jp morgan asset management -valuenotes investment confidence index wave 9

7/30/2019 JP Morgan Asset Management -ValueNotes Investment Confidence Index Wave 9

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J.P. Morgan Asset Management ValueNotes Investment Confidence Survey November 23rd to December 04th, 2011

J.P. Morgan Asset Management ValueNotesInvestment Confidence Index Wave IX, December 2011

Indias only Investor and Advisor focused sentiment indicator


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J.P. Morgan Asset Management Standard Template 2009.ppt


J.P. Morgan Asset Management ValueNotes Investment Confidence Index

Background

Introduction to the indices

Survey methodology

Respondent profile

Investor and advisor confidence Key findings

Investment activity Retail investors and corporate treasuries

Other sentiment influencers

J P M A t M t St d d T l t 2009 t


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Background

The inaugural Investor Confidence Index was launched in the UK in the early 1990s

Subsequently launched in Germany, France and other European countries

In Asia, similar Investor Confidence Indices launched by the firm in Hong Kong, Japan and Taiwan

The Hong Kong Investor Confidence Index has just completed its 21st wave (3Q 2011) and continues to evoke

much interest

The J.P. Morgan Asset Management ValueNotes Investment Confidence Index (ICI) was launched in India in

July 2009

2

J P Morgan Asset Management Standard Template 2009 ppt


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J.P. Morgan Asset Management ValueNotes

Investment Confidence Index

The definitive indicator of investment confidence levels across key investment centers

Focused on three important investor segments: retail investors, corporates and the advisor community

(distributors)

Key objectives

To quantify confidence in the investment environment

To study investment behavior and sentiment over time based on key factors

To evaluate trends in such behavior

To study short-term and long-term changes in investment outlook

3



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g g p pp


Quarterly indices tracking sentiment across the investment community

Investment Confidence Index: A composite index reflecting the combined sentiment of retail investors,

corporates and distributors

Retail Investor Confidence Index: Based on a survey of retail investors across India

Corporate Confidence Index: Based on a survey of corporate treasuries across India

Advisor Confidence Index: Based on a survey of distributors of financial products

Banks, National/Regional Distributors (N/RDs) and Independent Financial Advisors (IFAs)

4



6/57J.P. Morgan Asset Management ValueNotes Investment Confidence Survey November 23rd to December 04th, 20115

Survey Methodology: face to face, online and telephonic interviews

Screener questions capture respondent profile

Six index questions - capture respondents confidence, over the next six

months

1) Improvement in the Indian economic situation

2) Improvement in the general investment market environment and atmosphere3) Improvement in the global economic situation

4) Increase in the BSE Sensex

5) Appreciation in personal/clients investment portfolio

6) Increase in personal/clients investments

Other sentiment drivers

Delhi

Ahmedabad

MumbaiPune

Kolkata

ChennaiBengaluru

Hyderabad




Index Construction Methodology

Each Index question assigned a point between 0 and 200

All six Index questions carry equal weight

Investment Confidence Index equally weights retail, corporate and advisor indices

Advisor Confidence Index equally weights the Bank Confidence Index, N/RD Confidence Index and the IFAConfidence Index

Indices constructed in a similar manner from the six Index questions posed to all

0 50 100 150 200

Extremely LikelySomewhat LikelyMore or Less the Same as CurrentSomewhat UnlikelyExtremely Unlikely




Respondent Sample Wave IX, December 2011

City Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

Retail 12% 14% 12% 11% 12% 12% 12% 15%

IFAs 11% 11% 11% 15% 11% 12% 15% 14%

Corporate 26% 34% 12% 6% 10% 8% 4% 0%

Wallet Size

(INR)2 to 5 lakhs 5 to 10 lakhs 10 to 25 lakhs 25 to 50 lakhs 50 lakhs +

Retail 26% 34% 22% 12% 12%

Treasury size

(INR)

10 lakhs to 1

crore

1 crore to 50

crores

50 to 150

crores

150 to 500

crores

500 crores +

Corporate 0% 8% 8% 40% 44%

Category Retail Corporate IFAs(Advisors)

Banks(Advisors)

NRDs(Advisors)

Number of respondents 1,635 50 242 20 20



Investor and Advisor Confidence, Wave IX, December 2011

- Key Findings




9

Investment Confidence Index (ICI) remains flat

Investment Confidence Index and its underlying indices

Investment Confidence Index (125) shows no improvement from July 2011, remains subdued.

Retail investor confidence reaches its lowest in nine quarters, optimism within India Inc. and advisors improves.

136

146

141

140145

146

132

124125

138145

147 152

160

152

140137

132134

142

131 134 132 134

122

109 115

136

152

146

135 144 135

130 125 127

100

150

200

Jul 2009 Sep 2009 Feb 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jul 2011 Dec 2011

Investment Confidence Index Retail Corporate Advisor




Bank confidence has recovered by 18 points from its July 2011 low to reach 133.

N/RDs are also marginally more optimistic this quarter (129).

10

IFA confidence plummets 17 points, touches all time low

IFAs vs. Banks vs. N/RDs

135

150

146 140

157

147

139 136

119

138

158

150

140

135

148

130

115

133135

147143

127

140 147

126

124 129

100

150

200


IFA Banks N/RDs




11

Confidence in Indias growth story revives, but is still measured Sentiment surrounding the Indian economy and investment environment is still weak as compared to that

September 2010 levels.

Confidence over appreciation in portfolio and change in investment amounts falls continuously over the year.

148

141

113

143

1

39

132 13

6

154

149

13

4

146

146

149

146

147

143

126

141

142 1

49

141

152

144

111

1

39 1

45 1

51

140

157

149

125

141

145

156

1451

53

148

131

142 1

50

154

146

136

127

117

130 1

39 1

46

132

121

121

103

123

13

6

1

39

1241

30

126

107

125

130

129

125

50

100

150

200

Improvement in Indianeconomic situation

Improvement ininvestment market

environment andatmosphere

Improvement in globaleconomic

environment

Increase in BSESensex

Appreciation ininvestment portfolio

Change in amountof investments

InvestmentConfidence Index




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142

135

131

101

124

129

120

119

110

92

119

130

125

136

134

128

135

131

50 100 150 200

Change in amountof investments

Appreciation ininvestment portfolio

Increase in BSE Sensex

Improvement in globaleconomic environment

Improvement in investment marketenvironment and atmosphere

Improvement in Indianeconomic situation

Retail

Corporate

Advisor

Neutral

12

Investors more confident about global economic recovery than

corporates and advisors

India Inc. (92) is the most sceptical about improvement in the global economic situation.

Advisors most upbeat about increase in their clients investments.

Extremely LikelySomewhat LikelyMore or Less the Same as CurrentSomewhat Unlikely


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Other sentiment drivers

- Economic signals, Sensex expectations



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19%15% 11% 13%

20%25% 23%

19%12%

4%

12% 10%

53%46%

20%

36%

14%

24%

15%

24%

49%

26%31%

24%

0%

20%

40%

60%

Dec 2010 Mar 2011 Jul 2011 Dec 2011 Dec 2010 Mar 2011 Jul 2011 Dec 2011

Retail Corporate Advisors

13%21%

17% 19%20%

9%10% 8% 8%

36%

22%

6%

24%

4%

19%

24% 21%

7%

0%

20%

40%

60%

Good corporate results Increase in employmentopportunities

Better than expectedmonsoon

Strong GDP growth Fiscal and monetarymeasures

Growth in Exports


14

Strong GDP growth the most favoured economic indicator through the

year

In December 2011, retail investors (21%) voted for increase in employment opportunities as the most positive

economic indicator. Governments fiscal measures was the second most favoured indicator for retail (20%) andcorporate investors (22%).

Corporate and advisor votes for strong GDP growth have decreased over the year indicating that they expectGDP growth to decline in the coming months.

December 2011

Good corporate results Strong GDP growth



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26%

15% 13%4%

13% 7% 6%

19%

32%

10%4% 6%

18%

6% 6%

18%24% 24%

3% 3%16%

1% 1%

25%

0%

20%

40%

60%

Inflation High govtborrowings / high

fiscal deficit

Currencyfluctuation

Increase ininterest rates

Poor governanceand corruption

Eurozonesovereign debt

crisis

Decrease inindustrial output

Global uncertainty


15

Inflation and global uncertainty voted biggest fears for Indian economy

High fiscal deficit, a growing concern among advisors (24%) over the year.

Inflation concerns have dropped significantly among corporates and advisors. In this quarter, only 32%corporate investors voted high inflation as the most negative economic indicator as against 56% in July 2011.

December 2011

19%

26%31%

26%

19%

22% 23%

13%

63%70%

58%

32%

8%12% 18% 18%

48%

60%54%

24%

16%

22% 22%16%

0%

20%

40%

60%

80%

Dec 2010 Mar 2011 Jul 2011 Dec 2011 Dec 2010 Mar 2011 Jul 2011 Dec 2011


Inflation Corruption



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3% 3% 6% 9%

18%20%

13%

15%

5% 5% 3%5%

1% 2% 5%

8%

29%

32%

15%

2% 0% 0%0%

10%

20%

30%

40%

0- 13000 13000 -14000

14000 -15000

15000 -16000

16000 -17000

17000 -18000

18000 -19000

19000 -20000

20000 -21000

21000 -22000

22000 andabove

Retail AdvisorBSE Sensexduring the

16

BSE Sensex likely to trade between 17,000 20,000 in June 2012

48% retail investors and 76% advisors expect the benchmark index to trade between 17,000 and 20,000 in June

2012.

Indian investors and advisors were an optimistic lot in July 2011 and 67% of them expected the Sensex to trade

between 19,000 and 20,000 in December 2011.

Indian investors and advisors bullish about the Sensex in June 2012

Majority of investors and advisors prove inaccurate about Sensex trading levels in December 2011

0%0%

1% 2%4%

12%

23% 25%19%

10%

2% 1%1%

0% 1%3%

0%5%

15%

23%

35%

10%7%

0%0% 1%

0%

10%

20%

30%

40%

0- 14000 14000 -15000

15000 -16000

16000 -17000

17000 -18000

18000 -19000

19000 -20000

20000 -21000

21000 -22000

22000 -23000

23000 -24000

24000 -25000

25000 -26000

Retail AdvisorBSE

Sensex in

July 2011

BSE Sensex inDecember

2011



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Sensex expectations not met

Investors and advisors generally expect a 5-10% increase from the Index levels during the survey.

For the last two quarters the Sensex has been trading 15-20% lower than the expected level.

Wave

Sensex

level

during

the

survey

Weighted Expected

Sensex - 6 months

later

Deviation Expected

v/s Actual Sensex level

during the survey

Actual

Sensex level

- 6 months

later

Deviation Expected v/s

Actual Sensex level six

months later

Retail Advisors Retail Advisors Retail Advisors

July 2009 15,670 16,591 16,722 6% 7% 17,465 -5% -4%September 2009 17,127 17,315 18,611 1% 9% 17,528 -1% 6%February 2010 16,430 17,464 17,718 6% 8% 17,971 -3% -1%June 2010 17,701 17,704 17,900 0% 1% 20,509 -14% -13%September 2010 20,069 19,355 17,900 -4% -11% 19,445 0% -8%December 2010 20,509 19,519 19,389 -5% -5% 18,846 4% 3%March 2011 19,445 19,093 19,389 -2% 0% 16,454 16% 18%July 2011 18,197 19,100 19,596 5% 8% 15,870 20% 23%December 2011 15,870 17,391 18,942 10% 19% N/A N/A N/A


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Investment strategy and activity Retail and corporate investors



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Mutual funds attract investors

Investments in stocks have fallen by 6 percentage points since last quarter, whereas investments in mutual

funds rose by 9% during the same period.

Investment activity in gold and other bullion falls 19 percentage points since December 2010.

Retail investment activity in the past 12 months

* Other stock market derivative products (e.g. futures, options)

54% 56%

35% 36%

7%

37%

58%

22%

27%

9%

42%

59%

29%25%

9%

41%

58%

24%17%

8%

0%

20%

40%

60%

80%

Time deposit Insurance and Retirement products Property Gold and other bullion Foreign currencies

Dec 2010 Mar 2011 Ju l 2011 Dec 2011

68% 66%

23%

13%4%

12%

61%

50%

19% 16%

2%13%

64%61%

22% 20%

4%12%

58%

70%

23%

14%3%

8%

0%

20%

40%

60%

80%

Stocks Mutual Funds Bonds Certificate of deposits Warrants Derivatives*



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Investors prefer to preserve capital instead of taking risks

42% of retail investors describe their current investment strategy as preserve capital.

Only 14% expected to adopt an extremely aggressive investment strategy in the next six months, while 39%

investors not expected to change their investment strategy in the coming months.

Current investment strategy Investment strategy in coming 6 months

13%

42%29%

16%Risk Averse

PreserveCapital

CautiousInvestments

Wil ling to take

risks

14%

32%39%

10%5%

Extremelyaggressive

Somewhataggressive

No change

Somewhatconservative

Extremelyconservative



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Risk-averse investors prefer mutual funds to stocks Risk-averse investors reduce investments in stocks (from 70% to 56%) during the last 3 quarters; increase

activity in mutual funds (from 44% to 68%). Risk takers increased their exposure in stocks (from 67% to 74%).

Investors viewing long-term investment period as 1 2 years increased activity in mutual funds (from 38% to

78%) in the last 3 quarters.

54%

70%64%

70%

61%56%

48%

60%

73%

52%59%

52%52%

65%69%

65%68%

61%

44% 41%

68% 67%

75%74%

0%

20%

40%

60%

80%

Mar 2011 Jul 2011 Dec 2011 Mar 2011 Jul 2011 Dec 2011

I am very risk averse

I want to preserve mycapital

I am a fairly cautiousinvestor

I am a risk taker

Mutual Funds Stocks

38%

65%

78%65%

57%51%48%

57%

76%

58%

68%

56%54%

60%63% 61%

70%62%

52%

60%66% 64%

61% 62%58%

72% 69%

53%60%

48%

0%

20%

40%

60%

80%

Mar 2011 Jul 2011 Dec 2011 Mar 2011 Jul 2011 Dec 2011

1 year 2 years

2 years 3 years

3 years 5 years

5 years 10 years

Over 10 years

Retail investment in mutual funds and stocks v/s current investment strategy

Retail investment in mutual funds and stocks v/s interpretation of long term investment periodMutual Funds Stocks



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Corporate investors increase investments in mutual funds significantly

Corporate investment activity in the past 12 months

Corporate investment activity in debt and equity mutual funds surged by 12% and 18% respectively since July

2011.

Activity in stocks (30%) appears to be reviving after falling to a low point in July 2011 (18%).

* Other stock market derivative products (e.g. futures, options)

67%

43% 47%

90%

37%45%

74%

32%

44%

92%

38%

46%

70%

22%30%

74%

26%18%

70%

36% 32%

86%

44%

30%

0%

20%

40%

60%

80%

100%

Term deposi ts In ter-corporate deposi ts Commercial Papers Debt Mutual Funds Equity Mutual Funds Stocks

Dec 2010 Mar 2011 Ju l 2011 Dec 2011

30% 28%

8% 6% 4%8%

59%

45%

24% 25% 14%

0%

48%38%

16%10% 6% 2%

34%

22%4% 4% 2% 4%

0%

20%

40%

60%

80%

100%

Bonds Certificate of deposits Warrants Derivatives* Structured products Others



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Money Market Funds lose sheen due to incessant interest rate hikes

Corporate investments in debt mutual funds in the past 12 months

Investment activity in Money Market Funds (60%) fell significantly in December 2011 after hovering around 85%

in the last two quarters.

Investments in floating rate bonds, debt funds and gilt funds surged by 16 percentage points and 14 percentage

points respectively over the last quarter.

35%

67% 69%

39%

25%

46%

86%

60%

40%

32%

20%

84%

36%

14%

8%

26%

60%

42%

30%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bond funds Money MarketFunds

Fixed MaturityPlans

Floating RateDebt Funds

GILT funds

Dec 2010 Mar 2011 Jul 2011 Dec 2011



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50%64%

72% 76%6%

12%18% 8%

44%

24% 10% 16%

0%

20%

40%

60%

80%

100%

Short term bond funds Income/ Dynamic / ActiveBond Funds

Gilt funds Income/ Duration funds

Increase portfolio

Decrease portfolio

Portfolio will remain thesame

24

Corporates likely to maintain current investment levels in liquid funds Despite RBIs regulation on limiting banks exposure in liquid funds to 10% (of the previous years networth),

48% of corporate investors will maintain the current investment amount.

76% of corporate investors are expected to maintain their investments in duration funds; corporates more likelyto increase investments (44%) in short term bond funds.

10%

18%

50%

12% 10%

16%

30%

48%

4% 2%0%

20%

40%

60%

80%

Def in itely w il l inc rease Somewhat l ikely to increase Maintain the currentinvestment amount

Somewhat l ikely to decrease Definitely will decrease

Jul 2011 Dec2011Effect of RBIs regulation on exposure to liquid funds

Corporate investments in duration funds



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Corporates expecting 10-20% returns view long-term as 2-5 years

Investors who expect more than 20% from their investments were divided on their interpretation of long term

investment period.

Interpretation of long term v/s annual returns

0%0% 0% 0% 0%

0%

50%

18%14%

5%

25%

0%

50%

36%

29% 52%25%

100%

0%

18%

29%

29%

38%

0%

0%9%

14%

5%13%

0%

0%

20%

40%

60%

80%

100%

Less th an 1 year 1 year 2 years 2 years 3 years 3 years 5 years 5 years 10 years Over 10 years

Above 20%

16 20%

11 15%

5 10%

0 5%


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Other findings

- Investment sentiment by demography, investment preferences, capital

investments



28/57


HNIs most confident this quarter; confidence falters across all age groups Investors with smaller wallet sizes (INR 2- 5 lakhs and INR 5-10 lakhs) witnessed continuous decline in

confidence levels over the past year.

Investors aged 25 35 years are the most confident age group (134), while those aged 50 -55 years are the

least optimistic (122).

158160

159162 162

138142 144 146 144139 138 136 136 137

125129

139133

143

100

120

140

160

180

INR 2 to 5 lakhs INR 5 to 10 lakhs INR 10 to 25 lakhs INR 25 to 50 lakhs INR 50 lakhs and above

Dec 2010 Mar 2011 Jul 2011 Dec 2011Retail Confidence (Dec 2010)- 159.5Retail Confidence (Jul 2011) -137.5

Retail Confidence (Mar 2011)- 142.0Retail Confidence (Dec2011) - 131.5

161 164 160 157 157 153 157 151

140140 142143 143

149138 136

125124

139 136 137 140 138 140130

135 139

125

134 134 132 132

126 122 127 126

100

120

140

160

180

Age 22 to 25 Age 25 to 30 Age 30 to 35 Age 35 to 40 Age 40 to 45 Age 45 to 50 Age 50 to 55 Age 55 to 60 Age 60 to 65

Dec 2010 Mar 2011 Jul 2011 Dec 2011Retail Confidence (Dec 2010) - 159.5Retail Conf idence (Jul 2011) - 137.5

Retail Confidence (Mar 2011) - 142.0Retail Confidence (Dec 2011) - 131.5

Retail Confidence - By Liquid Assets/ Wallet Size

Retail Confidence - By Age



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Hyderabad investors upbeat; Mumbai IFAs the most despondent

Slowdown in domestic economic growth coupled with global economic uncertainty weigh down investor

confidence across all cities, except Mumbai (148) and Hyderabad (152).

Delhi/ NCR IFAs (139) continue to occupy their pole position in the current quarter too.

165 165149

162147

176

152160

151

130 133

152 147136 135

150158

135 138144

127136

126138141

148

125 125 125 128

152

110

80

120

160

200

Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

Retail (Dec 2010) Retail (Mar 2011)Retai l (Jul 2011) Retai l (Dec 2011)

Retail confidence (Dec 2010)-159.5 Retail confidence (Mar 2011) - 142.0Retail confidence (Jul 2011) - 137.5 Retail confidence (Dec 2011) - 131.5

159 154

139146

152 152

126

146145 146

130

150

131137 139 133

139130 132

140 141 135 137141139

106

120 115 120 118121 117

80

120

160

200

Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

IFA (Dec 2010) IFA (Mar 2011)

IFA (Jul 2011) IFA (Dec 2011)IFA confidence (Dec 2010)- 132.2 IFA confidence (Mar 2011) - 123.5IFAconfidence (Jul 2011) - 109.0 IFA confidence (Dec 2011) - 115.0



30/57


Investors continue to favour Banking and Financial services

Investors (42%) and advisors (55%) vote for banking and financial services as the most attractive sector for

investments.

Telecom is expected to attract the least number of investors as it ranks at the bottom of investors and advisors

wish list.

23%

36%

18%

24%25%

27%

21%

2%

23%

42%

19%

26%

22% 22%

14%

3%4%

56%

15%

38%

10%12%

6%

11%8%

55%

10%

19%

7% 8%

5%

12%

0%

10%

20%

30%

40%

50%

60%

Automobiles Banking andFinancial Services

Capital Goods FMCG Oil and gas IT & ITES Telecom Others

Retail (Jul 2011) Retail (Dec 2011)

Advisor (Jul 2011) Advisor (Dec 2011)

Preferred sectors for investment Retail investors and Advisors



31/57


Investors upbeat about investing internationally; advisors cautious

48% of retail investors are inclined towards considering international investments, while advisors are marginally

cautious as only 35% of them responded that they would recommend their clients to invest internationally.

International investment preference- Retail investors International investment preference- Advisors

48%52%

Yes

No

35%

65%

Yes

No



32/57


Investors prefer Asian markets, advisors recommend emerging markets

Advisors (33%) show a clear preference for emerging markets such as Eastern Europe and Latin America.

Asia (38%) is the most preferred destination for retail investors, followed by the US (21%).

21%

15%

13%

38%

13%

9%

4%

0%

9%

3% 2%

6%5%

13%

33%

3%

0%

10%

20%

30%

40%

50%

USA Europe Japan Asia South East Asia Greater China Emerging markets Others

Retail Advisors



33/57


Expectation of increase in income and profits moderates

Only 50% of corporates expect their PAT to increase in the next 6 months, in comparison to 85% in Dec 2010.

Retail investors expectation of increase in income in the coming six months also declined noticeably.

0% 0% 1% 1% 0% 0% 0% 4%

1% 2% 7% 3% 0% 2% 2%8%17%

23%

26%35%

16%

22% 26%

36%49%

53%

47% 38%

71%

34%

54%

36%

32%22% 19% 22%

14%

42%

18% 16%

0%

20%

40%

60%

80%

100%

Retail (Dec2010)

Retail (Mar2011)

Retail (Jul2011)

Retail (Dec2011)

Corporate (Dec2010)

Corporate (Mar2011)

Corporate (Jul2011)

Corporate (Dec2011)

Extremelylikely

Somewhatlikely

More or lessthe same

Somewhatunlikely

Extremelyunlikely

Retail Investor increase in personal income Corporate treasuries in profits (NPAT)



34/57


Corporate community likely to make capital investments in the next 6 12

months

Corporates appear to be bullish about the economy as over 50% of them are expected to undertake capital

investments in the next 6 12 months

18% 4%24%

2%

12%

12%

36%

8%

20%

24%

24%

38%

27%

40%

8%

38%

24%20%

8% 14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dec 2010 Mar 2011 Jul 2011 Dec 2011

Extremely likely

Somewhat likely

More or less thesame

Somewhat unlikely

Extremely unlikely



35/57


Investors prefer financial advisors and personal network

Retail investors prefer financial advisors (20%) and personal network (26%) as a source of information for

making financial decisions.

Retail investors using advisory services of brokers have fallen by 8 percentage points over the year.

27%

16%

8%6%

11%

24%

8%

18% 18%

5%

11%10%

25%

13%

18%19%

7%

12%

7%

26%

9%

19% 20%

9%

11%9%

26%

6%

0%

5%

10%

15%

20%

25%

30%

Broker services Financial advisor Bank relationshipmanager

News & financialmedia

Online resources Personal network Personal research

Dec 2010 Mar 2011 Jul 2011 Dec 2011


36/57


Thank you


37/57


Annexure



38/57


Indices by city December 2011 (Wave IX)

37

Dec 2011

Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

IFA Confidence Index 139.1 106.2 120.2 115.1 119.6 117.5 120.8 116.9

Improvement in Indian economic

situation146.2 101.9 113.5 120.3 116.1 112.1 112.5 124.2

Improvement in investment market

environment and atmosphere128.8 92.6 115.4 109.5 103.6 113.8 123.6 116.7

Improvement in global economic

environment100.0 77.8 103.8 97.3 107.1 108.6 112.5 100.0

Increase in BSE Sensex 142.3 114.8 132.7 124.3 116.1 120.7 112.5 107.6

Appreciation in investment

portfolio

157.7 122.2 126.9 117.6 126.8 119.0 125.0 115.2

Change in amount of investments 159.6 127.8 128.8 121.6 148.2 131.0 138.9 137.9

Dec 2011

Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad AhmedabadRetail Confidence Index 140.8 148.0 124.5 124.9 125.2 128.4 151.9 110.0


situation149.0 160.2 125.0 131.2 136.0 132.2 158.0 69.0




environment126.9 144.7 118.8 123.1 121.9 125.8 156.3 110.5



portfolio137.8 144.4 118.5 129.6 132.1 131.9 161.3 129.3




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Indices by city July 2011 (Wave VIII)

38

July 2011



situation165.0 118.2 141.4 142.2 135.5 141.0 132.2 133.7




environment150.2 136.9 133.3 140.4 123.0 129.5 113.9 146.8



portfolio156.9 144.2 133.3 146.4 130.0 137.3 125.7 133.4


July 2011




situation140.6 131.5 124.2 145.2 140.8 132.8 130.3 125.9




environment114.1 98.9 97.0 104.8 111.8 112.1 112.1 116.7



portfolio145.3 141.3 151.5 135.5 144.7 143.1 139.4 157.4



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Indices by city March 2011 (Wave VII)

39

March 2011



situation154.2 132.9 143.5 156.7 161.6 143.2 144.8 159.2




environment147.3 107.1 128.8 155.2 152.5 119.5 120.7 137.1



portfolio153.5 139.8 130.3 143.6 143.3 139.0 134.0 153.2


March 2011


IFA Confidence Index 145.2 145.6 130.3 150.3 131.4 137.2 139 132.8


situation141.9 146.9 110.0 160.0 130.0 136.7 137.1 131.7




environment125.8 123.4 96.7 131.7 105.0 116.7 106.5 120.0



portfolio 150.0 148.4 153.3 145.0 125.0 138.3 145.2 131.7


J.P. Morgan Asset Management ValueNotes Investment Confidence Survey November 23rd to December 04th, 2011 J.P. Morgan Asset Management Standard Template 2009.ppt


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Indices by city December 2010 (Wave VI)

40

December 2010



situation169.8 167.5 162.4 170.3 156.2 184.4 165.9 167.3




environment161.6 165.1 147.3 158.6 144.3 181.0 158.2 140.0



portfolio166.7 162.7 140.5 158.4 144.5 181.2 151.0 164.3


December 2010




situation170.3 154.8 145.7 154.7 148.3 143.5 124.1 148.6




environment131.3 127.4 124.3 118.8 125.0 124.2 105.6 134.7



portfolio 160.9 161.3 148.6 160.9 156.7 167.7 135.2 152.8




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Indices by city September 2010 (Wave V)

41

September 2010



situation172.4 169.1 158.4 176.3 162.5 158.3 177.9 170.1




environment143.8 136.2 148.6 165.7 151.0 127.0 166.2 161.2



portfolio152.2 165.4 147.1 159.4 150.0 155.9 151.7 165.9


September 2010




situation148.4 160.9 143.3 176.7 160.6 153.0 145.0 169.4




environment112.9 107.8 120.0 135.0 128.8 122.7 110.0 116.1



portfolio 162.9 178.1 156.7 170.0 157.6 166.7 187.5 171.0




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Indices by city June 2010 (Wave IV)

42

June 2010



situation156.3 155.5 161.5 165.4 143.8 149.5 157.8 165.4




environment149.5 148.8 143.4 155.0 147.5 133.5 118.8 155.0



portfolio153.6 150.2 146.3 159 147.3 144.1 105.8 159.0


June 2010




situation150.0 145.0 148.3 148.4 159.4 162.9 165.0 160.0




environment106.5 113.8 96.7 106.3 142.2 143.5 135.0 141.7



portfolio 151.6 147.5 155.0 151.6 148.4 135.5 130.0 138.3




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Indices by city February 2010 (Wave III)

43

February 2010



situation154.8 165.5 137.0 176.4 151.9 158.3 136.9 169.8




environment148.2 156.1 136.3 157.5 146.6 151.7 88.4 149.3



portfolio159.0 165.7 134.4 164.2 155.8 146.9 62.1 141.0


February 2010




situation140.6 145.0 156.7 153.3 167.7 178.3 158.3 178.3




environment129.7 113.8 125.0 121.7 150.0 136.7 143.3 155.0



portfolio148.4 147.5 153.3 156.7 137.1 138.3 145.0 141.7



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Indices by city July 2009 (Wave I)

45

July 2009


Retail Confidence Index 139.7 142.5 144.6 160.2 131.7 149.6 98.1 137.2


situation144.0 149.0 149.5 166.2 131.1 154.6 102.7 137.9




environment133.9 132.0 141.8 156.3 126.6 139.9 96.5 133.7



portfolio135.9 144.3 144.8 159.4 130.2 150.4 99.8 137.9


July 2009




situation144.0 149.0 149.5 166.2 131.1 154.6 102.7 137.9




environment133.9 132.0 141.8 156.3 126.6 139.9 96.5 133.7



portfolio135.9 144.3 144.8 159.4 130.2 150.4 99.8 137.9




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Indices Overall

46


Retail 138.3 145.1 147.1 151.7 160.1 159.5 142.0 137.5 131.5

Advisor 136.0 151.7 145.9 135.4 144.1 147.2 131.5 124.9 115.0

Corporate 133.5 142.5 130.7 134.0 131.8 132.2 123.5 109.0 127.2



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Survey Methodology

Screeners to capture respondent profile

Retail: Gender, location, age, occupational status, sector of engagement, liquid assets, investment activity in the past year

Corporate: Treasury size, years of treasury experience and treasury activity in the past year

Advisors: Extent of distribution reach, location (for IFAs)

Six index questions to compute indices - respondents confidence, over the next six months

Improvement in the Indian economic situation, general Investment market environment and atmosphere, global economicsituation

BSE Sensex increasing from current levels

Prospect of self (retail and corporate) / clients (advisors) investment portfolio appreciating and

Increase / decrease in investments (self - retail and corporate, clients advisors)

Other questions primary source of investment information, new capital investment projects, types of financial advisory services

rendered, preferred investment destination, positive and negative economic indicators, interpretation of a long term investment,

expected percentage of annual return, likelihood of non-investment income increasing, and range BSE Sensex will trade at in

December 2011,preferred sector for investment, effect of RBIs regulation on limiting investment in liquid funds on corporates.

Interviews - face-to-face, online and telephone with investors and advisors in Delhi / NCR,

Kolkata, Ahmedabad, Mumbai, Pune, Hyderabad, Bengaluru and Chennai

current survey conducted between 23rdNovember 4th December, 2011



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Index Construction Methodology

Each Index question assigned a point between 0 and 200

Extremely likely - 200 points

Somewhat likely 150 points

More or less the same as current 100 points

Somewhat unlikely 50 points

Extremely unlikely 0 points

All six Index questions carry equal weight

Sub indices computed for each Index question, weighted by number of responses

Average of the six sub indices is the overall Index for the category / segment / city

The Advisor Confidence Index equally weights the Bank Confidence Index, N/RDs Confidence Index and the

IFA Confidence Index

Three indices constructed in a similar manner from the six Index questions posed to all

indices at any point, can range from 0 to 200; 200 being the highest possible confidence


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Respondent Sample

- Retail, Corporate & Advisor



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Eligibility

Retail

Employees from media, advertising & marketing, PR, research and financial websites excluded Employees and immediate relatives of J.P. Morgan Asset Management and ValueNotes not eligible for participation

Investment experience > 2 years

Age >=22 and = INR 2 lakhs in wallet size

Invested in stocks, mutual funds, bonds, foreign currency, certificate of deposits, warrants or derivative products in the last year

Actively save for investments, whether regularly or once in a while

Corporate

Treasury size > =INR 10 lakhs

Treasury experience >= 2 years

Advisors

Distribute financial products

>= 2 years of experience in financial services

N/RDs with nation wide reach



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Retail respondent profile

1,623 retail investors from the selected cities surveyed

Retail By wallet sizeRetail By city

12%

14%

12%

11%12%

12%

12%

15%

Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad

26%

34%

22%

12%

6%INR 2 to 5 lakhs

INR 5 to 10 lakhs

INR 10 to 25 lakhs

INR 25 to 50 lakhs

INR 50 lakhs andabove



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Corporate respondent profile

Treasury size represents investments excluding strategic equity holdings and hedging investments

Corporate By City Corporate By treasury size

26%

34%

12%

6%

10%

8%4%0%

Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad

0% 8%

8%

40%

44%

INR 10 lakhs100lakhs (INR 1 crore)

INR 1 50 crores

INR 50 150crores

INR 150 500crores

INR 500 crores andabove



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Advisor respondent profile

Advisors include 20 banks, 20 National / Regional Distributors (N/RDs) and 242 IFAs from the selected

cities

Advisor sentiment equally weighted across the three categories

IFAs By City

11%

11%

11%

15%

11%

12%

15%

14%

Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad



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Advisory services profile

Financial planning & advice (86%) is the top service offered by advisors followed by portfolio management

services (64%)

0%

0%

64%

86%

47%

41%

61%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Others

None of the above

Portfolio management services

Financial planning & advice

Finan cial product advice

Capital market advice

Basic tax plannin g



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Disclaimers / Risk Factors

Statutory details: Sponsor: JPMorgan Asset Management (Asia) Inc. Trustee: JPMorgan Mutual Fund India Private Limited, a

company incorporated under the Companies Act, 1956. Asset Management Company: JPMorgan Asset Management India

Private Limited, a company incorporated under the Companies Act, 1956. JPMorgan Mutual Fund has been established as a Trust

under the Indian Trusts Act, 1882, by JPMorgan Asset Management (Asia) Inc., liability restricted to initial contribution of Rs.1

lakh.

Risk Factors / Disclaimers: Mutual fund investments are subject to market risks. Please read the Offer Document,

Statement of Additional Information and Scheme Information Document carefully before investing.

The information contained herein is provided based on a public survey. Although we endeavour to ensure that the information is as

current and accurate as possible, errors do occasionally occur. Therefore, we cannot guarantee the accuracy and adequacy of the

information. Readers should, wherever possible, verify the information before acting on it.

This information is based on our assumptions and interpretations of the survey conducted. No part of our compensation was, is, or

will be directly or indirectly related to the specific recommendations or views expressed herein. Be aware that our assumptions and

interpretations are partially based on our observation of participants past behavior. Do not base your actions on the material so

provided. These observations will change if different assumptions and interpretations are applied for the purpose of preparing this

survey report.



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Research Methodology

Retail investors, corporate investors and advisors were surveyed through a combination of face-to-face interviews, online surveys (through www.valuenotes.com) and

telephone interviews. The surveys were conducted in selected Indian cities -Delhi / NCR, Kolkata, Ahmedabad, Mumbai, Pune, Hyderabad, Bengaluru and Chennai. Thenumber of responses to each question is multiplied by the respective confidence-level point and these are aggregated at each Index question level. Sub indices arecalculated for each of these six Index questions, which is the arithmetical mean of the aggregates. The arithmet ical mean of the subindices forms the Overall ConfidenceIndex for that respondent category. The Advisor Confidence Index gives equal weights to the Bank Confidence Index, ND Confidence Index and the IFA Confidence Index toarrive at the overall advisor sentiment. The Confidence Index, at any given point can vary between 0 and 200. 200 denotes the highest level of confidence in improvementfrom current conditions, 100 denotes a neutral sentiment and 0 denotes an extremely negative outlook.

Accuracy or Adequacy of Information

The information contained herein is provided based on a public survey. Although we endeavour to ensure that the information is as current and accurate as possible, errorsdo occasionally occur. Therefore, we cannot guarantee the accuracy and adequacy of the information. Readers should, wherever possible, verify the information beforeacting on it.

Interpretations and assumptions which may differ from person to person

This information is based on our assumptions and interpretations of the survey conducted. No part of our compensation was, is, or will be directly or indirectly related to thespecific recommendations or views expressed herein. Be aware that our assumptions and interpretations are partially based on our observation of participants pastbehavior. Do not base your actions on the material so provided. These observations will change if different assumptions and interpretations are applied for the purpose ofpreparing this survey report.

Reproduction of material is prohibited unless approval is taken

Information provided in this survey report is with the intent that it be readily available for personal and public non-commercial use and may be reproduced, in part or in wholeand by any means, without charge or further permission from J. P. Morgan Asset Management. We only ask that Users exercise due diligence in ensuring the accuracy ofthe materials reproduced; J. P. Morgan Asset Management be identified as the source; and, the reproduction is not represented as an official version of the materialsreproduced, nor as having been made, in affiliation with or with the endorsement of J. P. Morgan Asset Management. Our Corporate logo may not be used for any purposewithout explicit authorization.

Reproduction of material included in this survey report, in whole or in part, for the purposes of commercial distribution is prohibited except with written permission from J. P.

Morgan Asset Management. Through the permission granting process, J. P. Morgan Asset Management helps ensure individuals/organizations wishing to reproducematerials for commercial purposes have access to the most accurate, up-to-date versions. To obtain permission to reproduce materials on this site for commercial purposes,please contact: Marketing and Communications, JPMorgan Asset Management India Private Limited, JP Morgan Towers, Off CST Road, Kalina, Santacruz East, Mumbai.

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