amortization and interest expenses, as a percentage of equity value. Yields for each of the sub-vessel types above are calculated and respective weightings are applied to each of the sub-sectors to arrive at the current levered yields for Global Transportation; asset classes are based on NCREIF ODCE (Private Real Estate), FTSE NAREIT Global/USA REITs (Global/U.S. REITs), MSCI Global Infrastructure Asset Index (Infrastructure Assets), Bloomberg Barclays U.S Convertibles Composite (Convertibles), J.P. Morgan Government Bond Index EM Global (GBI-EM) (Local EMD), J.P. Morgan Emerging Market Bond Index Global (EMBIG) (USD EMD), J.P. Morgan Asia Credit Index Non-investment Grade Corporate (Asia HY bonds), MSCI Emerging Markets (EM Equity), MSCI The World Index (DM Equity), MSCI Emerging Markets High Dividend Yield Index (EM High Div. Equity), MSCI The World High Dividend Yield Index (DM High Div. Equity), MSCI Europe (Eur. Equity), MSCI USA (U.S. Equity). Transport yield is as of 31/3/18, Infrastructure 31/12/17, EM High Div. Equity and DM High Div. Equity (31/5/18). Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Asset class yields
EquityFixed incomeAlternatives
9.3%
8.3%
7.4%
6.7%
6.0%
4.4% 4.4% 4.2%3.9% 3.9%
3.5%3.1%
2.9%2.6% 2.4%
1.9%
0%
2%
4%
6%
8%
10%
Globaltransport
Asia HYbonds
Local cur.EMD
USDEMD
Infrastructureassets
EM highdiv. equity
GlobalREITs
U.S.REITs
Private realestate
DM highdiv. equity
Eur.equity
Convertibles U.S.10-year
EMequity
DMequity
U.S.equity
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Inve
stin
g pr
inci
ples
-0.9% -0.7%
1.8%
0.1%
2.1%
0.0%
-2.9%
-0.2%
0.6%
-3.3%
-1.0%
2.9%
1.4% 1.0%0.6% 0.8%
0.0% 0.5%
-0.3%
0.5%
-2.1%
-0.8%
2.9%
0.7% 0.5% 0.4%0.2%
-0.1% -0.2% -0.4% -0.6% -1.3%-1.7%
-6%
-3%
0%
3%
6%
India Thailand Korea Taiwan Australia China Singapore Japan Malaysia Hong Kong U.S.
Real return on cash and yields
Source: FactSet, various central banks, J.P. Morgan Asset Management; (Top) IMF.*Post crisis time period defined as 2008-2014. Post 1st Fed rate hike defined as 2015-2017. YTD average annual real deposit rate are as of 31/5/18, except for Japan (30/4/2018). **Real yield is calculated based on the last 12-month average CPI for each respective market. Nominal yields are the 10-year government bond yield for each respective market. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Real and nominal yields**
Average annual real deposit rateBased on respective market’s deposit rate less year-over-year inflation
Nominal yield
Real yield
Post crisis*Post 1st Fed rate hike*2018 YTD*
1.3%0.3% 0.5% -0.1% 0.0% 0.7% 1.3% 0.9%
2.2% 2.9% 2.6% 2.6% 2.7%
7.6%
3.6% 2.8%
7.9% 7.9% 7.6%
11.4%
-1.5% -1.4% -1.4%-0.7% -0.7% -0.5% -0.2% -0.2%
0.4% 0.7% 0.7% 0.9% 1.6% 1.7% 1.8% 2.1%
4.0% 4.3% 4.8%
9.3%
-4%-2%0%2%4%6%8%
10%12%14%
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Inve
stin
g pr
inci
ples
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
-80
-60
-40
-20
0
20
40
60
80
100
120
'95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17
2,518,4122,257,028
1,631,056
1,215,242942,431
11,581
45,465
75,781
101,862
249,802
841,891
1,227,389 1,474,119
0
400,000
800,000
1,200,000
1,600,000
2,000,000
2,400,000
2,800,000
Stay Invested Missed top1 day
Missed top5 days
Missed top10 days
Missed top15 days
Investors’ market timing
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management; (Left) Investment Company Institute (ICI). Mutual fund and ETF flows are through 31/5/18.*More than 10,000 trading days used to calculate the total cumulative price return of S&P 500 since 1/1/80. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Market timing of retail investorsRolling 3-month U.S. equity flows (USD billions) S&P 500 Index
S&P 500 cumulative price return since 1980*Hypothetical investment of $100,000
S&P 500Mutual fund + ETF flows
Under different scenarios
Actual loss from missing daysImplied compounding loss
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stin
g pr
inci
ples
Annual returns and intra-year declines
Source: FactSet, MSCI, J.P. Morgan Asset Management.Returns are price returns based on MSCI AC Asia Pacific ex-Japan Index in U.S. dollar terms. Intra-year decline is the largest peak to trough decline during the respective year. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
MSCI AC Asia Pacific ex-Japan intra-year declines vs. calendar year returnsDespite average intra-year drops of -20% (median: -16%), annual returns are positive in 19 of 31 years (61%)
Calendar year returnIntra-year decline
26%
17%
-16%
27%
6%
80%
-14%
4%9%
-36%
-7%
47%
-31%
-5% -8%
44%
19% 17%
29%33%
-53%
68%
15%
-18%
19%
0.5%
-0.2%
-12%
4%
34%
-5%
-10% -14%
-24%
-8% -12%-5%
-21%
-12% -11%
-41% -40%
-13%
-34% -34%
-25%
-13%-18%
-9%
-18% -19%
-62%
-21% -19%
-30%
-16% -16% -13%
-27%
-13%
-4%
-13%
-80%
-60%
-40%
-20%
%
20%
40%
60%
80%
100%
'88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
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Inve
stin
g pr
inci
ples
-0.9% 0.2%1.6%
0.9%2.0% 3.7% 3.4% 3.0% 4.5% 6.1% 7.8%
-9.1% -8.5% -6.7%-4.2%
-1.5%1.3%
-0.2% -0.6%
2.3%
7.8%4.4% 3.9% 2.5% 3.5% 3.2%
2.1% 3.6% 4.9%4.5%
5.5%5.2%
1.6% 1.7% 2.0% 1.9% 1.6%3.5%
2.7% 3.5%
3.9%
4.2%
-10%
-5%
0%
5%
10%
15%
Australia Singapore Japan Malaysia Indonesia Korea China Taiwan Hong Kong Thailand Philippines Brazil Russia Poland Turkey Mexico SouthAfrica
EM(EmergingMarkets)
Europe AC AsiaPacific
ex-Japan
U.S.(S&P 500)
MSCI World Index: Performance under different scenariosIndex, 1970 = 100
Total return**: Dividends vs. capital appreciationAverage annualized returns over 10 years
The compounding effect
Source: FactSet, MSCI, J.P. Morgan Asset Management.*Reinvestment in cash based on the same month U.S. three-month Treasury bill (secondary market) yield.**Returns are total (gross) returns based on MSCI indices in U.S. dollar terms. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Annualized return Total return (dividends received and reinvested back into equities) 9.6%Total return (dividends received and reinvested in cash)* 8.8%Total return (dividends received but not reinvested) 7.2%Price return 6.5%
Capital appreciationDividends with compounding
Asia Pacific Other EM Regions
5,931
8,530
2,965
2,0890
3,000
6,000
9,000
'70 '75 '80 '85 '90 '95 '00 '05 '10 '15
|GTM – Asia 67
67
Inve
stin
g pr
inci
ples
Portfolio construction, asset class returns and volatility
Source: Bloomberg Finance L.P., Dow Jones, FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management. Hypothetical portfolios were created to illustrate different risk/return profiles and are not meant to represent actual asset allocation. USD total return calculations are based on MSCI Total Return, Bloomberg Barclays and J.P. Morgan indices. AxJ stands for MSCI AC Asia ex-Japan and APxJ stands for MSCI AC Asia Pacific ex-Japan. *Monthly total returns between 31/12/02 and 29/6/18 used for all asset classes.Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Annualized returns and volatilityTotal returns in USD*
Annualized volatility
Annu
aliz
ed r
etur
ns
EquitiesBonds and cash
Portfolios
High dividend (HD) equities
Alternatives
Hypothetical portfolio constructionConservative Balanced Aggressive
DM equities 10% 30% 20%EM equities 5% 10% 40%U.S. HY 10% 15% 10%U.S. bonds 25% 10% 5%Cash 35% 10% 0%EMD 10% 15% 5%REITs 5% 10% 20%
DM
EM
Europe
AxJ
APxJ
U.S.
U.S. HY
U.S. bonds
Cash
Hedge fund - mkt neutral
Hedge fund - macro
Hedge fund - distressed
Hedge fund - rel val
Private real estate
APxJ HD
AxJ HD
DM HD
EM HD
Gold
Commodities
REITs
EMD
Asian bonds
Conservative
Balanced
Aggressive
-2%
0%
2%
4%
6%
8%
10%
12%
14%
0% 5% 10% 15% 20% 25%
|GTM – Asia 68
68
Inve
stin
g pr
inci
ples
40
90
140
190
240
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
-39%
-8%-15% -3% -2% 1% -1% 1% 2% 7% 1% 5%
47% 43%33% 28% 23% 21% 19% 16% 16% 17% 12% 14%
-50%-40%-30%-20%-10%
0%10%20%30%40%50%60%
The benefits of diversification and long-term investing
Source: Bloomberg Finance L.P., FactSet, J.P. Morgan Asset Management; (Top) Robert Shiller, Strategas/Ibbotson, U.S. Federal Reserve; (Bottom) MSCI. Returns shown are based on calendar year returns from 1950 to 2017. “Large cap equity” represents the S&P 500 Shiller Composite Index and “Bonds” represents the Strategas/Ibbotson Index for periods from 1950 to 1980 and the Bloomberg Barclays Aggregate after index inception in 1980. Global equities represented by MSCI AC World Index, global bonds represented by Bloomberg Barclays Aggregate Global Bond Index. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Portfolio returns: Global equities, global bonds vs. equity and fixed income blendTotal returns, 2006 = 100
Range of U.S. equity, U.S. bond and blended total returnsAnnual total returns, 1950-2017 Large cap equity
Bonds50/50 portfolio
1-yr rolling 5-yr rolling 10-yr rolling 20-yr rolling
Portfolio returns since 2006 Annualized return
Annualized volatility
Global equities 6.8% 15.6%Global bonds 3.6% 5.5%50/50 equity & bond mix 5.3% 8.9%
|GTM – Asia 69
69
Inve
stin
g pr
inci
ples
0%
5%
10%
15%
20%
25%
30%
35%
40%
Korea Australia China Singapore HongKong
Japan Taiwan*
The benefits of saving and investing early
Source: J.P. Morgan Asset Management; (Left) National Development Council of Taiwan (NDC), United Nations Population Project (UN). For illustrative purposes only, assumes a 5% return on investment and a 2% return on cash in investors’ base currency. Actual investments may incur higher or lower growth rates and charges. *All data from UN except for Taiwan, which is from NDC. Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Aging populationPopulation over 65
Accumulation of investment at 5% growth per yearInvestment return
20252000
2050
$1,395,216
$2,536,795
$1,232,200
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
25 30 35 40 45 50 55 60 65Age
Blue invests $20,000 annually between the ages of 25 and 65
Orange invests $20,000 annually between the ages of 35 and 65
Green invests $20,000 annually in cash only between the ages of 25 and 65
|GTM – Asia 70
70
Inve
stin
g pr
inci
ples
Environmental, social and governance investing
Source: J.P Morgan Asset Management; (Bottom left) Global Sustainable Investment Alliance; (Right) MSCI.*Represents assets managed using one or more sustainable investment strategies, including sharia-compliant funds, excluding Japan and Australia. **MSCI AC World ESG Leaders is a capitalization-weighted index that provides exposure to companies with high Environmental, Social and Governance (ESG) rankings relative to their sector peers and companies with involvement in alcohol, gambling, tobacco, nuclear power and weapons are excluded. Rankings are given based on MSCI framework. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/6/18.
Sustainable investing strategies consider: Sustainable investing performanceEquity index total return, 2008 = 100
Demand for sustainable investing strategies in AsiaUSD billions managed under sustainable investing guidance*
Environmental: Issues relating to the quality and functioning of the natural environment and natural systems, e.g., carbon emissions, environmental regulations, water stress and waste
Social: Issues relating to the rights, well-being and interests of people and communities, e.g., labor management, health and product safety
Governance: Issues relating to the management and oversight of companies and other investee entities, e.g., board, ownership and pay
34.0
44.9
52.1
$30
$35
$40
$45
$50
$55
2012 2014 2016
+32%
+16%
MSCI AC World ESG Leaders**
MSCI AC World
20
40
60
80
100
120
140
160
'08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
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J.P. Morgan Asset Management: Index DefinitionsAll indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not include fees or expenses. The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. This world-renowned index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 Index focuses on the large-cap segment of the market, with approximately 75% coverage of U.S. equities, it is also an ideal proxy for the total market. An investor cannot invest directly in an index. The Tokyo Stock Price Index ('TOPIX') is a composite index of all common stocks listed on the First Section of Tokyo Stock Exchange (TSE).The index is basically a measure of the changes in aggregate market value of TSE common stocks. The base for the index is the aggregate market value of its component stocks as of the close on January 4, 1968. The aggregate market value is calculated by multiplying the number of listed shares of each component stock by its price and totaling the products derived there from.The Bombay Exchange Sensitive Index (‘SENSEX), first compiled in 1986, was calculated on a "Market Capitalization-Weighted" methodology of 30 component stocks representing large, well-established and financially sound companies across key sectors. The base year of SENSEX was taken as 1978-79. SENSEX today is widely reported in both domestic and international markets through print as well as electronic media. It is scientifically designed and is based on globally accepted construction and review methodology. Since September 1, 2003, SENSEX is being calculated on a free-float market capitalization methodology.The Korea Composite Stock Price Index (‘KOSPI) is market capitalization based index on all common stocks listed on the Stock Market Division of the Korea Exchange (KRX) and excludes preferred stocks. The stock price index is calculated using the actual price traded on the market and not the “base price” used for market management such as establishment of price change limits. When no market price is available for issues that are not being traded or have halted trading, the latest closing price is used. KOSPI was a assigned a base index of 100 set to January 4, 1980.The China Shenzhen Composite Index is an actual market-cap weighted index that tracks the stock performance of all the A-share and B-share lists on Shenzhen Stock Exchange. The index was developed on April 3, 1991 with a base price of 100. The Euro Stoxx 600 Index represents large, mid and small capitalization companies across 18 European countries.The MSCI® EAFE (Europe, Australia, Far East) Net Index is recognized as the pre-eminent benchmark in the United States to measure international equity performance. It comprises 21 MSCI country indexes, representing the developed markets outside of North America. The MSCI Emerging Markets IndexSM is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. As of June 2007, the MSCI Emerging Markets Index consisted of the following 25 emerging market country indices: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.The MSCI ACWI (All Country World Index) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. As of June 2009 the MSCI ACWI consisted of 45 country indices comprising 23 developed and 22 emerging market country indices.The following MSCI Total Return IndicesSM are calculated with gross dividends:This series approximates the maximum possible dividend reinvestment. The amount reinvested is the dividend distributed to individuals resident in the country of the company, but does not include tax credits.The MSCI Europe IndexSM is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe. As of June 2007, the MSCI Europe Index consisted of the following 16 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. The MSCI Pacific IndexSM is a free float-adjusted market capitalization index that is designed to measure equity market performance in the Pacific region. As of June 2007, the MSCI Pacific Index consisted of the following 5 Developed Market countries: Australia, Hong Kong, Japan, New Zealand, and Singapore.
The MSCI Europe ex UK IndexSM is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in Europe, excluding the United Kingdom. The MSCI Europe ex UK Index consists of the following 15 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, and Switzerland.The MSCI Pacific ex Japan IndexSM is a free float-adjusted market capitalization index that is designed to measure equity market performance in the Pacific region, excluding Japan. As of June 2007, the MSCI Pacific Index consisted of the following 4 Developed Market countries: Australia, Hong Kong, New Zealand, and Singapore. The MSCI USA IndexSM is designed to measure the performance of the large and mid cap segments of the U.S. market. With 586 constituents, the index covers approximately 84% of the free float-adjusted market capitalization in the U.S.. The MSCI USA Index was launched on Dec ember 31, 1969.The MSCI China IndexSM captures large and mid cap representation across China H shares, B shares, Red chips and P chips. With 148 constituents, the index covers about 84% of this China equity universe. The MSCI China Index was launched on December 31, 1992.The MSCI Indonesia IndexSM is designed to measure the performance of the large and mid cap segments of the Indonesian market. With 25 constituents, the index covers about 84% of the Indonesian equity universe. The MSCI Indonesia Index was launched on December 31, 1990.The MSCI Korea IndexSM is designed to measure the performance of the large and mid cap segments of the South Korean market. With 105 constituents, the index covers about 84% of the Korean equity universe. The MSCI Korea Index was launched on December 31, 1989.The MSCI India IndexSM is designed to measure the performance of the large and mid cap segments of the Indian market. With 71 constituents, the index covers about 84% of the Indian equity universe. The MSCI India Index was launched on December 31, 1993.The MSCI Japan IndexSM is designed to measure the performance of the large and mid cap segments of the Japan market. With 315 constituents, the index covers approximately 84% of the free float-adjusted market capitalization in Japan. The MSCI Japan Index was launched on December 31, 1969.The MSCI Hong Kong IndexSM is designed to measure the performance of the large and mid cap segments of the Hong Kong market. With 42 constituents, the index covers approximately 84% of the free float-adjusted market capitalization of the Hong Kong equity universe. The MSCI Hong Kong Index was launched on December 31, 1972.The MSCI Taiwan IndexSM is designed to measure the performance of the large and mid cap segments of the Taiwan market. With 113 constituents, the index covers approximately 84% of the free float-adjusted market capitalization in Taiwan. The MSCI Taiwan Index was launched on December 31, 1989.The MSCI Environmental, Social and Governance (ESG) Universal Indices are designed to address the needs of asset owners who may look to enhance their exposure to ESG while maintaining a broad and diversified universe to invest in. By re-weighting free-float market cap weights based upon certain ESG metrics tilting away from free-float market cap weights, the indices enhance exposure to those companies that demonstrate both a higher MSCI ESG Rating and a positive ESG trend, while maintaining a broad and diversified investment universe.
72
West Texas Intermediate (WTI) is the underlying commodity for the New York Mercantile Exchange's oil futures contracts. The Bloomberg Commodity Index is calculated on an excess return basis and reflects commodity futures price movements. The index rebalances annually weighted 2/3 by trading volume and 1/3 by world production and weight-caps are applied at the commodity, sector and group level for diversification. Roll period typically occurs from 6th-10th business day based on the roll schedule.The Bloomberg Commodity Subindexes represent commodity groups and sectors, as well as single commodities, that make up the Bloomberg Commodity Index. The subindexes track exchange-traded futures of physical commodities, and the commodity groups and sectors, like in the case of the broad index, are weighted to account for economic significance and market liquidity. The various subindexes include Agriculture, Energy, Livestock, Grains, Industrial Metals, Precious Metals and Softs.The Bloomberg Barclays High Yield Index covers the universe of fixed rate, non-investment grade debt. Pay-in-kind (PIK) bonds, Eurobonds, and debt issues from countries designated as emerging markets (e.g., Argentina, Brazil, Venezuela, etc.) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries are included. Original issue zeroes, step-up coupon structures, and 144-As are also included.The Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value. In addition, the securities must be denominated in U.S. dollars and must be fixed rate and non convertible.The Bloomberg Barclays Corporate Bond Index is the Corporate component of the U.S. Credit index.The Bloomberg Barclays TIPS Index consists of Inflation-Protection securities issued by the U.S. Treasury.The J.P. Morgan EMBI Global Index includes U.S. dollar denominated Brady bonds, Eurobonds, traded loans and local market debt instruments issued by sovereign and quasi-sovereign entities.The J.P. Morgan GBI-EM Global Diversified consists of regularly traded, liquid fixed-rate, domestic currency government bonds to which international investors can gain exposure. The weightings among the countries are more evenly distributed within this index.The J.P. Morgan Corporate Emerging Markets Bond Index (CEMBI): The CEMBI tracks total returns of US dollar-denominated debt instruments issued by corporate entities in Emerging Markets countries, and consists of an investable universe of corporate bonds.The J.P. Morgan Domestic High Yield Index is designed to mirror the investable universe of the U.S. dollar domestic high yield corporate debt market.The VIX-CBOE Volatility Index measures market expectations of near-term volatility conveyed by S&P 500 Index (SPX) option prices. The MOVE-Merrill Lynch Option Volatility Index is a blended implied normal volatility for constant one-month at-the-money options on U.S. Treasuries.
Price to forward earnings is a measure of the price-to-earnings ratio (P/E) using forecasted earnings. Price to book value compares a stock's market value to its book value. Price to cash flow is a measure of the market's expectations of a firm's future financial health. Price to dividends is the ratio of the price of a share on a stock exchange to the dividends per share paid in the previous year, used as a measure of a company's potential as an investment.Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise.The price of equity securities may rise, or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies, sectors or industries, or the securities market as a whole, such as changes in economic or political conditions. Equity securities are subject to “stock market risk” meaning that stock prices in general may decline over short or extended periods of time.Small-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies since smaller companies generally have a higher risk of failure. Historically, smaller companies' stock has experienced a greater degree of market volatility than the average stock.Mid-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies. Historically, mid-cap companies' stock has experienced a greater degree of market volatility than the average stock.Real estate investments may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographical sector. Real estate investments may be subject to risks including, but not limited to, declines in the value of real estate, risks related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by borrower.International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies can raise or lower returns. Also, some markets may not be as politically and economically stable as other nations. Investments in emerging markets can be more volatile. The normal risks of international investing are heightened when investing in emerging markets. In addition, the small size of securities markets and the low trading volume may lead to a lack of liquidity, which leads to increased volatility. Also, emerging markets may not provide adequate legal protection for private or foreign investment or private property.Investments in commodities may have greater volatility than investments in traditional securities, particularly if the instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Use of leveraged commodity-linked derivatives creates an opportunity for increased return but, at the same time, creates the possibility for greater loss.Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the original investment. The use of derivatives may not be successful, resulting in investment losses, and the cost of such strategies may reduce investment returns.There is no guarantee that the use of long and short positions will succeed in limiting an investor's exposure to domestic stock market movements, capitalization, sector swings or other risk factors. Investing using long and short selling strategies may have higher portfolio turnover rates. Short selling involves certain risks, including additional costs associated with covering short positions and a possibility of unlimited loss on certain short sale positions.
J.P. Morgan Asset Management: Index Definitions, Risks and Disclosures
73
J.P. Morgan Asset Management: Risks and DisclosuresThe Market Insights program provides comprehensive data and commentary on global markets without reference to products. Designed as a tool to help clients understand the markets and support investment decision-making, the program explores the implications of current economic data and changing market conditions.
For the purposes of MiFID II, the JPM Market Insights and Portfolio Insights programmes are marketing communications and are not in scope for any MiFID II / MiFIR requirements specifically related to investment research. Furthermore, the J.P. Morgan Asset Management Market Insights and Portfolio Insights programmes, as non-independent research, have not been prepared in accordance with legal requirements designed to promote the independence of investment research, nor are they subject to any prohibition on dealing ahead of the dissemination of investment research.
This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own professional advisers, if any investment mentioned herein is believed to be suitable to their personal goals. Investors should ensure that they obtain all available relevant information before making any investment. Any forecasts, figures, opinions or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Both past performance and yields are not a reliable indicator of current and future results.
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Copyright 2018 JPMorgan Chase & Co. All rights reserved.
Prepared by: David Kelly, Tai Hui, Kerry Craig, Yoshinori Shigemi, Jasslyn Yeo, Marcella Chow, Ian Hui, Agnes Lin, Shogo Maekawa, Chaoping Zhu and Hannah Anderson.
Unless otherwise stated, all data are as of June 30, 2018 or most recently available.
MI-GTMASIA-E JUNE 2018
Material ID: 0903c02a82243f29