Using Market Insights to illustrate the UBS House View · PDF fileUsing Market Insights to illustrate the UBS House View ... as part of the Research Advisory Board led by UBS Investment

Insight + Process = ResultsSM

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Using Market Insights to illustrate the UBS House View

The UBS Chief Investment Office and Wealth Management Research organizations publish the UBS House View, which highlights trends and investment opportunities UBS advisors and clients should focus on. J.P. Morgan’s Market Insights — managed by J.P. Morgan Funds Chief Global Strategist Dr. David Kelly — is dedicated to providing financial professionals with a rich set of tools that allow them to explain economic and investment ideas to their clients in a clear and unbiased manner. Dr. David Kelly, as part of the Research Advisory Board led by UBS Investment Strategist Mike Ryan, is a regular contributor to the intellectual capital UBS makes available to financial advisors and clients.

Featuring slides from the Guide to the Markets, the following pages provide talking points and visual support for some of the recommendations outlined in the UBS House View. We hope that you find this information helpful.

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RECOMMENDATIONS FROM THE UBS HOUSE VIEW}

Guide to the Markets®Guide to the Markets®Guide to the MarketsGuide to the Markets

1

For additional information on J.P. Morgan’s Market Insights program, please contact your J.P.MorganFundsClientAdvisor, call 1-800-338-4345orvisit www.jpmorganfunds.com/mi.


2 | J.P. MORGAN ASSET MANAGEMENT



Finding income outside of fixed income

Guide to the Markets, page 62

“On a tactical basis we continue to recommend allocating some portion of strategic bond allocations toward equities.”

UBS House View, June 2014

• With interest rates at historic lows, investors have been forced to search outside of fixed income to maintain or increase the cash flow from their portfolios. One way that investors can increase yield is through an investment in dividend-paying stocks. Dividend-paying stocks can not only provide a steady stream of income, but as shown on page 62 of the Guide to the Markets, dividend yields around the world tend to be higher than their respective country’s 10-year government bond yield. This provides investors with an opportunity to generate additional income, which can provide a “cushion” for portfolios during volatile markets.

• As shown on the top of page 62, dividends have accounted for nearly half of stock market returns in the long run. However, many investors fail to look abroad in their search for income, despite the fact that dividend yields on foreign stocks tend to be higher than those in the United States. With Europe out of recession and U.S. equity valuations creating hesitation in the market, investors could be well served by investing in relatively defensive, large-cap dividend-paying stocks.

• Dividend paying stocks are not the only asset class outside of fixed income that can provide investors with a healthy stream of income, as things like REITs (international and domestic) and preferred stock offer more income than 10-year U.S. Treasuries. Diversifying sources of yield can be one of the best ways for investors to increase the amount of income that their portfolio generates, while simultaneously reducing the volatility of a portfolio’s cash flow.

Yield Alternatives: Domestic and Global

15%

20%

S&P 500 Total Return: Dividends vs. Capital AppreciationAverage annualized returns Capital Appreciation

Dividends

4.7% 5.4% 6.0% 5.1% 3.3% 4.2% 4.4% 2.5%1.8% 4.0%

13.9%

-5 3%

3.0%

13.6%

4.4%1.6%

12.6% 15.3%

-2.7%

5.8%

0%

5%

10%

15%

-5.3%

-10%

-5%

1926 - 1929 1930's 1940's 1950's 1960's 1970's 1980's 1990's 2000's 1926 to 2013

Equity Dividend Yields REIT YieldsMajor world markets annualized Major world markets annualizedMajor world markets, annualized

10-year government bond yield

10-year government bond yield

Major world markets, annualized

4.5%

3.5%3.2%

2.9%2.7%

2 5%3%

4%

5%

3.7%

5.6%

4.5%

5.6%

4.9%

4.0%

3.3% 3.3%4%

5%

6%

setC

lass

2.0%

2.5%

1.9%

0%

1%

2%

0%

1%

2%

3%

62

Source: (Top chart) Standard & Poor’s, Ibbotson, J.P. Morgan Asset Management. (Bottom right) FactSet, NAREIT, J.P. Morgan Asset Management. Dividend vs. capital appreciation returns are through 12/31/13. Yields shown are that of the appropriate FTSE NAREIT REIT index, which excludes property development companies. (Bottom left) FactSet, MSCI, J.P. Morgan Asset Management. Yields shown are that of the appropriate MSCI index. Guide to the Markets – U.S.

Data are as of 6/30/14.

As %

U.S. Australia U.K. France Switzerland Canada ACWI Japan%

U.S. Singapore Australia Canada France Global Japan U.K.

JPMORGAN INCOME BUILDER FUND TICKERS: A: JNBAX C: JNBCX

When interest rates and yields are low, where can you find the income to help meet expenses, boost returns and stabilize your portfolio? The Income Builder Fund pursues attractive yield opportunities wherever they arise globally in an effort to increase your income and total return potential.

JPMORGAN EQUITY INCOME FUND TICKERS: A: OIEIX C: OINCX

The Equity Income Fund invests individend-paying companies to pursue monthly income and a smoother ride in uncertain times. It aims to deliver higher returns than the stock market — with lower risk. And it seeks greater growth potential than bonds, along with attractive yields.

The JPMorgan Equity Income and Income Builder Funds are available on PACE MultiAdvisor, PMP, Strategic Advisor and Strategic Wealth Portfolio platforms.

USING MARKET INSIGHTS TO ILLUSTRATE THE UBS HOUSE VIEW | 3


• While many valuation metrics are approaching long term averages, bull markets do not end at average valuations. Investors should be aware of the risks inherent in expensive markets, but recognize equities may have room to push higher from current levels. Some stocks simply have not kept pace with the overall market, and whether that was because the trends that lifted the market did not help them as much, or because of a more specific reason, it is important to remember that today’s out of favor stocks can become tomorrow’s best performers.

• Stock valuations remain attractive relative to bonds, and a variety of valuation metrics indicate that large cap stocks in particular appear cheap relative to their long-term averages. For example, as shown on page 5 of the Guide, large cap growth stocks were trading at a forward P/E ratio that was approximately 87% of their long-term average as of the end of 1Q14, making it the “cheapest” part of the U.S. equity market. Additionally, these companies should benefit from a bottoming in capital spending, and given that U.S. corporations have sufficient funds on hand to finance projects, we should see an increase in capital spending as business confidence improves.

• Companies with leading franchises and large exposures to overseas markets, especially higher-growth emerging economies, stand to benefit from acceleration in global growth. These companies tend to have strong operational capabilities, as well as enough pricing power to offset rising margin pressures, which should support their ability to grow going forward. These attributes, combined with reasonable valuations, make equities, and particularly large cap growth, attractive areas for investment.

U.S. Growth


Returns and Valuations by Style

2Q 2014 Year to Date Current P/E vs. 20-year avg. P/E

Value Blend Growth Value Blend Growth

ge ge

15.0 15.6 18.3

Value Blend Growth

rge

Equi

ties

Larg 5.1% 5.2% 5.1%

Larg 8.3% 7.1% 6.3%

Mid 5.6% 5.0% 4.4% Mid 11.1% 8.7% 6.5%

14.0 16.2 21.0

17.0 18.4 19.8

14.1 16.4 21.8

16 7 18 5 20 7

Lar

Mid

Since Market Low (March 2009)Since Market Peak (October 2007)Current P/E as % of 20-year avg. P/E

E.g.: Large Cap Blend stocks are 3.4% cheaper than their historical average.

Smal

l

2.4% 2.0% 1.7%

Smal

l

4.2% 3.2% 2.2%16.7 18.5 20.7

14.4 17.2 21.4Smal

l

Value Blend Growth

Larg

e

107.4% 96.6% 87.1%

Mid 120.1% 111.7% 90.7%

Value Blend Growth Value Blend Growth

Larg

e

35.7% 45.2% 59.9%

Larg

e

238.2% 224.4% 226.2%

Mid 63.2% 63.2% 61.4% Mid 316.6% 293.9% 273.1% M 120.1% 111.7% 90.7%

Smal

l

116.1% 107.6% 96.5%

Source: Russell Investment Group Standard & Poor’s FactSet J P Morgan Asset Management

M 63.2% 63.2% 61.4% M 316.6% 293.9% 273.1%

Smal

l

48.1% 55.0% 61.3%

Smal

l

266.2% 273.8% 280.7%

5

Source: Russell Investment Group, Standard & Poor s, FactSet, J.P. Morgan Asset Management.All calculations are cumulative total return, including dividends reinvested for the stated period. Since Market Peak represents period 10/9/07 – 6/30/14, illustrating market returns since the S&P 500 Index high on 10/9/07. Since Market Low represents period 3/9/09 – 6/30/14, illustrating market returns since the S&P 500 Index low on 3/9/09. Returns are cumulative returns, not annualized. For all time periods, total return is based on Russell-style indexes with the exception of the large blend category, which is reflected by the S&P 500 Index. Past performance is not indicative of future returns.Guide to the Markets – U.S.


“Growth has underperformed value over the past couple of months as so-called momentum stocks have suffered. However, we see signs that this intra-market rotation has run its course. Therefore, we maintain a moderate preference for growth over value given low relative valuations, particularly for the technology sector.”


JPMORGAN LARGE CAP GROWTH FUND TICKER: A: OLGAX C: OLGCX

The Large Cap Growth Fund allows you to participate in some of America’s best-known, fastest-growing companies. Managers look for stocks that are rising rapidly in the current recovery and have the potential to continue outperforming over the next three to five years.

JPMORGAN DYNAMIC GROWTH FUND TICKERS: A: DGAAX C: DGXCX

We believe strong opportunities remain in U.S. stocks, particularly in the large growth sector. The Dynamic Growth Fund seeks long-term capital growth by investing primarily in large companies with market capitalizations equal to those within the universe of the Russell 1000 Growth Index.

The JPMorgan Large Cap Growth Fund is recommended on the UBS Mutual Fund Select List. It is available on PACE Multi Advisor, PMP, Strategic Advisor and Strategic Wealth Portfolio platforms.

The JPMorgan Dynamic Growth Fund is available on PACE Multi Advisor, PMP, Strategic Advisor and Strategic Wealth Portfolio platforms.




• As global economic growth continues in 2014, we believe that equities have the potential to outperform fixed income, as unused, pent-up demand in key cyclical areas, easy monetary policy and improvements in consumer confidence could support continued economic growth. While there are signs that Europe’s economy is finally emerging from the doldrums and emerging markets have stabilized, it will be important for investors to remain cognizant of the risks that still remain including higher oil prices, an unexpected slowdown in the European economy, or another “taper tantrum” in emerging markets when the Federal Reserve ends quantitative easing later this year.

• Following a blockbuster year in U.S. equities in 2013, it investors need to understand where we are in the market cycle, and appropriately manage their expectations moving forward. While we are still expecting 2014 to be a good year, earnings growth and dividends will likely drive the bulk of total return. As shown on page 8 of the Guide, corporate profits remain very close to all-time highs, but analyst expectations are for earnings growth to continue over the coming quarters, pushing corporate profits to record levels.

• Earnings growth will be dependent on the ability of companies to preserve profit margins as well as the level of interest rates. Margins will be dependent on wage growth, and although we are beginning to observe wages gradually move higher, it is not yet at a pace which poses a serious threat to corporate profitability. Additionally, while interest rates remain low, they should gradually rise over time as the US economy continues to strengthen and inflationary pressures begin to materialize, increasing the cost of borrowing at a time when an increase in corporate leverage could help drive an improvement in return on equity.

Core U.S. equity


“Impressive corporate earnings continue to power stocks higher with the S&P 500 hitting new highs this month. First quarter earnings rose 6% year-over-year despite “flattish” real GDP growth. High frequency indicators are already signaling a rebound in real economic activity after the winter-induced weakness, which suggests profit growth should accelerate.”


Corporate Profits and Leverage

10%

12%S&P 500 Earnings Per ShareOperating basis, quarterly

Profit Margins

S&P 500 Operating EPS % of Sales per Share1Q14*: $27.32 1Q14:

9.8%

$23

$27

4%

6%

8%

10%

Equi

ties

p g p

1Q14:8.9%

2Q07: $24.06

After Tax Adj Corp Profits % of GDP

$15

$19

0%

2%

'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10

Total Leverage

After-Tax, Adj. Corp. Profits, % of GDP

$7

$11

180%

200%

220%

240%S&P 500, ratio of total debt to total equity, quarterly

-$1

$3

'01 '02 '03 '04 '0 '06 '0 '08 '09 '10 '11 '12 '13 '14 80%

100%

120%

140%

160%

1Q14: 102%

Average: 171%

8

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14Source: BEA, Standard & Poor’s, Compustat, J.P. Morgan Asset Management.EPS levels are based on operating earnings per share. *Most recently available data is 4Q13 as 1Q14 are Standard & Poor’s preliminary estimates. Past performance is not indicative of future returns.

Guide to the Markets – U.S.


'96 '98 '00 '02 '04 '06 '08 '10 '12 '1480%

JPMORGAN U.S. LARGE CAP CORE PLUS FUND TICKERS: A: JLCAX C: JLPCX

Expand your investment universe. When analyzing markets, fund managers gain insights into which stocks appear most and least attractive. The JPMorgan U.S. Large Cap Core Plus Fund makes use of those insights with a “130/30” strategy that seeks to offer more flexibility and return potential than long-only equity investments.

The JPMorgan U.S. Large Cap Core Plus Fund is recommended on the UBS Mutual Fund Select List. It is available on PACE Multi Advisor, PMP, Strategic Advisor and Strategic Wealth Portfolio platforms.



• Following a 30-year bull market in bonds, the risks in fixed income appear to outweigh the rewards, making asset allocation even more important. With interest rates at historic lows, investors have been forced to search outside of fixed income in an effort to maintain or increase the cash flow from their portfolios. While balance and diversification within fixed income will play an increasingly large role going forward, one way that investors can increase yield is by adding exposure to credit-sensitive sectors such as corporate bonds. Although investment grade corporate bonds offer a small yield premium to Treasuries, high yield corporate bonds currently offer one of the more attractive risk/reward relationships in fixed income.

• In addition to providing more yield than comparable maturity Treasuries, corporate bonds have a lower duration, or are less sensitive to rising interest rates, than other areas of the fixed income market. As shown on page 32 of the Guide to the Markets, investment grade and high yield bond prices would decline notably less than the 10-year Treasury given a 1% rise in interest rates, which is important given the historically low level of interest rates and the probability that they will eventually rise.

• Corporate bond default rates are extremely low, and high yield bond issuance has increased materially over the past few years as companies have taken advantage of historically low interest rates to refinance their existing debt. More broadly speaking, corporations are flush with cash that can be used to make both principal and interest payments on their outstanding debt going forward, keeping the risk of a sharp rise in defaults low. Additionally, even if economic growth slows materially, cash-rich balance sheets should prevent default rates from rising to levels typically observed during recessions.

Fixed income diversification


“We would acknowledge that with significant uncertainty about the drivers of the recent rally, there is also increased uncertainty surrounding the path yields may take from here. The recent rally should highlight the value of holding a portion of fixed rate bonds within a diversified portfolio. Ultimately, we retain our conviction that yields will increase.”


JPMORGAN STRATEGIC INCOME OPPORTUNITIES FUND TICKER: A: JSOAX C: JSOCX

Why limit your portfolio to certain fixed income sectors and styles when you can invest opportunistically across the entire market? The Strategic Income Opportunities Fund is free to pursue promising investments worldwide while avoiding areas of perceived weakness.

JPMORGAN CORE BOND FUND TICKER: A: PGBOX C: OBOCX

Quality matters. Nearly every investor needs a strong foundation of high-quality bonds with the potential to stabilize and diversify portfolios. By targeting intermediate bonds of the highest quality, the JPMorgan Core Bond Fund seeks to provide regular income, consistent returns and may help cushion against volatility.

The JPMorgan Strategic Income Opportunities Fund is available on PACE Multi Advisor, PMP, Strategic Advisor, Retail and Strategic Wealth Portfolio platforms.

The JPMorgan Core Bond Fund is recommended on the UBS Mutual Fund Select List. It is available on PACE Multi Advisor, PMP, Strategic Advisor and Strategic Wealth Portfolio platforms.

Fixed Income Yields and Returns

US Treasuries # of issues

Correlation to 10-year

Avg.Maturity 6/30/2014 3/31/2014 2Q14 YTD

2-Year 90 0 64 2 years 0 47% 0 44% 0 26% 0 44%

Yield Return Price Impact of a 1% Rise/Fall in Interest Rates*

+1%-1%-2.0%

5 0%

0.9%2y UST 2-Year 90 0.64 2 years 0.47% 0.44% 0.26% 0.44%

5-Year 96 0.91 5 1.62% 1.73% 1.18% 1.92%

10-Year 18 1.00 10 2.53% 2.73% 2.66% 6.14%

30-Year 20 0.92 30 3.34% 3.56% 5.24% 13.77%-16.9%

-8.5%

-6.7%

-4.7%

21.9%

9.4%

7.7%

5.0%

30y UST

10y UST

TIPS

5y UST

TIPS 35 0.59 10 0.27% 0.60% 3.81% 5.83%

Sector

Broad Market 8,523 0.86 7.7 years 2.22% 2.39% 2.04% 3.93%

MBS 429 0.81 7.2 2.79% 3.11% 2.41% 4.03%

ncom

e

-3.8%

-3.2%

-0.1%

3.5%

3.5%

0.1%

ABS

Convertibles

Floating Rate

Municipals 9,101 0.47 9.9 2.25% 2.55% 2.49% 5.69%

Corporates 5,039 0.46 10.5 2.91% 3.10% 2.66% 5.68%

High Yield 2,164 -0.24 6.6 4.91% 5.23% 2.41% 5.46%

Floating Rate 47 -0.21 3.1 1.01% 1.17% 0.73% 1.13%

Fixe

d In

-6.1%

-6.0%

-5.6%

-4.1%

5.6%

4.1%

5.6%

4.0%

Munis

MBS

US Aggregate

US HY

Convertibles 514 -0.32 -- 1.19% 1.20% 4.23% 8.80%

ABS 1,358 -0.04 4.1 1.90% 1.90% 1.19% 2.33%

Source: U.S. Treasury, Barclays Capital, FactSet, J.P. Morgan Asset Management.Fixed income sectors shown above are provided by Barclays Capital and are represented by – Broad Market: Barclays U.S. Aggregate; MBS: U.S. Aggregate Securitized - MBS Index; Corporate: U.S. Corporates; Municipals: Muni Bond 10-year Index; High Yield: Corporate High Yield Index; TIPS: Treasury Inflation Protection Securities (TIPS). Floating Rate: Barclays FRN (BBB); Convertibles: Barclays U.S. Convertibles Composite; ABS: Barclays ABS + CMBS. Treasury securities data for # of issues based on U.S. Treasury benchmarks from Barclays Capital.

-6.6%7.6%

-30% -10% 10% 30%

IG Corps

32

(BBB); Convertibles: Barclays U.S. Convertibles Composite; ABS: Barclays ABS CMBS. Treasury securities data for # of issues based on U.S. Treasury benchmarks from Barclays Capital.Yield and return information based on bellwethers for Treasury securities. Sector yields reflect yield to worst, while Treasury yields are yield to maturity. Correlations are based on 10-years of monthly returns for all sectors. Change in bond price is calculated using both duration and convexity according to the following formula: New Price = (Price + (Price * -Duration * Change in Interest Rates))+(0.5 * Price * Convexity * (Change in Interest Rates)^2). *Calculation assumes 2-year Treasury interest rate falls 0.47% to 0.00%,as interest rates can only fall to 0.00%. Chart is for illustrative purposes only. Past performance is not indicative of future results. Guide to the Markets – U.S.Data are as of 6/30/14.




RISKS ASSOCIATED WITH INVESTING IN THE FUNDS

Large Cap Growth Fund: The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies, sectors or industries selected for the fund’s portfolio or the securities market as a whole, such as changes in economic or political conditions. Equity securities are subject to “stock market risk,” meaning that stock prices in general (or in particular, the prices of the types of securities in which a fund invests) may decline over short or extended periods of time. When the value of a fund’s securities goes down, an investment in a fund decreases in value.

Income Builder Fund: Asset allocation/diversification does not guarantee investment returns and does not eliminate the risk of loss. The fund’s fixed income securities are subject to interest rate risk. If rates increase, the value of the fund’s investments generally declines. The fund may invest in securities that are below investment grade (i.e., “high yield” or “junk bonds”) that are generally rated in the fifth or lower rating categories of Standard & Poor’s and Moody’s Investors Service. Although these securities tend to provide higher yields than higher rated securities, there is a greater risk that the fund’s share price will decline. The fund may invest up to 60% of its total assets in equity securities. The fund’s investment in equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. When the value of a fund’s securities goes down, an investment in a fund decreases in value. The fund has the ability to invest 0 to 100% of its total assets in high yield securities. Under normal circumstances, the fund expects to invest no more than 70% of its total assets in such securities. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Also, some overseas markets may not be as politically and economically stable as the United States and other nations. The fund’s investments in real estate securities, including REITs, are subject to the same risks as direct investments in real estate and mortgages, including default, prepayments, changes in value resulting from changes in interest rates and demand for real and rental property, and the management skill and creditworthiness of REIT issuers. The fund may invest in derivatives, which 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 fund’s original investment. Many derivatives create leverage, thereby causing the fund to be more volatile than it would be if it had not used derivatives. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends.

Strategic Income Opportunities Fund: The fund’s investment in equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. When the value of a fund’s securities goes down, an investment in a fund decreases in value. The fund’s fixed income securities are subject to interest rate risk. If rates increase, the value of the fund’s investments generally declines. Ordinarily the fund will invest no more than 75% of its total assets in credit securities. The fund may invest in securities that are below investment grade (i.e., “high yield” or “junk bonds”) that are generally rated in the fifth or lower rating categories of Standard & Poor’s and Moody’s Investors Service. Although these securities tend to provide higher yields than higher rated securities, there is a greater risk that the fund’s share price will decline. The fund has the ability to invest 100% of its total assets in high yield securities. International investing involves special risks, including economic, political and currency instability — especially in emerging markets. The fund’s investments in emerging markets could lead to more volatility in the value of the fund’s shares. The small size of securities markets and the low trading volume may lead to a lack of liquidity, which leads to increased volatility. Emerging markets may not provide adequate legal protection for private or foreign investment or private property. The fund may engage in short sales. There is no guarantee that the use of long and short positions will succeed in limiting the fund’s exposure to domestic stock market movements, capitalization, sector-swings or other risk factors. Investment in a portfolio involved in long and short selling may have higher portfolio turnover rates. This will likely result in additional tax consequences. Short selling involves certain risks, including additional costs associated with covering short positions and a possibility of unlimited loss on certain short sale positions. The fund may invest in futures contracts and derivatives. Many derivatives create leverage, thereby causing the fund to be more volatile than it would be if it had not used derivatives. The fund will invest no more than 50% of its total assets in foreign and emerging markets securities. The fund has an absolute return orientation, which means that it is not managed relative to an index.



Equity Income Fund: The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies, sectors or industries selected for the fund’s portfolio or the securities market as a whole, such as changes in economic or political conditions. Equity securities are subject to “stock market risk” meaning that stock prices in general (or in particular, the prices of the types of securities in which a fund invests) may decline over short or extended periods of time. When the value of a fund’s securities goes down, an investment in a fund decreases in value. The fund may invest in derivatives which 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 fund’s original investment. Many derivatives create leverage thereby causing the fund to be more volatile than it would be if it had not used derivatives. There is no guarantee that companies that can issue dividends will declare, continue to pay, or increase dividends.

Dynamic Growth Fund: The Fund is subject to management risk and may not achieve its objective if the adviser’s expectations regarding particular securities or markets are not met. The Fund is also subject to equity market risk. The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. The Fund may invest in derivatives that may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions and could result in losses that significantly exceed the Fund’s original investment. Many derivatives create leverage that can cause the Fund to be more volatile than it would be if it had not used derivatives. The Fund may invest in foreign securities which are subject to additional risks including political and economic risks, greater volatility, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, and less stringent investor protection and disclosure standards of foreign markets.

Core Bond Fund: The Fund’s fixed income securities are subject to interest rate risk. If rates increase, the value of the Fund’s investments generally declines. Ordinarily, the Fund will invest at least 80% of its total assets in bonds, both domestic and foreign. International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Also, some overseas markets may not be as politically and economically stable as the United States and other nations. The Fund may invest up to 5% of its assets in “sub-prime” mortgage-related securities. The risk of defaults is generally higher in the case of mortgage-backed investments that include so-called “sub-prime” mortgages. The structure of some of these securities may be complex and there may be less available information than other types of debt securities. The Fund may invest in futures contracts and derivatives. Many derivatives create leverage that can cause the Fund to be more volatile than it would be if it had not used derivatives.

U.S. Large Cap Core Plus Fund: The Fund may engage in short sales. There is no guarantee that the use of long and short positions will succeed in limiting the Fund’s exposure to domestic stock market movements, capitalization, sector-swings or other risk factors. Investment in a portfolio involved in long and short selling may have higher portfolio turnover rates. This will likely result in additional tax consequences. Short selling involves certain risks, including additional costs associated with covering short positions and a possibility of unlimited loss on certain short sale positions. The Fund may use derivatives in connection with its investment strategies to hedge and manage risk and to increase its return. 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 Fund’s original investment. The Fund will have substantial short positions and must borrow those securities to make delivery to the buyer. The Fund may not always be able to borrow a security it wants to sell short. The Fund also may be unable to close out an established short position at an acceptable price, and may have to sell related long positions at disadvantageous times.


Insight + Process = ResultsSM


J.P. Morgan Asset Management

Investing means transforming information into insight and insight into financial success. That process requires the experience to recognize opportunities, the vision to respond with sound strategies and the attentiveness that helps deliver the right results for each client.

Contact JPMorgan Distribution Services, Inc. at 1-800-338-4345 for a fund prospectus. You can also visit us at www.jpmorganfunds.com. Investors should carefully consider the investment objectives and risks as well as charges and expenses of the mutual fund before investing. The prospectus contains this and other information about the mutual fund. Read the prospectus carefully before investing. The information in this brochure is intended solely to report on various investment views held by J.P. Morgan Asset Management. Opinions, estimates, forecasts and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable but should not be assumed to be accurate or complete. The views presented are subject to change. The views and strategies described may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. This brochure is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The information in this brochure is not intended to provide and should not be relied on for investment recommendations. Past performance is no guarantee of future results. Diversification does not guarantee investment returns and does not eliminate the risk of loss.

J.P. Morgan Funds are distributed by JPMorgan Distribution Services, Inc., which is an affiliate of JPMorgan Chase & Co. Affiliates of JPMorgan Chase & Co. receive fees for providing various services to the funds. JPMorgan Distribution Services, Inc. is a member of FINRA/SIPC.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc.

© JPMorgan Chase & Co., July 2014

SA-UBS2014

Documents

Using Market Insights to illustrate the UBS House View · PDF fileUsing Market Insights to illustrate the UBS House View ... as part of the Research Advisory Board led by UBS Investment