J.P. Morgan Private Bank Outlook 2021

J.P.
Morgan Australia Market – Private Bank Outlook 2021

February 2021
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Strictly Private and Confidential

Speakers
MODERATED BY
Oliver Bareau
Managing Director – Head of Australia
J.P. Morgan Private Bank
Tom Reid
Executive Director – Global Investment Specialist
FEATURING
Alex Wolf
Executive Director – Head of Investment Strategy for Asia
Chris Baggini
Managing Director – Global Head of Equity Strategy
Adam Margolis
Executive Director – Head of Cross Asset Solutions for Asia
1
Agenda
Page
Macro Overview & Credit 3
Equities & Megatrends 18
FX, Commodities, Volatility & Risk Management 36
Summary 49
FAQs 54
Megatrends Appendix 60
Disclaimers 76
2
MACRO
The world will heal. Embrace the optimism.

How we’re thinking about investing in the shadow of COVID-19
Our view: Investment action:
The recovery will continue, especially as Ensure portfolios have adequate risk to
vaccines are distributed. benefit from a cyclical recovery
We prefer the U.S., Asia, and

Policy support will drive economic and
beneficiaries of stimulus. Central banks
investment outcomes.
are set to stay supportive for years.
Reduce cash. Use prudent leverage.

Large output gaps will keep inflation and rates
Move up the risk spectrum for yield. Look
subdued.
at High yield & Asia bonds.
Cyclical sectors to play catch-up in 2021,

Equities: neither bargain, nor bubble. Stocks
but secular growers to carry the day on a
should beat bonds.
multi-year horizon.
Use inexpensive FX hedging.

Years of pronounced USD strength are behind Consider non-USD assets including
us. Expect moderate USD weakness. Emerging Markets, e.g. Asia ex-Japan
equities.
3
MACRO
There has been a coordinated monetary response, and we expect more support to come
Developed economy central banks have implemented aggressive monetary easing measures
GLOBAL CENTRAL BANKS HAVE DEPLOYED MASSIVE STIMULUS
12-month change, USD billions Projected The coordinated effort among developed
8,000 market central banks has helped provide
European Central Bank stability and liquidity.
7,000 Bank of Japan  In addition to traditional monetary policy tools

(including interest rate cuts and a reduction in
Federal Reserve reserve requirements), central banks have
6,000 vowed to backstop a range of financial
markets, including those of sovereign and
corporate debt.
5,000
 Central bank balance sheets will grow as
central bankers buy assets in pursuit of
4,000
expansionary policy. There are long-term
concerns associated with that, but the short-
3,000 term stresses require immediate action.
 These efforts dwarf the post-Global Financial
2,000 Crisis policy response, in terms of both speed
and magnitude.
1,000
0
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22
Source: Federal Reserve, European Central Bank, Bank of Japan, Haver Analytics; projections from J.P. Morgan Investment Bank Research. Data is as of December 31, 2020, except Federal Reserve
as of November 30, 2020.
For illustrative purposes only. Estimates, forecasts and comparisons are as of the dates stated in the material. For illustrative purposes only. This does not reflect the performance of any
specific investment scenario and does not take into account various other factors which may impact actual performance. Simulated performance is not a reliable indicator of future
results.
4
MACRO
Policy rates in the U.S. and Europe are set to remain low for years
Both central banks remain committed to accommodative monetary policy to support the recovery
GLOBAL CENTRAL BANKS HAVE BEEN QUICK TO DEPLOY STIMULUS
Central Bank Rates, % Both the Fed and ECB stepped in with supportive
monetary policy to cushion the economic blow of
Fed funds rate
2.5% the COVID-19 outbreak.
Fed market expectations  As the crisis unfolded, the Fed cut rates by
150bps, implemented a new quantitate easing
2.0%
ECB deposit rate program, and changed how it thinks about
inflation.
ECB deposit rate
1.5% expectations  The Fed will now target an average inflation rate of
RBA cash rate 2% over time, rather than a 2% target (a level
which some viewed as a ceiling). This change
1.0%
RBA cash rate expectations means the Fed will be more tolerant of inflation,
and by extension, economic growth.
0.5%  The ECB similarly stepped in with a €1.35tn
Pandemic Emergency Purchase Program (PEPP),
increased the capacity of its targeted longer-term
0.0% refinancing operations (TLTRO) program, and
recommended that banks avert distributing
dividends for the time being.
-0.5%
 These measures, among others, are designed to
ease financial conditions and allow credit to flow to
-1.0% the real economy. We believe that these
'15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25
measures will be effective.
Sources: Federal Reserve, Reserve Bank of Australia, European Central Bank, Bloomberg Finance L.P., J.P. Morgan Private Bank. Data is as December 31, 2020. Market expectations for the
ECB represent the 1-day EONIA (the 1-day interbank interest rate for the Eurozone). “Today” refers to the date December 31, 2020.
results.
5
MACRO
Back to basics: the Fed is going to stay supportive until inflation and employment are at target
This is, arguably, the most important thing for investors to remember
UNITED STATES: GROWTH AND INTEREST RATES
% Borrowing costs are a key variable to
6% economic growth. The Fed is trying to
Cost to borrow exceeded maintain a wide gap between borrowing
trend growth in costs and potential growth.
5% 2000 and 2007
 Recessions tend to occur when the cost to
borrow exceeds the return that consumers
and businesses hope to earn with their
4%
borrowed money. This time around, the
Frictions recession has been sparked by an exogenous
building event – the COVID-19 pandemic.
3%
 Slack in the labor market will translate into
U.S. trend real GDP muted wage pressure, which will bolster the
2% growth (% YoY) Fed’s “lower for longer” stance.
 Over the long-term, we expect this
relationship to support a durable economic
1% IG real borrowing rate
(5yr real treasury yield + recovery.
average long-term spread)  Further, recent changes to the Fed’s
0% statement of goals to incorporate flexible
average inflation targeting (FAIT) further
suggest that interest rates may stay lower for
(1)% longer.
'97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19
Source: Haver Analytics, J.P. Morgan Private Bank Economics, J.P. Morgan Private Bank Fixed Income Strategy. Data is as of December 31, 2020.
results.
6
MACRO
We expect 10-year Treasury rates to move higher and the curve to steepen
Fed may anchor short term rates, but the long end could reprice higher with growth
We expect the 10-year Treasury yield at 1.50% by the end of 2021 We expect negative total return in 2021 for
Fed funds rate, % 10y Treasuries, as the carry is not enough
2.50 to outweigh the duration move.
 One of the most common ways to think
about 10-year Treasury rates is the
Market
geometric average of expected cash rates
2.00
over 10 years. We agree with the market
Revised outlook that cash rates over the next 5 years will be
low with FAIT. However, we disagree
1.50 Outlook- further out. Currently, the market prices
implied 10Y cash rates in 10 years time to be only half
rate - 1.50 of what the Fed sees as neutral (2.5%).
 Inflation swaps already suggest the Fed is
1.00 1.14
Market path credible in reaching its mandates, pricing
implied 10Y rate that inflation will average 2% over the next
decade.
0.50  Under the FAIT framework where the Fed
will wait for 2% realized inflation before
hiking, long term rates expected to rise
more than short term rates, leading the
-
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 curve to steepen.
Source: Bloomberg Finance L.P. Data as of February 2, 2021.

All case studies are shown for illustrative purposes only, and are hypothetical. Any name referenced is fictional. Information is not a guarantee of future results.
results.
7
MACRO
Cash is likely to be a drag for years to come – an erosion of purchasing power

Across the developed world, cash should continue to lead to negative real returns
HOLDING CASH IS EXPECTED TO ERODE PURCHASING POWER OVER THE NEXT FEW YEARS
Purchasing power of 100 units of local currency Cash can be an important allocation in
101 portfolios, but investors must acknowledge
that holding cash has an opportunity cost
$100 A$100 £100 and can erode purchasing power in certain
100 Purchasing power of $100 in cash
environments.
Purchasing power of A$100 in cash
 Cash rates across the developed world are
99 $99 Purchasing power of £100 in cash
A$98 expected to be near their effective lower
£98
bounds through 2023.
98
 At the same time, central banks project
$97 inflation to increase—in the U.S. and UK to
97 A$97
£96 nearly reach or exceed 2%; in Australia, the
RBA only sees price inflation reaching 1.8%
96 $96 by year-end 2022.
 Over the next 3 years, cash balances
95 A$95
should erode an average of 5% in value
£94
after adjusted for inflation.
94
93
2020 2021 2022 2023
Source: J.P. Morgan Private Bank , Bloomberg Finance L.P. Fed, RBA, and BoE inflation forecasts. Euro 2022 inflation number used for 2023 Data as of November 25, 2020.
results.
8
MACRO
The recovery has proved resilient despite the fiscal and health situation
The economy has powered through the third COVID wave in the U.S., and consumers have excess cash
THE RECOVERY CONTINUES DESPITE LIMITED FISCAL AMERICANS SIT ON A PILE OF CASH THAT MAY BE SPENT
SUPPORT AND A SPIKE IN COVID CASES LIMITING MOBILITY ONCE THE VACCINE IS FULLY ROLLED OUT
Year-over-year GDP Mobility Index (Jan/Feb 2020 baseline) $billions $ billions
4% 20 $1,400 $1,400
Personal Saving Exceeding Pre-
COVID Level $1,275
2% Personal Saving (Pre-COVID Level)
0 $1,200 $1,200
0%
-20 $1,000 $1,000
(2)%
-40 $800 $800

(4)%
Cumulative Excess Savings
(6)% -60 $600 $600
(8)%
-80 $400 $400
(10)% Economic activity (left)
Mobility (right)
-100 $200 $200
(12)%
(14)% -120 $0 $0
Jan '20 Mar '20 May '20 Jul '20 Sep '20 Nov '20 Jan '21 Jan '19 May '19 Sep '19 Jan '20 May '20 Sep '20
Source:.(Left) Federal Reserve Bank of New York, Haver Analytics, Google Mobility. Data is as of December 26, 2020 (Right) Wells Fargo, Haver Analytics. Data is as of November 2020.
results.
9
MACRO
Australia macro outlook

21-Mar 21-Jun 21-Sep 21-Dec
AUD/USD 0.75 0.73 0.72 0.71
GDP (%saar) 5 3.2 2.8 2.5
CPI (oya) 0.6 2.9 2 2
Policy rate (%) 0.1 0.1 0.1 0.1
China property and iron ore imports China imports from Australia
$USD, mil $USD, mil
y/y %, 3mma y/y %, 3mma copper (left side)
50% 25% 350 meats (left side) 12000
property sales (advanced 9 months, left side)
metal ores (right side)
iron ore imports (right side)
40% 20% 300 total (right side) 10000
30% 15% 250

8000
20% 10% 200
6000
10% 5% 150
0% 0% 4000
100
-10% -5% 2000

50
-20% -10%
Sep-2012
Aug-2015
Sep-2017
Aug-2020
Oct-2014
Oct-2019
Apr-2012
Jul-2013
May-2014
Apr-2017
Jul-2018
May-2019
Jan-2011
Jun-2011
Jan-2016
Jun-2016
Feb-2013
Mar-2015
Feb-2018
Mar-2020
Nov-2011
Dec-2013
Nov-2016
Dec-2018
0 0
Oct-09
Oct-10
Oct-11
Oct-12
Oct-13
Oct-14
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
Source: J.P. Morgan Research, China National Bureau of Statistics, China Customs, Australia Bureau of Statistics. Data as of December 31, 2020.
results.
10
MACRO
A weaker U.S. dollar generally benefits Emerging Market assets…

….due to easing financial conditions
NEGATIVE CORRELATION BETWEEN USD AND EM EQUITIES
Index Jan 1 2010 = 100 (both axes) The prospects of stronger global growth
140 220 heading into 2021 and a weaker U.S. dollar
U.S. Dollar Index (left axis) MSCI EM (right axis)
are tailwinds for emerging market assets.
200  Historically, periods of a weaker U.S. dollar
130 tend to coincide with outperformance by
180 emerging market assets broadly.
 One key reason is that a weaker USD eases
120 160 financial conditions for emerging markets that
have USD-denominated debt.
140  In addition, emerging markets will also likely
110 benefit from the prospect of COVID
120 vaccination progress and global cyclical
recovery in 2021.
100 100
80
90
60
80 40
'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21
Source: MSCI, FactSet. Data is as of January 4, 2021.
results.
11
CREDIT
Chinese sovereign bonds are in focus

Benefit from an all-time high interest rate differential, attractive risk-adjusted return, and a stable currency
INTEREST RATE DIFFERENTIAL RISK-ADJUSTED RETURN

% 10-year government bond yield, %
Difference (China minus U.S.) 12%
U.S.: 10yr Govt bond yield
6% Current yield (line represents historical standard
China: 10yr Govt bond yield deviation)
10%
5%
8%
4%
6%
3%
4%
2%
2%
1%
0%
0%
-2%
(1)%
-4%
(2)%
(3)%
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Sources: (Both) Wind, Haver Analytics. Data is as of November 30, 2020. CGB = Chinese Government Bond.
results.
12
CREDIT
Prudent leverage continues to be attractive

Low cash rates = a low hurdle rate
BBB-rated credits and all of HY offer spreads wider than the cost of capital
Spreads, bps In a world where cash rates are near the
zero-lower bound and expected to stay
600 there for a while, consider deploying
12/31/2019
11/30/2020 530 modest leverage to increase yield.
125bps 497
500  Spreads are still wide to last year. Index
level BBB spreads are 44bps above the
418 424
hurdle rate so investors can deploy a
400 leverage strategy even within the IG space.
348
330  To us the most compelling leverage
300 285 275 opportunities are in US HY & China FI.
248 Modest leverage ($1 of borrowing for $2 of
236
own money) provides potential all-in yields
200 of >5%.
157167
127137
98 108
100
-
IG A BBB CEMBI EMBI BB B HY

results.
13
MACRO
Geopolitical tensions create uncertainty, but some investment strategies could benefit
5 investment ideas to navigate U.S.-China tensions
1 Structured products
 Derivatives can monetize volatility and provide downside protection
2 Supply chain redirection
 Economies that benefit from increased foreign direct investment and export growth/market share
3 “Decoupling” has created benefits for local companies
 Localization has increased across many sectors, particularly in tech
4 Traditional hedges
 Precious metals add diversification and protection against rising geopolitical risks
5 Tech competition creates a silver lining: more spending on R&D could lead to increased innovation
 Companies at the cutting edge of technology are more likely to receive policy support, achieve long-term structural growth, and
hold through volatility
Source: J.P. Morgan Private Bank as of December 31, 2020.Structured product involves derivatives. Do not invest in it unless you fully understand and are willing to assume the risks associated with it.
The most common risks include, but are not limited to, risk of adverse or unanticipated market developments, issuer credit quality risk, risk of lack of uniform standard pricing, risk of adverse events
involving any underlying reference obligations, risk of high volatility, risk of illiquidity/little to no secondary market, and conflicts of interest. Before investing in a structured product, investors should
review the accompanying offering document, prospectus or prospectus supplement to understand the actual terms and key risks associated with the each individual structured product. Any payments
on a structured product are subject to the credit risk of the issuer and/or guarantor. Investors may lose their entire investment, i.e., incur an unlimited loss. The risks listed above are not complete.
For a more comprehensive list of the risks involved with this particular product, please speak to your J.P. Morgan representative. If you are in any doubt about the risks involved in the product, you may
clarify with the intermediary or seek independent professional advice.
results.
14
MACRO
While presidential party changes seem like a big deal in the moment…
… GDP has grown no matter who is in the White House
REAL GROSS DOMESTIC PRODUCT HAS INCREASED OVER TIME NO MATTER WHICH PARTY WAS IN THE WHITE HOUSE
Real GDP, billions (chained 2012 dollars) Republican Democrat
Recession
25,000
2016
20,000
2008
15,000 2020
1980 2000
10,000 1992
5,000 1968 1976
1932 1952 1960
0
1930 1938 1946 1954 1962 1970 1978 1986 1994 2002 2010 2018
Source: Haver Analytics, White House History as of November 30, 2020. Democratic and Republican indicator is the party of the president in the White House at that time.
results.
15
Agenda
Page
Summary 49
FAQs 54
Disclaimers 76
results.
16
EQUITIES
We expect 2021 to continue to reward companies with superior earnings growth
2020 equity index total returns
90
78.71
80
70
% (local currenY)
60
48.88
50
40
29.89
30
18.39 16.03
20
8.91
10 2.27
-2.59
0
Hang Seng Nasdaq 100 China A-shares S&P 500 MSCI World Topix ASX 200 Euro Stoxx 50
-10
Tech
Equity Index
 We continue to see markets with large allocations by growth sectors (Technology, Healthcare & Industrials) to outperform
 The best returns as expected to be driven by Emerging Markets – in particular domestic China – and the US
 While markets dominated by value sectors – such as Europe and Australia – we see as trailing

results.
17
EQUITIES
The Australian equities universe is heavily represented by value sectors
Communication Services Energy Utilites

4% 4% 1%  Over the last 10yrs, more than 75% of
Technology ASX 200 total returns have been
4% generated by dividends – an even
Financials higher proportion for those investors
Consumer Staples 28%
6% who receive franking credits
 In comparison to global peers, the ASX

Real Estate
200 has an outsized allocation to value
7%
sectors with Financials and Materials
representing almost half of index
Industrials exposure by market capitalization
7%
 The sector weightings suggest index

Consumer Discretionary returns will continue to be led by more
8% mature dividend-paying names, and
Materials less so by companies with high
Healthcare 20% earnings growth
11%

results.
18
EQUITIES
The Big Picture

As we enter 2021, we reiterate our positive view of the global markets for the next 12 months. We advise investors add to cyclicals, especially those exposed to inventory
replenishment, infrastructure, clean investments or the digital transformation of the global economy. We focus on “return to normal” opportunities as we clear the US
Presidential election, expect balanced government and see COVID-19 impact waning. As “mobility” improves in 2021, pent-up demand for corporate investment and consumer
spending should help many sectors experience a v-shaped recovery. We further believe balancing “normalcy” opportunities with secular trends like renewables and
environmental technologies will be a winning combination for global investors.
So what’s changed? Confidence in the restoration of growth and further earnings revisions. 2021 and 2022 should be good recovery years and Emerging Markets should
lead. China, South Korea and India are poised for above-average multi-year growth. Hong Kong and Singapore are service economies with pent-up demand. The region is
further supported by technology investment, consumerism, a weakening dollar and lower geopolitical risks. Asia’s improved growth will help Germany’s export-driven businesses
across the consumer and industrial sectors. We remain constructive on the U.S., as exposures to secular growth sectors like Healthcare and Technology continue compounding
earnings at above-average rates. A broadening of the markets from the mega-caps toward small and mid-cap stocks and cyclical industries, like Industrials and Basic Materials,
seems likely given operating leverage and earnings revisions.
December 2021 Equity Outlook
Level on P/E Forward Annualized
Region Index Price Earnings Growth Price Return1 Total Return 1
29th Jan 21 Multiple Dividend Yield
United States S&P 500 3,714 3,850 – 3,950 20.0x 24 – 26% 1.6% 3 -6% 5 - 8%
Europe STOXX Europe 600 395 425-435 16.5x 25 – 30% 3.0% 7 - 10% 10 - 13%
Japan Topix 1822 1,840 - 1,890 16.0x 14 – 16% 2.4% 1 - 3% 3 - 5%
Asia MSCI Asia ex-Japan 876 870 - 910 15.0x 25 – 27% 2.5% (1) - 4% 1 - 6%
China MSCI China 116 120 - 124 14.3x 20 – 22% 2.2% 3 - 7% 6 - 9%
Macro Assumptions
2021 Fixed Income Assumptions FX & Commodities Assumptions
2021 Real 2022 Real 2022 Core
Core
Region GDP GDP Inflation EUR/US WTI Crude
Inflation Year US 10Y Fed Funds Rate Year USD/JPY USD/CNH GBP/USD
Estimate Estimate Estimate D Oil
Estimate
U.S. 5.3% 1.7% 4.2% 1.9% 2021 1.50% 0.00-0.25% 1.23 101 6.30 1.35 $55/bbl
2021
Eurozone 4.3% 1.2% 4.2% 1.2%
China 8.2% 1.2% 5.5% 1.4%
World 5.8% 1.8%* 4.5% 1.9%*
results.
19
EQUITIES
Our bottom up approach to S&P 500 earnings

U.S. Equities: Our base case calls for two years of above trend earnings growth
Net Income ($B) y/y growth
Market Cap
Sectors 2019 2020e 2021e 2022e 2020e 2021e 2022e
Weights
Healthcare 14% $218 $238 $262 $282 9% 10% 7%
Consumer Disc 11% 106 71 108 117 -33% 52% 8%
Consumer Staples 7% 90 92 96 102 2% 4% 6%
Technology 27% 264 277 318 350 5% 15% 10%
Energy 2% 53 0 30 45 -100% - 49%
Financials 10% 246 165 210 250 -33% 27% 19%
Comm Services 11% 135 133 160 177 -2% 20% 11%
Utilities 3% 43 45 47 50 3% 5% 6%
Materials 3% 34 29 34 38 -16% 20% 11%
Industrials 8% 123 65 119 140 -47% 83% 18%
Real Estate 3% 38 35 38 40 -7% 8% 5%
S&P 500 100% $1,350 ~$1,150 ~$1,422 ~$1,591 ~-15% ~+24% ~+12%
Implied
$163 ~$140; -15% y/y ~$175; +25% y/y ~$195; +11% y/y
EPS ($)
Source: Factset, J.P. Morgan Private Bank as of November 27th 2020.
results.
20
EQUITIES
U.S. Equities: Value or Growth? We like both

The factor shifts have been tied to interest rates, which should remain at low levels
Russell 1000 value outperformance since 2009 Russell 1000 valuation remains attractive We expect Value and Growth to both work
Russell 100 Growth vs. Russell 100 Value NTM P/E higher in 2021.
Value rally Total Return, %
 Value outperformance since the end of the
Change GFC has correlated with the direction of
Months Value- 2.5x Growth relative to
From To in 10Y Value Growth
elapsed Growth Value 10-year interest rates. However, those
yield
2.3x 20Y Average instances have proved to be short-lived.
Mar-09 Sep-09 6 60 bp 68% 53% 15% +/- 1stdev  Value performance during early stages of
Dec-09 Apr-10 5 43 12 9 2 2.1x
the business cycle has struggled in the
Nov-10 Apr-11 5 64 13 10 3
1.9x prior two recoveries.
Sep-11 Feb-12 5 17 20 17 3
Jul-12 Aug-13 13 140 30 22 8 Current:1.6x  In 2021, we expect only slightly higher
1.7x
Oct-13 Nov-13 1 8 7 6 1 interest rates, making both factors
Feb-14 Apr-14 2 (4) 3 -1 4 1.5x investible.
Mar-15 May-15 2 20 0 -1 1  We prefer investors focus on “cyclicals”
Jan-16 Mar-16 1 (12) 1.3x
10 5 5 over “defensives” given the early cycle
Jul-16 Dec-16 5 100 12 5 6 dynamics at work.
1.1x
Nov-17 Jan-18 2 17 8 8 0
Sep-20 Nov-20 3 17 10 0 10 0.9x
Long-term average: 1.3x
Median 4 19 bp 11% 7% 4% 0.7x
Average 4 39 16 11 5 '96 '99 '02 '05 '08 '11 '14 '17
Sources: Bloomberg Finance L.P.,J.P. Morgan Private Bank. Data as of November 27, 2020. Value uses the Russell 1000 Value Index and Growth uses the Russell 1000 Growth index,), .
results.
21
EQUITIES
U.S. Equities: Key takeaways from our favorite 4 sectors

Industrials Technology
Our favorite cyclical sector as relative performance rebounds from multi- Technology is a beneficiary of several secular themes, strong relative long-term
generational lows and valuations remain attractive on normalized EPS. growth and improving profitability
• Faster-than-expected global recovery could lead to positive earnings • Digitization of all businesses remains the key driver of growth
surprises as utilization rates and margins expand. • COVID crisis made technology even more valuable to businesses and
• Residential building driving broad industrial growth supports the near-term, consumers
while the Internet of Things, de-globalization and factory automation could • Expanding cash flow margins and high sustainable growth
aid the intermediate-term. • Expected low interest rates help long-duration, growth assets maintain
• Stimulus from Infrastructure and “Green” initiatives could have impact on
higher valuations
2021 valuation and 2022 growth.
• Semiconductors offer the best risk/reward benefiting from the
• Strong retail demand and lean inventories worldwide offer an ideal setup
cyclical rebound, diminishing trade tensions and secular growth
for transports and machinery companies.
Pref. subsectors: Transport, Construction, Infrastructure, Machinery from the transition to the digital economy
Risks: tax rates, oil exposed firms remain under structural pressure, air travel Pref. subsectors: Semiconductors, GARP Software, Fintech
recovery Risks: regulatory, trade disruption, tax rates
Healthcare Materials
A sector with both growth and defensive characteristics, trading at a relative Driven by the industrial economy, there are opportunities in both stable growth
discount and cyclicals at reasonable valuations
• Continued innovation in drug development and medical tools/devices • Once exclusively composed of classic super-cyclicals, the sector is now
• Solid positive earnings expected for both 2020 and 2021 dominated by high quality companies, growing margins with lower
• Pick-up in elective procedures post COVID boosts ’21 growth volatility.
• Attractive, discounted valuation versus broader market and other • Specialty chemicals and industrial gases, which have consolidated,
defensive sectors account for ~55% of the sector.
• With volumes recovering from depressed levels, inventories lean around
the globe and a weakening dollar, there are opportunities in some deeper
Pref. subsectors: Life Sciences & Tools, Medical Devices, Biotech/Pharma
cyclicals and metals for earnings upside.
Risks: high profile drug trial failures, drug pricing reform, elective procedures Pref. subsectors: Industrial Gases, Specialty Chemicals, Copper
suspension, prolonged resurgence of COVID
Risks: commodity price weakness, USD strength, global industrial downturn
Sources: Bloomberg Finance L.P.,J.P. Morgan Private Bank. Data as of November 23, 2020. .
results.
22
EQUITIES
U.S. Equities: How we view the rest of the sectors

Sector Preferred sub-sectors Commentary
The consumer sector was a strong performer in 2020 with the majority of the sector benefiting from
Consumer Home builders pandemic trends i.e. e-commerce, athleisure. That said, as the positive vaccine news has shifted the
Discretionary Travel/Leisure conversation towards economies reopening, we prefer to be selective and invest in cyclically exposed
consumer segments.
Outlook for a steeper yield curve assisting NII expectations. 2H 2021 reserve releases and lower expenses
should help bank profitability rebound meaningfully in 2021. Balance sheets remain healthy and banks are
Diversified Financials
Financials waiting for the needed approval from the Fed to resume shareholder capital returns, which could happen in
Money Center Banks
2H of 2021, benefiting ROEs. Less regulatory scrutiny than feared given election outcome offset by
structurally lower interest rates.
Communication The very profitable Internet behemoths outweigh the transitioning media and communication companies.
Services Internet Digital advertising has reaccelerated as the economy bottomed in April. The sector is sensitive to
Entertainment regulatory oversight and the impact of business confidence on the advertising market. Gaming
opportunities accelerate with new consoles in 2020-2021.
This sector is driven by tech-enabled growth, interest rate dynamics and long-term COVID impacts. The
Real Estate Specialized REITs biggest risk remains in-city focused commercial REITs, lodging, malls and retail. We prefer REITs
(REITs) Towers benefiting from technology, including 5G communications (Towers) and data centers. Residential supply
shortages should help the single and multifamily housing segments recover quickly.
Usually a defensive hedge, this sector’s growth relies on infrastructure opportunities that may improve
Utilities Regulated Utilities given President Biden’s infrastructure plans. However, 2021/2022 earnings growth is low relative to other
sectors given the sector’s defensive tilt, making it less attractive in the current economic environment.
Consumer The pandemic benefited the sector as consumers stocked up on essentials. Looking ahead, this creates a
Beverages comparative headwind for most of the segments while cyclical industries face easing comps. Valuation
Staples remains elevated.
The combination of a sharp drop in demand, competition from renewable energy and volatile supply
arrangements torpedoed prices in 2020. The recent rally in the space has reflected an improved forward
Energy Conglomerates
curve and the tactical trading environment. We are reluctant to add strategic new capital to the entire
sector given the worsening regulatory environment.
Sources: Bloomberg Finance L.P.,J.P. Morgan Private Bank. Data as of November 23, 2020.
results.
23
EQUITIES
Companies with strong balance sheets and stable growth profiles can outperform
Certain types of exposures within equities can be less volatile than the market as a whole
COMPANIES WITH MORE STABLE BALANCE SHEETS HAVE OUTPERFORMED YTD
Goldman Sachs stock basket price level (Indexed: December 31, 2019 = 100) Companies with strong balance sheets and
stable growth profiles can help protect
140 Strong balance sheet companies*
capital in volatile markets.
130  Companies with strong balance sheets have

outperformed those with weaker balance
sheets by +32% in 2020.
120
 Throughout the drawdown earlier this year,
110 strong balance sheet companies were able to
protect capital and only experienced ~60% of
the drawdown in March relative the weaker
100
balance sheet companies.
90
80
Weak balance sheet companies**
70
60
50
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sources: Goldman Sachs, Bloomberg Finance L.P., J.P. Morgan Private Bank. Data is as of December 31, 2020. *Strong balance sheet basket identifies 50 S&P 500 companies across eight sectors
with strong balance sheets. **Weak balance sheet basket identifies 50 S&P 500 companies across eight sectors with strong balance sheets. The Altman Z-score to measure balance sheet strength.
The Z-score is a weighted sum of five financial ratios and was originally developed to forecast bankruptcies.
results.
24
EQUITIES
China Equities: Growth fuelled by cyclical and policy forces

End of 2021 Base Case for MSCI China set at 120-124 MSCI China Performance Track’s Earnings Growth Longer Term
• Fuelled by post-COVID cyclical recovery and the imminent 14th Five-Year Plan, we
LTM EPS, HK$ Dec 2021 Base Price 2022e EPS: Index Level
expect profit growth of China equities to meaningfully accelerate in 2021 (from +2%-
Outlook: 120–124 $8.5,* +16%
3% in 2020). We foresee a solid rebound in consumption and industrial activities, 9 LTM EPS (LHS) 130
improved operating leverage, and a stronger CNH. MSCI China (RHS)
8
• Our base case valuation conservatively assumes a contraction in P/E to 14.3x (from 110
2019 EPS: 2021e EPS:
the current 15x). 7
$5.9, +2% $7.4, * +21%
6 90
• We are positive on discretionary, tech and industrials, which benefit from the 2020e EPS:
ongoing cyclical recovery and policy stimulus from the dual circulation loop and new $6.1, +2%
5 70
Infrastructure initiatives.
4
Risks to our view
50
3
• Geopolitical risks or tensions to exacerbate and widen valuation discount
• Greater-than-expected COVID resurgence to impede sentiment and growth 2 30
'09 '11 '13 '15 '17 '19 '21 '23
• CNH appreciates less or more than expected
• Credit tightening or weaker stimulus versus our expectations
2021 Base Case of 25%-27% Earnings Growth MSCI China Breakdown of Potential Return
25% 20-22% Downside Base Upside
4% Case Case Case
6%
20%
2021 EPS growth: 15-16% 20-22% 22-23%
15% 2022 EPS growth: 12-13% 15-16% 16-17%
10-12%
(x) Fwd P/E Multiple: 11.5x 14.3x 15.0x
10%
(=) 2021 Price Outlook: 87-89 120-124 132-136
5%
Price Appreciation: (23)-(21)% 6-9% 17-21%
0%
2021 Total Return incl. Dividends: (21)-(19)% 9-12% 19-23%
Sales Growth Margin Expansion FX EPS Growth
Sources: Source: J.P. Morgan Private Bank. Data as of January 8, 2021. Downside case is not recessionary but represents PB view of markets in adverse, low growth scenario. It is not possible to
invest directly in an index. Please see Index Definitions at the end of the presentation. YE= Year-End
results.
25
EQUITIES
China Equities: Growth fuelled by cyclical and policy forces

Preferred Sub
Sectors Commentary
Sectors
We expect more policies to support automotive upgrades and accelerate EV penetration, as part of the long-term decarbonization focus. Home
Automobiles (including
Consumer appliance manufacturers should benefit from normalized channel inventories and drive volume and margin recovery on higher ASPs and subsidies.
EV), Home appliances,
Preferred Sectors
Discretionary E-commerce platforms find new growth engines in underpenetrated categories, e.g. grocery, with valuation supported by the inclusion in the
Tourism, E-commerce
Stock Connect to offset any regulatory overhang.
Smartphone ODM, data 2021 will likely mark a fast ramp-up in 5G penetration. This should drive stronger smartphone shipments, capacity utilization, and margin
Technology centers, cloud, performance. Momentum of cloud migration and data center expansion should continue, given under-spending in China vs. the US, and
connectivity solutions China’s next 5-year focus on new infrastructure.
Industrial profits stand to grow, given accelerating growth and increasing operating leverage. Resumption of construction activities is accelerated by
Railway equipment,
the 14th Five-Year plan, which, together with the 2060 carbon neutrality target, should drive the highway-to-railway transformation and support
Industrials construction, airport
replacement demand for railway equipment. Airports’ earnings are rebounding on passenger traffic recovery and potential easing of
operator
international travel restrictions.
Solid EV demand and tight supply bode well for battery materials. Industry leaders supplying to global battery makers continue to benefit from
EV battery materials,
Materials healthy order backlogs. Infrastructure buildout is likely to trend up further in select regions, such as the Greater Bay Area, which underpins demand
Cement, Gold
Tactical
Sectors
for construction materials.

Insurers should see a strong recovery of life business premium growth given the low base in 2020. Continued ADR delisting threat could be a
Stock exchange, blessing in disguise to the domestic brokers and stock exchange, helped by HK’s friendly stance towards secondary listings. Banks still face
Financials
Brokers, Insurers ongoing challenges from NIM compression and SOE defaults, though we expect them to pay decent dividend and see improving loan demand with
involvement in digital currency as a tailwind.
Communication While stellar growth of online gaming is tapering off, leading players’ strong new game pipelines should mitigate the high base effect. Ad revenues
Internet are trending up with demand strengthening. Antitrust legislations come mid-2021 and the US ban to invest in telecom operators serve as key
Services concerns.
Recurring national drug procurement with extended categories and drug reimbursement list expansion will accelerate consolidation. Online health
Online health services
Healthcare services providers benefit from favorable policies, and strong R&D outsourcing trend demand continues to sustain the growth of CDMOs. However,
providers, CDMOs
valuation remains a key risk to the sector, trading at 3 standard deviations above its 10-year average.
With the government committed to fighting climate change, we anticipate more policy support for clean energy, at the expense of traditional coal-
Utilities Renewable power
fired power plants.
Modern grocery
We expect COVID-19, like prior public health crises in China, to structurally change consumer behavior, accelerating the shift of grocery retail from
Consumer Staples retailers, hygienic
the traditional wet markets to modern and online marketplaces, and the premiumization of hygienic product consumption.
products
Outlook is improving given stronger CNH, potential rate cut and steady property sales. Credit spreads, nonetheless, will likely widen given concerns
Property Big-cap developers
from the fixed income market which would increase developers’ funding costs.
A global recovery may support oil price stabilization, though we are mindful of supply cut reversals. We are opportunistic at the right levels on names
Energy Integrated oil
geared toward integrated oil businesses, which will benefit from stabilizing oil prices and traffic recovery.
Sources: Bloomberg Finance L.P.,J.P. Morgan Private Bank. Data as of November 23, 2020.
results.
26
MEGATRENDS
COVID-19 may accelerate the growth of megatrends

Digital transformation, healthcare innovation, and sustainability look poised to outperform
Digital transformation Healthcare innovation Sustainability
Artificial intelligence Gene therapy Clean energy
5G Precision medicine Electric vehicles
Factory of the future Diagnostics Agricultural technology (Agtech)
Fintech
Source: J.P. Morgan Private Bank.
results.
27
MEGATRENDS
Global tactical trends

4 key trends
z
Global Tactical Trends
Pent Up Digital
Infrastructure Demand Decarbonization
Entertainment z
Early Cycle Travel & Clean

Physical Digital/5G Streaming Electric
Transport Consumer Gaming Energy
Spending Vehicles
Source: J.P. Morgan Private Bank.
results.
28
MEGATRENDS
5G adoption likely to accelerate in 2021 and beyond as the smartphone replacement

cycle kicks off
5G adoption is expected to increase 5G enabled smartphones are expected
~3x by 2022 to grow the market over the next year
5G smartphone shipments (m) Global Smartphone Shipments
mn mn (mn)
1500 4%
800 60% 3.2% 3.4%  Global smartphone shipments declined
meaningfully in the first half of 2020,
53% mainly driven by the impact of COVID-
700 1450 19 on consumer demand and the supply
50% 2.2% 2%
1.7% chain
600  Shipments are expected to recover
39% 1400 0% rapidly as consumer demand rebounds
40%
500 and Apple’s new products enter the
-1.6% markets
725
400 30%
1350 -2%  The strong adoption of 5G smartphones
-2.4% will continue to be a driver of
semiconductor sales as content per
300 device increases
525 20% 1300 -4%
17%
 Semiconductor companies take the
200 stance of “arms dealers”, winning by
1250 -6% supplying more chips at higher prices for
10%
100 -6.1% more units.
1% 225
10
0 0% 1200 -8%
2019 2020E 2021E 2022E
Source: J.P. Morgan Investment Bank Research. Data as of December 9, 2020.

results.
29
MEGATRENDS
The healthcare crisis accelerated digital trends that were already in place
eMarketer’s Digital Activities Forecasts Have Us Cord-Cutter Households, 2019 – 2024
Changed due to COVID-19 Millions, % change and % households
2020 growth rate vs change in forecast
Cord-cutter
50 households 40%
14%
% change  Many digital experiences improved in
Live Video 45 36% 2020 and COVID drove 2-3 years worth
%households 35%35%
Viewers - of growth into this year.
12% 151.5
33%
40  Successful categories are driving further
30% 30% investment, likely perpetuating high
Subscription growth into 2021 and 2022.
10% Video 35
OTT viewers - 27%
Game 27%
207.5  New product roll-outs accelerating in Q4
Viewers -
25%
51.3 30 24% 2020 and into 2021.
Digital
8% Audio  Cord-cutters usually witness better
Listeners -
25 20% service and lower costs.
215.2 19%
Digital
6% Video  Based on industry growth rates, live
Viewers - 20 video viewers, video game users and
244.4 15%
14% subscription OTT viewers have a
Digital Podcast
4% Gamers - Listeners -
15 promising 2021 outlook
106.7 11% 10%
174.7
9%
E Sport 10 8%
Social Viewers -
2% 35.7
Network 5%
Users - 5
212.1
0% 0 0%
-3% 2% 7% 12% 17% 22% 2019 2020 2021E 2022E 2023E 2024E
Source: eMarketer. Data as of December 15, 2020.
results.
30
MEGATRENDS
Gaming Cycle 2021 and Upcoming Catalysts
Software publishers are big winners in digital gaming
Increased engagement naturally extends to

Global Gaming Market Size
ad opportunities, search leading  The ongoing pandemic has accelerated
$ bn
2020E US advertising revenues, $ mn demand for gaming, year-to-date
$200 70,000 revenues up 13% vs. last year with
Mobile Console PC
devices reporting y/y growth.
$180
60,000  The demand for gaming is sustainable
$160 given increasing pushout of movies,
35 shows etc., causing an “entertainment
$140 35 50,000 gap” of 6-9 months.
34  Mobile gaming is still growing quickly
$120 34 40,000 despite a decrease in travel and
47
32 commuting. Large populations like India
$100 43
and China utilize their mobile devices as
41
30,000 their primary device.
30 38
$80
34 33  In game purchases grew ~58% y/y and
$60 33 20,000 was driven by higher engagement from
30 32 consumers compared to previous years
92
$40 25 82
73 10,000
 Publishers are raising the prices of games
23 63
24 56 to $70 from $60 with the release of the
$20 38
30 new hardware
18 22 0
$0  We expect to see more M&A
Source: LHS eMarketer, Statista. Data as of December 5, 2020. RHS RAB, OAAA, NAAA, PIB, CMAG, IAB, IDC. Data as of September 10 2020.
results.
31
MEGATRENDS
2020 was an inflection point for electric vehicles, adoption is expected to take off from here
Electric Vehicle (EV) Sales Are Rising By 2040, more kilometers may be driven by
Rapidly Globally EVs than by Internal Combustion Engine  EVs are a key part of decarbonization
(ICEs) vehicles efforts as transport accounts for
Million % of km travelled, two- or three-wheelers c.16% of global greenhouse gas
70 Rest of World India (GHG) emissions
100%
Europe China
 As governments around the world
U.S. 90%
60 incentivize and support EV adoption,
sales are set to rise rapidly. China and
80% Europe are leading in this mobility
ICE
50 transition
70%
 Global EV penetration was only 2% in
60% 2019. According to Morgan Stanley
40
Research, this may increase to 31% by
50% 2030 and 78% by 2040.
30  According to Goldman Sachs Research,
40% semiconductor content per car rises
EV by up to 3x for a full Battery EV
20 30% ($1,075) vs. internal combustion engine
(ICE) car ($350)
20%
10  Battery life has been a gating factor for
10% EV adoption. Technology
improvements may lead to a doubling of
0 0% capacity from 2019 by 2022
2015
2020
2025
2030
2035
2040
2045
2050
2020 2030 2040 2050
Source: Bloomberg New Energy Finance Ltd, New Energy Outlook. Data as of November 11 2020.
results.
32
MEGATRENDS
Pent-up demand for travel building after a difficult 2020

The number of travelers from 2019 – 2020 Mobility data indicates significant
pulled back significantly with little decline in movement throughout the
evidence of a significant rebound US as the pandemic furthers
Thousands Millions of people
3,500,000 2020 2019 retail_and_recreation
80 grocery_and_pharmacy  Despite a bounce off the Q1 lows, travel
parks remains down ~70% year-on-year late
transit_stations
3,000,000 in 2020
60
 US mobility was on the upswing during
the summer but has since dropped as
2,500,000 COVID cases rose in the fall
40
 The consumer remains broadly in good
2,000,000 shape, with savings rates ~2x levels in
20 2019
 Vaccinations have started and we
1,500,000
0 expect the consumer to spend on travel
after 50% of Americans get inoculated
1,000,000 -20
500,000 -40
0 -60
Jun-20
Jul-20
Mar-20
Nov-20
Dec-20
Aug-20
Sep-20
Apr-20
May-20
Oct-20
Jun-20
Jul-20
Feb-20
Mar-20
Nov-20
Aug-20
Sep-20
Apr-20
May-20
Oct-20
Source: RHS TSA, Cass Info, Bloomberg Finance LP; LHS Google Mobility Data. Data as of December 2020.
results.
33
Agenda
Page
Summary 49
FAQs 54
Disclaimers 76
results.
34
FX & COMMODITIES
The starting point matters: the U.S. dollar is already in overvalued territory
The real trade-weighted broad dollar index is roughly 7% above its long-term average
Deviation of U.S. Fed trade-weighted real broad dollar from 40-year average
%
Dollar “cycles” tend to play out over a number of
40
years. Over the past three dollar “cycles,” the broad
trade-weighted dollar moved roughly 30% over a
+44% period of 4-6 years, on average Deviation from 40-year Average
30 +8.5% p.a.
-30%
-9% p.a.
+26%
20 +4.5% p.a.
-26% +27%
-4.5% p.a. +4.3% p.a.
10
7%
0
-10
-20
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

results.
35
FX & COMMODITIES
Continued recovery in global growth could further weigh on the U.S. dollar
The U.S. dollar tends to depreciate when the outlook for global growth is improving
Currency betas to global growth revisions

Beta, represents historical percent move in currency for 1 percentage point increase in J.P. Morgan’s Global The U.S. dollar typically weakens when
Growth Forecast Revision index global growth is improving, regardless of
4 how the U.S. outlook is evolving relative to
the rest of the world. Our economists are
optimistic on the path of the global
3 recovery as countries emerge from
lockdown and a vaccine becomes more
2 widely available.
 During quarters where global growth
forecasts were revised higher, the trade-
1
weighted U.S. dollar has weakened by
about 1% on average since 2002.
0
 High-frequency global mobility indicators
continue to recover. A vaccine should
-1 facilitate this trend albeit at a slower pace
than seen over the summer.
-2
-3
JPY USD CHF EUR EM Agg. SEK GBP NOK CAD AUD

results.
36
FX & COMMODITIES
AUD – highly geared to global growth
AUD VS SPX 500 SINCE THE BEGINNING OF 2020

‒ We are tactically constructive on the broad
group of commodity linked currencies
SPX Index AUD/USD Exchange Rate
given their positive beta to global growth
and the recent upgrade to our oil price
4,000 0.80
outlook.
‒ Further signs that the COVID-19 recovery

3,700 0.75 will be V-shaped can support the
commodity outlook and the complex more
broadly, whilst any deterioration in the
Outlook would be bearish.
3,400 0.70
‒ Aud/Usd is likely to be supported by its
beta to risk sentiment and global equity
3,100 0.65 markets, where we see further upside. We
are looking for Aud/Usd to be trading in a
0.76-0.80 range by year end 2021.
2,800 SPX Index 0.60 ‒ Other focuses for the market:

AUD/USD Exchange Rate
• RBA growth / inflation /
2,500 0.55 unemployment forecasts
• Forward guidance and the policy
path for the LSAP and YCC
• Explicit commentary from the RBA
2,200 0.50 on currency strength
Jan20 Mar20 May20 Jul20 Sep20 Nov20 Jan21 • Governor Lowe Feb 3 speech
(‘The Year Ahead’)

results.
37
FX & COMMODITIES
CNH: Supported by attractive yield pickup, trade surplus and index-related inflows
Reduced risk of tariff escalation under a Biden administration also lessens chances of sudden depreciation
Attractive yield pickup vs. Treasuries can support the RMB

Robust capital inflows and sharp
% Yuan per USD improvement in China’s trade balance and
1.0 U.S. less China 10-year government bond yield (LHS) 7.40 current account can continue to provide
fundamental support for the currency,
USD/CNY (RHS)
7.20 while a less aggressive approach to tariffs
0.5
under the new US administration reduces
7.00 risks of a sharp and sudden devaluation.
0.0
 The yuan is one of the highest-yielding EM
6.80
currencies on a real basis, which, along
-0.5 with continued inclusion of local assets in
6.60
global market indices, should support
-1.0 6.40 robust portfolio inflows.
 Thus far, Chinese authorities appear
6.20
-1.5 generally tolerant of recent currency
6.00
strength, and show few signs of wanting to
-2.0 engineer depreciation.
5.80  We expect USDCNH to continue its decline
-2.5 in 2021 and look for a move to 6.20-6.40.
5.60
-3.0 5.40
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

results.
38
FX & COMMODITIES
GBP: Limited upside even after the “Brexit risk premium” is priced out
Even with a narrow EU trade deal, many risks remain to the U.K. outlook
GBPUSD actual vs. predicted fair value

We expect cable to settle around 1.39 by
USD per GBP Residual end of 2021
1.45 5%  We continue to see economic risks to GBP
Residual
in the near- and medium-term, which could
limit any relief rally, such as extended
1.40 COVID-related lockdowns, further BoE rate
cuts, and Brexit’s still-meaningful hit to
0%
growth.
1.35  We employ a near-term fair value model for
GBPUSD, based, in part, on relative
interest rates between the U.S. and U.K.,
1.30 -5% relative terms of trade between the two
countries and global risk sentiment. This
model suggests GBPUSD is trading just
1.25 2% below fair value, consistent with the
Predicted
market expecting, like us, a narrow trade
Actual -10% deal to be struck between the U.K. and EU
with respect to Brexit.
1.20
1.15 -15%
Mar '18 Sep '18 Mar '19 Sep '19 Mar '20 Sep '20

results.
39
FX & COMMODITIES
Gold: After a glittering 2020, future returns likely to be more muted
But the yellow metal’s role in portfolios is as important as ever
Gold price versus model-predicted value We expect the price of gold to settle around
$/oz $1,900 by end-2021.
 After rising around 20% the past two years, we
2200 expect much more muted gold returns moving
forward.
 While a vaccine should help boost growth
2000
expectations and yields, we believe there is a limit
to how far real yields, one of the key drivers of
1800 gold, can rise given the Fed’s new flexible average
inflation targeting framework.
 Meanwhile, stronger global growth typically sees
1600
the dollar – the other key driver of gold prices –
weaken. We expect these factors to largely offset
leading to a modest appreciation in the year
1400
ahead.
 Additionally, an allocation to gold can improve risk-
1200 adjusted portfolio performance by offering an
uncorrelated source of absolute return. The
correlation between gold and equities has
1000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 historically been close to zero.
Actual Model Outlook

results.
40
FX & COMMODITIES
While Bitcoin has had a strong rally, the digital currency’s volatility is in another league
The sizing of such a position in the context of a portfolio is critical
BITCOIN (BTC) IN $ BITCOIN VOLATILITY VS. GOLD, USD, & S&P 500
Price per unit, USD Rolling 12-week average weekly volatility, %
$45,000 20%
Bitcoin Gold DXY SPX
$40,000 18%
16%
$35,000
14%
$30,000
12%
$25,000
10%
$20,000
8%
$15,000
6%
$10,000
4%
$5,000
2%
$0 0%
2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021
Sources: (Both sides) Bloomberg Financial L.P. Data is as of January 12, 2021
results.
41
VOLATILITY
Volatility is normal – don’t let it derail your plans

Despite frequent pullbacks, equity markets have rewarded long-term investors
Volatility is normal…but don’t try to time it.
S&P 500 INTRA-YEAR DECLINES (MAX DRAWDOWNS) & CALENDAR YEAR RETURNS
Despite average intra-year drops of 13.8%, annual returns were positive in 30 of 40 years − The market has suffered pullbacks of 10% or
40% 2020 more in 23 of the last 41 years (including this
34
31 year).
30 29
30% 26 26 27 26 27 26
23 − Yet the full-year market return was positive in 30
20 20 19
20% 17 of 40 years – suggesting that staying invested
15 15 14 13
12 13 11 over the long-run has paid off.
9 10
10% 7
1 2
4 3 4 − Unfortunately, fund flows suggest investors sell
during the dips and miss the recovery.
0%
-2 0 -1
-3 -3 -4 − The time horizon for your money is important. Are
-10% -7 -7 -6 -6 -5 -6 -7 -6 -7
-10 -8 -8 -8 -9 -8 -8 -7 -8 your investment goals short- or long-term?
-9 -11 -12-10-13 -10 -10 -11
-12 Volatility may matter in some cases more than
-13 -14
-20% -17 -17 -16 others.
-18 -17
-20 -19 -19 -20
-23
-30%
-28
-30
-34 -34 -34
-40%
-38
-50%
-49 Calendar year return
-60%
'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 Peak to trough decline
Sources: FactSet, Standard & Poor’s, J.P. Morgan Asset Management - Guide to the Markets. Returns are based on price index only and do not include dividends. Intra-year drops refer to the largest
market drops from a peak to a trough during the year. For illustrative purposes only. Returns shown are calendar year returns from 1980 to present year. Data is as of June 30, 2020. It is not possible to
invest directly in an index. Analysis is based on the J.P. Morgan Guide to the Markets – Principles for Successful Long-term Investing.
results.
42
VOLATILITY
Making Volatility Your Friend

Take advantage of volatility through equity derivative strategies
Equity derivatives strategies play an important role in portfolio construction process
Investors can customize the risk / reward profile of equity investments by deploying appropriate equity derivative strategies in different market
environments, depending on the volatility landscape.
For example –
 To build in downside buffer / protection by trading away unexpected upside – in Challenging markets
 To profit from a directionless market via fixed returns and enhanced yield – in Sideway markets
 To capture and amplify market returns with modest leverage – in Directional markets
Source: Bloomberg Finance L.P. , July 2020.

results.
43
VOLATILITY
The Volatility Relationship
Implied volatility levels are often highly correlated with market drops
SPX vs. 1m Implied Volatility ASX vs. 1m Implied Volatility

3,600.00 80.00% 7,500.00 70.00%
3,400.00 70.00% 7,000.00 60.00%
3,200.00 60.00%
6,500.00 50.00%
3,000.00 50.00%
6,000.00 40.00%
2,800.00 40.00%
5,500.00 30.00%
2,600.00 30.00%
5,000.00 20.00%
2,400.00 20.00%
2,200.00 10.00% 4,500.00 10.00%
2,000.00 0.00% 4,000.00 0.00%

Oct-19 Nov-19 Jan-20 Feb-20 Oct-19 Nov-19 Jan-20 Feb-20
SPX Spot SPX 1m IV ASX Spot ASX 1m IV
Source: Bloomberg Finance L.P. , July 2020
results.
44
RISK MANAGEMENT
Currency Hedging
AUD 12M FORWARD POINTS SINCE 2000  When Aud / Usd rate differentials were at
their peak (Usd > Aud) back in 2019, as an
Australian investor it was costing you
AUD/USD 12M Forward Points
approx. 1% a year to hedge your Usd
100 exposure. This is now closer to 20bps.
50  With the Fed having cut rates aggressively
in response to the COVID-19 crisis, real
0
money investors (especially those in Europe
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
-50 or Japan) have become more active in
hedging their Usd exposure. FX volatility is
-100 higher and hedge costs are lower. We think
that this has been an important factor
-150 behind the Usd weakness since March ’20.
-200  Clients have become much more open to

the topic of currency diversification in recent
-250
months, with Usd overweights gradually
-300 being reduced.
-350  There is no ‘one size’ fits all approach given

that every client will have different
-400 requirements, whether personal, corporate
or investment related.
-450
 Overall we expect this trend to continue, in
-500 line with what is gradually being seen
across key market participants such as
Central Banks.

results.
45
RISK MANAGEMENT
Market pricing depressed short-term interest rates for extended time, how to take
advantage?
We expect short term rates to remain on hold for the next 12–24 months. The market is discounting very modest increases in the Federal Funds Rate for nearly the next 10 years.
A large divergence is evident between the Federal Reserve’s stated neutral rate of 2.5% and interest rate market prices.
We expect longer term rates to move modestly higher, but acknowledge tails risks to both lower and higher rates from longer term economic risks
 We consider something in the context of 1.50% on 10yr Treasury Yields as a longer term fair value based on our view of an economic recovery in the latter part of this year,
however given the current situation with Coronavirus and potential longer term economic implications, this view is fairly fluid
 We see potential tail risks leading to lower long term rates including significantly slower global growth and modest inflation expectations
 Further out we see potential tail risks to higher rates from longer term fiscal policy risks, higher fiscal deficits, and the potential for the Fed to let its policy allow for above target
inflation for a period of time
Libor and FED funds historically vs the current outlook

% Fed Funds Rate 1 Month Libor
3.0
2.5
2.0
1.5
Current 10y swap

1.0 rate¹: 0.9793
Current 5y swap
rate¹: 0.4302
0.5 Current 3y swap
rate¹: 0.1988
2021 YE
0.0 Fed Funds Futures
2015 2016 2017 2018 2019 2020 2021 2022 2023
¹ Swap rates are vs. USD 1mL. Source: Bloomberg Finance L.P. Data as of January 21, 2021
results.
46
Agenda
Page
Summary 49
FAQs 54
Disclaimers 76
results.
47
INVESTING PRINCIPLES
Be aware of your biases - think and invest globally

Exposure to foreign markets can lead to return and diversification benefits
EQUITY HOME BIAS BY COUNTRY
% of equity market owned by domestic investors & weight in MSCI All Country World Index
80% % of equity market owned by domestic investors
71% 71% MSCI All Country World Index weight
69%
70%
64%
60%
56%
50% 47%
45%
40%
30%
20%
10% 7%
5%
2% 3% 3%
0%
USA Japan Australia Canada United Kingdom Germany
Sources: International Monetary Fund, World Federation of Exchanges, National Statistics Agencies, MSCI. Data is as of December 31, 2019. Analysis is based on the J.P. Morgan Guide to the Markets
– Principles for Successful Long-term Investing. There can be no assurance that the Fund will achieve comparable results or that the Fund will be able to implement its investment strategy or achieve its
investment objective. These are presented for illustrative purposes only. Your actual portfolio will be constructed based upon investments for which you are eligible and based upon your personal
investment requirements and circumstances. Consult your J.P. Morgan representative regarding the minimum asset size necessary to fully implement these allocations.
results.
48
Stay invested
Even missing just a few good days can dramatically undermine portfolio returns
PERFORMANCE OF THE S&P 500
Performance of a $10,000 investment between December 31, 2000 and December 31, 2020
45,000
7.41%
40,000 “It’s always darkest before dawn”
Seven of the 10 best days occurred within fifteen days of the 10

35,000 worst days.
30,000
25,000
20,000 3.30%
15,000
0.64%
10,000
-1.55%
5,000
0
Fully Invested Missed 10 best days Missed 20 best days Missed 30 best days
Source: J.P. Morgan Asset Management analysis using data from Morningstar Direct. Returns are based on the S&P 500 Total Return Index, an unmanaged, capitalization-weighted index that
measures the performance of 500 large capitalization domestic stocks representing all major industries. Past performance is not indicative of future returns. An individual cannot invest directly in an
index. Data is as of December 31, 2020. Analysis is based on the J.P. Morgan Guide to Retirement.
results.
49
Maintain a long-run mindset

Time and diversification can help reduce uncertainty for long-term investors
RANGE OF STOCK, BOND, AND BLENDED TOTAL RETURNS
Rolling annualized total returns, 1950 – 2020 Long-term returns have been less volatile.
70%
 While markets can always have a bad day,
week, month, or even year, history suggests
60% investors are less likely to suffer losses over
50% longer periods – especially in a diversified
portfolio.
42%
 While rolling 12-month stock returns have
30% 33% varied widely since 1950 (+60% to -41%), a
30% blend of stocks and bonds has not suffered a
22% 21% negative return over any five-year rolling
19%
18% period in the past 69 years*.
10% 14% 16% 14%
11%  Keep the time horizon of your goals in mind.
5% 5%
0% 0% 1% 0% 2%  Important disclaimer: Investors should not
-4%
(10)% -6% -6% necessarily expect the same rates of return in
the future as we have seen in the past.
-20%
(30)%
-41%
(50)% 1-year 5-year rolling 10-year rolling 20-year rolling
Sources: Barclays, FactSet, Federal Reserve, Robert Shiller, Strategas/Ibbotson, J.P. Morgan Asset Management. Returns shown are rolling monthly returns from 1950 to 2020. Stocks represent the
S&P 500 Shiller Composite, and Bonds represent Strategas/Ibbotson government bonds for periods from 1950 to 2017, then Bloomberg Finance L.P. Barclays U.S. Treasury Total Return index from
2017 to 2019. 50/50 portfolio is rebalanced monthly and assumes no cost. Data is as of December 31, 2020. Analysis is based on the J.P. Morgan Guide to the Markets – Principles for Successful
Long-term Investing. *Actual worst 5-year rolling return of hypothetical 50/50 portfolio: -0.068%.
results.
50
The world will heal. Embrace the optimism.

How we’re thinking about investing in the shadow of COVID-19
Our view: Investment action:
The recovery will continue, especially as Ensure portfolios have adequate risk to
vaccines are distributed. benefit from a cyclical recovery
We prefer the U.S., Asia, and

Policy support will drive economic and
beneficiaries of stimulus. Central banks
investment outcomes.
are set to stay supportive for years.
Reduce cash. Use prudent leverage.

Large output gaps will keep inflation and rates
Move up the risk spectrum for yield. Look
subdued.
at High yield & Asia bonds.
Cyclical sectors to play catch-up in 2021,

Equities: neither bargain, nor bubble. Stocks
but secular growers to carry the day on a
should beat bonds.
multi-year horizon.
Use inexpensive FX hedging.

Years of pronounced USD strength are behind Consider non-USD assets including
us. Expect moderate USD weakness. Emerging Markets, e.g. Asia ex-Japan
equities.
Note: These are ONLY supplementary information and MUST be read together with the fund factsheets, prospectus and/or other relevant offering materials. The funds described herein are not
available to the general public and may only be promoted in Hong Kong to Professional Investors and in Singapore to Accredited Investors. In discussion of options and other strategies, results and
risks are based solely on hypothetical examples cited; actual results and risks will vary depending on specific circumstances. Investors are urged to consider carefully whether option or option-related
products in general, as well as the products or strategies discussed herein are suitable to their needs. In actual transactions, the client’s counterparty for OTC derivatives applications is JPMorgan
Chase Bank, N.A. and its affiliates. For a copy of the “Characteristics and Risks of Standardized Options” booklet, please contact your J.P. Morgan Advisor.
results.
51
Agenda
Page
Summary 49
FAQs 54
Disclaimers 76
results.
52
FAQS
As a larger source of demand, China is too large to isolate

In 2018: China is now the largest source of demand for many economies
 U.S. imports > China imports
 China imports > U.S. imports
Source: IMF, Haver Analytics. Data is as of December 31, 2018.
results.
53
FAQS
Should we be worried about increasing debt levels?

While the debt burden is certainly increasing, we don’t believe the U.S. government is at risk of default
FEDERAL NET DEBT (ACCUMULATED DEFICITS) DEBT SERVICE IS FALLING
% GDP, 1940-2030, 2020 CBO Baseline, end of fiscal year Interest expense, % GDP
140% 3.5%
2020:
126.4%
120% 2030: 3.0%
123.6%
100% 2.5%
80% 2.0%
Projections
60% 1.5%
40% 1.0%
20% 0.5%
'50 '60 '70 '80 '90 '00 '10 '20 '30 '40 '50 '60 '70 '80 '90 '00 '10 '20
Sources: (Left) Congressional Budget Office (CBO), Haver Analytics. Net debt is based on CBO January 2020 baseline. Forecasts are also CBO projections. Note: Years shown are fiscal years (Oct. 1
through Sep. 30). Data is as of December 31, 2020. Total federal assets are estimated from financial assets, government sponsored enterprise assets, gold reserves, mineral rights- including oil rights,
and federal land. This estimate does not include government-owned buildings, artifacts or art. (Right) J.P. Morgan PB Economics, Congressional Budget Office, Committee for a Responsible Budget.
Data is as of November 30, 2020.
results.
54
FAQS
What about geopolitical tensions?

Barring the unwind of economic imbalances, geopolitics generally haven't had a lasting market impact
S&P 500 INDEX AROUND MILITARY INVASIONS AND CONFLICTS (1950 - PRESENT)
Index, month of invasion = 100 Geopolitical events seldom have a lasting
140 market impact outside of commodity price
disruptions:
130
120 September 11th & U.S. invasion of

Afghanistan (2001). Markets recovered after
110 9/11 plunge. Declines in 2002 were arguably
driven by the continued Tech unwind.
100
1
Soviets into Czechoslovakia (08/1968).
90
2 Markets were resilient through the conflict, only
3 slumping much later during the post-Vietnam
80
period, which saw rising inflation and rates.
70
Arab-Israeli War (10/1973) led to an oil
60 embargo and U.S. energy crisis, leading to
surging inflation.
50
40
(12) (9) (6) (3) 0 3 6 9 12 15 18 21 24
Number of months before and after conflict started
Source: J.P. Morgan Asset Management – Eye on the Market (July 2014 edition), Bloomberg Finance L.P. Data is as of April 2014. Equity index represents price returns. Events not labeled include:
Korean War (1950), Soviets into Hungary (1956), Six-Day War (1967), Soviets into Afghanistan (1979), Martial Law in Poland (1981), Falklands War (1982), U.S. invades Grenada (1983), U.S. invades
Kuwait (1991), Serbians into Kosovo (1998) U.S. invades Iraq (2003), N. Korea sinks S. Korean Navy vessel (2010).
results.
55
FAQS
Where is inflation?
The Fed seems intent on reaching its inflation target; that may be hard to do
COMPONENTS SUGGEST HIGHER CORE INFLATION IS HARD TO ACHIEVE
%pt contribution to year-over-year % change in core PCE Almost half of consumer price inflation is
5% driven by four categories. All of them seem to
Everything else be either stalled (education, healthcare,
Education, healthcare, rents rents), or in secular decline (durable goods).
4% Durable goods  The chart shows the contribution to inflation

by category. As you can see, four categories
Core Inflation (% YoY)
drive more than half of the change in prices.
By understanding where prices in these four
3%
categories are likely to go, we can have an
informed view of where inflation is heading.
 Education, healthcare, and rent are all
2%
showing signs of slowing price increases.
Meanwhile, durable goods have actually
gotten cheaper in real terms since the 1990s
1% due to globalization.
 Given this view, we feel that inflation of 2% is
difficult to maintain, and it would be even
0% harder for inflation to spiral higher than that.
(1)%
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Source: Bureau of Labor Statistics, Haver Analytics. Data is as November 30, 2020.
results.
56
FAQS
Investment portfolios are built to last (we know bad stuff happens!)
But what about ___?
SOME EXAMPLES OF REASONS NOT TO INVEST
Year Event Cumulative price return1 There always seems to be a reason to be
1999 Y2K 205.6% nervous about investing
2000 Tech wreck; bubble bursts 155.6%
 While some of these events had significant
2001 September 11 184.5%
2002 Dot-com bubble: market down -49%
short-term impacts, the market has always
227.2%
2003 War on Terror – U.S. invades Iraq S&P 500 found a way to recover
326.9%
2004 Boxing Day Tsunami kills 225,000+ in southeast Asia 237.8%  There are always going to be events and
2005 Hurricane Katrina 209.9% headlines that make investors nervous and
2006 Not a bad year, but Pluto demoted from planet status 200.9% emotional when investing
2007 Sub-prime blows up 164.8%
 Admittedly, the up-close-and-personal nature
2008 Global Financial Crisis; bank failures 155.8%
of COVID-19 is different, and has the potential
2009 GFC: market down -56%; depths of despair 315.8%
to sway investor sentiment more than other
2010 Flash crash; BP oil spill; QE1 ends 236.8%
historical events
2011 S&P downgrades U.S. debt; 50% write-down of Greek debt 198.7%
2012 2nd Greek bailout; existential threat to Euro 198.7%  But this too shall pass: fear that we don’t find
2013 Taper Tantrum 163.4% a medical solution goes against everything we
2014 Ebola epidemic; Russia annexes Crimea 103.2% know about medicine, technology, and human
2015 Global deflation scare; China FX devaluation 82.4% ingenuity
2016 Brexit vote; U.S. election 83.8%
2017 Fed rate hikes; North Korea tensions 67.8%
2018 Trade war; February inflation scare 40.5%
2019 Trade, impeachment inquiry, global growth slowdown 49.8%
2020 COVID-19 pandemic, U.S. Presidential Election 16.3%
2021 What’s next? ???
Sources: J.P. Morgan Private Bank. FactSet. 1. Cumulative price returns for S&P 500 are calculated from December 31 of the year prior until December 31, 2020.
results.
57
Agenda
Page
Summary 49
FAQs 54
Disclaimers 76
results.
58
MEGATRENDS
The 5G revolution is on its way, but still has a long way to go

By 2026, 54% of total mobile data traffic 5G will account for 80% of North American
will be carried by 5G networks mobile subscriptions in 2026
Global Mobile Data Traffic Mobile subscriptions by region and technology (percent)
Exabyte/ month  The shift to 5G promises network
2G/3G 4G 5G
180 2020 2026 densification, allowing for more
100%
4% advanced services to be offered to more
9%
160
devices simultaneously
 5G has use cases well beyond mobile
140 80% broadband. It will also enable massive
advances in Internet of Things (IoT) and
Industry 4.0
120
66% 68%
 Asia is currently leading the 5G
60% 80% revolution, but North America and
100
5G Europe are quickening their pace
80  Technological innovations are years
from reaching the market, but Research
40%
60 & Development (R&D) is going on now
to tap the opportunity.
40  Overall, 5G could drive nearly $2.2

20% trillion in global economic activity over
2G/3G/4G
the next 15 years, per the Global
20
System for Mobile Communications
Association
0
0%
North East Asia Western Europe North America
results.
59
MEGATRENDS
Cloud Infrastructure is accelerating from 2019 levels
Top 4 Cloud Capital Expenditure (Capex) and Year-On-Year (Y/Y) Growth
$ Billions Capex Growth Y/Y

 Capex spending to support cloud
80 60%
infrastructure will rebound from 2 years
of depressed spending towards its long-
70 term 25% compound annual growth rate
51% 50% (CAGR).
60  Beneficiaries of cloud infrastructure

spending include IT hardware, data
40% centres, networking, infrastructure
39%
50
software, electrical equipment and
semiconductors.
40 30%
27%  While the digital transformation of the
27%
economy was already underway,
30 COVID-19 dramatically accelerated the
20% speed of adoption.
20  Economies of scale for the large cloud

14% players has resulted in higher
6% 10% 10% profitability levels at a faster than
10
expected pace, supporting the ability to
further invest.
0 0%
2015 2016 2017 2018 2019 2020E 2021E
results.
60
MEGATRENDS
China New Infrastructure: Blueprint for the next 5-Year Plan in China
Data center market in China expected to Increasing number of base stations supports
maintain its robust growth momentum the 5G ramp up in China
China data center market YoY growth Number of 5G base stations in China (‘mn)
 Aligned with digital transformation,
Overall industry Wholesale Retail ‘mn
China’s definition of “infrastructure” is
40% 5 broadening from transportation with a
4.7
digital tilt. The current emphasis is on
4.2 5G, Artificial Intelligence (AI), industrial
35%
Internet of Things (IoT), data centres,
4 electric vehicle (EV) charging, and
3.7
30% power grid.
 Unlike the traditional stimulus-led
25% 2.9 buildout, this New Infrastructure initiative
3
has garnered wide social participation
with targets formulated by local
20%
governments, state-owned enterprises
(SOEs) and even private enterprises.
2 1.8
15%
 We anticipate private sector
participation, which is expected to
10% account for >50% of the total new
1 0.9 infrastructure investment, to reduce the
fiscal burden, improve efficiency and
5%
2G/3G/4G minimize imbalances.
0.2
0% 0
2019
2020E
2021E
2022E
2023E
2024E
2025E
results.
61
MEGATRENDS
US Infrastructure has some potholes to fill; hopes for bipartisan progress in 2021
US Infrastructure Investment Gaps by 2040 Infrastructure Makes Up Decreasing
Share of Federal Spending
 Underinvestment across roads, airports
Projected Investment Investment Gap 5.5% and the electric grid reflect a change in
government priorities over the last 30
Roads $3.42 $3.36
years
5.0%
 The American Society of Civil Engineers
(ASCE) found that the nation’s
Electricity $3.15
infrastructure averaged a “D+,” meaning
4.5%
that conditions were “mostly below
standard,” exhibiting “significant
Airports $0.64 deterioration,” with a “strong risk of
4.0%
failure”.
 Globally, the US will fall behind without
Telecom $0.60
3.5% a significant step-up in infrastructure
spend. The 2019 World Economic
Forum’s Global Competitiveness
Rail 3.0% Report, ranked the United States 13th,
down from 5th in 2002.
 A further commitment to strategic
Water 2.5%
investments and maintenance is
considered necessary.
2.0%
Ports
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
results.
62
MEGATRENDS
A decade of residential construction retrenchment has resulted in a housing shortage

Inventory of homes for sale has tightened considerably
Year-on-year change in homes for sale, % of US population 16 years and older  Demand for housing is likely going to
40%
remain strong as millennials, the second
largest population cohort behind baby
30%
boomers, are increasingly entering their
30s and having life changing events.
 The unfortunate nature of COVID-19
20%
catalysed the movement towards home
ownership and away from densely
10%
packed urban dwellings
 Mortgage rates are at record lows and
unlikely to move drastically higher with
0%
the Fed on hold for the foreseeable
future, increased housing affordability
-10%  Inventory is lean as supply of existing
homes are near 20 year lows.
-20%  Strong demand and lack of supply are
likely to drive upside to both revenues
and margins throughout the supply
-30% chain
-40%
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
results.
63
MEGATRENDS
The EU Renovation Wave aims to increase efficiency and sustainability of the building stock
The majority of the European building A renovation rate of 2% would mean that
stock was built before the 1980s and are c. 60% of EU homes will be renovated and
highly inefficient in terms of energy use energy efficient by 2050
Households (millions) MIllion homes
Change in heat  As part of the EU Green Deal’s
demand (%)
Renovation Wave, the EU aims to
250 0%
35 double the renovation rate to 2% and to
renovate c.35mn buildings by 2030.
30  The renovation wave will cost €275
200 -5% billion per year, with about €90 billion
provided by public investment.
25
 The EU Renovation Wave plan could
150 -10% drive a cumulative 35% increase in
20
demand in the Construction sector over
the next 5 years.
15
100 -15%  The companies that are set to benefit
from this are focused on insulation,
10 heating, ventilation and air conditioning
(HVAC), and green building materials
50 -20%
5  We also expect construction markets to
benefit from current low interest rates
and abundant liquidity
0 0 -25%
2020 2030 2040 2050
New build homes
Efficient homes
France Germany Italy United Kingdom Inefficient homes
% change in heat demand
results.
64
MEGATRENDS
CO2 emissions set to decline due to lower targets across the globe
Power sector emissions, by region

Metric tons of CO2  COVID-19 has accelerated the shift
16,000 Rest of World towards renewable energy sources.
Other Asia-Pacific  Estimates indicate coal use in the power
India sector peaked in 2018 and emissions
14,000
China from the sector are expected to decline.
Other Americas
 Although coal use will likely rise again in
12,000 U.S. 2021 and 2022, it will likely never again
Middle East, Turkey & Africa reach the amounts consumed in 2018,
Europe as governments take action to reduce
10,000
coal exposure to meet their climate
targets.
8,000
 Consumption continues to decline in the
U.S. and Europe.
6,000  China’s commitment to become carbon-
neutral by 2060 also implies that coal
use in China’s power sector will shrink
4,000
over time. It is estimated that China’s
coal consumption will decline to 3% of
2,000 total energy mix by 2060 (estimated)
0
2012 2020 2025 2030 2035 2040 2045 2050
results.
65
MEGATRENDS
Favorable economics, in particular for wind, add to the push to adopt renewables
Cost of wind, solar and natural gas are Wind capacity around the world is
falling at an increasing pace growing rapidly as a result
Mean LCOE*, dollar per megawatt hour Gigawatts
 As the cost of clean energy falls, for
Rest of World
$140 400 4,500 utilities and corporates the move to
Wind Other Asia-Pacific renewables is becoming an increasingly
$130 Natural gas 4,000 India economic decision to make and capacity
350
is increasing rapidly across the globe as
Coal China
$120 a result.
Solar 3,500 Other Americas
300
 Offshore wind will likely emerge as the
$110 U.S. technology of choice, given its
3,000
250 Middle East, Turkey efficiency, the greater availability of
$100 & Africa installation sites and the relatively lower
2,500 Europe
cost per lifetime unit.
$90 200
 The International Energy Agency
2,000
$80 expects offshore wind to become a $1
150
trillion industry over the next two
$70 1,500 decades. The two biggest drivers are
100 countries' renewable targets and
$60 1,000 declining technology costs.
50  Offshore wind is set to become the

$50 largest source of electricity in the
500
European Union by 2040.
$40 0
0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2012
2020
2025
2030
2035
2040
2045
2050
results.
66
MEGATRENDS
Europe is leading the energy transition, committed to become the first climate-neutral
continent by 2050
The Latest Funding Underlines The Estimated Breakdown Of Capex (%)
Region’s Commitment To Climate Goals Implied By EU Green Deal
EU Funding in €bn  The European Green Deal is a set of
2,000 policies initiated by the European
750 1,824 Commission that will help Europe
become carbon-neutral by 2050.
Hydrogen
5% Energy  The European Green Deal is focused on
Batteries
9% efficiency energy decarbonization, infrastructure
1,500 Distribution 24%
grids
renovation, and roll-out of renewable
4% energy projects (wind and solar)
 Estimates suggest that the EU Green
1,074 Transmis
sion Deal could translate to €7tn of
1,000 grids investments by 2050
8%
 The European Union has a target to
achieve a 32% share of renewable
Passenger
Renewables EV energy in energy consumption by 2030
30% of total 18% 18%
500 funding to be  The EU’s most recently announced
committed to Heating Charging recovery package and the 2021-27
climate protection 2% Buses/Trucks stations
8% 4% budget, totalling over €1.8tn, further
supports these efforts
-
2021-27 2021-24 Next Recovery
Budget Gen. EU Plan
results.
67
MEGATRENDS
Decarbonization goals of China, Korea and Japan call for a powerful shift of energy mix to
renewables
China, Japan and Korea account for over Solar and wind power to represent ~60% of
1/3 of global CO2 emissions (2019) China’s power generation by 2060 (estimated)
100%
 China, Japan and Korea all announced
their timelines for decarbonization, a
90%
significant development as the three
countries combined account for ~34%
80%
of the world’s carbon emissions.
China,
29% 70%  To decarbonize the electricity mix,
Others, China will need to raise its reliance on
32%
60% renewable energy sources (solar, wind
and hydro) from current 16% to 50%+
50% by 2030, 70+% by 2050.
Saudi Japan,  A new basic energy plan by Japan is
Arabia, 3% 40%
2% due by June 2021, and potentially other
South environmental targets or directives
Indonesia, 30%
Korea, before the end of 2020.
2% 2%
Iran, 2% US, 15% 20%  Korea is committing tens of billions in
US dollars as part of the country’s multi-
Germany, India, year focus of halving its coal fired plants
Russia, 10%
2% 7%
4% to 30 by year 2034.
0%
2015 2020 2025 2060
Coal-fired Hydro Wind Solar Nuclear
results.
68
MEGATRENDS
Consumer behavior undergoes significant changes; pent-up demand rampant for 2021
More people expect to make a portion of purchases
online post COVID – 19 than before % growth in customers
 Despite weaker macro backdrop and lockdown constraints, total
Before COVID - 19 Expected Growth After COVID - 19 purchasing category consumer spending remained surprisingly strong.
online
 The slowdown in brick and mortar spending was met with an
Entertainment at home 44%
increase in the digital transactions. Some changes in consumer
Consumer Electronics 41%
behavior will be permanent.
Books 38%
38%  Recent strength in home-related categories likely lasts into 2022;
Tobacco
Footware 34% Declines in travel and leisure as well as service categories seem to
Accessories 30% be leveling off.
Skin care and makeup 28%  Ultimately, the rebound in spend despite rising COVID case counts
Apparel 28% is positive; with Brick & Mortar improvement week over week
Jewlery 27% following lackluster start to the year.
Snacks 25%
Child Products 20%
Vitamins 19% Real Personal Consumption Expenditures
Fitness and wellness 19% $ Billions
Food takeout / delivery 18%
14000
Furnishing 18%
Alcohol 16% 13000
Personal care products 15%
12000
Household supplies 11%
Groceries 10% 11000
OTC medicine 4%
10000
-10 10 30 50 70 90 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20
results.
69
MEGATRENDS
Inventories and transport data should inflect higher in 2021
CASS Intermodal Growth sees worst y/y Global Inventories hit multi-month lows
growth due to lower fuel + lag vs truckload during the late summer
rates; M/M looking more optimistic for 2021
Inventory to sales ratio, Indexed 2005 = 1 (yoy change)
Index Value Year/ year 50%
Month/ month
160 10.0%
 Inventory depletion from April – August
40% has fuelled a need to ramp-up
140 production and rebuild inventories.
5.0%
30%  December Manufacturing PMI data
120
showed the steepest rise in production
0.0% in over six years, with significant
20%
100 strength in new orders inflows given a
renewed rise in demand.
80 -5.0% 10%
 Alongside strength in the U.S. consumer
and recovery in COVID-impaired
60 0%
-10.0% sectors, manufacturing should continue
to be a bright spot in the 2021 recovery.
40
-10%
-15.0%
20
-20%
-20.0%
0
'19 '20 -30%
-20 -25.0% '05 '08 '11 '14 '17 '20
results.
70
MEGATRENDS
New console launches from Sony and Microsoft to catalyze further gaming demand
New gaming technologies are likely going to keep gaming demand strong well into 2021
Console upgrade preferences by platform Tencent, Sony, Apple and Microsoft are
leading gaming sales  After waiting for over 6 years, 2 vendors
% of users (multiple responses allowed) are simultaneously upgrading their
4Q19 gaming revenue $ mn
60% $6,000 hardware platforms.
US  Based on a JP Morgan survey, 89% of
China
PlayStation and 93% of Xbox users
50% $5,000 Japan
expect to upgrade within a year
 A large number of games will be coming
40%
to market over the next 12 months to
$4,000
take advantage of the new consoles
and drive further industry growth.
30% $3,000
 Impressive new PC graphics cards from
NVidia and Advanced Micro Devices
(AMD) are driving a higher-than-
20% average upgrade cycle that may also
$2,000
boost gaming demand.
 China and the US generate significantly
10% more gaming revenue than other
$1,000
countries.
0%
$0
PS5 PS5 Xbox Xbox Others
Digital Series Series
Edition X S
results.
71
MEGATRENDS
Yes, the shift to over-the-top (OTT) services has started…but the opportunity set
remains large
U.S. subscription OTT video service users Share of US Households with the Following
and penetration, 2017-2022 Subscriptions:
250 100% 90%  Penetration of streaming services is high

subscription OTT video
service users (lhs) but still increasing.
% of population (rhs) 80% 78%
 Streaming has a high share of consumer
193 198 wallets but digital entertainment remains a
200 188 80%
182 70% high growth category.
65%
170
 Households, on average, have less than
60%
153 three streaming apps. With increased
150 60% supply form large, well-funded companies,
50% households could reach 4-5 subscriptions
41% by 2022.
40%
100 40%
30%
30%
20%
50 20%
10%
0%
0 0% Streaming Cable and Streaming Gaming
2017 2018 2019 2020 2021 2022 video satellite music
service service
results.
72
MEGATRENDS
The move towards a zero-carbon world has only just begun, decarbonization is expected
to define the 2020s
Renewables will account for a significant European countries are leading in the
portion of power generation by 2050 energy transition, while China and the
U.S. are accelerating their efforts
Outlook for power % of total power Germany Italy
Historical global power generation mix generation from Iberia U.S.  The power generation mix is
Canada Brazil transforming, with solar and wind
100% China India
Other Average emerging as the new top contributors.
100%
90% Solar  Global levels of investment are

Hydro 90% significant and are accelerating the
80% shift towards clean energy
80%
Nuclear  Wind and Solar alone are expected to
70% Wind
supply 56% of electricity globally in
70%
60% Oil 2050, up from 9% today
60%  Nuclear, hydro and other renewables
50% Gas
are expected to provide a further
50% 20%, taking zero-carbon sources to
40%
76% of total power generation.
30% 40%  European countries are leading in the
energy transition, while China and the
20% 30% U.S. are accelerating their efforts to
Coal
decarbonize.
10% 20%
0% 10%
1970
1980
1990
2000
2010
2020
2030
2040
2050
2012
2015
2020
2025
2030
2035
2040
2045

2050
results.
73
Agenda
Page
Summary 49
FAQs 54
Disclaimers 76
results.
74
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J.P.

Morgan Australia Market – Private Bank Outlook 2021

Strictly Private and Confidential

The world will heal. Embrace the optimism.

Our view: Investment action:

We prefer the U.S., Asia, and

Reduce cash. Use prudent leverage.

Cyclical sectors to play catch-up in 2021,

Use inexpensive FX hedging.

7,000 Bank of Japan  In addition to traditional monetary policy tools

Source: Bloomberg Finance L.P. Data as of February 2, 2021.

Cash is likely to be a drag for years to come – an erosion of purchasing power

-40 $800 $800

(6)% -60 $600 $600

Australia macro outlook

30% 15% 250

-10% -5% 2000

A weaker U.S. dollar generally benefits Emerging Market assets…

Source: MSCI, FactSet. Data is as of January 4, 2021.

Chinese sovereign bonds are in focus

INTEREST RATE DIFFERENTIAL RISK-ADJUSTED RETURN

Prudent leverage continues to be attractive

Source: Bloomberg Finance L.P. Data as of February 2, 2021.

 Derivatives can monetize volatility and provide downside protection

2 Supply chain redirection

3 “Decoupling” has created benefits for local companies

 Localization has increased across many sectors, particularly in tech

5,000 1968 1976

1932 1952 1960

We expect 2021 to continue to reward companies with superior earnings growth

2020 equity index total returns

Source: Bloomberg Finance L.P. Data as of February 2, 2021.

The Australian equities universe is heavily represented by value sectors

Communication Services Energy Utilites

 In comparison to global peers, the ASX

 The sector weightings suggest index

Source: Bloomberg Finance L.P. Data as of February 2, 2021.

The Big Picture

Japan Topix 1822 1,840 - 1,890 16.0x 14 – 16% 2.4% 1 - 3% 3 - 5%

China MSCI China 116 120 - 124 14.3x 20 – 22% 2.2% 3 - 7% 6 - 9%

Our bottom up approach to S&P 500 earnings

Source: Factset, J.P. Morgan Private Bank as of November 27th 2020.

U.S. Equities: Value or Growth? We like both

U.S. Equities: Key takeaways from our favorite 4 sectors

U.S. Equities: How we view the rest of the sectors

130  Companies with strong balance sheets have

China Equities: Growth fuelled by cyclical and policy forces

China Equities: Growth fuelled by cyclical and policy forces

for construction materials.

COVID-19 may accelerate the growth of megatrends

Digital transformation Healthcare innovation Sustainability

Artificial intelligence Gene therapy Clean energy

5G Precision medicine Electric vehicles

Factory of the future Diagnostics Agricultural technology (Agtech)

Source: J.P. Morgan Private Bank.

Global tactical trends

Early Cycle Travel & Clean

Source: J.P. Morgan Private Bank.

5G adoption likely to accelerate in 2021 and beyond as the smartphone replacement

Source: J.P. Morgan Investment Bank Research. Data as of December 9, 2020.

Source: eMarketer. Data as of December 15, 2020.

Gaming Cycle 2021 and Upcoming Catalysts

Software publishers are big winners in digital gaming

Increased engagement naturally extends to