Guide to the Markets - Asia MARKET INSIGHTS

Guide to the Markets Asia | 3Q 2021 | As of June 30, 2021 Global Market Insights Strategy Team GTM – Asia | 2

Dr. David Kelly, CFA New York

Dr. Cecelia Mundt Karen Ward New York Tilmann Galler, CFA Tai Hui London Chaoping Zhu, CFA Frankfurt Hong Kong Shanghai

David Lebovitz New York Michael Bell, CFA Meera Pandit, CFA Maria Paola Toschi Marcella Chow London New York Milan Hong Kong

Gabriela Santos Shogo Maekawa New York Tokyo

Hugh Gimber, CFA London Agnes Lin Vincent Juvyns Ian Hui Taipei Luxembourg Hong Kong Jordan Jackson New York John Manley New York Ambrose Crofton, CFA London Dr. Jasslyn Yeo, CFA Lucia Gutierrez Mellado Stephanie Aliaga Singapore Madrid New York Kerry Craig, CFA Melbourne Nimish Vyas Jai Malhi, CFA New York London

Olivia Schubert Elena Domecq New York Max McKechnie Madrid London Page reference GTM – Asia | 3

 Regional and local economy  Equities  Other asset classes 4. Asia: Economic growth 32. Global and Asia equity market returns 66. Asset class returns 5. ASEAN: Exports and current account 33. Global equities: Return composition 67. Asset class returns through the economic cycle 6. ASEAN: Monetary and fiscal policy 34. Global equities: Earnings expectations 68. Asset class returns in rising inflation environments 7. China: Economic snapshot 35. Global equities: Inflation and profitability 69. Volatility 8. China: Cyclical indicators 36. Global equities: Input prices and profit margins 70. U.S. dollar 9. China: Fiscal policy 37. Global equities: Valuations 71. Currencies 10. China: Monetary policy and credit growth 38. Global equities: Growth versus value 72. Emerging market external positions 11. China: Exchange rate 39. APAC ex-Japan equities: Earnings expectations by market and 73. Commodities sector 74. Industrial and precious metals  Global economy 40. APAC ex-Japan equities: Performance drivers 75. Oil: Short-term market dynamics 12. Global growth 41. APAC ex-Japan equities: Dividends 76. Alternative sources of income 13. Global Purchasing Managers’ Index (PMI) 42. APAC ex-Japan equities: Exports and earnings 77. Understanding alternatives 14. Global capital expenditures 43. APAC ex-Japan equities: Earnings trend by revenue source 15. Global trade 44. China: Sector earnings and valuations  Investing principles 16. Global supply chains 45. China – Hong Kong: Equity flows 78. ESG considerations 17. Global semiconductors sales 46. Europe: Sector earnings and valuations 79. Emissions targets and global energy mix 18. Global inflation 47. United States: Sector earnings and valuations 80. Performance of sustainable investing 19. Global central bank policy rate changes 48. United States: Sources of earnings per share growth 81. Developed market (DM) vs. emerging market (EM) yields 20. G4 central bank policy rates and market expectations 49. United States: Bull and bear markets 82. Equity annual returns and intra-year declines 21. G4 central bank balance sheets 50. United States: Interest rates and equities 83. Fixed income annual returns and intra-year declines 22. Fiscal outlook 51. United States: Interest rates and equity performance 84. The compounding effect 23. Household savings and consumption 85. Portfolio construction, asset class returns and volatility 24. COVID-19 vaccinations and infections  Fixed income 86. The benefits of diversification and long-term investing 25. China-U.S. economic relations 52. Global fixed income returns 26. United States: Economic growth and the composition of GDP 53. Global fixed income: Yields and duration 27. United States: Business cycle thermometer 54. Global fixed income: Return composition 28. United States: Employment and wages 55. Global fixed income: Valuations 29. United States: Inflation 56. Global fixed income: Government bond yields and expected 30. United States: Monetary policy inflation 31. Eurozone: Economic snapshot 57. Global fixed income: Yields and risks 58. U.S. Treasury yield breakdown and curve spread 59. U.S. real yields 60. U.S. investment grade bonds 61. U.S. securitized assets 62. U.S. high yield bonds 63. Emerging market debt 64. Asia fixed income 65. China bonds

3 Asia: Economic growth GTM – Asia | 4

EM Asia ex-China* manufacturing PMI and real GDP growth Index Year-over-year change 65 12% Manufacturing PMI GDP growth

60 8% Regional and local economy

55 4%

50 0%

45 -4%

40 -8%

35 -12% '04 '06 '08 '10 '12 '14 '16 '18 '20

Source: IHS Markit, J.P. Morgan Economic Research, National Statistics Agencies, J.P. Morgan Asset Management. PMI = Purchasing Managers’ Index. Manufacturing PMIs are relative to 50, which indicates contraction (below 50) or expansion (above 50) of the manufacturing sector. *Emerging Market (EM) Asia ex-China includes Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

4 ASEAN: Exports and current account GTM – Asia | 5

Exports Current account balance Year-over-year change, 6-month moving average Share of GDP 50% 25%

40% 20%

Regional and Singapore local economy

Malaysia 30% 15%

Vietnam 10% 20% Thailand Philippines Singapore 10% 5% Malaysia

0% 0%

Indonesia Vietnam -10% -5% Thailand

Philippines -20% Indonesia -10% '10 '12 '14 '16 '18 '20 '12 '14 '16 '18 '20

Source: FactSet, National Statistics Agencies, J.P. Morgan Asset Management; (Right) Bangko Sentral ng Pilipinas, Bank Indonesia, Bank Negara Malaysia, Bank of Thailand, State Bank of Vietnam, Statistics Singapore. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

5 ASEAN: Monetary and fiscal policy GTM – Asia | 6

Central bank policy rates* Government deficit or surplus Per annum Share of GDP 7% 3% 2% Vietnam 1% 6% 0% Regional and local economy Indonesia -1% Thailand Indonesia 5% -2% -3% -4% Malaysia 4% Philippines -5% -6% Philippines 3% -7% Vietnam Malaysia -8% -9% 2% -10% -11% -12% 1% Thailand -13% Singapore -14% 0% -15% '17 '18 '19 '20 '21 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: Bangko Sentral ng Pilipinas, Bank Indonesia, Bank Negara Malaysia, Bank of Thailand, FactSet, State Bank of Vietnam, J.P. Morgan Asset Management; (Right) Bureau of Treasury Philippines, Ministry of Finance Indonesia, Statistics Singapore. *The central banks’ policy rates used are: Bank Indonesia 7-day reverse repo rate (Indonesia), overnight policy rate (Malaysia), Bangko Sentral ng Pilipinas overnight reverse repurchase facility (Philippines), one-day repurchase rate (Thailand) and Vietnam Base Rate (Vietnam). Singapore is not included as the Monetary Authority of Singapore manages the exchange rate of the Singapore dollar, rather than interest rates, in its monetary policy. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 6 China: Economic snapshot GTM – Asia | 7

Contribution to real GDP growth Caixin/Markit Purchasing Managers’ Indices Year-over-year change Level 20% Gross capital formation (investment) 65 Consumption 1Q2021: 18.3% Net exports 06/2021: 50.3 16% 60 GDP 06/2021: 51.3 Regional and local economy Services 55 12%

50 8% Manufacturing 45

4% 40

0% 35

-4% 30

-8% 25 '80 '85 '90 '95 '00 '05 '10 '15 '20 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 Source: J.P. Morgan Asset Management; (Left) CEIC, National Bureau of Statistics of China; (Right) Caixin/Markit, J.P. Morgan Economic Research. Purchasing Managers’ Index (PMI) is relative to 50, which indicates deceleration (below 50) or acceleration (above 50) of economic activities in the sector. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

7 China: Cyclical indicators GTM – Asia | 8

Fixed asset investment Consumption Year-to-date, year-over-year change Year-over-year change, 3-month moving average 40% 40% Retail sales Online sales 55%

35% 30% 30% 45% Regional and local economy Private State-owned enterprises 25% 20% 20% 35%

10% 15%

10% 25%

0% 5%

Aggregate 0% 15% -10% -5%

-10% 5% -20% -15%

-30% -20% -5% '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '16 '17 '18 '19 '20 '21 Source: CEIC, National Bureau of Statistics of China, J.P. Morgan Asset Management. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

8 China: Fiscal policy GTM – Asia | 9

Fiscal revenue and expenditure* Government financing** Year-over-year change, 3-month moving average CNY billions, bond issuance 30% 2,000 Revenue Expenditure 1,800 Special local government bonds General local government bonds Regional and local economy 20% 1,600 Central government bonds

1,400

10% 1,200

1,000

0% 800

600

-10% 400

200

-20% 0 '14 '15 '16 '17 '18 '19 '20 '21 '18 '19 '20 '21 Source: CEIC, J.P. Morgan Asset Management; (Left) Ministry of Finance of China; (Right) China Central Depository & Clearing Co. Ltd., Ministry of Finance of China. *Fiscal revenue includes taxes, government funds, which are mostly derived from local government land sales, and other government revenues. Fiscal expenditure includes government spending of funds raised from taxes, government funds and general bond issuance. **General local government bonds are issued to raise funds and offset fiscal deficits so as to maintain the ordinary operation of local governments. They are backed by the future fiscal revenue of the local governments. Special local government bonds are issued to support specific infrastructure and public projects. They are backed by the future revenue generated from the projects. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 9 China: Monetary policy and credit growth GTM – Asia | 10

Chinese credit impulse and global new orders Key interest rates % of nominal GDP, year-over-year change Difference from one year ago Per annum 25% 35 7.5% Global composite PMI - New orders 30 20% 25 Regional and local economy 15% 6.0% 20

10% 15 Lending rate (1-year)

10 5% 4.5% Medium-term 5 Loan prime lending facility 0% rate (1-year)** 0 (1-year)

-5% -5 3.0%

-10% -10 Interbank repo (7-day) -15 -15% 1.5% -20 Deposit rate (1-year) -20% -25 Credit impulse* (advanced 6 months) -25% -30 0.0% '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '15 '16 '17 '18 '19 '20 '21 Source: CEIC, People’s Bank of China (PBoC), J.P. Morgan Asset Management; (Left) Ministry of Finance of China; (Right) National Interbank Funding Center. *Credit impulse measures the year-over-year change of credit flow (net aggregate social financing) as a percentage of nominal GDP. Rolling 12-month nominal GDP and credit stock are used in the calculation. **In August 2019, the PBoC started to release 1-year and 5-year loan prime rates (LPR) on a monthly basis, which are based on quotes from 18 large banks. LPR has become the benchmark for commercial loans and floating rate loan contracts. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

10 China: Exchange rate GTM – Asia | 11

Chinese yuan exchange rate CFETS Index* USD / CNY 104 CFETS CNY index USD / CNY (inverse) 5.6

Dec. 11, 2015: 5.8 102 Stronger CNY Launch of the CFETS

Regional and index local economy May 31, 2021: Reserve ratio 6.0 100 on forex deposit raised to 7% from 5% Aug. 6, 2018: 6.2 98 Risk reserve ratio for forward sales of Oct. 12, 2020: CNY raised to 20% Risk reserve ratio for 6.4 Aug. 11, 2015: from 0% forward sales of CNY 96 Market reform to cut to 0% from 20% mechanism of CNY 6.6 exchange rate 94 6.8 Oct. 27, 2020: 92 Suspension of Weaker CNY 7.0 May 26, 2017: counter-cyclical Introduction of counter-cyclical factors factor to stabilize daily central parity 90 7.2 '15 '16 '17 '18 '19 '20 '21

Source: China Foreign Exchange Trade Center, FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management. *CFETS CNY Index is the China Foreign Exchange Trade System basket of 24 currencies traded against the Chinese renminbi, where the base value was set at 100 as of 31/12/14. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

11 Global growth GTM – Asia | 12

Real GDP growth Quarter-over-quarter growth 4% Forecast Eurozone 12.6% 11.7% 7.5% 5.3% U.S. 3% Japan China

2%

1% Global economy Global

0%

-1%

-2%

-3%

-9.3% -9.0% -8.1% -4% -11.5% 4Q '19 1Q '20 2Q '20 3Q '20 4Q '20 1Q '21 2Q '21 3Q '21 4Q '21 1Q '22 2Q '22 3Q '22 4Q '22 Source: J.P. Morgan Economic Research, J.P. Morgan Asset Management. Y-axis has been cut to maintain a reasonable scale. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

12 Global Purchasing Managers’ Index (PMI) GTM – Asia | 13

Global manufacturing and services PMI Global manufacturing PMI breakdown Index 65 Jul '20 '20 Aug Sep '20 Oct '20 Nov '20 Dec '20 Jan '21 Feb '21 '21 Mar Apr '21 '21 May Jun '21 Global 56.0 55.5 60 Services DM * 59.8 59.5 EM ** 52.0 51.3 55 U.S. (Markit) 62.1 62.1 U.S. (ISM) 61.2 60.6 Euro area 63.1 63.4 50 Ge rm any 64.4 65.1 France 59.4 59.0

Global economy Global 45 Italy 62.3 62.2 Spain 59.4 60.4 UK 65.6 63.9 40 Australia 60.4 58.6 Lowest point 04/20: 39.6 Japan 53.0 52.4 China (Markit) 52.0 51.3 35 China (NBS) 51.0 50.9 Manufacturing Kor e a 53.7 53.9 30 Taiw an 62.0 57.6 Indonesia 55.3 53.5 India 50.8 48.1 25 Russia 51.9 49.2 Lowest point 04/20: 23.7 Br az il 53.7 56.4 20 Mexico 47.6 48.8 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 # markets above 50 10 11 11 12 11 14 13 15 15 15 15 13

Source: Australian Industry Group, Institute for Supply Management, J.P. Morgan Economic Research, Markit, J.P. Morgan Asset Management. PMIs are relative to 50, which indicates deceleration (below 50) or acceleration (above 50) of the sector. Heatmap colors are based on PMI relative to the 50 level, with green (red) corresponding to acceleration (deceleration). *Developed market includes Australia, Canada, Denmark, euro area, Japan, New Zealand, Norway, Sweden, Switzerland, UK and the U.S. **Emerging market includes Brazil, Chile, China, Colombia, Croatia, Czech Republic, Hong Kong SAR, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Philippines, Poland, Romania, Russia, Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, Turkey and Vietnam. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 13 Global capital expenditures GTM – Asia | 14

Capital goods imports and investment goods output Credit spreads and U.S. capital spending Index Year-over-year change, 3MMA Year-over-year change 70 Global Mfg. PMI – Investment Goods Output sub-index 20% -150% Nonresidential fixed investment 20% (4Q lag) Spreads tightening, 65 15% -100% CAPEX rising 15%

60 10% -50% 10%

55 5% 0% 5% Global economy Global

50 0% 50% 0%

45 -5% 100% -5%

40 -10% 150% -10%

35 -15% 200% -15% Credit spreads Spreads widening, (inverted) CAPEX falling 30 Global (ex-China) capital goods imports growth* -20% 250% -20% '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Source: FactSet, J.P. Morgan Asset Management; (Left) J.P. Morgan Economic Research, National Statistics Agencies; (Right) Bloomberg Finance L.P., U.S. Bureau of Economic Analysis. Spreads based on option-adjusted spread for Bloomberg Barclays U.S. Corporate Investment Grade index. *The series aggregates monthly capital goods imports growth data of 28 developed and emerging markets, weighted by their nominal gross domestic product. 3MMA refers to 3-month moving average. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

14 Global trade GTM – Asia | 15

Global trade activity Exports growth Year-over-year change, 3MMA Index, 4-month lead Year-over-year change, 3MMA 20% Global trade volume growth New export orders* 75 25%

70 20% 15% Emerging markets

65 15% 10% 60 10%

5% 55 5% Global economy Global

0% 50 0%

45 -5% -5% Developed markets 40 -10% -10% 35 -15%

-15% 30 -20%

-20% 25 -25% '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19

Source: FactSet, J.P. Morgan Economics Research, Markit, Netherlands Bureau for Economic Policy Analysis, J.P. Morgan Asset Management. *Series shown is the Global Manufacturing Purchasing Managers’ Index Sub-Index for new export orders. Emerging markets and developed markets as defined by Netherlands Bureau for Economic Policy Analysis World Trade Monitor. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

15 Global supply chains GTM – Asia | 16

Baltic Dry Index* Supplier delivery times** Index, 3-month moving average Manufacturing Purchasing Managers’ Index (PMI) sub-index 3,000 60 Shorter delivery times 2,500 55

Emerging markets 50 2,000

Global economy Global 45 1,500 Developed markets

40

1,000 35

500 Longer 30 delivery times

0 25 '17 '18 '19 '20 '21 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: J.P. Morgan Asset Management; (Left) Baltic Exchange, FactSet; (Right) IHS Markit. *The Baltic Dry Index is an index of average prices paid for the transport of dry bulk materials across more than 20 routes, and is often viewed as a leading indicator of economic activity. **PMI sub-indices are relative to 50, which indicates whether supplier delivery times are increasing (below 50) or decreasing (above 50). Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

16 Global semiconductors sales GTM – Asia | 17

Global semiconductor sales into different regions USD billion, 3-month moving average 50 Americas

45 Europe China 40 Japan Asia Pacific ex-China and Japan 35

30 Global economy Global

25

20

15

10

5

0 '15 '16 '17 '18 '19 '20 '21

Source: FactSet, Semiconductor Industry Association, J.P. Morgan Asset Management. Monthly sales to each region are compiled by the World Semiconductor Trade Statistics organization. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

17 Global inflation GTM – Asia | 18

Headline consumer prices Year-over-year change, quarterly Below trend Inflation running Above trend Legend

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 '21 Apr May

U.S. 4.2% 4.9% UK 1.5% 2.1% Eurozone 1.6% 2.0% Japan -0.5% -0.1%

Developed Markets Developed Australia 2.3% 3.3% Global economy Global China 0.9% 1.3% India 4.2% 6.3% Korea 2.3% 2.6% Taiwan 2.1% 2.5%

EM Asia Indonesia 1.4% 1.7% Malaysia 4.7% 4.4% Thailand 3.4% 2.4%

Brazil 6.8% 8.1% Mexico 6.1% 5.9% Russia 2.4% 2.9%

Other EM Other Turkey 17.1% 16.6% South Africa 4.4% 5.2%

Source: Department of Statistics Malaysia, DGBAS, Eurostat, FactSet, Goskomstat of Russia, IBGE, India Ministry of Statistics & Programme Implementation, INEGI, J.P. Morgan Economics Research, Korean National Statistical Office, Melbourne Institute, Ministry of Commerce Thailand, Ministry of Internal Affairs & Communications Japan, National Bureau of Statistics China, Office for National Statistics UK, Statistics Indonesia, Statistics Institute Turkey, Statistics South Africa, U.S. Department of Labor, J.P. Morgan Asset Management. Quarterly averages, with the exception of the two most recent figures, which are single month readings, are shown. Colors are based on z-score of year-over-year inflation rate relative to each market’s own 10-year history where red (blue) indicates inflation above (below) long-run trend. EM represents emerging markets. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 18 Global central bank policy rate changes GTM – Asia | 19

Changes in central bank policy rates Number of hikes or cuts* 150

Developed markets Rate hikes 100 Emerging markets

50 YTD

Global economy Global 0

-50

-100

-150 Developed markets Rate cuts Emerging markets

-200 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: BIS, J.P. Morgan Asset Management. *Count covers the 38 central banks included in the Bank for International Settlements’ central bank policy monitor except Argentina, Croatia and Hong Kong. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

19 G4 central bank policy rates and market expectations GTM – Asia | 20

G4 central bank key policy rates Market expectations** for policy rates Per annum Per annum 7% 2.0%

6% 1.5%

5% U.S. UK 1.0% 4% UK Global economy Global

3% 0.5% U.S. 2% Japan Eurozone 0.0%

1% Eurozone Japan* -0.5% 0%

-1% -1.0% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 Jun '21 Jun '22 Jun '23 Jun '24 Jun '25

Source: J.P. Morgan Asset Management; (Left) FactSet; (Right) Bloomberg L.P. G4 are the Bank of England, the Bank of Japan (BoJ), the European Central Bank and the U.S. Federal Reserve. *The BoJ has adopted 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 hold current accounts at the BoJ. **Expectations are derived from the 3-month moving average of the overnight index swap (OIS) forward rates. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 20 G4 central bank balance sheets GTM – Asia | 21

G4 central bank balance sheets* USD trillions Forecast** 10 28 UK 12-month change Eurozone 26 in balance sheet Japan 24 8 U.S. 22

11/2008: U.S. 11/2010: U.S. 09/2012: U.S. 03/2020: U.S. 20 6 QE1 announced QE2 announced QE3 announced QE4 announced 18

Global economy Global 16

4 14

12

10 2 8

6 0 4

2

-2 0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: FactSet, J.P. Morgan Asset Management. *G4 is the eurozone, Japan, UK and the U.S. **Forecasts are based on implied monetary policy settings. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

21 Fiscal outlook GTM – Asia | 22

Budget balance Estimates, % of nominal GDP 0%

-2%

-4%

-6%

Global economy Global -8%

-10% 2020 2021 -12% 2022

-14%

-16% Asia Pacific ex-Japan

-18% UK U.S. Japan EU India Singapore Hong Philippines Malaysia Indonesia Thailand Australia Taiwan South China Kong Korea

Source: J.P. Morgan Economics Research, J.P. Morgan Asset Management. Figures represent budget balance estimates for the fiscal year. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

22 Household savings and consumption GTM – Asia | 23

Savings rate U.S. household disposable income breakdown Share of disposable income Year-over-year change 35% 40

35 Government transfers/Benefits 30% Disposable income 30 Income after tax

25% 25

20

Global economy Global 20% 15

10 15% EU 5

UK 10% 0

-5 5% U.S. -10

0% -15 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Source: U.S. Bureau of Economic Analysis, J.P. Morgan Asset Management; (Left) Eurostat, Office of National Statistics UK; (Right) Thomson Reuters Datastream. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

23 COVID-19 vaccinations and infections GTM – Asia | 24

People who have received at least one dose of vaccine Daily increase in cases (region) % of population 7-day moving average, per million people UK 66.1% 800 Chile 65.9% North America Israel 64.7% 700 Singapore 55.9%

U.S. 54.0% 600 European Union 50.8% China 43.2% 500 Turkey 41.6% Global economy Global Argentina 36.5% 400 Brazil 35.0% Europe Hong Kong 30.0% South Korea 29.9% 300 Australia 24.1% Mexico 24.0% 200 World 23.5%

Japan 23.4% 100 Latin America India 19.7% Asia Indonesia 10.7% 0 0% 20% 40% 60% 80% Mar '20 May '20 Jul '20 Sep '20 Nov '20 Jan '21 Mar '21 May '21 Source: J.P. Morgan Asset Management; (Left) Our World in Data; (Right) Johns Hopkins University, World Bank – World Development Indicators. North America includes U.S. and Canada; Europe includes France, Germany, Italy, Spain and UK; Asia includes Australia, China, Hong Kong, India, Japan, Singapore and South Korea; Latin America includes Brazil, Chile, Peru and Mexico. Population numbers are based on World Bank data as of 31/12/19. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

24 China–U.S. economic relations GTM – Asia | 25

Foreign direct investment Trade relations with the U.S. USD billions Goods export value, rolling 12 months, Index, Jun. 2018=100 20 U.S. imposes U.S. FDI into China China FDI into U.S. 130 25% tariffs on Exports to ROW ex-U.S. $34B U.S. imposes Exports to U.S. 125 10% tariffs on $200B 15 120

115 10

110 Global economy Global

5 105

100 0 95

90 -5 U.S. proposes U.S. imposes 85 increase from First-stage trade 25% tariffs 10% to 25% on agreement on $16B $200B -10 80 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Jun '18 Dec '18 Jun '19 Dec '19 Jun '20 Dec '20

Source: J.P. Morgan Asset Management; (Left) National Bureau of Statistics China, U.S. Bureau of Economics Analysis; (Right) CEIC, China Customs. ROW = Rest of World. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

25 United States: Economic growth and the composition of GDP GTM – Asia | 26

Real GDP Components of GDP Year-over-year change 1Q21 nominal GDP, USD trillions Real GDP 1Q21 10% 23 4.8% Housing Year-over-year change: 0.4% 21 Quarter-over-quarter SAAR* change: 6.4% 8% 13.0% Investment ex-housing 19 50-year average: 2.7% 10-year average: 2.0% 6% 17 17.9% Gov’t spending 15 4%

Global economy Global 13

2% 11

9 0% 68.3% Consumption 7

-2% 5

3 -4%

1 -6% -1 '71 '76 '81 '86 '91 '96 '01 '06 '11 '16 '21 -4.0% Net exports

Source: Bureau of Economic Analysis, FactSet, J.P. Morgan Asset Management. *SAAR stands for seasonally adjusted annualized rate. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

26 United States: Business cycle thermometer GTM – Asia | 27

U.S. business cycle indicators Current percentile rank relative to range of data since Jan. 1990 100

Latest 75 Elevated

Global economy Global 50 Retrenched

25 3 months ago

0 Consumer Wage Nonfarm Housing Light Vehicle Business Capex Durable Industrial Leading Credit Example Confidence Growth Payrolls Starts Sales Confidence Orders Production Economic Conditions Index Consumers Businesses

Source: BEA, Conference Board U.S., FactSet, U.S. Census Bureau, U.S. Department of Labor, Wards Intelligence, J.P. Morgan Asset Management. Indicators are: Consumer Confidence – Monthly survey index of how consumers perceive their own financial status and the general economy; Wage Growth – Average hourly earnings of production and non-supervisory workers; Nonfarm Payrolls – Monthly change in U.S. nonfarm employment (three-month moving average); Housing Starts – Number of private housing units that construction has started within a specified timeframe; Light Vehicle Sales – Cars and passenger trucks sold in a given month; Business Confidence – Monthly survey of Chief Executive Officers about their outlook for the economy; Capex – Monthly new orders of non-defense capital goods (excluding aircraft); Durable Orders – Monthly new orders of durable goods in the manufacturing sector, seasonally adjusted; Industrial Production – Monthly output of the industrial sector; Leading Economic Index – An index aggregating values of 10 key variables intended to forecast future U.S. economic activity; Credit Conditions – Leading Credit Index that aggregates performance of six financial market instruments to track credit conditions in the U.S. economy. 27 Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. United States: Employment and wages GTM – Asia | 28

Unemployment rate and average hourly earnings* Percent of labor force, year-over-year change, seasonally adjusted 16%

First Fed hike after recession** 14% Recessions

12%

10% Global economy Global

8%

Unemployment rate 6% 05/2021: 5.8%

4%

2% 05/2021: 2.4% Average hourly earnings

0% '85 '90 '95 '00 '05 '10 '15 '20 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. ** The first Fed hike after the last 3 recessions happened on 13/12/93, 25/12/03 and 20/01/15. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

28 United States: Inflation GTM – Asia | 29

Headline and core Personal Consumption Expenditure (PCE) inflation Year-over-year change, seasonally adjusted 6%

5%

Headline PCE inflation 4% Required 3-year headline 3% PCE avg.: Fed’s 2% headline PCE target 2.3% Global economy Global

2%

3-year 1% Core PCE inflation headline PCE avg.: 1.7% 0%

-1%

-2% '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '24

Source: Bureau of Economic Analysis, FactSet, Federal Reserve, J.P. Morgan Asset Management. The Federal Reserve (Fed) uses the Personal Consumption Expenditure (PCE) deflator to measure inflation. Core PCE is defined as PCE excluding food and energy prices. The PCE deflator employs an evolving chain-weighted basket of consumer expenditures. In August 2020, the Fed unveiled its Average Inflation Targeting policy, which seeks to achieve inflation that averages 2% over time. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

29 United States: Monetary policy GTM – Asia | 30

Federal funds rate expectations Market expectations for the fed funds rate FOMC June 2021 forecasts 6% Percent Long 2021 2022 2023 Federal funds rate run Change in real GDP, 4Q to 4Q 7.0 3.3 2.4 1.8 5% FOMC year-end estimates Market expectations on 30/06/21 Unemployment rate, 4Q 4.5 3.8 3.5 4.0 FOMC long-run projection PCE inflation, 4Q to 4Q 3.4 2.1 2.2 2.0 4% Global economy Global

3% 2.50%

2%

1%

0% Long '06 '08 '10 '12 '14 '16 '18 '20 '22 '24run Source: Bloomberg Finance L.P., FactSet, U.S. Federal Reserve, J.P. Morgan Asset Management. Market expectations are the federal funds rates priced into the Fed Fund futures market as of 30/06/21. Federal Reserve projections shown are the median estimates of Federal Open Market Committee (FOMC) participants. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

30 Eurozone: Economic snapshot GTM – Asia | 31

Eurozone activity Consumer confidence* and retail sales Year-over-year change Year-over-year change, 3-month moving average Index 50% 15% 0 Retail sales 40% 10% -5 30%

20% 5%

-10

Global economy Global Exports 10% 0% 0% -15 Industrial -10% production -5%

-20% -20 -10% -30% Consumer confidence -40% -15% -25 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: Eurostat, FactSet, J.P. Morgan Asset Management; (Right) European Commission. *Eurozone consumer confidence as reported by the European Commission, which measures the level of optimism that consumers have about the economy in relation to prior months and is typically below zero. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

31 Global and Asia equity market returns GTM – Asia | 32

10-yrs ('11 - '21) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2Q '21 YTD '21 Ann. Ret. Ann. Vol.

U.S. India U.S. China A Japan Taiwan China U.S. Taiwan Korea U.S. Taiwan U.S. China A

2.1% 26.0% 32.4% 52.1% 9.9% 19.6% 54.3% -4.4% 37.7% 45.2% 8.5% 18.9% 14.8% 24.1%

ASEAN China Japan India China A U.S. Korea India China A Taiwan Europe U.S. Taiwan India

-6.1% 23.1% 27.3% 23.9% 2.4% 12.0% 47.8% -7.3% 37.2% 42.0% 7.7% 15.3% 13.0% 22.4%

Europe ASEAN Europe U.S. U.S. Korea India Taiwan U.S. China A Taiwan India China China

-10.5% 22.8% 26.0% 13.7% 1.4% 9.2% 38.8% -8.2% 31.5% 38.4% 7.2% 12.5% 7.9% 20.6% APAC APAC APAC Korea Taiwan Taiwan Europe ASEAN Europe China India Europe China A Korea ex-JP ex-JP ex-JP -11.8% 22.6% 9.8% 10.1% -2.3% 7.1% 37.3% -8.4% 24.6% 29.7% 7.0% 12.3% 7.8% 20.5% APAC APAC Japan Korea Korea China India ASEAN China A Japan China China A Japan Taiwan ex-JP ex-JP -14.2% 21.5% 4.2% 8.3% -6.1% 6.2% 32.6% -12.6% 23.7% 22.8% 5.8% 6.9% 7.5% 17.4% APAC APAC APAC APAC Equities Europe China ASEAN Korea Japan ASEAN Japan U.S. Korea Korea ex-JP ex-JP ex-JP ex-JP -15.4% 19.9% 4.0% 6.4% -6.3% 2.7% 30.1% -13.7% 20.1% 18.4% 4.9% 6.8% 7.0% 16.7% APAC APAC APAC APAC China Taiwan China China Taiwan Europe India China A Korea Europe ex-JP ex-JP ex-JP ex-JP -18.2% 17.7% 3.7% 3.1% -7.6% 1.1% 28.5% -14.3% 19.5% 15.9% 4.1% 2.2% 6.8% 16.5% APAC Taiwan U.S. China A Japan Europe Europe China Korea Japan China China Europe ASEAN ex-JP -20.2% 16.0% -2.6% -3.7% -9.1% 0.2% 26.2% -18.7% 13.1% 14.9% 2.3% 1.9% 6.2% 16.5%

China A China A India Europe Taiwan India Japan Korea ASEAN Europe Japan Japan India U.S.

-20.5% 10.9% -3.8% -5.7% -11.0% -1.4% 24.4% -20.5% 8.8% 5.9% -0.2% 1.5% 5.6% 13.6%

India Japan ASEAN Korea ASEAN China A U.S. China A India ASEAN ASEAN ASEAN ASEAN Japan

-37.2% 8.4% -4.5% -10.7% -18.4% -15.2% 21.8% -27.6% 7.6% -6.2% -1.7% -1.7% 1.4% 13.4% Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management. Returns are total returns in U.S. dollars based on MSCI indices, except the U.S., which is the S&P 500, and China A, which is the CSI 300 index in U.S. dollar terms. 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 30/06/11 – 30/06/21. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

32 Global equities: Return composition GTM – Asia | 33

Sources of global equity returns* Total return, USD Total return Multiple expansion** 40% Currency return Dividend yield 2020 2021 YTD EPS growth outlook***

30% 22.8% 18.7% 18.4% 20% 15.3% 14.9% 12.3%

7.6% 10% 5.9% 6.9% 1.5%

Equities 0%

-10%

-20%

-30% Asia Pacific EM U.S. Japan Europe Asia Pacific EM U.S. Japan Europe ex-Japan ex-Japan Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management. *All return values are MSCI Gross Index (official) data, except the U.S., which is the S&P 500. **Multiple expansion is based on the forward price-to-earnings ratio. ***Earnings per share (EPS) growth outlook is based on next 12-month aggregate (NTMA) earnings estimates. Diversification does not guarantee positive returns or eliminate risk of loss. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

33 Global equities: Earnings expectations GTM – Asia | 34

Earnings growth Earnings revisions ratios Earnings per share, year-over-year change, consensus estimates Net earnings revisions to consensus estimates, 13-week moving average 60% 60% 2020 2021 2022 50% 50% 44% 40% Japan 40% 37% 38% U.S.

20% 30%

20% 0% 12% 11% 10% 10% 10%

Equities Europe -20%

0%

-2% -3% -40% -10% Asia Pacific -13% ex-Japan -20% -60%

-30% -26% U.S. Asia Pacific ex- EM Europe -80% Japan '14 '15 '16 '17 '18 '19 '20 '21

Source: IBES, MSCI, Standard & Poor’s, Thomson Reuters Datastream, J.P. Morgan Asset Management. Asia Pacific ex-Japan, emerging markets (EM), Europe and U.S. equity indices used are the MSCI Asia Pacific ex-Japan, MSCI Emerging Markets, MSCI Europe and S&P 500, respectively. Consensus estimates used are calendar year estimates from IBES. Revisions are based on the current unreported year. Net earnings revisions is (number of companies with upward earnings revisions – number of companies with downward earnings revisions) / number of total companies. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 34 Global equities: Inflation and profitability GTM – Asia | 35

MSCI AC World EPS and global inflation U.S. wage growth** and profit margins Year-over-year change Year-over-year change Year-over-year change Year-over-year change 60 9 12% PPI inflation* Earnings per share 50% Profit margins Wage growth**

40% 50 8

8% 30% 40 7

20% 4% 30 6

10% 20 5 0% 0%

Equities 10 4 -10%

-4% 0 3 -20%

-10 2 -30% -8%

-40% -20 1

-12% -50% -30 0 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Source: FactSet, J.P. Morgan Asset Management; (Left) Federal Reserve Bank of Dallas, MSCI; (Right) U.S. Bureau of Economic Analysis, U.S. Department of Labor. *PPI is producer price index, world excluding U.S. **Wage growth is the year-over-year change in the average hourly earnings of production and non-supervisory workers. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

35 Global equities: Input prices and profit margins GTM – Asia | 36

Developed market input prices and margins Emerging markets (EM) Asia input prices and margins PMI manufacturing diffusion index, 3MMA MSCI World net margin PMI manufacturing diffusion index, 3MMA MSCI EM Asia net margin 20 12% 15 12 Input less output prices* Net margins Input less output prices* Net margins

12 11% 11 15 9

10% 10 6 10

9% 3 9 Equities 5 0 8% 8

-3 0 7% 7 -6

-5 6% -9 6 '10 '12 '14 '16 '18 '20 '06 '08 '10 '12 '14 '16 '18 '20 Source: FactSet, Markit, MSCI, J.P. Morgan Asset Management. *If the difference between input and output prices is above 0, this indicates manufacturing input prices are expected to rise faster than output prices, whereas a difference below 0 indicates manufacturing output prices are expected to rise faster than input prices. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

36 Global equities: Valuations GTM – Asia | 37

Equity market valuations – Price-to-earnings 15-yr. range Forward P/E ratios 41.1 38.3 15-yr. average 30x 35.8 Latest

21.5 23.1 20x 17.8 19.0 18.9 16.1 16.3 18.2 16.2 15.7 16.1 15.4 14.1 14.2 14.7 13.7 14.5 11.5 10x 9.1 7.4

0x S&P 500 Europe Asia Pac Emerging ASEAN China A China Hong India Indonesia Japan Korea Malaysia Philippines Singapore Taiwan Thailand Brazil Mexico Russia ex-UK ex-Japan markets (CSI 300) Kong

Equity market valuations – Price-to-book

Equities 15-yr. range Trailing P/B ratios 7.2 5.2 5.2 5x 15-yr. average Latest 4.3 4x 3.5 3x 2.7 2.4 2.3 2.3 2x 2.1 2.1 2.0 2.1 2.1 1.8 1.9 1.6 1.6 1.4 1.4 1.3 1x 1.2 1.0

0x S&P 500 Europe Asia Pac Emerging ASEAN China A China Hong India Indonesia Japan Korea Malaysia Philippines Singapore Taiwan Thailand Brazil Mexico Russia ex-UK ex-Japan markets (CSI 300) Kong

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. 15-year range for P/E and P/B ratios are cut off to maintain a more reasonable scale for some indices. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

37 Global equities: Growth versus value GTM – Asia | 38

Growth vs. value valuations* MSCI World Index sector earnings correlation to real GDP MSCI World growth / value fwd. P/E ratio, # of std. dev. over / under average 1Q2009 – 1Q2021 4 Industrials 0.5 Growth expensive 3 relative to value Real Estate** 0.3

Cons. Disc. 0.2 2 Financials 0.2

1 Growth Cons. Staples 0.1 Value

0 Energy 0.1 Equities Materials 0.1 -1 Info. Tech. 0.1

-2 Utilities 0.0

-3 Growth cheap Comm. Svcs -0.1 relative to value Health Care -0.1 -4 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 -0.1 0 0.1 0.2 0.3 0.4 0.5 0.6

Source: FactSet, MSCI, J.P. Morgan Asset Management. *Growth is the MSCI World Growth index and value is the MSCI World Value index. **Real estate correlation is since 30/09/17. Each sector is categorized as value or growth based upon their weights in the MSCI World growth and value indices. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

38 APAC ex-Japan equities: Earnings expectations by market and sector GTM – Asia | 39

Earnings growth by market Earnings per share, year-over-year change, consensus estimates 2021 2022 100% 97.6%

80% 58.5% 60% 51.9% 44.3% 41.2% 38.3% 40% 32.1% 33.8% 29.1% 28.7% 27.1% 16.7% 16.6%18.3% 20.1% 20% 11.3% 13.3% 14.2% 14.8% 15.0% 3.0% 5.5% 0% Taiwan Korea Asia Pacific ex- Hong Kong Singapore Australia Thailand India China Indonesia Philippines Japan

Earnings growth by sector

Equities Earnings per share, year-over-year change, consensus estimates 100% 89.4% 2021 2022 78.2% 80% 70.4%

60% 49.8% 40.0% 34.8% 40% 31.3% 23.3% 21.6% 11.8% 12.6% 18.5% 20% 6.7% 8.2% 9.0% 9.6% 11.0% 8.6% 6.6% 0% -3.0% -20% -10.3% -7.2% Communication Materials Health care Industrials Financials Energy Utilities Real estate Consumer Information Consumer services staples technology discretionary

Source: MSCI, J.P. Morgan Asset Management. (Top) IBES. Equity indices used are the respective MSCI indices. Consensus estimates used are calendar year estimates from IBES. (Bottom) FactSet. Sector indices used are from the MSCI AC Asia Pacific ex-Japan Index. Consensus estimates used are calendar year estimates from 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 30/06/21.

39 APAC ex-Japan equities: Performance drivers GTM – Asia | 40

APAC ex-JP price-to-book and subsequent returns APAC ex-JP / DM equity performance and USD index %, next 12 months’ price return in USD Relative index level, Dec. 1997 = 100 Index level 120% 250 40 MSCI APAC ex-JP / MSCI World (DM)

Current level

80% 200 60

40% 150 80 Equities 0% 100 100

-40% 50 120

USD Index (inverted)

-80% 0 140 0.8 1.2 1.6 2.0 2.4 2.8 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 Source: FactSet, MSCI, J.P. Morgan Asset Management; (Left) J.P. Morgan Economic Research. Dots represent monthly data points since 1996. DM = Developed markets. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

40 APAC ex-Japan equities: Dividends GTM – Asia | 41

APAC ex-JP earnings and dividends growth estimates Number of companies yielding greater than 3% by region Year-over-year change Constituents of MSCI AC World Index 70% 250 237 60% MSCI APAC ex-JP 50% Earnings per share 200 40%

30% 150 20%

10% 112 Equities 0% 100 92 91

-10% 61 -20% MSCI APAC ex-JP 50 Dividends per share -30%

-40% 0 -50% Asia Pac. ex- Europe EM ex-Asia U.S. Japan '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 Japan

Source: FactSet, MSCI, J.P. Morgan Asset Management. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

41 APAC ex-Japan equities: Exports and earnings GTM – Asia | 42

APAC ex-JP vs. DM growth and equity performance Growth in nominal exports and earnings per share %, next 12 months’ growth estimates Index level USD, year-over-year change 20% 120 70% Emerging Asia minus DM GDP growth 110 60% APAC ex-JP growth MSCI APAC ex- JP & equity 50% Earnings per share 15% outperformance 100 40% 90 30% 10% 80 20%

70 10% Equities Equities 5% 60 0%

-10% 50 -20% EM Asia ex-China exports* 0% 40 -30% APAC ex-JP growth & equity 30 underperformance -40% MSCI APAC ex-JP / MSCI World (DM) -5% 20 -50% '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21

Source: FactSet, MSCI, J.P. Morgan Asset Management; (Left) J.P. Morgan Economic Research; (Right) CEIC, national statistics agencies. DM = Developed markets. Past performance is not a reliable indicator of current and future results. *EM Asia ex-China includes Hong Kong, Korea, Malaysia, Singapore, Taiwan, Thailand and Vietnam. Overall exports aggregate is gross domestic product (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 30/06/21. 42 APAC ex-Japan equities: Earnings trend by revenue source GTM – Asia | 43

Domestic vs. exports-oriented Asian companies* MSCI AC Asia Pacific ex-Japan, earnings per share, Jan. 2010 = 100 450

400

350 Less than 70% of 300 revenue derived domestically

250 More than 95% of revenue derived domestically

Equities 200

150

100 Between 70% and 95% of revenue 50 derived domestically

0 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: FactSet, MSCI, J.P. Morgan Asset Management. Earnings per share (EPS) used is next 12 months’ aggregate estimate. *Universe of stocks within the MSCI AC Asia Pacific ex-Japan index are split into three buckets depending on their revenue exposure to their domestic market. Over the time period examined (01/01/10 – 30/06/21), monthly adjustments are made to the buckets to reflect changes in a company's operations over time. Subsequently, EPS for each bucket is calculated by summing the market-value weighted EPS for each company on a monthly basis over the examined period. Each EPS series is then indexed to 100 on 01/01/10. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 43 China: Sector earnings and valuations GTM – Asia | 44

Earnings growth of MSCI China* MSCI China price-to-earnings Earnings per share, year-over-year change, consensus estimates Forward P/E ratios 60% 70x 2021 2022 Current 50% 60x 15-year range 15-year average 40% 50x 30%

40x 20%

10% 30x Equities 0% 20x

-10% 10x Tech. Energy Utilities Materials Financials Industrials 0x Real Estate Health Care MSCI China Cons. Discr. Cons. Staples Comm. Services Comm. Sector Weight 1.3 4.9 12.8 1.9 2.5 3.9 4.7 100.0 6.6 18.9 34.4 8.2 (%)

Source: FactSet, MSCI, J.P. Morgan Asset Management. *Sector indices used are from the MSCI China Index. Consensus estimates used are calendar year estimates from FactSet. Past performance is not a reliable indicator of current and future results. **Data for the forward price-to-earnings ratio in the real estate and health care sectors begin from 30/09/16 and 30/06/09, respectively. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

44 China – Hong Kong: Equity flows GTM – Asia | 45

Stock Connect monthly net flows Hang Seng China A/H Premium CNY billions HKD billions Index, Over 100 = Premium, Below 100 = Discount to H-shares 90 Northbound (Hong Kong to China) 330 160 A-shares trading at a 300 higher premium over H-shares 60 270 150 240

210 30 180 140 150 0 120 Equities

90 130 -30 60

30 5-year average 120 -60 0 A-shares trading at a -30 lower premium over Southbound (China to Hong Kong) H-shares -90 -60 110 '15 '16 '17 '18 '19 '20 '21 '15 '16 '17 '18 '19 '20 '21 Source: J.P. Morgan Asset Management; (Left) CEIC, Hong Kong Exchanges and Clearing Limited; (Right) Bloomberg, Hang Seng Index. Hang Seng China A/H Premium index tracks the price premium (or discount) of A-shares to H-shares. The higher the index, the higher premium of A-shares over H-shares, and vice-versa. Ticker tracks price feed only. Index currency is in USD. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

45 Europe: Sector earnings and valuations GTM – Asia | 46

MSCI Europe earnings growth estimates MSCI Europe price-to-earnings Earnings per share, year-over-year change, consensus estimates Forward P/E ratios 120% 35x 2021 2022 Current 100% 30x 15-year range 80% 15-year average

60% 25x

40% 20x 20% 15x 0% Equities -20% 10x

-40% 5x Tech. Utilities Energy* Materials Financials Industrials 0x Real Estate Health Care Cons. Discr.* MSCI Europe Cons. Staples Comm. Services Comm. Sector Weight 8.3 15.7 4.2 100.0 12.9 14.1 1.3 3.9 8.3 4.4 14.7 12.2 (%)

Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management. *Consumer discretionary sector earnings are expected to increase by 181% and energy sector earnings are expected to increase by 932% in 2021. **Data for the forward price-to-earnings ratio in the real estate sector begins 30/09/16. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

46 United States: Sector earnings and valuations GTM – Asia | 47

S&P 500 earnings growth estimates S&P 500 price-to-earnings Earnings per share, year-over-year change, consensus estimates Forward P/E ratios 120% 60x 2021 2022 Current 100% 15-year range 50x 15-year average 80%

60% 40x

40% 30x 20%

Equities 0% 20x

-20% 10x Tech. Utilities Energy* S&P 500 S&P Materials Financials Industrials

Real Estate 0x Health Care Cons. Discr. Cons. Staples Comm. Services Comm. Sector Weight 2.6 11.3 2.6 13.0 2.5 5.9 27.4 100.0 11.1 2.9 12.3 8.5 (%)

Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management. *Energy sector earnings are expected to increase by 1,071% in 2021. **The energy sector reached a historic maximum of 1,221x and a historic minimum of -482x. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

47 United States: Sources of earnings per share growth GTM – Asia | 48

S&P 500 year-over-year operating EPS growth Annual growth broken into revenue, changes in profit margin & changes in share count Share of EPS growth 2021* Avg. '01-20 80% 2021* Margin 44.6% 2.8% Revenue 11.9% 3.0% Share Count -0.4% 0.3% 60% Total EPS 56.1% 6.0% 56% 47%

40%

24% 22% 19% 19% 17% 20% 15% 15% 15% 13% 11% 5% 6% 4% 0% Equities 0%

-6%

-20% -11% -22% -31% -40% -40%

-60% '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 Source: Compustat, FactSet, Standard & Poor’s, J.P. Morgan Asset Management. EPS levels are based on annual operating earnings per share. Percentages may not sum due to rounding. Past performance is not indicative of future returns. *2021 earnings estimates are based on forecasts from FactSet Market Aggregates. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

48 United States: Bull and bear markets GTM – Asia | 49

S&P 500 bull market gains 600% Duration: 15 months 500% Price return: 400% 92%

300% 149 months 132 months 50 months 61 months 582% 401% 86% 200% 44 months 229% 80% 26 months 74 months 60 months 100% 48% 32 months 126% 101% 74% 0% '58 '60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

S&P 500 bear market losses Equities 0% -10% -20% 8 months -30% 6 months -22% 21 months -28% Duration: -40% 18 months -27% 3 months 1 month -36% -50% -34% Price return: 21 months 31 months -34% -60% -48% -49% 17 months -70% -57% '58 '60 '62 '64 '66 '68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management. A bear market represents a 20% or more decline from the previous market high; a bull market represents a 20% increase from a market trough. Charts and labels refer to price 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 30/06/21.

49 United States: Interest rates and equities GTM – Asia | 50

Correlations between weekly stock returns and interest rate movements Weekly S&P 500 returns, 10-year Treasury yield, rolling 1-year correlation, January 1997 – March 2021 1.0

2020 onwards 2009-2019 2003-2008 1997-2002 0.8 Positive relationship between yield 0.6 movements and stock returns 0.4

0.2

0.0 Equities Correlation -0.2 Negative relationship -0.4 between yield movements and stock -0.6 returns

-0.8 0% 1% 2% 3% 4% 5% 6% 7% 8% 10-year Treasury yield

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 1-year correlations only. Periods based on different Federal Reserve interest rate cycles. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

50 United States: Interest rates and equity performance GTM – Asia | 51

Correlations of S&P 500 relative sector performance to U.S. 10-year Treasury yield Correlation over last 10 years

Financials

Industrials Sectors tending to Energy outperform index with rising yields Materials

Tech.

Cons. Discr.

Equities Comm. Services Sectors tending to underperform index with rising yields Health Care

Real Estate

Cons. Staples

Utilities

-0.6 -0.4 -0.2 0 0.2 0.4 0.6 Correlation

Source: FactSet, U.S. Federal Reserve, Standard & Poor’s, J.P. Morgan Asset Management. Returns are based on price index only and do not include 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 30/06/21.

51 Global fixed income returns GTM – Asia | 52

10-yrs ('11 - '21) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2Q '21 YTD '21 Ann. Ret. Ann. Vol.

Europe HY Europe HY USD Asian Asia HY U.S. HY Europe HY Cash U.S. IG Europe HY Local EMD U.S. HY U.S. HY Local EMD

30.5% 14.9% 8.3% 5.2% 17.1% 21.0% 1.8% 14.5% 10.9% 4.4% 3.6% 6.7% 13.0% U.S. USD USD Asia HY U.S. HY U.S. IG USD Asian Local EMD Local EMD U.S. IG Asia HY Asia HY Europe HY Treas EMD EMD 20.4% 7.4% 7.5% 2.8% 11.4% 15.4% 0.9% 14.4% 9.9% 3.9% 1.3% 6.6% 12.4% USD USD USD USD Local EMD Asia HY Asia HY Asia HY DM Gov 't U.S. HY DM Gov 't U.S. IG Europe HY EMD EMD EMD EMD 19.9% 2.0% 6.1% 1.2% 11.2% 9.3% -0.7% 14.3% 9.7% 3.5% 0.4% 5.3% 7.9% USD USD U.S. USD U.S. Cash U.S. HY USD Asian Local EMD U.S. HY Cash USD Asian Asia HY EMD EMD Treas EMD Treas 18.5% 0.0% 5.5% 0.8% 10.2% 7.5% -0.8% 13.1% 8.0% 2.7% 0.0% 5.2% 7.5% U.S. U.S. HY USD Asian Cash U.S. IG Asia HY U.S. HY Asia HY U.S. HY Europe HY USD Asian U.S. IG U.S. HY Treas 15.8% -1.4% 5.1% 0.0% 6.1% 6.9% -2.1% 12.8% 7.1% 2.3% -0.1% 5.2% 7.0% U.S. USD Asian U.S. IG U.S. HY U.S. IG USD Asian DM Gov 't U.S. IG USD Asian USD Asian Local EMD Europe HY U.S. IG Treas 14.3% -1.5% 2.5% -0.7% 5.8% 6.8% -2.5% 11.3% 6.3% 1.7% -0.3% 4.4% 5.2% U.S. USD USD U.S. U.S. IG DM Gov 't DM Gov 't Europe HY U.S. IG Asia HY Europe HY DM Gov 't DM Gov 't Treas EMD EMD Treas 9.8% -2.7% 0.7% -2.6% 3.4% 6.4% -3.2% 10.3% 5.9% 1.1% -1.0% 2.8% 4.8% U.S. USD U.S. DM Gov 't Cash U.S. HY DM Gov 't USD Asian Asia HY USD Asian U.S. IG DM Gov 't USD Asian

Fixed incomeFixed Treas EMD Treas 2.0% -4.5% 0.0% -4.5% 1.6% 5.8% -4.6% 6.9% 4.9% 1.1% -1.3% 1.6% 4.6% U.S. U.S. U.S. U.S. DM Gov 't Local EMD Europe HY Europe HY Local EMD DM Gov 't Cash Asia HY Cash Treas Treas Treas Treas 1.3% -5.5% -6.0% -7.6% 1.0% 2.3% -6.7% 6.0% 0.5% 0.8% -2.6% 0.6% 3.7% USD Cash Local EMD Local EMD Cash Cash Europe HY Cash Local EMD Cash DM Gov 't Local EMD Cash EMD 0.1% -6.6% -6.1% -18.0% 0.3% 0.8% -8.2% 2.2% -1.2% 0.0% -4.6% 0.3% 0.2%

Source: Barclays, 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. HY), Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index (U.S. 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 Bond), Bloomberg Barclays Pan European High Yield (Europe HY), J.P. Morgan Government Bond Index – Global Traded (DM Government Bond), J.P. Morgan Asia Credit High Yield Index (Asia 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). 10-year data is used to calculate annualized returns (Ann. Ret.) and annualized volatility (Ann. Vol.). Returns are in U.S. dollars and reflect the period from 30/06/11 – 30/06/21. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 52 Global fixed income: Yields and duration GTM – Asia | 53

Fixed income yields Yield to maturity 8% Developed market Investment-grade bonds High yield bonds Asia & emerging market bonds government bonds

6%

4%

2%

0%

Fixed incomeFixed Duration (years)

5.4 2.0 7.4 8.7 5.9 3.4 3.9 3.8 4.4 5.6 5.1 4.5 8.0 -2% Germany Japan U.S. Europe U.S. Global U.S. Asia Europe Global U.S. Asia USD Local USD USD 10y 10y 10y IG ABS IG IG IG HY HY HY HY Asia EMD China EMD Credit Offshore Credit

Source: Barclays, Bloomberg Finance L.P., FactSet, ICE BofA Merrill Lynch, J.P. Morgan Economic Research, J.P. Morgan Asset Management. Based on Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index (U.S. IG), Bloomberg Barclays Euro Aggregate Credit – Corporate (Europe IG), J.P. Morgan Asia Credit Investment Grade Index (Asia IG), Bloomberg Barclays Global Aggregate – Corporate (Global IG), Bloomberg Barclays U.S. Aggregate Credit – Corporate High Yield Index (U.S. HY), Bloomberg Barclays U.S. Aggregate Securitized – Asset Backed Securities (U.S. ABS), Bloomberg Barclays Pan European High Yield (Europe HY), J.P. Morgan Asia Credit High Yield Index (Asia HY), ICE BofA Global High Yield (Global HY), J.P. Morgan GBI-EM (Local EMD), J.P. Morgan EMBI Global (USD EMD), J.P. Morgan Asia Credit Index (JACI) (USD Asia Credit), J.P. Morgan Asia Credit China Index (USD China Offshore Credit). 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. Yields are not guaranteed, positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results. 53 Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. Global fixed income: Return composition GTM – Asia | 54

Debt return composition Last 12 months 18% Total return Income return Price return 15% Currency return

12%

9%

6%

3%

0% Fixed incomeFixed -3%

-6% U.S. high yield USD DM USD Asia USD EMD USD EMD Local EMD USD Asia USD China Local DM high yield high yield corporates corporates offshore credit sovereigns

Source: J.P. Morgan Economics Research, J.P. Morgan Asset Management. Based on J.P. Morgan Asia Credit High Yield Index (USD Asia high yield), J.P. Morgan CEMBI (USD emerging market debt (EMD) corporates), J.P. Morgan EMBI Global (USD EMD), J.P. Morgan Asia Credit Corporates Index (USD Asia corporates), J.P. Morgan Asia Credit China Index (USD China offshore credit), J.P. Morgan Developed Market HY Index (USD DM high yield), J.P. Morgan Domestic High Yield Index (U.S. high yield), J.P. Morgan GBI-EM Global (Local EMD), J.P. Morgan GBI-DM (Local DM 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 30/06/21. 54 Global fixed income: Valuations GTM – Asia | 55

Spread to worst across fixed income sub-sectors Basis points, last 10 years 1,200 10-yr. range 1139 1130 2020 maximum Latest 1045 10-yr. average 1,000 2020 minimum

800

676 662 600 606 561 531 499 504 478 464 432 437 400 409 411 387 349 370 360 350 328 346 303 309 272 275 236 238 200 211 214 221 Fixed incomeFixed 163 179 193 125 105 110 67 62 0 U.S. high U.S. Euro high Euro USD USD China USD Asia USD EMD USD EMD Local EMD yield investment yield investment Asia offshore credit high yield corporates grade grade credit Source: iBoxx, ICE BofA Merrill Lynch, J.P. Morgan Economics 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), J.P. Morgan Euro High Yield Index (Euro high yield), iBoxx EUR corporates (Euro investment grade), J.P. Morgan Asia Credit Index (JACI) (USD Asia credit), J.P. Morgan Asia Credit China Index (USD China offshore credit), J.P. Morgan Asia Credit High Yield Index (USD Asia high yield), J.P. Morgan EMBI Global (USD EMD), J.P. Morgan Corporate Emerging Markets Bond Index – CEMBI (USD EMD corporates), J.P. Morgan GBI-EM Global (Local EMD). 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 30/06/21. 55 Global fixed income: Government bond yields and expected inflation GTM – Asia | 56

10-year government bond yields Market-based inflation expectations 16% 5-year 5-year inflation swap rate Average 4% Latest since 1970* 14% U.S. 6.2% 1.4% Germany 5.3% -0.2% 3% 12% Japan 2.2% 0.1% U.S.

10% 2% Eurozone

8%

1% 6% Japan

4% 0%

2% Fixed incomeFixed -1% 0%

-2% -2% '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: J.P. Morgan Asset Management; (Left) FactSet, Tullett Prebon; (Right) Bloomberg Finance L.P. *Data begins, and averages calculated from, 01/01/70 for U.S. Treasuries, 02/10/72 for German Bunds and 03/02/86 for Japanese Government Bonds. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

56 Global fixed income: Yields and risks GTM – Asia | 57

Yields and correlations of fixed income returns to equities Yield, 10-year correlation between monthly total returns

8% Higher yielding USD Asia HY sectors 7% Government Credit 6% Emerging Market U.S. HY

Government & Credit USD EMD 5% Local EMD USD Asia Credit USD EMD corporates

month average) month 4% - Local Asia USD China offshore Europe HY credit 3% U.S. IG

2% U.S. MBS 10y UST TIPS 1% U.S. Floating Rate Yield to maturity (12 maturity to Yield U.S. Aggregate

Fixed incomeFixed UK (1-10y) 2y UST France (1-10y) 0% Germany (1-10y) Stronger correlation Japan (1-10y) to equities -1% -0.5 -0.4 -0.3 -0.2 -0.1 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Correlation to MSCI AC World*

Source: Barclays, Bloomberg Finance L.P., FactSet, ICE BofA Merrill Lynch, J.P. Morgan Economics Research, MSCI, J.P. Morgan Asset Management. Based on Bloomberg Barclays U.S. Treasury (UST) Bellwether 2y & 10y (2y & 10y UST), Bloomberg Barclays Treasury Inflation-Protected Securities (TIPS), ICE BofAML Country Government (1-10y) (France, Germany, Japan & UK (1-10y)), Bloomberg Barclays U.S. Aggregate, Credit – Investment Grade & High Yield (U.S. Aggregate, IG & HY), Bloomberg Barclays U.S. Floating Rate (U.S. Floating Rate), Bloomberg Barclays U.S. Aggregate Securitized – Mortgage-Backed Securities (U.S. MBS), Bloomberg Barclays Pan-European High Yield (Europe HY), J.P. Morgan GBI-EM Global (Local EMD), J.P. Morgan EMBI Global (USD EMD), J.P. Morgan Asia Credit (JACI) (USD Asia Credit), J.P. Morgan Asia Credit (JACI) – High Yield (USD Asia HY), J.P. Morgan Asia Credit China Index (USD China offshore credit), J.P. Morgan CEMBI (USD EMD corporates), J.P. Morgan Asia Diversified (JADE) (Local Asia). *Correlations are based on 10-years of monthly returns. 57 Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. U.S. Treasury yield breakdown and curve spread GTM – Asia | 58

U.S. 10-year Treasury yield U.S. Treasury yield curve spread: Term spread 4% Basis points, 10-year yield – 2-year yield 10-year 300 nominal yield

3% 250 10-year inflation 200 breakeven 2%

150

1% 100

50 0%

0 Fixed incomeFixed -1% 10-year real yield -50

-2% -100 '16 '17 '18 '19 '20 '21 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Source: J.P. Morgan Asset Management; (Left) Bloomberg Finance L.P.; (Right) FactSet, U.S. Federal Reserve. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

58 U.S. real yields GTM – Asia | 59

Real 10-year and 2-year U.S. Treasury yields 6%

5% Recession

4%

3%

2%

10-year Treasury 1%

0%

-1%

Fixed incomeFixed -2% 2-year Treasury

-3%

-4% '90 '95 '00 '05 '10 '15 '20

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 consumer price index inflation for that month except for June 2021, where real yields are calculated by subtracting May 2021 year-over-year core inflation. Yield is not guaranteed. 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 30/06/21.

59 U.S. investment grade bonds GTM – Asia | 60

Corporate bond spread Credit quality and duration Option-adjusted spread over U.S. Treasury, basis points* Duration BBB index share 700 9 60% Duration Share of BBB rating bonds in index Average Latest Investment grade 130bps 80bps 600 50% 8 500 Recessions

40% 400

7

300 30%

200 6

Fixed incomeFixed 20% 100

0 5 10% '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19

Source: Bloomberg Barclays, FactSet, J.P. Morgan Asset Management. *Investment grade is Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

60 U.S. securitized assets GTM – Asia | 61

Spreads Consumer sector delinquency* Option-adjusted spreads, bps 20% 350 Total debt balance (USD ABS 18% trillion)** 300 Student 1.58 16% Credit Card 0.77 Auto 1.38 250 14% Mortgage 10.16 Total 14.64 12% 200 10% CMBS 150 8%

6% 100

Fixed incomeFixed 4% 50 2% MBS 0 0% '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '04 '06 '08 '10 '12 '14 '16 '18 '20 Source: Barclays, Bloomberg Finance L.P., FactSet, J.P. Morgan Asset Management; (Right) U.S. Federal Reserve. *Delinquency rate is defined as loans at least 90 days late or more with payments. **Sectors not shown but included in the total figure are Revolving Home Equity and Others. Latest data are as of 1Q21. MBS are mortgage-backed securities, CMBS are commercial mortgage-backed securities, ABS are asset-backed securities. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

61 U.S. high yield bonds GTM – Asia | 62

High yield spread and default rate*

20% Default rate Spread to worst (basis points) 2,000

10-yr Recessions Latest average 16% HY spread to 1,600 532bps 370bps worst HY energy 673bps 440bps spread to worst HY default rate 2.3% 1.6% 12% 1,200 HY ex-energy 2.9%** 0.7% default rate

8% 800

Fixed incomeFixed 4% 400

0% 0 '90 '95 '00 '05 '10 '15 '20

Source: J.P. Morgan Economics Research, J.P. Morgan Asset Management. *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. **Data reflects 20-year average and is as of 31/12/20. 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 30/06/21.

62 Emerging market debt GTM – Asia | 63

Spread between local rates and U.S. Treasuries EM debt spreads to U.S. Treasuries and future returns 3-5 year local currency government bond index*, basis points 12-month forward total return, spread in basis points** 50%

-200 0 200 400 600 800 S&P Moody's Current spread range: Thailand A- Baa1 40% 5-year average 320-330 Current Poland A A2 30% Malaysia A A3

China A+ A1 20%

Indonesia BBB Baa1 10%

S. Africa BB Ba1 0% Colombia BBB Baa2

India BBB- Baa3 -10% Fixed incomeFixed Mexico BBB+ Baa1 -20% Russia BBB Baa3

Brazil BB- Ba2 -30% 100 300 500 700 900

Source: Barclays, Bloomberg Finance L.P., J.P. Morgan Asset Management; (Left) J.P. Morgan Economics Research. *J.P. Morgan GBI-EM Broad Diversified Index sub-component used for each country. Spread is the difference between the yield on each country’s local 3-5 year government bond, except for South Africa, which uses 1-5 year, and the yield on the Bloomberg Barclays U.S. Aggregate Government - Treasury (3-5 Year). S&P and Moody’s are respective country’s local currency long-term debt ratings. **EM debt is represented by the J.P. Morgan Emerging Market Equal Weight Blended Index, which is an equal-weighted composite index of the J.P. Morgan GBI-EM Global Diversified, J.P. Morgan EMBI Global Diversified and J.P. Morgan CEMBI Broad Diversified indices. Spreads are the difference between the yield on EM debt securities and an equivalent maturity U.S. Treasury bond in basis points. Returns are calculated using monthly data from the period 31/01/03 – 30/06/21. 63 Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. Asia fixed income GTM – Asia | 64

JACI spread JACI rating weights Basis points over U.S. Treasury Share of market capitalization 1,400

10-yr average Latest AAA AA Non-investment grade 520bps 611bps 1% 6% 1,200 Non-investment grade JACI 279bps 273bps 23%

1,000

Corporates 800 A 31%

600 JACI

400 Fixed incomeFixed

200 BBB 39%

0 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: J.P. Morgan Economics Research, J.P. Morgan Asset Management. The JACI is the J.P. Morgan Asia Credit Index. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

64 China bonds GTM – Asia | 65

Bond yields* Risk-adjusted return and correlation** Yield per annum 1.6 12% Benchmark Index 1.4 China Developed Market onshore 10% USD China Emerging Market offshore credit 1.2

8% 1.0 return

CNH China offshore credit 0.8 6% adjusted adjusted Thailand Global Agg 0.6 Risk - Malaysia Australia 4% India 0.4 Indonesia UK France Italy

Fixed incomeFixed Mexico Germany 2% 0.2 Japan 3-year China Government Bond South Africa Index 0.0 0% 0.0 0.2 0.4 0.6 0.8 1.0 '11 '13 '15 '17 '19 '21 Correlations to Global Agg

Source: J.P. Morgan Economics Research, J.P. Morgan Asset Management; (Left) FTSE Russell, National Interbank Funding Center; (Right) Bloomberg Finance L.P. *Credit indices shown are yield-to-worst, government bond index shown displays yield-to-maturity. FTSE Dim Sum Bond Index (CNH China offshore credit), J.P. Morgan Asia Credit China Index (USD China offshore credit). **Risk-adjusted return is annualized returns from 31/12/04 to 30/06/21, correlation data uses returns over the same period. Yields are not guaranteed, positive yield does not imply positive return. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 65 Asset class returns GTM – Asia | 66

10-yrs ('11 - '21) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2Q '21 YTD '21 Ann. Ret. Ann. Vol. APAC Asian Asian APAC APAC EMD DM Equities EM ex-Asia Cash DM Equities EM ex-Asia EM ex-Asia DM Equities EM ex-Asia ex-JP Bonds Bonds ex-JP ex-JP 8.5% 22.6% 27.4% 8.3% 2.8% 25.2% 37.3% 1.8% 28.4% 22.8% 10.3% 13.4% 11.3% 22.8% Global Corp Global Corp Global Corp Asian APAC APAC APAC U.S. IG U.S. IG EMD EM ex-Asia DM Equities DM Equities DM Equities HY HY HY Bonds ex-JP ex-JP ex-JP 8.1% 18.9% 8.4% 7.5% 1.2% 14.0% 24.7% -0.8% 19.5% 16.5% 7.9% 13.3% 7.0% 16.9% Global Global APAC APAC EMD Diversified EMD Cash EMD DM Equities EM ex-Asia Diversified Diversified DM Equities Bonds Bonds ex-JP ex-JP 5.6% 18.5% 5.4% 5.5% 0.0% 10.2% 23.1% -1.2% 16.9% 11.2% 4.1% 6.9% 6.5% 14.4% Asian APAC Global Corp DM Equities DM Equities DM Equities DM Equities Diversified U.S. IG Diversified U.S. IG Diversified Diversified Diversified Bonds ex-JP HY 4.1% 16.5% 3.7% 5.5% -0.3% 8.2% 17.2% -2.5% 16.4% 9.9% 4.0% 4.5% 6.1% 9.2% Global Corp Global Corp Global Corp Global Global Corp Global Corp Diversified Cash Diversified U.S. IG Diversified U.S. IG EMD EMD HY HY HY Bonds HY HY 2.6% 15.4% 0.0% 3.3% -0.7% 8.1% 10.3% -3.5% 14.5% 9.2% 3.9% 2.6% 5.3% 8.2% Asian APAC Global APAC Global Corp Asian Cash EM ex-Asia EMD EMD EMD U.S. IG Cash EMD Bonds ex-JP Bonds ex-JP HY Bonds 0.1% 14.8% -1.4% 3.1% -3.2% 7.1% 9.3% -4.6% 14.4% 8.2% 3.5% 0.0% 5.2% 8.0% Asian Global Global Global Corp Asian Global Corp Asian Diversified U.S. IG Diversified U.S. IG Diversified U.S. IG U.S. IG Bonds Bonds Bonds HY Bonds HY Bonds -2.4% 14.3% -1.5% 0.6% -3.4% 6.1% 7.4% -6.0% 13.4% 6.3% 2.5% -0.1% 5.2% 5.2% Global Global Corp Global Corp Asian Asian Global Global Global DM Equities U.S. IG U.S. IG DM Equities EMD EMD Bonds HY HY Bonds Bonds Bonds Bonds Bonds -5.0% 9.8% -2.6% 0.2% -4.9% 5.8% 6.4% -8.2% 11.3% 5.9% 1.3% -1.0% 2.1% 4.8% APAC Global APAC Global Asian Global Asian Asian EMD Cash EM ex-Asia Cash U.S. IG Cash ex-JP Bonds ex-JP Bonds Bonds Bonds Bonds Bonds -15.4% 4.3% -6.6% 0.0% -9.1% 2.1% 5.8% -11.5% 6.8% 0.5% 1.1% -1.3% 0.6% 4.6% Other Other APAC Global EM ex-Asia Cash EM ex-Asia EM ex-Asia EM ex-Asia Cash Cash Cash EM ex-Asia Cash EM ex-Asia Cash ex-JP Bonds asset classes asset -19.6% 0.1% -9.3% -13.3% -25.1% 0.3% 0.8% -13.7% 2.2% -9.7% 0.0% -3.2% -1.1% 0.2%

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 World Index (DM Equities), 20% in the MSCI AC Asia Pacific ex-Japan (APAC ex-JP), 5% in the MSCI EM ex-Asia (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 Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index (U.S. IG) 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 30/06/11 – 30/06/21. Please see disclosure page at end for index definitions. Past performance is not a reliable indicator of current and future results. Diversification does not guarantee investment returns and does 66 not eliminate the risk of loss. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. Asset class returns through the economic cycle GTM – Asia | 67

Asset class returns Annualized monthly USD returns based on global manufacturing Purchasing Managers’ Index (PMI) levels since 1998 40%

30%

20%

10%

0%

-10%

U.S. equities Government bonds U.S. dollar -20% EM ex-Asia equities Investment grade bonds Gold APAC ex-JP equities High yield bonds -30% Emerging market debt Asian bonds Other Other -40%

asset classes asset Turnaround Expansion Cooling Contraction (PMI < 50 and rising) (PMI > 50 and rising) (PMI > 50 and falling) (PMI < 50 and falling)

Source: Bloomberg Finance L.P., FactSet, IHS Markit, J.P. Morgan Economic Research, MSCI, Standard & Poor’s, J.P. Morgan Asset Management. Based on S&P 500 (U.S. equities), MSCI EM ex-Asia Index (EM ex-Asia), MSCI AC Asia Pacific ex-Japan (APAC ex-JP), Bloomberg Barclays Global Treasury (Government bonds), Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index (Investment grade bonds), Bloomberg Barclays Global Corporate High Yield Index (High yield bonds), J.P. Morgan EMBIG Index (EM debt), J.P. Morgan Asia Credit Index (Asian bonds), DXY index (U.S. dollar), Gold USD/ozt (Gold). All data represent total return in U.S. dollar terms and are calculated from 31/01/98 except for high yield bonds (31/12/00) and Asia bonds (31/10/05) due to data availability. PMIs are relative to 50, which indicates deceleration (below 50) or acceleration (above 50) of the sector. Please see disclosure page at end for index definitions. Past performance is not a reliable indicator of current and future results. 67 Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. Asset class returns in rising inflation environments GTM – Asia | 68

High and rising U.S. inflation Arithmetic average of nominal annual returns of different asset classes for years in which inflation was above median and rising, 1989 to 2020 20% 16% 15% U.S. average inflation: 3.4% 14% 9% 9% 10% 6% 6% 4% 5% 2% 1%

0%

-5% -2% U.S. equities World equities Global bonds* U.S. govt. U.S. inv. U.S. high yield EM debt** Real estate Commodities Cash bonds grade

Low and rising U.S. inflation Arithmetic average of nominal annual returns of different asset classes for years in which inflation was below median and rising, 1989 to 2020 20% 15% 15% 13% U.S. average inflation: 1.9% 12% 10% 10% 10% 6% 5% 5% 3% 2% 1% 0% Other Other

asset classes asset -5% U.S. equities World equities Global bonds* U.S. govt. U.S. inv. U.S. high yield EM debt** Real estate Commodities Cash bonds grade Source: Barclays, Bloomberg, Dow Jones, FactSet, Federal Reserve, J.P. Morgan, MSCI Global, NCREIF, Strategas/Ibbotson, J.P. Morgan Asset Management. Median inflation was 2.51% in measured period. Rising or falling inflation distinction is relative to the previous year. High and rising inflation occurred in 8 of the 32 measured years. Low and rising inflation occurred in 7 of the 32 measured years. *Global bonds based on the period 1991-2020. **EM debt based on the period 1994-2020. Based on Shiller S&P 500 Composite total return index (U.S. equities), MSCI AC World Index (World equities), Bloomberg Barclays Global Aggregate (Global bonds), Bloomberg Barclays Aggregate U.S. Treasury Index (U.S. govt. bonds), Bloomberg Barclays Aggregate U.S. Corporate Investment Grade Index (U.S. inv. grade), Bloomberg Barclays U.S. Corporate High Yield Index (U.S. high yield), J.P. Morgan EMBI Global (EM debt), NCREIF Property Index (Real estate) and S&P GSCI (Commodities). Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 68 Volatility GTM – Asia | 69

VIX index* 12 90 6 0.9 80 0.8 70 Recession 0.7

60 5 0.6 3 4 7 8 50 1 2 9 10 0.5 11 40 0.4 30 Average: 19.5 0.3 20 0.2 10 0.1 0 0 '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 '19 '20 '21

VIX breaks 35 in six S&P 500 Performance VIX returns to long-term Related event months** On the day After 1 month After 3 months After 12 months average***(days) 1 6-Aug-90 Recession – oil price shock and rate hikes -3.0% -4.2% -5.9% 16.8% 218 2 30-Oct-97 Asian crisis -1.7% 7.5% 9.1% 21.6% 113 3 27-Aug-98 Long-Term Capital Management -3.8% 0.6% 13.8% 29.3% 309 4 17-Sep-01 Recession – collapse of dot-com bubble -4.9% 2.9% 9.2% -15.9% 172 5 15-Jul-02 Enron accounting scandal -0.4% 1.3% -8.3% 9.0% 304 6 17-Sep-08 Recession – global financial crisis -4.7% -14.8% -21.8% -7.9% 476 7 7-May-10 Greece bailout package, austerity imposed -1.5% -5.0% 1.0% 21.2% 157 8 8-Aug-11 European debt crisis, U.S. credit downgrade -6.7% 5.9% 12.7% 25.2% 165 9 24-Aug-15 Chinese yuan devaluation -3.9% 2.1% 10.2% 15.5% 44 10 5-Feb-18 Bond market re-pricing growth and rate hikes -4.1% 3.4% 0.9% 3.4% 9 Other Other 11 24-Dec-18 Global growth and market liquidity fears -2.7% 12.4% 19.0% 37.1% 18

asset classes asset 12 27-Feb-20 Recession – Coronavirus pandemic -4.4% -13.2% 1.7% 27.9% 383 Median -3.9% 1.7% 5.4% 19.0% Average -3.5% -0.1% 3.5% 15.3% 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 after initial VIX spikes above 35. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

69 U.S. dollar GTM – Asia | 70

U.S. dollar and interest rate differential Index Yield spread 140 3.0% U.S. dollar index* U.S. minus DM 10-year government bond yield** Recessions 130 2.5%

120 2.0%

110 1.5%

100 1.0%

90 0.5%

80 0.0%

70 -0.5% Other Other asset classes asset 60 -1.0% '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Source: FactSet, OECD, Tullett Prebon, WM/Reuters, J.P. Morgan Asset Management. *The U.S. dollar index shown here is a nominal trade-weighted index of major trading partners’ currencies. Major currencies are the British pound, Canadian dollar, euro, Japanese yen, Swedish kroner and Swiss franc. **DM is developed markets and the yield is calculated as a GDP-weighted average of the 10-year government bond yields of Australia, Canada, France, Germany, Italy, Japan, Switzerland and the 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 30/06/21. 70 Currencies GTM – Asia | 71

Currency deviation from 10-year average in real effective exchange rate* terms Number of standard deviations away from average 3 FX above long-term average 2 Max

1 Current

0

-1

Min -2 FX below long-term average

Other Other -3 asset classes asset

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 30/06/21.

71 Emerging market external positions GTM – Asia | 72

Current account positions, currency movements and reserve adequacy Currency appreciation vs. USD

25% South Africa 20% Chile Mexico 15% Brazil

10% China Philippines Korea 5% Vietnam India Poland Malaysia 0% Colombia -5% Indonesia Thailand Russia -10% -15% -20% Turkey Key: Asia EM ex-Asia -25% Weaker position

-30% Argentina -35% = Adequate reserves* Local vs.USD currency change,Last 12 months -40% Other Other Stronger position -45% asset classes asset Currency -6% -4% -2% 0% 2% 4% 6% depreciation vs. USD Current account as % of GDP, 2020 Source: FactSet, International Monetary Fund, J.P. Morgan Asset Management. *Adequate reserves are stocks of a country’s foreign exchange reserves that 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 30/06/21.

72 Commodities GTM – Asia | 73

Commodity prices Returns Commodity price z-scores for the past five years, USD per unit -4 -3 -2 -1 0 1 2 3 4 2016 - 2021 2016 2017 2018 2019 2020 2Q '21 Ann. Ret. Ann. Vol. Euro M&M Gold (E) M&M (E) Gold (E) M&M (E) Comdty. M&M (E) Gold (E) Commodity Index $59 $95 (FI) 62.9% 37.5% -0.9% 51.1% 27.6% 13.3% 22.9% 31.3% $95 US M&M M&M (E) Agri. (E) M&M (E) Gold (E) Energy (E) Agri. (E) M&M (E) Gold $1,130 $2,069 (FI) $1,772 57.8% 20.3% -3.5% 17.1% 25.7% 10.3% 14.2% 26.5% US M&M EM M&M EM M&M EM M&M Energy (FI) Agri. (E) M&M (E) Energy (E) Agriculture $34 $61 (FI) (FI) (FI) (FI) $58 45.5% 14.7% -3.7% 16.5% 19.5% 9.4% 9.5% 25.6% EM M&M US M&M EM M&M US M&M EM M&M US M&M Energy (FI) Agri. (E) Oil $12 $76 (FI) (FI) (FI) (FI) (FI) (FI) $73 32.4% 9.9% -4.1% 14.0% 10.6% 3.7% 9.0% 14.8% US M&M Energy (E) Gold (E) Agri. (E) Agri. (E) Gold (E) Gold (E) Comdty. Aluminium $1,422 $2,603 (FI) $2,523 29.2% 9.4% -8.9% 13.8% 8.5% 3.6% 5.2% 12.6% $10,725 Euro M&M EM M&M Energy (E) Comdty. Energy (FI) Energy (FI) Energy (FI) Energy (FI) Copper $4,573 (FI) (FI) $9,385 21.9% 9.1% -11.2% 13.4% 6.0% 3.2% 4.9% 10.1% Euro M&M US M&M Euro M&M EM M&M Agri. (E) Energy (FI) Energy (E) Energy (E) Iron Ore $53 $218 (FI) (FI) (FI) (FI) $215 15.7% 9.0% -11.4% 9.5% 3.5% 3.1% 3.3% 9.7%

Euro M&M US M&M Comdty. Gold (E) Comdty. Comdty. Agri. (E) Comdty. (FI) (FI)

Other Other 11.8% 3.9% -13.0% 7.7% -3.1% 0.4% 2.4% 7.2%

Euro M&M Euro M&M Euro M&M

asset classes asset Energy (FI) Comdty. M&M (E) Energy (E) Energy (E) Example Low level High level (FI) (FI) (FI) Current 11.1% 1.7% -17.8% 5.2% -28.5% 0.4% 2.1% 5.7%

Source: Bloomberg Finance L.P., FactSet, J.P. Morgan Asset Management; (Left) CME, CRB, LME; (Right) Barclays, J.P. Morgan Economic Research, MSCI. Commodities represented by appropriate Bloomberg Commodity sub-index priced in U.S. dollars. Crude oil is West Texas Intermediate (WTI) crude. Aluminum and copper is price on LME. Iron Ore is iron ore 62% Fe -Cost and Freight China Port. Other commodity prices represented by futures contracts. Z-scores calculated using daily prices over 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)). 5-year total return data used to calculate annualized returns (Ann. Ret.) and 5-year price return data used to calculate annualized volatility (Ann. Vol.), reflects the period 30/06/16 – 30/06/21. Past performance is not a reliable indicator of current and future results. 73 Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. Industrial and precious metals GTM – Asia | 74

China credit impulse and industrial metals’ prices Gold and real rates % of nominal GDP, y/y change y/y change, 3MMA USD / Troy oz Yield 25% China credit impulse 100% 2,200 -1.5% Gold price U.S. 10-year TIPS (inverted)

20% 80% -1.0% 2,000

15% 60% -0.5% 1,800

10% 40% 0.0% 1,600

5% 20% 0.5%

1,400 0% 0% 1.0%

1,200 -5% -20% 1.5%

-10% -40% 1,000 2.0% Other Other

asset classes asset Bloomberg Industrial Metals Index -15% -60% 800 2.5% '05 '07 '09 '11 '13 '15 '17 '19 '21 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: Factset, J.P. Morgan Asset Management; (Left) Bloomberg, People’s Bank of China; (Right) U.S. Federal Reserve. Credit impulse measures the year-over-year change in credit flow (net flow of total social financing) as a percentage of nominal GDP. TIPS are Treasury Inflation- Protected Securities. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

74 Oil: Short-term market dynamics GTM – Asia | 75

Global oil supply and demand Price of oil Million barrels / day Brent crude, USD / bbl 105 150 07/2008: $145.65 Forecast

Supply 100 125 06/2014: $115.19

95 100

06/2021: $75.13

90 75

Demand

85 50

80 25 12/2008: $33.73 Other Other 4/2020: $9.12 asset classes asset 75 0 '18 '19 '20 '21 '22 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20

Source: FactSet, J.P. Morgan Asset Management; (Left) U.S. Energy Information Administration; (Right) Commodity Research Bureau. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

75 Alternative sources of income GTM – Asia | 76

Asset class yields 10% 9.5%

9% Equity Fixed income 8% Alternatives 7.4%

7%

6% 5.3%

5% 4.7% 4.7% 4.6% 4.6% 4.4% 4.0% 4% 3.4% 3.3% 3% 2.4% 2.3% 2% 1.9% 1.4% 1.3% 1% Other Other 0%

asset classes asset Global Asia HY Global Infrastructure USD Local cur. EM high APAC ex-JP Private DM high Global Eur. Convertibles APAC U.S. U.S. transport bonds HY bonds assets EMD EMD div. equity high div. real estate div. equity REITs equity ex-JP equity 10-year equity equity

Source: Alerian, Bank of America, Bloomberg Finance L.P., Clarkson, Drewry Maritime Consultants, FactSet, Federal Reserve, FTSE, MSCI, 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 MSCI Global Property Fund Index (Private real estate), FTSE NAREIT Global REITs (Global REITs), MSCI Global Infrastructure Asset Index (Infrastructure assets), Bloomberg Barclays U.S Convertibles Composite (Convertibles), Bloomberg Barclays Global High Yield Index (Global HY bonds), J.P. Morgan Government Bond Index EM Global (GBI-EM) (Local currency EMD), J.P. Morgan Emerging Market Bond Index Global (EMBIG) (USD EMD), J.P. Morgan Asia Credit Index Non-investment Grade (Asia HY bonds), MSCI Asia Pacific ex-Japan equities (APAC ex-JP equity), MSCI Asia Pacific ex-Japan High Dividend Yield Index (APAC ex-JP high div. equity), Emerging Markets High Dividend Yield Index (EM high div. equity), MSCI World High Dividend Yield Index (DM high div. equity), MSCI Europe (Eur. equity), MSCI USA (U.S. 76 equity). Transport yield is as of 31/12/21, Infrastructure 31/12/20 and Private Real Estate 31/12/20. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. Understanding alternatives GTM – Asia | 77

Alternatives and portfolio risk/return* Public and private market correlations Annualized volatility and returns, 1Q96 – 1Q21 Quarterly returns 10% Other Financial Global Private Hedge real assets real estate markets funds assets

U.S. APAC U.S. U.S. Equity 60% Stocks Global Global Global Rel. Global 2008 - 2020 Core Core Direct Private Long/ Bonds Equities Infra. Value Macro 20% Bonds RE RE Lending Equity Short 20% Alternatives 9% Global 1.0 Bonds

40% Stocks Global 0.3 1.0 40% Bonds Equities 20% Alternatives 70% Stocks U.S. Core RE -0.2 0.0 1.0 8% 30% Bonds

Return APAC Core -0.2 0.0 0.8 1.0 RE

20% Stocks Global Infra. -0.1 -0.1 0.3 0.2 1.0 60% Bonds 50% Stocks 50% Bonds 20% Alternatives U.S. Direct -0.1 0.7 0.3 0.3 0.1 1.0 7% Lending

U.S. Private 0.0 0.8 0.3 0.3 0.1 0.9 1.0 Equity 30% Stocks Equity 0.2 1.0 0.0 0.0 -0.1 0.7 0.9 1.0 70% Bonds Long/Short

Other Other 6% Relative 0.1 0.9 -0.1 0.0 -0.1 0.9 0.8 0.9 1.0 2% 4% 6% 8% 10% 12% Value asset classes asset

Volatility Global Macro 0.4 0.4 -0.2 -0.2 -0.1 0.1 0.2 0.4 0.3 1.0

Source: Barclays, Bloomberg, FactSet, HFRI, NCREIF, J.P. Morgan Asset Management; (Left) Standard & Poor’s; (Right) Cambridge Associates, Cliffwater MSCI. *Stocks: S&P 500. Bonds: Bloomberg Barclays U.S. Aggregate. Alternatives: equally weighted composite of hedge funds (HFR FW Comp.) and private real estate. The volatility and returns are based on data from the period 31/03/96 – 31/03/21. RE – real estate. Global equities: MSCI AC World Index. Global bonds: Bloomberg Barclays Global Aggregate Index. U.S. core real estate: NCREIF Property Index – Open End Diversified Core Equity component. Asia Pacific (APAC) core real estate: IPD Global Property Fund Index – Asia-Pacific. Global infrastructure (infra.): MSCI Global Quarterly Infrastructure Asset Index (equal-weighted blend). U.S. direct lending: Cliffwater Direct Lending Index. U.S. private equity: Cambridge Associates U.S. Private Equity Index. Hedge fund indices include equity long/short, relative value and global macro and are all from HFRI. All correlation coefficients are calculated based on USD quarterly total return data for the period 31/12/08 – 31/12/20. 77 Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. ESG considerations GTM – Asia | 78

“I buy from companies that are conscious and supportive APAC-domiciled sustainable mutual fund and ETF AUM* of protecting the environment.” USD billions % of adults 90 90% Agree Disagree 80 80%

70% 70

60% 60

50% 50

40% 40

30% 30 20% 20 10%

10 0%

0 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Investing principles Source: J.P. Morgan Asset Management. (Left) PwC’s June 2021 Global consumer insights pulse survey was conducted in March 2021. It polled 8,681 consumers across 22 territories. The respondents were at least 18 years old and were required to have shopped online at least once in the previous year. (Right) Morningstar Direct. *APAC domiciled funds include Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand. Data reflect most recently available as of 30/06/21.

78 Emissions targets and global energy mix GTM – Asia | 79

Greenhouse gas emission targets Global energy mix Billion tonnes/year, CO2 equivalent % primary energy consumption 18 Illustrative path Current Oil Coal Gas Nuclear and hydro Renewables policy to government forecast net-zero targets Forecast 16 China 100 U.S. 14 EU 90

80 12 70 10 60

8 50

6 40

30 4 20 2 10

0 0 1990 2000 2010 2020 2030 2040 2050 2060 '70 '80 '90 '00 '10 '20 '30 '40 '50 Investing principles Source: J.P. Morgan Asset Management; (Left) Climate Action Tracker. Current policy forecast is the post-Covid forecast provided by Climate Action Tracker; (Right) BP Energy Outlook 2020, J.P. Morgan Asset Management. Forecast is based on BP’s scenario for global net-zero emissions by 2050. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

79 Performance of sustainable investing GTM – Asia | 80

Global sustainable funds performance Spread between green and traditional corporate bonds Ranked by Morningstar category quartile Basis points, spread difference between green and traditional bonds 2 Top half Bottom half 100% 1 90% 0 80% -1 55% 70% 59% 60% -2 60%

-3 50%

-4 40% Green bonds trading at a premium/lower spread 30% -5 vs. traditional bonds

45% 20% 41% 40% -6

10% -7

0% -8 2020 3-year 5-year Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Investing principles Source: J.P. Morgan Asset Management; (Left) Morningstar Direct. To identify sustainable funds, we searched Morningstar Direct, as follows: 1. Open-End Funds and ETFs universe 2. Domicile = Global. 3. Sustainable Investment Overall = Yes. 4. Oldest share class = Yes. 3-year and 5-year trailing performances reflect the periods 01/06/18 – 31/05/21 and 01/06/16 – 31/05/21, respectively. 2020 includes funds with full-year records only, and 4,106 funds in total (2,313 equity, 1,793 fixed income/asset allocation/other). 3-year includes 3,321 funds (1,834 equity, 1,487 fixed income/asset allocation/other). 5-year includes 2,642 funds (1,460 equity, 1,182 fixed income/asset allocation/other). Figures may not match with prior reports due to ongoing revisions by data providers after the prior reports have been published. (Right) Barclays Research. Data shown is for a Barclays Research custom universe of green and non-green investment grade credits, matched by issuer, currency, seniority and maturity. The universe consists of 105 pairs, 73 euro-denominated and 32 dollar-denominated, and 59 financials and 46 non-Financials. Past 80 performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. Developed market (DM) vs. emerging market (EM) yields GTM – Asia | 81

DM real and nominal yields* EM real and nominal yields* 2% 8% Nominal yield Nominal yield Real yield Real yield 7%

1% 6%

5%

0% 4%

3%

-1% 2%

1%

-2% 0% Investing principles Source: FactSet, J.P. Morgan Asset Management. *Real yield is calculated based on the last 12-month average Consumer Price Index (CPI) for each respective market. Nominal yields are the 10-year local currency 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 30/06/21.

81 Equity annual returns and intra-year declines GTM – Asia | 82

MSCI AC Asia Pacific ex-Japan intra-year declines vs. calendar year returns Despite average intra-year drops of -20% (median: -18%), annual returns are positive in 21 of 33 (64%) years 100% Calendar year return 80% Intra-year decline 80% 68%

60% 47% 44%

40% 33% 34% 27% 29% YTD 26% ‘21 19% 19% 20% 20% 17% 17% 15% 16% 9% 6% 4% 4% 6% -36% -31% 0.5% 0% -0.2% -5% -5% -7% -8% -4% -8% -10% -16% -14% -11% -9% -12% -11% -20% -14% -12% -12% -13% -13% -13% -13% -16% -11% -18%-16%-16% -18% -18%-19% -21% -21%-19% -24% -25% -27% -25% -30% -40% -34%-34% -32% -41%-40%

-60% -53% -62% -80% '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 Investing principles 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 30/06/21.

82 Fixed income annual returns and intra-year declines GTM – Asia | 83

Bloomberg Barclays Global Aggregate USD intra-year declines vs. calendar year returns Despite average intra-year drops of -3% (median: -3%), annual returns are positive in 16 of 18 (89%) years 10% 9% Calendar year return 8% 8% 8% 7% Intra-year decline 7% 6% 6% 6% 5% 5% 4% 4% 4% 4% 4% 3% 2% YTD 2% ‘21 1% 0% 0% -1% -1% -1% -2% -1% -2% -2% -2% -2% -2% -2% -2% -3% -3% -4% -3% -4% -4% -5% -5% -5% -6% -5%

-6% -8% '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 Investing principles Source: Bloomberg Barclays, FactSet, J.P. Morgan Asset Management. Returns are total returns based on Bloomberg Barclays Global Aggregate USD Index. 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 30/06/21.

83 The compounding effect GTM – Asia | 84

MSCI World Index: Performance under different scenarios Index, 1970 = 100 14,000 Annualized return 13,074 Total return (dividends received and reinvested back into equities) 9.9% 12,000 Total return (dividends received and reinvested in cash)* 8.7% Total return (dividends received but not reinvested) 7.4% Price return 6.8% 10,000

8,000 7,320

6,000

3,947 4,000

2,000 2,917

0 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 '20 Investing principles 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. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21.

84 Portfolio construction, asset class returns and volatility GTM – Asia | 85

Annualized returns and volatility Hypothetical portfolio construction Total returns in USD* Conservative Balanced Aggressive High yielding DM equities 10% 30% 20% DM HD equities 25% 16% High dividend (HD) equities EM equities 5% 10% 40% EM HD equities 10% Equities U.S. HY 10% 15% 10% APxJ HD equities 10% U.S. bonds 25% 10% 5% U.S. HY 20% 14% Bonds and cash Alternatives Cash 35% 10% 0% EMD 15% Portfolios EMD 10% 15% 5% Asian bonds 15% 12% REITs 5% 10% 20% REITs 5% U.S.

10%

DM AxJ HD AxJ APxJ Private real estate 8% High yielding Gold U.S. HY APxJ HD REITs EMD DM HD EM HD EM 6% Asian bonds Aggressive Annualized returns Annualized Hedge fund - rel val Hedge fund - distressed Balanced Europe U.S. bonds Conservative 4% Hedge fund - macro

2% Hedge fund - mkt neutral

Cash 0% 0% 5% 10% 15% 20% 25% Annualized volatility Investing principles 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. U.S. dollar 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 30/06/06 and 30/06/21 are 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 30/06/21. 85 The benefits of diversification and long-term investing GTM – Asia | 86

Correlations between stocks and sovereign bonds Weekly rolling six-month correlation of equities and sovereign bond prices* 0.8 Stocks and bonds moving MSCI AC World / Global government bonds* 0.6 in the same direction S&P 500 / U.S. government bonds* 0.4 0.2 0.0 -0.2 -0.4 -0.6 -0.8 Stocks and bonds moving -1.0 in the opposite direction '01 '03 '05 '07 '09 '11 '13 '15 '17 '19

Portfolio returns: Global equities, global bonds vs. equity and fixed income blend Total returns, 2006 = 100

400 Annualized Annualized Portfolio returns since 2006 350 return volatility 300 Global equities 8.0% 16.2% 250 Global bonds 3.7% 5.4% 200 50/50 equity & bond mix 6.1% 9.5% 150 100 50 0 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 Investing principles Source: Bloomberg Finance L.P., FactSet, MSCI, J.P. Morgan Asset Management; (Top) Standard & Poor’s. *Rolling six-month pairwise correlations between weekly returns in equity (S&P 500 and MSCI All Country World Index price indices) and bond (Bloomberg Barclays U.S. Aggregate Government Treasury and Bloomberg Barclays Global Aggregate Government Treasuries price indices) markets. Global equities represented by MSCI AC World Index, global bonds represented by Bloomberg Barclays Aggregate Global Bond Index. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/21. 86 J.P. Morgan Asset Management: Index Definitions

All indexes are unmanaged and an individual cannot invest directly in an index. Index returns do not include The MSCI Europe ex UK IndexSM is a free float-adjusted market capitalization weighted index that is designed to fees or expenses. measure the equity market performance of the developed markets in Europe, excluding the United Kingdom. The The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. This world-renowned MSCI Europe ex UK Index consists of the following 15 developed market country indices: Austria, Belgium, index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Although Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, and the S&P 500 Index focuses on the large-cap segment of the market, with approximately 75% coverage of U.S. Switzerland. equities, it is also an ideal proxy for the total market. An investor cannot invest directly in an index. The MSCI Pacific ex Japan IndexSM is a free float-adjusted market capitalization index that is designed to measure The Tokyo Stock Price Index ('TOPIX') is a composite index of all common stocks listed on the First Section of equity market performance in the Pacific region, excluding Japan. As of June 2007, the MSCI Pacific Index consisted Tokyo Stock Exchange (TSE).The index is basically a measure of the changes in aggregate market value of TSE of the following 4 Developed Markets: Australia, Hong Kong, New Zealand, and Singapore. common stocks. The base for the index is the aggregate market value of its component stocks as of the close on The MSCI USA IndexSM is designed to measure the performance of the large and mid cap segments of the U.S. January 4, 1968. The aggregate market value is calculated by multiplying the number of listed shares of each market. With 586 constituents, the index covers approximately 84% of the free float-adjusted market capitalization in component stock by its price and totaling the products derived there from. the U.S.. The MSCI USA Index was launched on Dec ember 31, 1969. The Bombay Exchange Sensitive Index (‘SENSEX’), first compiled in 1986, was calculated on a "Market The MSCI China IndexSM captures large and mid cap representation across China H shares, B shares, Red chips and Capitalization-Weighted" methodology of 30 component stocks representing large, well-established and financially P chips. With 148 constituents, the index covers about 84% of this China equity universe. The MSCI China Index was sound companies across key sectors. The base year of SENSEX was taken as 1978-79. SENSEX today is widely launched on December 31, 1992. 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, The MSCI Indonesia IndexSM is designed to measure the performance of the large and mid cap segments of the SENSEX is being calculated on a free-float market capitalization methodology. 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 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 The MSCI Korea IndexSM is designed to measure the performance of the large and mid cap segments of the South calculated using the actual price traded on the market and not the “base price” used for market management such as Korean market. With 105 constituents, the index covers about 84% of the Korean equity universe. The MSCI Korea establishment of price change limits. When no market price is available for issues that are not being traded or have Index was launched on December 31, 1989. halted trading, the latest closing price is used. KOSPI was a assigned a base index of 100 set to January 4, 1980. The MSCI India IndexSM is designed to measure the performance of the large and mid cap segments of the Indian The China Shenzhen Composite Index is an actual market-cap weighted index that tracks the stock performance of market. With 71 constituents, the index covers about 84% of the Indian equity universe. The MSCI India Index was all the A-share and B-share lists on Shenzhen Stock Exchange. The index was developed on April 3, 1991 with a launched on December 31, 1993. base price of 100. The MSCI Japan IndexSM is designed to measure the performance of the large and mid cap segments of the Japan The Euro Stoxx 600 Index represents large, mid and small capitalization companies across 18 European countries. 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® 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 The MSCI Hong Kong IndexSM is designed to measure the performance of the large and mid cap segments of the developed markets outside of North America. 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 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 The MSCI Taiwan IndexSM is designed to measure the performance of the large and mid cap segments of the Taiwan consisted of the following 25 emerging markets indices: Argentina, Brazil, Chile, China, Colombia, Czech Republic, market. With 113 constituents, the index covers approximately 84% of the free float-adjusted market capitalization in Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Taiwan. The MSCI Taiwan Index was launched on December 31, 1989. Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. The MSCI Environmental, Social and Governance (ESG) Universal Indices are designed to address the needs of The MSCI ACWI (All Country World Index) Index is a free float-adjusted market capitalization weighted index that is asset owners who may look to enhance their exposure to ESG while maintaining a broad and diversified universe to designed to measure the equity market performance of developed and emerging markets. As of June 2009 the MSCI invest in. By re-weighting free-float market cap weights based upon certain ESG metrics tilting away from free-float ACWI consisted of 45 country indices comprising 23 developed and 22 emerging market country indices. 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. 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 markets: Australia, Hong Kong, Japan, New Zealand, and Singapore.

87 J.P. Morgan Asset Management: Index Definitions, Risks and Disclosures

West Texas Intermediate (WTI) is the underlying commodity for the New York Mercantile Exchange's oil futures Price to forward earnings is a measure of the price-to-earnings ratio (P/E) using forecasted earnings. Price to book contracts. value compares a stock's market value to its book value. Price to cash flow is a measure of the market's The Bloomberg Commodity Index is calculated on an excess return basis and reflects commodity futures price expectations of a firm's future financial health. Price to dividends is the ratio of the price of a share on a stock movements. The index rebalances annually weighted 2/3 by trading volume and 1/3 by world production and weight- exchange to the dividends per share paid in the previous year, used as a measure of a company's potential as an caps are applied at the commodity, sector and group level for diversification. Roll period typically occurs from 6th-10th investment. business day based on the roll schedule. Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise. The Bloomberg Commodity Subindexes represent commodity groups and sectors, as well as single commodities, The price of equity securities may rise, or fall because of changes in the broad market or changes in a company’s that make up the Bloomberg Commodity Index. The subindexes track exchange-traded futures of physical financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting commodities, and the commodity groups and sectors, like in the case of the broad index, are weighted to account for individual companies, sectors or industries, or the securities market as a whole, such as changes in economic or economic significance and market liquidity. The various subindexes include Agriculture, Energy, Livestock, Grains, political conditions. Equity securities are subject to “stock market risk” meaning that stock prices in general may Industrial Metals, Precious Metals and Softs. decline over short or extended periods of time. The Bloomberg Barclays High Yield Index covers the universe of fixed rate, non-investment grade debt. Pay-in-kind Small-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies (PIK) bonds, Eurobonds, and debt issues from countries designated as emerging markets (e.g., Argentina, Brazil, since smaller companies generally have a higher risk of failure. Historically, smaller companies' stock has experienced Venezuela, etc.) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries are a greater degree of market volatility than the average stock. included. Original issue zeroes, step-up coupon structures, and 144-As are also included. Mid-capitalization investing typically carries more risk than investing in well-established "blue-chip" companies. The Bloomberg Barclays 1-3 Month U.S. Treasury Bill Index includes all publicly issued zero-coupon U.S. Historically, mid-cap companies' stock has experienced a greater degree of market volatility than the average stock. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment Real estate investments may be subject to a higher degree of market risk because of concentration in a specific grade, and have $250 million or more of outstanding face value. In addition, the securities must be denominated in industry, sector or geographical sector. Real estate investments may be subject to risks including, but not limited to, U.S. dollars and must be fixed rate and non convertible. declines in the value of real estate, risks related to general and economic conditions, changes in the value of the The Bloomberg Barclays Corporate Bond Index is the Corporate component of the U.S. Credit index. underlying property owned by the trust and defaults by borrower. The Bloomberg Barclays TIPS Index consists of Inflation-Protection securities issued by the U.S. Treasury. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates The J.P. Morgan EMBI Global Index includes U.S. dollar denominated Brady bonds, Eurobonds, traded loans and and differences in accounting and taxation policies can raise or lower returns. Also, some markets may not be as local market debt instruments issued by sovereign and quasi-sovereign entities. 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 The J.P. Morgan GBI-EM Global Diversified consists of regularly traded, liquid fixed-rate, domestic currency of securities markets and the low trading volume may lead to a lack of liquidity, which leads to increased volatility. government bonds to which international investors can gain exposure. The weightings among the countries are more Also, emerging markets may not provide adequate legal protection for private or foreign investment or private evenly distributed within this index. property. The J.P. Morgan Corporate Emerging Markets Bond Index (CEMBI): The CEMBI tracks total returns of US dollar- Investments in commodities may have greater volatility than investments in traditional securities, particularly if the denominated debt instruments issued by corporate entities in Emerging Markets countries, and consists of an instruments involve leverage. The value of commodity-linked derivative instruments may be affected by changes in investable universe of corporate bonds. overall market movements, commodity index volatility, changes in interest rates, or factors affecting a particular The J.P. Morgan Domestic High Yield Index is designed to mirror the investable universe of the U.S. dollar industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international domestic high yield corporate debt market. 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. The VIX-CBOE Volatility Index measures market expectations of near-term volatility conveyed by S&P 500 Index (SPX) option prices. 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 The MOVE-Merrill Lynch Option Volatility Index is a blended implied normal volatility for constant one-month at- original investment. The use of derivatives may not be successful, resulting in investment losses, and the cost of such the-money options on U.S. Treasuries. 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. Forecasts, projections and other forward looking statements are based upon current beliefs and expectations. They are for illustrative purposes only and serve as an indication of what may occur. Given the inherent uncertainties and risks associated with forecast, projections or other forward statements, actual events, results or performance may differ materially from those reflected or contemplated. Positive yield does not imply positive return. J.P. Morgan Asset Management (JPMAM) Global Market Insights Strategy Team as of 30/06/21. There can be no assurance that the professionals currently employed by JPMAM will continue to be employed by JPMAM or that the past performance or success of any such professional serves as an indicator of such professional's future performance or success.

88 J.P. Morgan Asset Management: Risks and Disclosures

The 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 programs 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 programs, 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. 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All rights reserved.

Prepared by: David Kelly, Tai Hui, Kerry Craig, Agnes Lin, Jasslyn Yeo, Chaoping Zhu, Marcella Chow, Ian Hui and Shogo Maekawa.

Unless otherwise stated, all data are as of June 30, 2021 or most recently available.

MI-GTMASIA-E JUNE 2021

Material ID: 0903c02a823a5888 89