J.P. Morgan bond funds

Transcription

1 NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE J.P. Morgan bond funds Instruments for increasing income and diversification potential

2 Find the answers inside What is a bond? p. 2 Become an informed bond investor Why invest in bonds? p. 4 Discover three reasons to add bonds to your portfolio Why bond mutual funds? p. 6 Diversify and simplify with J.P. Morgan Why J.P. Morgan Funds? p. 8 Access one of the world s largest fund families How are my bond funds p. 10 managed? Put our professionals and processes to work for you Fine tune your portfolio with bonds Bonds aren t only for older, more conservative investors. No matter what your age or circumstances, your investment plan is unlikely to be complete without them. Bonds normally earn more than cash and fluctuate less than stocks. As part of a broadly diversified portfolio, they may offer opportunities to increase your income and total return potential while also reducing overall risks. Whether you seek higher-yielding corporate bonds, tax-exempt municipal bonds or the relative safety of U.S. Treasury bonds, J.P. Morgan manages a variety of solutions with specific investment objectives. U.S. equity International equity Investing in bonds involves certain risks. Bond prices generally fall when interest rates rise. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Specialty Asset allocation funds Tax-exempt fixed income Taxable fixed income

3 Diversified investors need bonds A well-orchestrated portfolio includes a broad mix of fixed income instruments, more commonly known as bonds If you re conservative and investing primarily for income, bonds typically pay higher interest rates than CDs, money market funds or other short-term investments. If you re aggressive and investing primarily for growth, bonds have the potential to offset stock market risks. Because bonds often rise when stocks decline, they may help you cushion volatility and limit losses during stock market downturns. Positive bond returns in a negative stock market Stocks and bonds tend to react differently to economic conditions. For example, bonds have posted positive returns in each year stocks declined since 1980, helping diversified investors offset losses with gains. Bonds Stocks 6.26% 8.95% 11.63% 8.42% 10.27% 5.08% -4.97% -3.10% -9.11% % % Key insight % Source: J.P. Morgan Asset Management. Stocks represented by the S&P 500 Index, an unmanaged broad-based index that is used as a representation of the U.S. stock market. It includes 500 widely-held common stocks. Bonds represented by the Barclays Capital Aggregate Bond Index, an unmanaged index which represents a mix of maturities. It is a replica (or model) of the U.S. government bond, mortgage-backed securities and corporate bond markets. Total return figures assume the reinvestment of dividends. An individual cannot invest directly in an index. Past performance is not indicative of future results. Stocks and bonds can move in opposite directions over the short term which is why diversified investors own both over the long term.

4 Bonds An essential part of any well-rounded portfolio A bond is a loan and you re the lender Governments and corporations issue bonds to raise capital for their operations. When you invest in a bond, you loan money to the issuer, who agrees to pay you a fixed rate of interest for a set period of time. When that period expires, the bond matures and the issuer repays your original loan amount. Bonds vary by maturity and credit quality Like any investment, bond returns normally increase with risks, as measured by many factors including maturity and credit quality: Maturity can range from as short as a few months to as long as 30 years or more. In general, the longer a bond s maturity, the higher its interest rate and its risks. Credit quality reflects an issuer s financial ability to pay regular interest and repay principal at maturity. Because higherrated investment grade bonds are considered safer, they typically pay less interest than lower-rated high yield or junk bonds. A broad choice of fixed income instruments U.S. government bonds Corporate bonds Municipal bonds International bonds Issued by U.S. Treasury and federal agencies Guaranteed by the U.S. government or backed by its agencies Interest is taxable; U.S. Treasury bonds are exempt from state and local taxes Issued by companies to finance business activities Credit quality varies by issuer Interest is taxable Issued by state and local governments to fund public projects Credit quality varies by issuer; may be insured Interest is exempt from federal and, in some cases, state and local taxes* Issued in developed foreign countries or emerging markets Generally involve more risk than U.S. bonds Interest is taxable *For some investors, income from municipal bonds may be subject to the alternative minimum tax. Any capital gains are federally taxable. 2 J.P. MORGAN BOND FUNDS

5 Bond returns = income + price changes A bond s interest payments are only part of its total return because price changes also affect the value of your investment: Interest payments. Bond funds belong in most portfolios even if you don t need the income. Regular interest payments help to bolster returns during down markets and can be reinvested in more fund shares to take advantage of compounded earnings. Price changes. Bonds are subject to gains or losses if sold before maturity, although their prices usually fluctuate less than stocks. As a rule, bonds move in the opposite direction of interest rates. When interest rates rise, bond prices fall. When interest rates fall, bond prices rise. And the longer a bond s maturity, the more sensitive it may be to interest rate movements. Key insight High-quality bonds have earned positive returns in 34 out of 36 years, providing a solid foundation for diversified portfolios.* The relationship between bond prices and interest rates *Source: Based on Barclays Capital Aggregate Bond Index, Interest rates Bond prices Interest rates Bond prices When interest rates rise New bonds are issued at higher rates, making current bonds less valuable. When interest rates fall New bonds are issued at lower rates, making current bonds more valuable. The above illustration is for illustrative purposes only. J.P. MORGAN ASSET MANAGEMENT 3

6 Why bonds? Three reasons to invest in bonds 1. To earn regular income The interest rate on a bond is known as its coupon. For example, a $100,000 bond with a 5% coupon would pay $5,000 in interest annually, or about $417 each month a regular income stream for you to spend or reinvest. 2. To potentially offset stock risks and stabilize your portfolio Bonds offer two possible ways to counter stock risks. First, their returns aren t closely correlated, meaning bonds may be up when stocks are down to smooth out overall portfolio performance. Second, bond income may provide an ongoing source of returns that may act as a cushion against unpredictable market fluctuations. 3. To expand portfolio diversification The bond market offers opportunities to diversify across many types of securities short-term and long-term, high quality and high yield, U.S. and international. Diversification exposes you to return potential from multiple market sectors while seeking to limit risk from any one. And because different bonds tend to perform well at different times, you increase the likelihood of offsetting weakness from some investments with strength from others. The power of diversified investing History shows that adding bonds to a stock portfolio produced less dramatic highs and lows, without a major drop-off in annual returns. Your financial professional can recommend a bond allocation to suit your individual goals, timeframe and risk tolerance. n Average return n Largest gain n Largest loss 40% 30% 20% 10% 0% -10% -20% -30% -40% 37.53% 12.44% 11.79% % 33.72% 100% stocks 80% stocks 20% bonds % 29.91% 11.14% 10.49% 60% stocks 40% bonds % 28.19% 40% stocks 60% bonds % 30.41% 9.84% 9.19% 20% stocks 80% bonds 32.62% -3.21% -2.92% 100% bonds Source: Constructed by J.P. Morgan Asset Management using data Largest from Lipper, loss Inc. From 1979 to 2011, 12-month annual Largest gain periods with dividends reinvested. Stocks measured by the S&P 500 Average Index, a capitalization-weighted index that measures the performance of 500 large-capitalization domestic stocks representing all major industries. Bonds measured by Barclays Capital U.S. Aggregate Bond Index, an index that represents a mix of maturities. It is a replica (or model) of the U.S. government bond, mortgage-backed securities and corporate bond markets. It is not possible to invest directly in the indexes shown. The chart is shown for illustrative purposes only. Past performance is no guarantee of future results. 4 J.P. MORGAN BOND FUNDS

7 Building a core + opportunistic bond portfolio Bond holdings need to be as diversified as stocks to create the right blend of lower-risk and higher-yielding securities. Step 1: Anchor your core portfolio in quality. High-quality, investment grade bonds seek the consistency needed to generate regular income, stabilize portfolios and preserve capital during down markets. Step 2: Diversify your core by investment approach some top-down, some bottom-up. Step 3: Add opportunistic bonds with the potential to increase income and total returns while broadening overall diversification. Key insight Many bond investors under-diversify, taking on too much risk or not enough return potential. The solution: Work with a financial professional to find your mix of core + opportunistic. Start with quality core, then add opportunitistic Extended High yield International Emerging markets Multi-sector Go anywhere investments with the flexibility to pursue opportunities wherever they arise OPPORTUNISTIC typically 20-30% Seeks return potential Pursue higher income Increase growth potential Cushion against inflation CORE typically 70-80% Seeks portfolio stability High quality Low volatility Low correlation to stocks Top-down Selects bonds based primarily on big picture analysis of economic and market conditions Bottom-up Selects bonds based primarily on in-depth analysis of their fundamentals and characteristics J.P. MORGAN ASSET MANAGEMENT 5

8 Bond mutual funds Broadly diversified, professionally managed investments Key insight Mutual funds seek to deliver all the advantages of a diversified bond portfolio without the costs or complexities of managing it yourself. Diversify with mutual funds Mutual funds pool money from many investors to create a diversified portfolio of securities. One fund might own hundreds of different bonds so no single holding has too much influence on total returns. That s more diversification than you can likely achieve on your own for less than it usually costs to buy an individual bond. Take advantage of professional management Fixed income markets are large and complex, making it difficult for investors to research, trade and manage their own individual bonds. One simple solution is to invest in mutual funds managed by professionals who analyze markets, make buy-sell decisions and monitor your investments on a daily basis. Individual bonds vs. bond mutual funds Individual bond Bond mutual fund Minimum initial investment Daily professional management Diversification Frequency of income Reinvestment of income Transaction costs Opportunities for tax savings Time commitment Usually $5,000 or more per bond No, bondholder makes all key decisions No, risk is concentrated in a single issue Semi-annually in most cases No, can t take advantage of compounding Higher because trades are usually smaller No, only one bond to sell at a profit or loss High, requires specialized knowledge and resources Only $1,000 for most funds Yes, managers actively seek to reduce risk and enhance return Yes, risk is spread across many issues Monthly in most cases Yes, can buy additional fund shares if income not needed Lower due to volume discounts on institutional-size trades Yes, managers can sell certain bonds to limit taxable gains Low, fund handles most details, including recordkeeping 6 J.P. MORGAN BOND FUNDS

9 J.P. Morgan Asset Management An experienced bond fund manager A legacy of leadership and innovation We draw on our long history of serving affluent, sophisticated investors to deliver solutions for you today. For example, portfolio management systems originally developed for large pension plans are now applied to all J.P. Morgan bond funds giving you access to tools and technologies once reserved for institutional clients. Depth and breadth of fixed income capabilities We cover the full spectrum of bond market sectors, maturities, credit qualities and geographic regions for both taxable and tax-exempt investing. Whether you wish to increase yields, reduce taxes or control risk, you ll find plenty of opportunities to diversify the portion of your portfolio allocated to fixed income. Dedicated teams of fixed income specialists J.P. Morgan Asset Management leverages the insights of 226 fixed income professionals worldwide to manage your bond investments.* Because bond markets are broad and complex, our teams specialize in certain aspects of portfolio management, from macro-level strategy to research and security selection: Our macro strategy team analyzes the economy, interest rates and other factors affecting the overall bond market. Credit and quantitative analysts conduct proprietary research on every bond considered for a portfolio. Sector specialist teams combine a depth of expertise with a diversity of opinions to identify attractive investment opportunities within their respective fields. Key insight J.P. Morgan Asset Management is among the world s most well-respected financial institutions, with a reputation for integrity, stability and leadership. *As of 12/31/11. Who is J.P. Morgan Asset Management? Over a century serving institutional investors, financial advisors and affluent individuals around the world Strong global organization with over $1.3 trillion in assets under management 1 More than 720 investment professionals in 23 countries, including almost 300 career research analysts 2 Extensive product capabilities, with well over 100 mutual funds Sixth largest mutual fund firm in the U.S. 3 1 Based on AUM for the Asset Management (JPMAM, PCS, PB) division of J.P. Morgan Chase & Co. as of 12/31/11 2 J.P. Morgan Asset Management as of 12/31/11 3 Lipper, Inc., June 2011 e J.P. MORGAN ASSET MANAGEMENT 7

10 J.P. Morgan Funds Your choice of core and opportunistic bond funds Tax-exempt yields and their taxable equivalents One of the world s largest, most diverse fund families J.P. Morgan Asset Management s history of innovation is reflected in our diverse bond fund lineup. From the industry s first inflation-protected municipal bond portfolio to a broad range of core and opportunistic strategies, you receive a breadth of solutions few other firms can match. Use this chart to determine which bond fund provides more income after taxes. For example, a taxable bond fund must yield 6% to match a municipal bond fund yielding 4%, assuming the 33% federal tax bracket. Tax-exempt yield 3.0% 4.0% 5.0% 6.0% Taxable-equivalent yield Federal tax bracket 25% 28% 33% 35% 4.0% 4.2% 4.5% 4.6% 5.3% 5.6% 6.0% 6.2% 6.7% 6.9% 7.5% 7.7% 8.0% 8.3% 9.0% 9.2% Should you invest in taxable or tax-exempt bond funds? You and your financial professional can answer that question by considering several others: What is your tax bracket? The higher your federal tax rate, the more you may benefit from tax-exempt municipal bond funds. Are state income taxes a concern? Many states don t tax their own residents on income earned from municipal bonds issued in that state. Are you investing in an IRA or other tax-advantaged accounts? If so, consider taxable bond funds to postpone taxes on investment earnings until withdrawals begin. What is the taxable-equivalent yield? Although municipal bonds typically pay lower interest rates, they may provide higher after-tax income than similar taxable bonds. When comparing funds, review the taxable-equivalent yield. This is what you must earn on a taxable bond to equal a tax-exempt yield. Source: J.P. Morgan Asset Management. The above chart is shown for illustrative purposes only. J.P. Morgan Distribution Services, Inc., its parent and affiliates do not provide legal or tax advice. This information is provided for general educational purposes only. This is not to be considered legal or tax advice. Investors should consult with their legal or tax advisors for personalized assistance, including information regarding any specific state law requirements. 8 J.P. MORGAN BOND FUNDS

11 Key insight With experienced professionals covering major markets worldwide, J.P. Morgan is a manager you can trust for building a well-rounded bond portfolio. J.P. Morgan core and opportunistic bond funds J.P. Morgan offers core bond funds for the foundation of your portfolio, along with opportunistic funds designed to enhance diversification and return potential. Your financial professional can help you choose the funds meeting your unique needs. Core bond funds Diversified short-term High-quality short-term Diversified intermediate High-quality intermediate Short Duration Bond Short Term Bond II Short-Intermediate Municipal Bond Managed Income Treasury & Agency Core Bond Core Plus Bond Intermediate Tax Free Bond Municipal Income Tax Free Bond Total Return Multi-Sector Income Government Bond Mortgage-Backed Securities Opportunistic bond funds Stability Inflation protection High income Absolute return International State-specific municipal bond Limited Duration Bond Taxable bond fund Real Return Tax Aware Real Return Inflation Managed Bond Tax-exempt bond fund High Yield Tax Aware High Income Credit Opportunities Floating Rate Income Fund Strategic Income Opportunities Tax Aware Income Opportunities Emerging Markets Debt International Currency Income Ex-G4 Currency Strategies Arizona California Michigan New York Ohio J.P. MORGAN ASSET MANAGEMENT 9

12 Bond fund management Experienced professionals, backed by exceptional research Conducting proprietary research to maintain an information advantage Rather than rely on bond agency ratings, our career analysts conduct original credit research on each issue and issuer. We thoroughly analyze a security s finances and fundamentals, while using sophisticated technologies to estimate the impact of interest rate changes on trades under consideration. The desired result is an information advantage that translates into a performance edge. Value-driven security selection powered by research insights J.P. Morgan bond funds pursue returns primarily from informed security selection, not market timing, sector bets or interest rate speculation that can inflate risks. Through rigorous analysis and disciplined portfolio construction, we target the market s most compelling values bonds with lower prices and higher return potential than comparable issues. Pursuing strong returns through active management As active managers, we seek better results than simply mirroring a market index or holding bonds until maturity. Our approach empowers fund managers to pursue promising investments anywhere in their defined universe and to strategically trade bonds as economic conditions warrant. Disciplined, time-tested portfolio construction Top-down analysis Bottom-up research Value-driven security selection Bond portfolio Assess macroeconomic factors, determine sector allocations and identify favorable maturities Conduct quantitative research, analyze credit quality and evaluate bond structure Capture specialist teams best ideas and the market s most compelling values Diversify holdings while employing strict risk controls 10 J.P. MORGAN BOND FUNDS

13 Sharing insights globally to bring you our best ideas Fixed income specialists work in distinct teams but also exchange information with other bond and stock professionals throughout our global organization. As a result, analysts in one sector can tap into the expertise of their colleagues worldwide to better assess a bond s current value and future prospects. Managing risk at every step of the process At J.P. Morgan, managing risk is essential to maximize total returns and provide downside protection. Before buying, we confirm that return potential justifies the risks being taken and that each bond contributes positively to portfolio diversification. After purchase, we continue monitoring securities to determine if and when to sell. Institutional pricing advantages for individual investors As one of the world s largest fixed income investors, J.P. Morgan Asset Management conducts high-volume transactions that may help reduce costs and enhance total returns: Over $866 billion of fixed income trading power gives us the leverage to negotiate favorable prices for bonds bought and sold on your behalf.* Relationships with more than 100 bond dealers provide early access to investment opportunities and the flexibility to shop around for the best values. Our dedicated fixed income trading desk ensures that transactions are executed promptly and cost-effectively. *As of December 31, 2011, based on discretionary managed fixed income assets. Key insight J.P. Morgan s professionals perform in-depth analysis to identify opportunities and uncover risks a less informed investor might overlook. J.P. MORGAN ASSET MANAGEMENT 11

14 J.P. Morgan bond funds Insight + Process = Results Insight Why bonds? Higher return potential than cash, lower risk than stocks Regular income to spend, reinvest and cushion stock market volatility An essential part of any well-diversified portfolio Process Why J.P. Morgan Funds? Access to one of the world s largest, most respected bond managers Dedicated team of 226 fixed income specialists Career analysts conduct independent research to provide you with an information advantage Processes and professionals tested over multiple market cycles Results Why it matters to you? Focused on consistent long-term returns vs. benchmarks and peers Strict controls for managing risks and avoiding major bets Seek to capture gains in up markets while cushioning volatility and limiting losses during down markets Increase your income and diversification potential Whether young or old, aggressive or conservative, working or retired, nearly every investor could use extra income and additional diversification. No matter what your goals, J.P. Morgan bond funds may help you achieve them with the insight and process to pursue your desired results. 12 J.P. MORGAN BOND FUNDS

15 Next steps Compose your bond portfolio Meet with a financial professional to determine the right mix of core + opportunistic Select the J.P. Morgan bond funds meeting your individual needs For more information about maximizing the income and diversification potential of bond funds, please consult your financial professional or contact us at or J.P. MORGAN ASSET MANAGEMENT 13

16 NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE RISKS ASSOCIATED WITH INVESTING IN THE FUNDS Because these funds primarily invest in bonds, they are subject to interest rate risks. Bond prices generally fall when interest rates rise. Some funds may invest in futures contracts and other derivatives. This may make the funds more volatile. For some investors, income may be subject to the Alternative Minimum Tax. Capital gains, if any, are federally taxable. Income may be subject to state and local taxes. Arizona Municipal Bond Fund California Tax Free Bond Fund Michigan Municipal Bond Fund New York Tax Free Bond Fund Ohio Municipal Bond Fund. Most of the funds investments will be concentrated within one state and the performance will be affected by the fiscal and economic health of that state. Therefore, the funds could experience more volatility. Emerging Markets Debt Fund. Foreign investing involves special risks, including economic, political and currency instability especially in emerging markets. Most of the fund s investments will be concentrated to a smaller pool of issuer types and may invest more than 5% of its assets in a single issuer. The fund may invest in junk bonds, which are highly sensitive to economic news, and whose issuers have a less secure financial position. The fund may also invest in certain securities such as non-investment grade bonds, futures contracts and other derivatives, which contribute to fund volatility. These risks make emerging market securities more volatile and less liquid than securities issues in more developed countries. Government Bond Fund. Under normal circumstances, the fund will invest at least 80% of its assets in bonds issues by the U.S. government and its agencies and instrumentalities. For purposes of this policy, assets mean net assets plus the amount of borrowings for investment purposes. Ordinarily, such bonds will have principal and interest guaranteed by the U.S. government or its agencies and instrumentalities, be subject to repurchase agreements, or represent an interest in or be secured by mortgages that are issued or guaranteed by certain U.S. government agencies or instrumentalities. High Yield Fund Credit Opportunities Fund. Securities rated below investment grade are called high-yield bonds, non-investment grade bonds, below investment-grade bonds or junk bonds. They generally are 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 prices will decline. Limited Duration Bond Fund Mortgage-Backed Securities Fund. The fund invests in collateralized mortgage obligations (CMOs). CMOs are issued in multiple classes, and each class may have its own interest rate and/or final payment date. A class with an earlier final payment date may have certain preferences in receiving principal payments or earning interest. As a result, the value of some classes in which the Fund invests may be more volatile and may be subject to higher risk of nonpayment. The fund invests in Mortgage-related and asset-backed securities which are subject to certain other risks. The value of these securities will be influenced by the factors affecting the housing market and the assets underlying such securities. As a result, during periods of declining asset value, difficult or frozen credit markets, swings in interest rates, or deteriorating economic conditions, mortgage-related and asset-backed securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. Additionally, during such periods and also under normal conditions, these securities are also subject to prepayment and call risk. When mortgages and other obligations are prepaid and when securities are called, the fund may have to reinvest in securities with a lower yield or fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss. Some of these securities may receive little or no collateral protection from the underlying assets. The risk of such 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. Municipal Income Fund. Under normal circumstances, the fund invests at least 80% of its net assets in municipal bonds, the income from which is exempt from federal income tax, This is a fundamental policy. For the purposes of this policy, the fund s net assets include borrowings by the fund for investment purposes. The fund also invests in mortgage-backed securities and asset-backed securities, as well as auction rate securities and restricted securities. The securities in which the fund invests may have fixed rates of return or floating or variable rates. Real Return Fund Tax Aware Real Return Fund. The fund may be subject to the risk that its inflation-linked derivative contracts will be with a limited number of counterparties. This may result in certain concentration risk, including counterparty liquidity, deflation and pricing risk. Short Term Bond II Fund and International Currency Income Fund. The funds may invest in international fixed income 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. Strategic Income Opportunities Fund. Securities rated below investment grade are called high-yield bonds, non-investment grade bonds, below investment-grade bonds or junk bonds. They generally are 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 prices will decline. The fund may invest in international fixed income 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. 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 or 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. Tax Aware High Income Fund. Securities rated below investment grade are called high-yield bonds, non-investment grade bonds, below investment-grade bonds or junk bonds. They generally are 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 prices will decline. The fund s tax aware strategies may reduce the amount of taxable income that you recognize as a result of your investment in the fund but will not eliminate it. These strategies require trade-offs that reduce pre-tax income. Total Return Fund. The fund may invest in foreign securities, which involve special risks, including economic, political and currency instability especially in emerging markets. The fund may invest in junk bonds, which are highly sensitive to economic news, and whose issuers have a less secure financial position. Contact JPMorgan Distribution Services, Inc. at for a fund prospectus. You can also visit us at Investors should carefully consider the investment objectives and risk 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. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. 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 ser vices 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, JPMorgan Investment Management Inc., Security Capital Research & Management Incorporated and JPMorgan Alternative Asset Management, Inc. JPMorgan Chase & Co., March 2012 BRO-FIXINCAC