JPMorgan Asian Investment Trust plc Investment Manager Presentation Annual General Meeting 28 January 2015 Performance To end September 2014 Trailing Returns 4Q 2014^ FY to 30th Sept 14 JPM Asian Investment Trust NAV 6.9% 6.0% 6.0% 25.7% 24.2% 179.1% JPM Asian Investment Trust Share price 7.3% 5.2% 5.2% 20.1% 21.2% 215.4% MSCI AC Asia ex Japan Index (NDR)* 4.1% 8.1% 8.1% 31.0% 37.3% 153.0% NAV Excess Returns (Arithmetic) 2.8% -2.2% -2.2% -5.3% -13.1% 26.1% 1 Year 3 Years 5 Years Since Incep’n** Calendar Returns 2014 2013 2012 2011 2010 2009 JPM Asian Investment Trust 11.3% 2.9% 13.6% -23.5% 28.9% 44.9% MSCI AC Asia ex Japan Index(NDR)* 11.3% 1.2% 17.0% -16.7% 23.4% 53.2% Excess Returns -0.05% 1.7% -3.4% -6.8% 5.5% -8.3% * Prior to 1/1/01, MSCI AC Asia ex Japan (GDR). ** Inception date = 12 Sep 1997 ^ Figures to 31 Dec 2014 Source: J.P. Morgan Asset Management, as at 30 Sep 2014 NDR is net dividends reinvested. GDR is gross dividends reinvested. AC is All Countries. Past performance is not an indication of future performance. Performance is stated net of fees. 1 Performance since inception 400 JPM Asian Investment Trust 323.6 MSCI AC Asia ex Japan (NDR) 293.0 Share Price 263.4 200 100 50 25 9/97 4/99 11/00 5/02 12/03 7/05 2/07 9/08 4/10 11/11 Inception date = 12 Sep 1997 * Prior to 1/1/01, MSCI AC Asia ex Japan (GDR). Source: J.P. Morgan Asset Management, as at 31 Dec 2014. Data is re based as at inception date on a log basis. Past performance is not an indication of future performance 2 5/13 12/14 2014 Attribution Analysis – 1 year to 30 Sep 2014 Major Detractors: Stock selection in North Asia Major Contributors: Overweight India and Stock selection in Malaysia Average Over/Under Weight (%) Portfolio Return (%) Benchmark Return (%) Country + Currency Selection (%) Stock Selection (%) Total (%) Malaysia -3.0 21.5 5.1 0.08 0.34 0.42 India 1.6 38.4 37.5 0.37 -0.03 0.33 Singapore -2.7 9.8 4.1 0.14 0.14 0.28 Philippines -0.6 39.1 18.4 -0.01 0.06 0.05 Indonesia -1.3 24.4 19.7 -0.21 0.18 -0.03 Thailand 1.5 10.1 11.3 -0.06 -0.11 -0.16 Taiwan -0.6 9.3 12.1 0.03 -0.29 -0.27 Hong Kong -0.3 -1.1 5.3 0.06 -0.54 -0.48 Korea 0.6 -4.0 0.3 0.00 -1.03 -1.03 China 6.0 1.7 4.4 -0.26 -0.78 -1.04 Cash -1.0 0.0 0.0 -0.23 0.00 -0.23 Total 0.0 6.0 8.1 -0.09 -2.07 -2.16 Source: FactSet, J.P. Morgan Asset Management, as at 30 Sep 2014 Past performance is not indicative of future performance. For illustrative purposes only. Subject to change at the discretion of the Investment Manager without notice. 3 Top ten contributors to active returns – 1 year to 30 Sep 2014 Top 10 Contributors (%) Country Sector Tata Motors Limited Tencent Holdings Ltd. HDFC Bank Limited Mahindra & Mahindra Ltd. Beijing Enterprises Water Group Limited Alibaba Group Holding Ltd. Sponsored ADR Korea Investment Holdings Co., Ltd. Delta Electronics, Inc. True Corp. Public Co., Ltd. Advanced Semiconductor Engineering, Inc. India China India India China China Korea Taiwan Thailand Taiwan Consumer Discretionary Information Technology Financials Consumer Discretionary Utilities Information Technology Financials Information Technology Telecommunication Services Information Technology Top 10 Detractors(%) Country Sector Hyundai Heavy Industries Co., Ltd. SK Innovation Co., Ltd China Cinda Asset Management Co., Ltd. MGM China Holdings Limited Great Wall Motor Co., Ltd. Sino-Thai Engineering & Construction Public Co. Ltd. Hon Hai Precision Industry Co., Ltd. CNOOC Limited Agricultural Bank of China Limited China Construction Bank Corporation Korea Korea China Hong Kong China Thailand Taiwan China China China Industrials Energy Financials Consumer Discretionary Consumer Discretionary Industrials Information Technology Energy Financials Financials Average Portfolio Weight Average Benchmark* Weight Stock Return Contributions to Active Returns 1.68 4.17 1.95 1.09 0.99 0.03 0.90 1.25 0.13 1.18 0.17 2.35 0.40 0.18 0.07 0.00 0.05 0.36 0.05 0.22 64.75 41.54 58.10 68.36 67.16 32.19 35.94 33.21 52.70 24.68 0.66 0.64 0.64 0.42 0.33 0.26 0.26 0.19 0.19 0.17 Average Portfolio Weight Average Benchmark* Weight Stock Return Contributions to Active Returns -47.09 -42.88 -31.89 -26.56 -32.09 -46.35 38.99 -27.77 -6.73 -3.35 -0.71 -0.53 -0.49 -0.47 -0.34 -0.31 -0.29 -0.26 -0.26 -0.25 1.14 1.09 0.72 0.83 0.79 0.14 0.00 0.79 1.33 2.73 0.28 0.23 0.04 0.12 0.16 0.00 1.10 1.06 0.33 1.75 * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management, as at 30 Sep 2014 Past performance is not indicative of future performance. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. However, it cannot be assumed that these types of investments will be available to or will be selected by the fund in the future. Subject to change at the discretion of the Investment Manager without notice. 4 Performance of Asian markets in 2013 and 2014 – Big Reversal MSCI Indices Total Return Calendar Year 2013 Calendar Year 2014 MSCI JAPAN 24.1 MSCI INDONESIA MSCI HONG KONG 9.0 MSCI TAIWAN MSCI PHILIPPINES 7.0 MSCI MALAYSIA 1.8 MSCI CHINA MSCI CHINA 2.0 MSCI HONG KONG -0.2 -30 4.5 2.6 -5.0 MSCI KOREA -20 -10 0 10 20 30 Source: Factset. As at 31 Dec 2014. Indices performance calculated gross of tax with dividends reinvested into the index in GBP. Indices do not include fees or operating expenses and are not available for actual investment. Past performance is not indicative of future performance. 5 9.3 MSCI MALAYSIA -25.1 -40 12.7 MSCI JAPAN -16.0 MSCI INDONESIA 14.8 MSCI AUSTRALIA -6.6 MSCI THAILAND 16.8 MSCI SINGAPORE -4.0 MSCI INDIA 23.9 MSCI TAIWAN MSCI KOREA MSCI PHILIPPINES 31.1 MSCI THAILAND 3.7 MSCI SINGAPORE 34.3 MSCI INDIA 5.4 MSCI AUSTRALIA 35.4 -7.0 -20 -10 0 10 20 30 40 2014 Attribution Analysis – Calendar Year 2014 Major Detractors: Stock selection in Hong Kong and China Major Contributors: Stock selection in India and Thailand – u/w Malaysia Average Over/Under Weight (%) Benchmark Return (%) Country + Currency Selection (%) Portfolio Return (%) Stock Selection (%) Total (%) India 2.9 41.7 31.6 0.37 1.11 1.48 Thailand 1.6 33.9 23.7 0.05 0.43 0.49 Singapore -2.8 17.0 9.4 0.10 0.22 0.31 Malaysia -3.3 -45.2 -5.1 0.61 -0.44 0.17 Taiwan -0.9 17.1 16.2 0.03 0.14 0.17 Philippines -0.4 62.8 33.4 -0.10 0.23 0.13 Australia 0.1 7.1 0.0 0.10 0.00 0.10 Korea 0.7 -3.9 -5.6 -0.16 0.19 0.04 Indonesia -0.9 45.0 34.5 -0.40 0.29 -0.11 Hong Kong -1.3 1.6 11.6 0.04 -1.08 -1.04 China 5.4 9.3 14.7 0.04 -1.61 -1.57 Cash -1.2 0.0 0.0 -0.06 0.00 -0.06 Total 0.0 11.4 11.3 0.60 -0.50 0.10 Source: FactSet, J.P. Morgan Asset Management, as at 31 Dec 2014 Past performance is not indicative of future performance. For illustrative purposes only. Subject to change at the discretion of the Investment Manager without notice. 6 Top ten contributors to active returns – Calendar Year 2014 Top 10 Contributors (%) Country Sector HDFC Bank Limited China Minsheng Banking Corp., Ltd. China Pacific Insurance (Group) Co., Ltd. China Vanke Co., Ltd Tata Motors Limited Alibaba Group Holding Ltd. Sponsored ADR Tencent Holdings Ltd. Taiwan Semiconductor Manufacturing Co., Ltd. BDO Unibank, Inc. Kotak Mahindra Bank Limited India China China China India China China Taiwan Philippines India Financials Financials Financials Financials Consumer Discretionary Information Technology Information Technology Information Technology Financials Financials Top 10 Detractors(%) Country Sector Hyundai Heavy Industries Co., Ltd. MGM China Holdings Limited SapuraKencana Petroleum Bhd. SK Innovation Co., Ltd China Oilfield Services Limited Ping An Insurance (Group) Company of China, Ltd. Great Wall Motor Co., Ltd. China Life Insurance Co. Ltd. (China) China Resources Gas Group Limited KB Financial Group Inc. Korea Hong Kong Malaysia Korea China China China China China Korea Industrials Consumer Discretionary Energy Energy Energy Financials Consumer Discretionary Financials Utilities Financials Average Portfolio Weight Average Benchmark* Weight Stock Return Contributions to Active Returns 2.33 1.68 0.68 1.37 1.85 0.27 4.28 4.58 0.95 0.39 0.28 0.19 0.31 0.08 0.18 0.00 2.50 3.24 0.10 0.07 67.31 53.72 59.42 57.38 46.46 60.90 20.70 36.40 62.72 49.36 0.98 0.83 0.81 0.56 0.51 0.47 0.33 0.31 0.31 0.29 Average Portfolio Weight Average Benchmark* Weight Stock Return Contributions to Active Returns -55.55 -32.62 -50.61 -43.48 -38.86 -9.02 -31.78 -10.45 -20.01 -11.67 -0.89 -0.71 -0.58 -0.57 -0.49 -0.46 -0.40 -0.39 -0.37 -0.36 1.01 1.30 0.93 0.86 1.04 1.51 0.41 0.58 1.11 2.45 0.22 0.11 0.15 0.20 0.14 0.53 0.15 0.70 0.09 0.46 * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management, as at 31 Dec 2014 Past performance is not indicative of future performance. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. However, it cannot be assumed that these types of investments will be available to or will be selected by the fund in the future. Subject to change at the discretion of the Investment Manager without notice. 7 Fund Positioning 8 Country weightings As of 31 December 2014 Greater China – fund remains overweight China and underweight Taiwan and Hong Kong India – fund exposure has increased substantially since last year, partly due to stock performance ASEAN – we are underweight the ASEAN markets as a whole but remain overweight in Thailand Country weightings As of 31/12/2013 32.9 29.3 As of 31/12/2014 26.7 Benchmark* as of 31/12/2014 21.6 18.4 18.0 14.4 14.0 13.5 15.5 12.5 10.0 8.7 8.1 13.5 4.5 6.6 3.0 4.3 3.6 6.3 1.3 2.8 3.4 0.0 1.7 1.6 0.0 1.1 0.0 2.4 4.4 0.0 0.0 -2.6 -1.3 China Korea India Taiwan Hong Kong Thailand Singapore Indonesia Philippines Australia Malaysia Cash * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management The Fund is an actively managed portfolio, holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. 9 Sector weightings As of 31 December 2014 We have increased our position in financials (especially the banks) and remain overweight in information technology. We also initiated holdings in the health care sector We have reduced over overweight in Consumer Discretionary (e.g. Macau Gaming, autos) Energy, Material and Utilities sectors were also reduced throughout the year. Sector weightings 42.4 35.0 As of 31/12/2013 As of 31/12/2014 33.7 Benchmark* as of 31/12/2014 25.7 24.4 22.2 17.7 21.7 18.1 14.6 6.8 7.2 6.1 Banks Insurance 9.0 6.0 6.8 Real Estate Financials 9.4 8.7 3.4 2.7 1.5 7.7 6.1 4.7 8.3 5.1 4.8 8.1 5.2 3.3 4.0 5.3 3.2 4.2 0.0 2.8 1.9 2.6 6.6 5.0 1.2 1.6 Diversified Financials 0.0 -2.6-1.3 Financials Information Consumer Technology Discretionary Materials Industrials Consumer Staples Utilities Health Care Energy Telecom Services * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management The Fund is an actively managed portfolio, holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. 10 Cash JPMorgan Asian Investment Trust – Top 10 holdings % Fund 31/12/13 % Fund 31/12/14 B’mark* 31/12/14 Active Information Technology 6.2 5.4 4.9 +0.5 Taiwan Information Technology 4.2 5.0 3.5 +1.5 3 Tencent Holdings China Information Technology 4.0 4.1 2.4 +1.7 4 China Construction Bank China Financials 3.9 3.3 1.9 +1.4 5 HDFC Bank India Financials 1.7 3.2 - +3.2 6 AIA Group Hong Kong Financials 3.3 3.2 2.2 +1.1 7 China Minsheng Banking China Financials 1.2 3.0 0.3 +2.7 8 China Pacific Insurance (Group) China Financials - 2.9 0.4 +2.5 9 KB Financial Group Korea Financials 1.8 2.7 0.4 +2.3 10 DBS Group Holdings Singapore Financials 2.2 2.6 0.9 +1.8 28.5 35.4 16.9 18.7 Stock Name Country Sector 1 Samsung Electronics Korea 2 Taiwan Semiconductor Manufacturing Number of Stocks: Portfolio: 68 Benchmark: 597 Top 20 Holdings 52.5 Top 30 Holdings 66.0 * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management, as at 31 Dec 2014 The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. The holdings represent the current holdings of the fund. However, it cannot be assumed that these types of investments will be available to or will be selected by the fund in the future. 11 Key positioning Indian private sector banks are the best managed banks in Asia and will benefit from the impending economic re-acceleration. Internet and e-commerce companies in China are taking market share from off-line players, at an unprecedented speed. We are overweight this sector but wary of valuations. Within ASEAN, we have a preference for Thailand over markets such as Malaysia and Singapore. Asian technology stocks are probably the most exposed to the recovery in Developed markets, Asian consumption and smartphone penetration. We are increasing Taiwan technology and have additional holdings like AAC in China. Within China – we are looking to play structural themes such as increase in Healthcare spending and Environmental related sectors e.g. water and waste treatment. 12 Market Outlook 13 2015 outlook – Contrasting catalysts lead to a measured prognosis There are reasons to expect a stronger earnings outcome in 2015 The sharply lower price of oil is good for most sectors and economies in Asia Widespread economic reform across Asia is good for earnings and valuations Weaker currencies are good for competitiveness and have a positive translation effect Interest rates are generally declining, especially in China and India There are some undeniable macro concerns The strong US Dollar is empirically bad for emerging market equities and debt Deflation is prevalent globally and exerts a negative effect on demand Central banks are uncoordinated and in some cases mutually unfriendly The rally in China is a welcome reminder that stocks and markets that have underperformed and are supported by low valuations often deliver unexpected and gratifying returns. In a growth constrained world, growth stocks and sectors will outperform. 14 Oil – the speed of the collapse in the price is more jarring than the actual price Brent Crude and WTI Prices USD 140 WTI Crude Oil (USD/bbl) Brent Crude Oil (USD/bbl) 120 100 80 60 40 20 0 '09 '10 '11 Source: EIA, IEA, IMF, Deutsche Bank, FactSet Net demand is world consumption minus world production. Data reflect most recently available as of 19/1/15. Source: J.P. Morgan Asset Management "Guide to the Markets - Asia", 1Q 2015. 15 '12 '13 '14 '15 Fundamentally, Asia benefits from falling oil prices 64 GTM - Asia Oil Imports Brent Crude Oil Price and EM CPI Inflation Net imports (imports minus exports) as % of GDP, 2014 IMF Estimates Year-over-year % change Thailand 14.0% Asia Pacific Emerging Markets Korea 7.2% Turkey 6.9% Taiwan 6.6% Hong Kong 6.4% Hungary 5.7% Philippines 5.2% India 5.0% South Africa 4.7% Japan 4.2% Indonesia EM Asia CPI Inflation 120% 8% 80% 6% 40% 3.3% New Zealand 2.2% China 2.2% Brazil 1.6% Australia 4% 0% 0.6% Mexico -0.6% Malaysia -0.9% Vietnam 2% -4.4% Iran -40% -11.0% Russia -12.9% UAE -27.1% -39.7% -50% -40% -80% -30% -20% -10% 0% 10% 20% Source: IMF, FactSet, J.P. Morgan Asset Management “Guide to the Markets – Asia 1Q 2015.” Data reflect most recently available as of 31/12/14. Source: J.P. Morgan Asset Management "Guide to the Markets - Asia", 1Q 2015. Data reflect most recently available as of 31/12/14. 16 10% EM CPI Inflation Brent Crude Oil Price 7.3% Singapore Saudi Arabia 160% 0% '04 '06 '08 '10 '12 '14 Accelerating political change and economic reform around Asia India Modi will meet expectations, which were too high at the outset Various bureaucracy busting measures have been implemented already The investment cycle has bottomed, and the recovery should be turbocharged by Modi China President Xi Jinping is defying the skeptics, and is pushing painful but necessary reform “Marketization” could transform the SOEs and materially boost earnings and efficiency Social reforms like the one child policy and Hukou and anti-corruption are bold and farreaching Japan Thailand Politics has stabilized, consumption is recovering New Government has approved/revived major infrastructure and investment projects After the cabinet reshuffle and midterm elections , can PM Abe regain momentum? The Third Arrow has disappointed but now Abe has re-focused Corporate earnings and consumption are tracking well State enterprises are slated for major upgrading Korea Indonesia Jokowi has taken office with a powerful mandate but he will have to sharpen his political elbows to be effective Infrastructure will be the primary focus, especially power infrastructure and roads Fuel subsidies have been cut but more is needed President Park reshuffled her cabinet and suddenly embraced change The moribund property market is responding to new policies – this could be huge! Tax policy has been altered to encourage more dividends and more investment Source: J.P. Morgan Asset Management, 31 Dec 2014 The opinions and views expressed here are those held by the author at the time of publication, which are subject to change and are not to be taken as or construed as investment advice. 17 New Asian Leaders are deregulating energy prices which reduces the subsidy bill US$/bbl India Gas prices hiked by 33% Malaysia ~10% fuel price hike 105 Thailand LPG raised by ~3% Thailand Floats LPG Prices for retail China 25% gasoline tax hike 17% diesel tax hike India 16% gasoline tax hike 41% diesel tax hike Malaysia Abolishes fuel subsidies 95 Indonesia Fuel subsidies abolished for gasoline, fixed at Rp1,000 for diesel Thailand LPG raised by ~3% NGV raised by ~~10% 85 Thailand Raises producer level LPG Prices India Diesel prices decontrolled Direct benefit transfer scheme for LPG 75 China 9% gasoline tax hike 9% diesel tax hike Malaysia ~2% gas price hike (non-power sector) Indonesia ~30% fuel price hike 65 China 12% gasoline tax hike 18% diesel tax hike Indonesia ~23% LPG Hike 55 China Threshold for windfall tax raised from US$55/bbl to US$65/bbl Thailand Govt. announced intention to float LPG/NGV prices 45 Sep-14 Sep-14 Sep-14 India 15% gasoline tax hike 32% diesel tax hike Oct-14 Source: Company data, Bloomberg, Morgan Stanley Research 18 India 20% gasoline tax hike 19% diesel tax hike Oct-14 Nov-14 Nov-14 Dec-14 Dec-14 Jan-15 Thailand – Meeting General, now Prime Minister, Prayuth Source: Bangkok Post, 16 Aug 2014 http://www.bangkokpost.com/news/local/426993/ncpo-reassures-worried-foreign-investors. 19 Indonesia – Jakarta before and after Jokowi – Optics Matter ! Jakarta before Jokowi 20 Jakarta after Jokowi Indonesia – JPM ASEAN team meeting with the Energy Minister Source: J.P. Morgan Asset Management. Data as at 31 Dec 2014. 21 China – Anti corruption campaign blows away expectations Source Waltham Economy of Asia Review . As at 31 Dec 2014. 22 China – A map of tigers and flies Corruption investigations announced by the Communist Party's Central Commission for Discipline Inspection since Xi Jinping's rise to power Source South China Morning Post 23 Recently, the US Dollar Index (DXY) cleared a critical level, portending sustained dollar strength US Dollar Index 160 1985: Plaza Accord 150 Jan 2003 - Nov 2007 Huge Bull Market Jan 1987 - Jul 1994 The Bull Market that we missed 140 130 120 110 Jan 2008 - Dec 2008 Collapse ! 100 90 80 Aug 1994 - Sep 1998 Asian Crisis 70 60 1973 1975 1978 1981 Source: Bloomberg. Data as at 31 Dec 2014. 24 1984 1986 1989 1992 1995 1997 2000 2003 2006 2008 2011 2014 A Strong Dollar hinders Emerging Market, including Asian, stock market performance Relative Asia ex Japan / Developed Markets Equity Performance and Dollar Index, rebased 1988 = 100 300 120 MSCI AxJ / MSCI the World (DM) DXY (RHS) 250 110 200 100 150 90 100 80 50 70 '88 '90 '92 '94 '96 '98 '00 '02 Source: J.P. Morgan Asset Management. Data as at 31 Dec 2014. MSCI AxJ is the MSCI Asia ex Japan Index and MSCI the World DM is the MSCI World Developed Markets 25 '04 '06 '08 '10 '12 '14 The Inflation heat map looks disinflationary Rising Inflation Unchanged Falling Inflation Central Bank Central Bank Policy Rate* Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Target / Forecast 5.60 ( 11/2014) 2.5 2.5 2.0 2.4 1.8 2.5 2.3 2.3 2.0 1.6 1.6 1.4 China 3.5 4.3 4.6 3.9 4.0 3.7 3.7 3.6 4.1 3.9 6.6 5.2 5.1 Hong Kong 4.5 0.50 ( 12/2008) 6.4 5.1 5.0 6.0 5.6 6.2 5.7 5.2 3.7 2.4 1.8 0.0 India 5.0 7.75 ( 01/2015) Country Indonesia 8.4 8.2 7.8 7.3 7.3 7.3 6.7 4.5 4.0 4.5 4.8 6.2 3.5 – 5.5 Japan 1.6 1.4 1.5 1.6 3.4 3.7 3.6 3.4 3.3 3.3 2.9 2.4 2.0 Korea 1.1 1.1 1.0 1.3 1.5 1.7 1.7 1.6 1.4 1.2 1.2 1.0 2.5 – 3.5 2.00 ( 10/2014) Malaysia 3.2 3.4 3.5 3.5 3.4 3.2 3.3 3.2 3.3 2.6 2.8 3.0 2.0 – 3.0 3.25 ( 07/2014) Philippines 4.1 4.2 4.1 3.9 4.1 4.5 4.4 4.9 4.9 4.4 4.3 3.7 3.0 – 5.0 4.00 ( 09/2014) Singapore 1.5 1.4 0.4 1.2 2.5 2.7 1.8 1.2 0.9 0.6 0.1 -0.3 2.0 – 3.0 0.12 (N/A)** Taiwan 0.3 0.8 -0.1 1.6 1.7 1.6 1.6 1.8 2.1 0.7 1.1 0.9 1.2 Thailand 1.7 1.9 2.0 2.1 2.5 2.6 2.4 2.2 2.1 1.8 1.5 1.3 0.5 – 3.0 Germany 1.4 1.3 1.2 1.0 1.3 0.9 1.0 0.8 0.8 0.8 0.8 0.6 2.0 US 1.5 1.6 1.1 1.5 2.0 2.1 2.1 2.0 1.7 1.7 1.7 1.3 2.0 7.75 ( 11/2014) 0-0.10 ( 10/2010) 1.875 ( 06/2011) 2.00 ( 03/2014) 0.05 ( 09/2014)* 0-0.25 ( 12/2008) All data shown above are headline CPI inflation unless otherwise stated. India: Data for India is Wholesale Price Index. Thailand’s central bank targets core CPI, which excludes raw food and energy. *The arrows and dates in the Central Bank Policy Rate column indicate the direction and date of last change, respectively. The central bank’s policy rate for each country includes the one-year benchmark lending rate (China), official base rate adjusted in accordance to the Hong Kong dollar’s demand or supply (Hong Kong), RBI policy repo rate (India), BI benchmark policy rate (Indonesia), BoJ uncollateralised overnight call rate (Japan), BoK base rate (Korea), overnight policy rate (Malaysia), reverse repurchase (RRP) rate (Philippines), discount rate (Taiwan), 1-day repurchase rate (Thailand), ECB main refinancing operations rate (Germany) and Federal funds rate (U.S.). **The Monetary Authority of Singapore does not set monetary policy by targeting a short-term interest rate. Instead, it manages the Singapore dollar exchange rate against a trade-weighted basket of currencies of the country’s major trading partners and competitors. Source: J.P. Morgan Asset Management, 19 Jan 2015 26 MSCI Asia ex Japan 12m forward valuations Valuations are attractive, assuming an earnings recovery Latest PE value as of (31 Dec 2014): 11.5x Latest PB value as of (31 Dec 2014): 1.4x x x 18 3.0 16 2.5 +1sd 13.6 14 +1sd 1.9 2.0 Avg 12.0 12 Avg 1.6 11.5 1.5 10 1.4 -1sd 10.5 -1sd 1.4 1.0 8 0.5 6 04 05 06 07 08 09 10 11 12 13 14 04 05 06 07 08 09 10 Source: Thomson Reuters Datastream, 31 Dec 2014 Source: Thomson Reuters Datastream, 31 Dec 2014 PE = Price to Earnings Ratio PB = Price to Book Ratio Indices do not include fees or operating expenses and are not available for actual investment. Past performance is not indicative of future performance 27 11 12 13 14 Appendices 28 China: Credit conditions RMB Reference and Closing Rate USD/RMB 6.5 Ceiling of Daily Trading PBoC Reference Rate Closing Rate 6.4 6.3 6.2 Floor of Daily Trading 6.1 6.0 '12 '13 Source: People’s Bank of China, National Bureau of Statistics of China, CEIC, FactSet Data reflect most recently available as of 31/12/14. Source: J.P. Morgan Asset Management "Guide to the Markets - Asia", 1Q 2015 Page 11 29 '14 India inflation and repo rate Wholesale Prices - all items, nsa 14% Reserve Bank of India Repo Rate Consumer Price Index YoY % Change 12% 10% 8% 6% 4% 2% 0% -2% '07 Source: J.P. Morgan Asset Management, 19 Jan 2015 NSA is not seasonally adjusted 30 '09 '11 '13 '15 Portfolio characteristics at 31 December 2014 Portfolio Benchmark* Portfolio Benchmark* Dividend Yield 1.8 2.5 Market Capitalisation (US$m) 42,306.7 41,330.3 Price / Earnings 13.1 12.9 Hist. 3yr Sales Growth 16.4 13.3 P/E using FY1 Estimates 13.4 12.6 Hist. 3yr EPS Growth 15.5 9.7 Price / Cash Earnings 9.2 8.1 Est. 3-5 Yr EPS Growth 16.7 12.4 Price / Book 1.8 1.5 Return of Assets 9.9 8.7 Price / Sales 1.4 1.1 Return of Equity 17.4 15.8 Operating Margin 20.6 20.4 Predicted Tracking Error 3.28 Net Margin 17.5 18.2 Predicted Beta 1.03 LT Debt / Capital 25.8 22.8 * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management / MSCI & FactSet, as at 31 Dec 2014 The above portfolio characteristics are shown for illustrative purposes only and are subject to change without notice. 31 Portfolio characteristics Active Share (%) Number of Holdings Sep 14 Oct 14 Nov 14 Dec 14 Sep 14 Oct 14 Nov 14 Dec 14 73.4 70.3 71.5 72.7 84 74 71 68 Tracking Error (%) Turnover (%) Sep 14 Oct 14 Nov 14 Dec 14 Sep 14 Oct 14 Nov 14 Dec 14 6.5 7.8 6.8 5.1 2.75 2.73 2.93 3.28 Note: October turnover only represents the turnover of the portfolio within the month Source: Axioma, J.P. Morgan Asset Management 32 Country weightings As of 30 September 2014 Greater China – fund remains overweight China and underweight Taiwan and China Korea – fund remains overweight – with a focus on names exposed to global recovery and domestic housing improvement. ASEAN – we are underweight the ASEAN markets, with the exception of Thailand where we are overweight and Indonesia where we are marginally overweight. India – fund exposure has increased substantially since last year, partly due to positive political and economic outlook and partly due to stock performance Country weightings As of 30/9/2013 As of 30/9/2014 Benchmark* as of 30/9/2014 28.6 29.5 24.7 21.0 22.6 19.3 15.4 13.4 14.0 16.6 13.8 9.1 7.6 10.0 12.2 5.9 5.4 3.0 1.1 3.7 3.4 3.9 3.3 6.3 5.0 0.0 1.1 1.6 1.6 1.0 0.3 0.0 -4.3 China Korea Taiwan India Hong Kong Thailand Indonesia Singapore Philippines Malaysia Cash * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management The Fund is an actively managed portfolio, holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. 33 Sector weightings As of 30 September 2014 We are overweight financials and information technology. We are overweight consumer discretionary sector and underweight the consumer staples We are overweight Materials, neutral Energy and underweight Utilities and Telecom Services. Sector weightings As of 30/9/2013 As of 30/9/2014 37.8 34.9 Benchmark* as of 30/9/2014 31.7 24.1 23.6 18.0 22.1 21.1 17.4 13.712.8 10.9 4.9 6.1 5.2 9.3 5.2 6.5 1.0 Banks Insurance Real Estate Financials 2.9 2.6 7.6 7.8 5.3 7.9 8.6 5.9 5.8 5.4 4.7 5.5 3.3 4.5 6.7 3.0 2.7 4.1 0.0 2.6 1.9 1.8 1.5 0.3 Diversified Financials -4.3 Financials Information Consumer Technology Discretionary Materials Energy Industrials Consumer Staples Utilities Health Care Telecom Services * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management The Fund is an actively managed portfolio, holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. 34 0.0 Cash JPMorgan Asian Investment Trust – Top 10 holdings % Fund 30/9/13 % Fund 30/9/14 B’mark* 30/9/14 Active Information Technology 6.6 5.1 4.6 0.5 Taiwan Information Technology 4.0 4.7 3.2 1.5 3 Tencent Holdings China Information Technology 3.6 3.8 2.5 1.4 4 KB Financial Group Korea Financials 2.7 3.3 0.5 2.8 5 AIA Group Hong Kong Financials 3.3 3.0 2.0 1.0 6 HDFC Bank India Financials 1.4 2.9 0.2 2.7 7 POSCO Korea Materials 3.4 2.5 0.7 1.8 8 DBS Group Holdings Singapore Financials 1.7 2.2 0.8 1.4 9 Tata Motors India Consumer Discretionary 1.2 2.1 0.2 1.9 10 KIA Motors Korea Consumer Discretionary 0.6 2.0 0.4 1.6 28.5 31.6 15.1 16.6 Stock Name Country Sector 1 Samsung Electronics Korea 2 Taiwan Semiconductor Manufacturing Number of Stocks: Portfolio: 84 Benchmark: 595 Top 20 Holdings 48.0 Top 30 Holdings 60.5 * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management, as at 30 Sep 2014 The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. The holdings represent the current holdings of the fund. However, it cannot be assumed that these types of investments will be available to or will be selected by the fund in the future. 35 Portfolio characteristics at 30 September 2014 Portfolio Benchmark* Portfolio Benchmark* Dividend Yield 1.9 2.5 Market Capitalisation (US$m) 36,202.6 38,640.9 Price / Earnings 12.9 12.5 Hist. 3yr Sales Growth 16.6 13.2 P/E using FY1 Estimates 12.5 11.9 Hist. 3yr EPS Growth 18.9 8.4 Price / Cash Earnings 8.7 8.0 Est. 3-5 Yr EPS Growth 15.8 12.6 Price / Book 1.7 1.5 Return of Assets 9.8 8.5 Price / Sales 1.1 1.1 Return of Equity 17.8 15.7 Operating Margin 19.7 20.0 Predicted Tracking Error 2.75 Net Margin 16.8 17.8 Predicted Beta 1.09 LT Debt / Capital 26.2 22.7 * MSCI AC Asia ex Japan (NDR) Source: J.P. Morgan Asset Management / MSCI & FactSet, as at 30 Sep 2014 The above portfolio characteristics are shown for illustrative purposes only and are subject to change without notice. 36 Asia-Pacific Performance Mkt Cap Yield (%) PBV (x) USD bn 2014 2015 2016 2014 2015 2016 2015 2015 2014 2015 2016 1M 3M YTD MSCI Asia Pacific Index MSCI Asia Pacific ex Japan Index MSCI Asia Index 6,704 14.1 13.0 11.8 12.1 9.1 9.8 2.8 1.4 10.5 10.7 10.9 -2.0 -1.7 -2.5 4,063 13.2 12.2 11.1 8.3 7.9 9.8 3.4 1.5 11.9 12.0 12.2 -2.3 -1.2 -0.2 5,750 14.0 12.7 11.5 13.4 10.0 10.1 2.5 1.3 10.3 10.5 10.7 -1.9 -1.3 -1.6 MSCI Asia ex Japan Index 3,109 12.7 11.6 10.5 9.4 9.1 10.3 2.9 1.4 11.7 11.8 11.9 -2.3 -0.2 2.2 Australia 934 14.9 14.5 13.4 4.4 3.2 7.9 5.0 1.9 12.5 12.8 13.2 -2.5 -4.5 -7.5 China 831 10.1 9.4 8.4 7.9 8.0 11.3 3.4 1.3 14.1 13.7 13.8 1.1 7.1 4.7 Hong Kong 388 13.2 14.5 12.7 24.1 -8.9 9.2 3.2 1.2 9.6 8.3 8.2 -4.2 2.7 2.0 India 272 18.9 16.4 14.1 11.0 15.4 16.4 1.6 2.6 15.3 15.8 16.3 -6.0 -0.8 21.9 24.1 31 Dec 2014 Indonesia P/E (X) EPS Growth (%) ROE (%) USD Performance 105 16.4 14.8 13.0 8.3 10.5 14.0 2.7 2.9 20.2 19.6 19.6 -0.5 0.4 Japan 2,641 15.9 14.3 13.0 20.1 11.4 9.8 2.0 1.3 8.7 9.0 9.3 -1.5 -2.5 -5.7 Korea 559 11.6 9.5 8.8 -0.6 21.5 7.9 1.5 0.9 8.8 9.8 9.7 -3.2 -8.7 -12.6 Malaysia 137 16.3 15.0 13.8 -3.2 8.7 9.0 3.3 1.8 11.7 12.0 12.2 -6.6 -11.1 -13.4 New Zealand 20 20.3 19.0 17.6 5.7 6.8 8.0 4.8 1.9 10.3 9.9 10.5 3.0 2.1 2.6 Philippines 49 21.3 18.9 16.9 6.1 12.7 12.1 2.3 2.8 14.5 14.9 15.2 0.0 0.6 23.7 Singapore 195 14.5 13.6 12.3 6.7 7.1 10.1 3.7 1.3 9.5 9.6 10.1 -0.9 -1.0 -0.6 Taiwan 481 14.2 13.2 12.3 23.7 7.4 8.3 3.5 1.7 13.2 13.1 13.2 -2.2 1.7 6.9 Thailand 92 14.8 13.1 11.5 5.5 12.4 14.3 3.4 1.9 14.2 14.6 15.3 -7.2 -6.4 13.3 MSCI AC World Index 36,893 16.1 14.9 13.3 6.2 8.3 11.7 2.6 1.9 12.7 12.8 13.3 -2.0 0.1 2.1 MSCI Europe Index MSCI EM (Emerging Markets) Index MSCI United States Index 8,203 15.2 14.0 12.6 2.8 8.9 11.6 3.8 1.6 11.3 11.7 12.3 -4.3 -4.6 -8.6 652 9.6 9.2 8.2 -7.6 4.8 11.6 4.2 1.0 11.7 11.3 11.5 -10.1 -10.6 -17.6 19,315 18.0 16.7 14.8 6.6 8.0 12.3 2.0 2.5 15.2 15.1 15.7 -0.5 4.3 11.1 Note: The above data are compiled based on the MSCI AC Asia Pacific universe of stocks with which IBES forecasts are available. Fiscal year of each company is calendarized to December as the year-end. The market capitalization for countries, sectors and the region are free-float adjusted. Source: IBES Consensus, MSCI, FactSet. As at 31 Dec 2014. AC is All Countries 37 Monitoring the Trend in Country EPS Forecasts (2014 and 2015) Asia Pacific ex-Japan 115 110 105 100 95 90 85 80 Feb 13 Australia 2015 105 100 2014 100 2014 Jan 14 Jul 14 Dec 14 95 Feb 13 Aug 13 Jan 14 Jul 14 Dec 14 Taiwan 2015 120 120 110 Jan 14 Jul 14 Dec 14 Indonesia 95 Feb 13 Aug 13 Jan 14 Jul 14 Dec 14 60 Feb 13 2014 Aug 13 Jul 14 Dec 14 115 110 105 100 95 90 85 80 75 70 Feb 13 120 105 130 115 2015 120 2014 90 90 Jan 14 85 Feb 13 80 Feb 13 Aug 13 Jan 14 Jul 14 Dec 14 Jan 14 Jul 14 2015 2014 Aug 13 Jan 14 Jul 14 Dec 14 Jul 14 Dec 14 2015 105 2014 Aug 13 Jan 14 2014 100 Jul 14 Dec 14 95 Feb 13 Aug 13 Jan 14 Source: I/B/E/S, as at 31 Dec 2014 Notes: All year ends are for December except Australia which is for June. EPS figures are normalized, starting at 100 on base date Feb 2013 for ease of comparison. These numbers are directly from IBES aggregate and may differ from those in the growth expectations pages where changes are made for exceptional items. This dashboard aims to show changes in earnings expectations. Countries' earnings revisions are in local currency whereas APxJ regions' earnings revisions are in US$. 38 Dec 14 110 2015 100 2014 Aug 13 Philippines 140 110 Dec 14 Jan 14 India 100 Jul 14 95 Feb 13 110 95 Aug 13 2015 70 Malaysia 2015 Dec 14 Thailand 80 2014 100 Aug 13 Jul 14 90 105 95 Jan 14 100 2015 110 100 Aug 13 Korea 125 115 2014 90 Feb 13 2014 100 95 Aug 13 2015 110 2015 105 2014 110 120 115 110 105 100 95 90 85 Feb 13 115 110 105 115 90 Feb 13 Hong Kong 115 2015 China 105 Singapore 110 Monitoring the Trend in Sector EPS Forecasts (2014 and 2015) Asia Pacific ex-Japan 115 110 105 100 95 90 85 80 Feb 13 Consumer Discretionary 2015 2014 Aug 13 Jan 14 Jul 14 Dec 14 Financials Consumer Staples 110 2015 105 100 2014 95 Aug 13 Jan 14 Jul 14 Dec 14 120 115 110 105 100 95 90 85 Feb 13 Materials Telecom 115 110 105 100 95 90 85 80 75 70 65 Feb 13 105 2015 110 2014 90 90 Aug 13 Jan 14 Jul 14 Dec 14 Jul 14 Dec 14 75 Feb 13 Aug 13 Jan 14 Jul 14 Dec 14 105 2015 2015 95 2014 85 75 2014 65 Aug 13 Jan 14 Jul 14 Dec 14 55 Feb 13 105 100 95 90 85 80 75 70 65 Feb 13 2015 2014 Aug 13 Jan 14 Jul 14 Aug 13 Jan 14 Jul 14 Dec 14 120 115 110 105 100 95 90 85 80 Feb 13 2015 2014 Aug 13 Jan 14 Jul 14 Utilities 110 2015 105 2015 2014 100 2014 95 Aug 13 Jan 14 Jul 14 Dec 14 90 Feb 13 Aug 13 Jan 14 Jul 14 Dec 14 Source: I/B/E/S, as at 31 Dec 2014 Notes: All year ends are for December. EPS figures are normalized, starting at 100 on base date Feb 2013 for ease of comparison. These numbers are directly from IBES aggregate and may differ from those in the growth expectations pages where changes are made for exceptional items. This dashboard aims to show changes in earnings expectations. Sectors’ earnings revisions are in local currency whereas APxJ regions' earnings revisions are in US$. 39 Dec 14 Information Technology 115 80 Jan 14 70 Feb 13 Industrials 85 Aug 13 2014 80 95 2014 2015 100 100 2015 Energy 120 Health Care 115 90 Feb 13 115 110 105 100 95 90 85 80 75 Feb 13 Dec 14 Pacific Regional Group CIO, Asia Pacific Ted Pulling Pacific & Regional India Australia ASEAN Hong Kong Rukhshad Shroff Raj Nair Hong Kong James Ewinger^ Tim Wood Singapore Pauline Ng Sarinee Sernsukskul Chang-qi Ong Stacey Neo Isaac Thong India Harshad Patwardhan Amit Gadgil Karan Sikka Praveen Kotian Hong Kong Ted Pulling Jeffrey Roskell Victor Lee Aisa Ogoshi^ James Ewinger^ Joanna Kwok Sonia Yu Marc Franklin Julie Ho Ruben Lienhard David Hanbury Japan Greater China Korea Tokyo Shoichi Mizusawa Daisuke Nakayama Koji Namiki Miyako Urabe Eiji Saito Nicholas Weindling Oliver Cox Naohiro Ozawa Hong Kong Howard Wang Emerson Yip Lilian Leung Song Shen Shumin Huang Hong Kong David Choi John Cho Singapore Michael Koh Desmond Loh Japan Goro Fukami Michiko Sakai Central Dealing Portfolio Analysis Client Portfolio Management Hong Kong Hong Kong London Hong Kong Lee Bray Clement Lui Sherene Ban Dennis Eldridge Yasuko Sato Erina Jindai Pinakin Patel Constance Wong Janet Tsang Julian Wong Japan Hong Kong Robert Lloyd Aisa Ogoshi^ Chief Operating Officer Taiwan Behavioural Finance Hong Kong Mark Davids Geoff Hoare Alice Wong Korea Jacob Kim Alex Lee Joseph Kwon Japan Oliver Cox William Tong Andy Kung James Yeh Pedro Tai Renee Lin Vincent Yen Wanchen Chang Connie Shen Penny Tu Neil Sun Vincent Yu Bonny Weng Yvonne Lee Hong Kong Shanghai Christopher Spelman CIFM JV - 16 Equity PMs - 30 Analysts Junko Kitamura ^ Country specialists who also manage regional portfolios [HK Compliance Approved – 23/7/2014. Last Updated – 28/10/2014] Source: J.P. Morgan Asset Management. As at 30 Sep 2014 There can be no assurances that the professionals currently employed by J.P. Morgan Asset Management will continue to be employed by J.P. Morgan Asset Management or that the past performance or success of any such professional serves as an indicator of such professional’s future performance or success. 40 This is a promotional document and as such the views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the product(s) or underlying overseas investments. Both past performance and yield may not be a reliable guide to future performance. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment product(s), there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its affiliates worldwide. You should note that if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also take note that information and data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA Privacy Policy which can be accessed through the following website http://www.jpmorgan.com/pages/privacy. Investment is subject to documentation which is comprised of the Investment Trust Profiles and Key Features and Terms and Conditions, copies of which can be obtained free of charge from JPMorgan Asset Management Marketing Limited. Issued by JPMorgan Asset Management Marketing Limited which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 288553. Registered address: 25 Bank St, Canary Wharf, London E14 5JP. Compliance approval number: 4d03c02a8001f15d . 41
© Copyright 2024