jp morgan -valuenotes investment confidence index wave 8, july 2011

J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – July 22nd to August 04th, 2011

J.P. Morgan Asset Management – ValueNotes

Investment Confidence Index – Wave VIII, July 2011

…India‟s only Investor and Advisor focused sentiment indicator

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


1

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



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 20th wave (2Q 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 – 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



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 Investor 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



5

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 atmosphere

3) 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

Mumbai Pune

Kolkata

Chennai Bengaluru

Hyderabad



6

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 IFA

Confidence Index

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

0 50 100 150 200

Extremely Likely Somewhat Likely More or Less the Same as Current Somewhat Unlikely Extremely Unlikely



7

Respondent Sample – Wave VIII, July 2011

92.4% of retail investors invested in stocks and/or mutual funds over the last 12 months

City Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

Retail 14% 13% 12% 12% 12% 13% 12% 12%

IFAs 12% 17% 12% 12% 14% 11% 12% 10%

Corporate 18% 34% 4% 4% 6% 26% 4% 4%

Wallet Size

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

Retail 27% 33% 25% 10% 5%

Treasury size

(INR)

10 lakhs to 1

crore

1 crore to 50

crores

50 to 150

crores

150 to 500

crores 500 crores +

Corporate 4% 18% 24% 18% 36%

Category Retail Corporate IFAs

(Advisors)

Banks

(Advisors)

NRDs

(Advisors)

Number of respondents 1,623 50 309 20 20


8

Investor and Advisor Confidence, Wave VIII, July 2011

- Key Findings



9

Investment Confidence Index (ICI) touches its lowest

Investment Confidence Index

Investment Confidence Index score stands at 123.8, falling 8.5 points from last quarter

Continuous fall in confidence level indicates increasing cautiousness within the Indian financial community


123.8

132.3

146.3

145.4

140.4

141.2

146.4

135.9

0 50 100 150 200

Jul 2011

Mar 2011

Dec 2010

Sep 2010

Jun 2010

Feb 2010

Sep 2009

Jul 2009



10

Corporates most sceptical of the lot

Confidence across all categories heads south; optimism within India Inc. drops 15 points

Retail vs. Corporate vs. Advisors

Corporate confidence lowest in March 2011

Retail confidence lowest in July 2011

Extremely Likely Somewhat Likely More or Less the Same as Current Somewhat Unlikely

131

124

142

132

159

132

160

135

134

152

146

131

147

142

145

134

125

109

137

147144

152

136

138

50 100 150 200

Advisor

Corporate

RetailJul 2009

Sep 2009

Feb 2010

Jun 2010

Sep 2010

Dec 2010

Mar 2011

Jul 2011

Neutral



11

Domestic and global economic woes dent confidence across the board

Optimism over global economic environment falters dramatically within India Inc. (82)

Advisors (153) more upbeat about increase in investments than retail investors (139)


153

138

126

93

119

120

125

131

102

82

110

104

139

138

140

134

135

139

50 100 150 200

Change in amount

of investments

Appreciation in

investment portfolio

Increase in BSE Sensex

Improvement in global

economic environment

Improvement in investment market

environment and atmosphere

Improvement in Indian

economic situation

Retail

Corporate

Advisor

Neutral



12

Advisor sentiment shaken across all categories; Banks least confident

IFAs vs. Banks vs. N/RDs

Bank confidence hurt the most, falls 15 points since March 2011


123.8

114.6

136.5

125.8

129.6

139.0

147.2

147.5

146.9

135.0

156.9

126.9

139.6

139.7

142.5

149.6

145.7

147.2

157.5

150.2

135.0

137.9

140.4

134.9

50 100 150 200

N/RDs

Banks

IFAJul 2009

Sep 2009

Feb 2010

Jun 2010

Sep 2010

Dec 2010

Mar 2011

Jul 2011

Neutral



13

Advisors hopeful that clients’ investments will appreciate

IFAs (159 points) expect higher client inflows. Banks (75 points) most pessimistic about global economic

environment.


140

103

124

145

130

128

98

120

123

115

155

110

75

105

136

159

144

140

108

133

134

50 100 150 200

Advisor Confidence Index

Change in amount

of investments

Appreciation in

investment portfolio

Increase in BSE Sensex

Improvement in global

economic environment


environment and atmosphere

Improvement in Indian

economic situation

IFA

Banks

N/RD's

Neutral



14

Investment activity in Mutual funds jumps significantly

Investment activity in Mutual Funds (61%) improves significantly (11 percentage points) since March 2011.

Instruments with most activity such as Time Deposits (42%), and Stocks (64%) witness a marginal rise this

quarter compared to March 2011 levels

Retail investment activity in the past 12 months

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

92%

52%

69%

35% 36%

5%

95%

54% 56%

35% 36%

7%

89%

37%

58%

22% 27%

9%

82%

42%

59%

29% 25%

9%

0%

20%

40%

60%

80%

100%

Savings account Time deposit Insurance and Retirement

products

Property Gold and other bullion Foreign currencies

Sep 2010 Dec 2010Mar 2011 Jul 2011

76%

60%

18% 12%3%

18%

1%

68% 66%

23%13%

4%12%

2%

61%50%

19% 16%2%

13%1%

64% 61%

22% 20%

4%12%

1%0%

20%

40%

60%

80%

100%

Stocks Mutual Funds Bonds Certificate of

deposits

Warrants Derivatives* Others



15

Delhi/ NCR investors buck the trend; most confident amongst other cities

IFAs in Bengaluru and Ahmedabad most optimistic (141) across all cities

Investor confidence in Bengaluru (127) records biggest dip (20 points) since last quarter

152

135126

159 163151

169156 152

163 168160

176165 165

149

162

147 147151

130 133

152136

150

136 138127

158

135 138144

80

120

160

200

Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

Retail (Sep 2010) Retail (Dec 2010)Retail (Mar 2011) Retail (Jul 2011)

Retail confidence (Sep 2010) -160.1 Retail confidence (Dec 2010) - 159.5

Retail confidence (Mar 2011) - 142.0 Retail confidence (Jul 2011) - 137.5

150158 162159 154

139146

152 152

126

146145 146

130

150

131 137 139133

139130 132

140 141135 137 141

156157166

150156

80

120

160

200

Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

IFA (Sep 2010) IFA (Dec 2010)IFA (Mar 2011) IFA (Jul 2011)

IFA confidence (Sep 2010) - 156.9 IFA confidence (Dec 2010) - 146.9

IFA confidence (Mar 2011) - 139.0 IFA confidence (Jul 2011) - 136.5



16

Confidence revives among older investors

Confidence among investors aged 55 to 60 years and aged 60 to 65 years records sharp rebound of 10 points

and 15 points, respectively, since March 2011

Confidence among middle aged investors (40 – 45 years) drops 11 points over March 2011

151

143

136

140

159162

159 161 160 161

155153

155

161 164160

157 157153

157

140140

142 143

149

138136

125 124

139137

140138

130

135

139

120

130

140

150

160

170

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

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

Retail Confidence (Jul 2011) - 137.5

Retail Confidence (Sep 2010) - 160.1

Retail Confidence (Mar 2011) - 142.0



17

Banking and Financial Services a popular sector for investment

Retail investors (36%) and advisors (56%) vote for investing in the Banking and Financial Services sector

FMCG and IT & ITES sectors runners-up for advisors (38%) and retail investors (27%) respectively.

23%

36%

18%

24%25%

27%

21%

2%

7%4%

56%

15%

38%

10% 12%

6%

11%12%

0%

10%

20%

30%

40%

50%

60%

Automobiles Banking and

Financial

Services

Capital Goods FMCG Oil and gas IT & ITES Telecom Others Don‟t know/

refused to

answer

Retail Advisor



18

Current investor strategy – Be cautious

Current investment strategy for most retail investors is to preserve capital (40%) and to maintain a cautious

outlook towards their investments (35%)

Investors expected to turn more aggressive (54%) with their investment strategies in the next six months

Current investment strategy Investment strategy in coming 6 months

15%

40%

35%

10%

Risk Averse

Preserve Capital

Cautious

Investments

Willing to take risks

14%

40%31%

12%3%

Extremely aggressive

Somewhat aggressive

No change

Somewhat conservative

Extremely conservative



19

Corporate activity in Mutual Funds takes a drubbing

Corporate investment activity in the past 12 months

Instruments with most activity such as Debt Mutual Funds, Stocks and Bonds witness a significant drop this

quarter compared to December 2010 levels

Debt Mutual Funds (74%) and Stocks (18%) take a beating of 18 and 28 percentage points, respectively

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

56%

30% 32%

94%

24% 26%

67%

43% 47%

90%

37%45%

74%

32%

44%

92%

38%46%

70%

22%30%

74%

26%18%

0%

20%

40%

60%

80%

100%

Term deposits Inter-corporate deposits Commercial Papers Debt Mutual Funds Equity Mutual Funds Stocks

Sep 2010 Dec 2010Mar 2011 Jul 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



20

MMFs still preferred while FMPs lose favour

Corporate investments in debt mutual funds in the past 12 months

Fixed Maturity Plans (36%) down 24 percentage points this quarter and 33 percentage points since 6 months

Bond Funds (20%), Floating Rate Debt Funds (14%), GILT Funds (8%) drop this quarter by 26/26/24 percentage

points respectively

32%

88%

54%

34%

20%

12%

35%

67% 69%

39%

25%

0%

46%

86%

60%

40%

32%

0%

20%

84%

36%

14%

8%

0%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bond funds Money Market

Funds

Fixed Maturity

Plans

Floating Rate

Debt Funds

GILT funds Others

Sep 2010 Dec 2010 Mar 2011 Jul 2011



21

Corporates likely to maintain current investment levels in liquid funds

Despite RBI‟s regulation on limiting banks‟ exposure in liquid funds to 10% (of the previous year‟s networth),

50% are corporates likely to maintain current investment amount in liquid funds prior its implementation (i.e

January 2012)

However, 28% of corporates expected to increase liquid funds investments before implementation of the regulation

10%

18%

50%

12%

10%Definitely will increase

Somewhat likely to

increase

Maintain the current

investment amount

Somewhat likely to

decrease

Definitely will decrease



22

Majority advisors consider ‘3 – 5 years’ as long-term

Long term investments for corporates is a shorter time span compared to advisors and retail investors; 48%

corporate interpret 1 - 3 years as long term whereas, 32% interpret 3 – 5 years

Advisors (47%) and retail investors (29%) interpret long term investment period to be between 3 and 5 years

2%

13%

24%

29%

20%

8%

3%

6%

28%

20%

32%

12%

0%2%0%

4%

25%

47%

19%

4%

0%0%

10%

20%

30%

40%

50%

60%

Less than 1 year 1 year – 2 years 2 years – 3 years 3 years – 5 years 5 years – 10 years Over 10 years Can't Say

Retail Corporate Advisor



23

Financial community expects higher ROI from equity funds over long-term

A majority of advisors (45%), retail (39%) and corporates (36%) expect an annual return of 10 – 15% from equity funds with an investment horizon of more than three years

A sizeable percentage of advisors (36%), retail investors (19%) and corporate (38%) are expecting a higher return of 15 – 12%

7%

24%

39%

19%

7%

3%

0%

4%

36%38%

10%12%

0%2%

45%

36%

11%

7%

0%

10%

20%

30%

40%

50%

60%

0 - 5% 5 - 10% 10 - 15% 15 - 20% Above 20% Can't Say

Retail Corporate Advisor


24

Other sentiment drivers

- Sensex, economic signals, expectations on income



25

Sensex likely to trade between 19,000 – 21,000 in Dec’ 2011

Retail investors (48%) and advisors (58%) expect BSE Sensex to hover between 19,000 and 21,000 in Dec‟

2011.

Advisors (37%) and retail investors (26%) were highly optimistic about the Sensex levels in March 2011,

indicating it will trade between 20,000 – 21,000. However, it traded between 17,800 – 19,200

Advisors more confident of BSE Sensex trading at higher levels in December 2011

Investors and advisors optimistic about Sensex in June 2011; Majority proved incorrect

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%-5%

5%

15%

25%

35%

45%

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 Advisor

BSE Sensex

during the

Survey

2%1%

1%

1%

6%

22%

23% 23%

11%

4% 4%1%

1%

0%1% 0%

3%

1%

10%

27%

29%

21%

4% 5%

0% 0%-5%

5%

15%

25%

35%

0- 17000 17000 -

18000

18000 -

19000

19000 -

20000

20000 -

21000

21000 -

22000

22000 -

23000

23000 -

24000

24000 -

25000

25000 -

26000

26000 -

27000

27000 -

28000

28000 and

above

Retail Advisor

BSE Sensex

in June 2011

BSE

Sensex in

December

2010



26

GDP growth – Most positive economic booster

Advisors (31%) are most optimistic on GDP growth compared to retail investors (23%) and corporates (20%)

Corporates (18%) consider RBI measures as the second most positive indicator along with retail investors (20%) and advisors (23%)

11%

23%20%

14%

10%

7%

13%

1%

12%

20%18%

16%

10% 10% 10%

4%

15%

31%

23%

4%2%

8%11%

5%

0%

10%

20%

30%

40%

50%

60%

Good corporate

results

GDP growth

meeting/exceeding

expectations

RBI‟s continued

monetary

measures

Increase in

employment

opportunities

Increased credit

offtake from the

private sector

Increase in

Industrial output /

Exports

Government's fiscal

measures

Others

Retail Corporate Advisors



27

GDP growth holds traction through the year

Outlook over GDP growth gathers steam over the year especially among retail investors. 23% investors vote GDP growth as a positive indicator in July 2011 as against 16% in September 2010

Retail investor outlook towards corporate results (11%) falls 14 percentage points over the year

March 2011

December 2010

July 2011

September 2010

11%

23% 20%12%

20% 18%15%

31%

23%

0%

20%

40%

60%

Good corporate results GDP growth

meeting/exceeding

expectations

RBI‟s continued

monetary measures

19% 20% 17%12%

53%

6%14%

49%

6%

0%

20%

40%

60%


meeting/exceeding

expectations

RBI‟s continued

monetary measures

15%

25%19%

4%12%

24% 26%21%

46%

0%

20%

40%

60%


meeting/exceeding

expectations

RBI‟s continued

monetary measures


25%16% 13%14%

34%

16%11%

37%

7%

0%

20%

40%

60%


meeting/exceeding

expectations

RBI‟s continued

monetary measures




28

Inflation and corruption create jitters within the financial fraternity

India Inc. most worried about inflation. 58% corporates believe inflation to be a leading negative economic indicator

Poor governance and corruption turned out to be second biggest negative economic indicator this quarter. Retail (23%), Corporate (18%), Advisors (22%)

31%

10%

17%

9%

23%

7%

3%

58%

2%

6% 6%

18%

6%4%

54%

3%1%

18%22%

1% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Inflation Impact of changing

climate globally

High govt borrowings

/ high fiscal deficit

Increase in interest

rates

Poor governance and

corruption

Eurozone sovereign

debt crisis

Others




29

Inflationary woes mount over the year

Inflation and corruption act as biggest confidence killers through the year. Retail investors consistently worried

about high fiscal deficit.

March 2011

December 2010 September 2010

July 2011

31%23%

17%

58%

18%

6%

54%

22%

1%0%

20%

40%

60%

80%

Inflation Poor governance and

corruption

High govt borrowings /

high fiscal deficit

19% 19% 17%

63%

8%4%

48%

16%

4%

0%

20%

40%

60%

80%

Inflation Corruption High govt borrowings /

high fiscal deficit

26%16%

26%30%

8%

30%40%

14%

36%

0%

20%

40%

60%

80%

Inflation High govt borrowings /

high fiscal deficit

Fear of resurgence of

US / global recession

RetailCorporateAdvisors

26% 22%17%

70%

12%4%

60%

22%

8%

0%

20%

40%

60%

80%

Inflation Corruption High govt borrowings /

high fiscal deficit

Retail

Corporate

Advisors



30

Corporates upbeat about increase in profits

A significant 54% of corporates believe that profits (NPAT) are „somewhat likely' to increase, while 18% believe

it is „extremely likely‟ to increase

Retail investors‟ expectation (66%) about increase in income drops 9 percentage points from March 2011.

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

0% 0% 0% 1% 0% 0% 0% 0%1% 1%

2%

7%

4%0% 2% 2%

15% 17%23%

26%

20%16%

22%26%

46%49%

53%

47%

40%

71%

34%

54%

37%32%

22%19%

36%

14%

42%

18%

0%

20%

40%

60%

80%

100%

Retail (Sep

2010)

Retail (Dec

2010)

Retail (Mar

2011)

Retail (Jul

2011)

Corporate

(Sep 2010)

Corporate

(Dec 2010)

Corporate (Mar

2011)

Corporate (Jul

2011)

Extremely likely

Somewhat likely

More or less

the same

Somewhat

unlikely

Extremely unlikely


31

Key investment influencers

- International markets, information sources, expected retirement age, advisory

services, capital investments



32

Advisors favour international markets; Retail investors think otherwise

40% advisors in favour of recommending investments in international markets, while only 16% retail investors

show inclination towards investing in international markets.

16%

84%

Yes

No

40%

60%

Yes

No

International investment preference- Retail investors International investment preference- Advisors



33

Advisors recommend Emerging Markets; Retail investors opt for Asia and

USA

36% Advisors are likely to recommend their clients to invest in Emerging Markets while only 7% of retail

investors think of investing in Emerging Markets. Retail investors consider Asia (32%) and USA (27%) as

preferred international investment destinations

27%

20%

13%

32%

13%15%

7%

0%

7%

4% 5%

24%

13%

22%

36%

4%

0%

10%

20%

30%

40%

50%

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

Retail Advisors



34

N/RDs and IFAs recommend Emerging Markets; Banks prefer Asia

40% IFAs, 30% Banks and 50% N/RDs recommend investors invest in markets other than India

Of the 50% of N/RDs, 60% select Emerging Markets as their favoured international market followed by China

(20%) and Asia (20%)

5%

14%17%

12%

24%

34%

5%7%

0%

36%

7%

21%

14%

7%

0% 0%

20% 20% 20%

60%

0%

11%

0%

10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

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

IFA Banks N/RD



35

Financial Advisors and Personal Network preferred

19% retail investors prefer financial advisors while 26% prefer personal network as a source of information for

investment decision making

12%

5%

8%

15%

8%

11%

8%

18%

5%

11% 10%

13%

19%

7%

12%

7%9%

24%

28%27%

16%

8%6%

24%

18%

25%

18%

26%

0%

5%

10%

15%

20%

25%

30%

Broker services Financial advisor Bank relationship

manager

News & financial

media

Online resources Personal network Personal research

Sep 2010 Dec 2010 Mar 2011 Jul 2011



36

Investors likely to retire when aged 55-60 years

39% and 34% of retail investors expect to retire between 55 to 60 years and 60 to 65 years, respectively

12% of investors expect to retire between 50 to 55 years and 8% of investors expect to retire between 65 to 70 years of age

39%34%

1%2%

8%

12%1%0%

3%

Below 45

Age 45 to 50

Age 50 to 55

Age 55 to 60

Age 60 to 65

Age 65 to 70

Age over 70

Already retired

Can't say



37

Corporates unlikely to undertake capital investments in near future

Majority of the corporates (60%) are unlikely to undertake capital investment during the next 6 -12 months. In

comparison 60% corporates were likely to make capital investments in March 2011.

Capital investment projects expected in the next 6 – 12 months

24%

4%18%26%

36%

12%

12%

8%

24%

24%

20%18%

8%

40%27%

12%

8%

20%24%

36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sep 2010 Dec 2010 Mar 2011 Jul 2011

Extremely likely

Somewhat likely

More or less the

same

Somewhat unlikely

Extremely unlikely


38

Thank you


39

Annexure



Indices by city – July 2011 (Wave VIII)

40

July 2011

Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

Retail Confidence Index 158.4 135.0 137.7 143.5 126.9 136.1 125.8 137.7

Improvement in Indian economic

situation 165.0 118.2 141.4 142.2 135.5 141.0 132.2 133.7


environment and atmosphere 158.1 123.5 139.9 136.7 124.1 136.3 121.0 138.4

Improvement in global economic

environment 150.2 136.9 133.3 140.4 123.0 129.5 113.9 146.8

Increase in BSE Sensex 162.7 132.8 143.2 148.8 133.3 133.2 130.0 135.4

Appreciation in investment

portfolio 156.9 144.2 133.3 146.4 130.0 137.3 125.7 133.4

Change in amount of investments 157.2 154.4 134.8 146.7 115.1 139.3 132.2 138.4

July 2011


IFA Confidence Index 138.8 129.9 132.1 140.1 140.6 135.1 137.4 141.0


situation 140.6 131.5 124.2 145.2 140.8 132.8 130.3 125.9




environment 114.1 98.9 97.0 104.8 111.8 112.1 112.1 116.7



portfolio 145.3 141.3 151.5 135.5 144.7 143.1 139.4 157.4


J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011

Indices by city – March 2011 (Wave VII)

41

March 2011




situation 154.2 132.9 143.5 156.7 161.6 143.2 144.8 159.2




environment 147.3 107.1 128.8 155.2 152.5 119.5 120.7 137.1



portfolio 153.5 139.8 130.3 143.6 143.3 139.0 134.0 153.2


March 2011


IFA Confidence Index 145.2 145.6 130.3 150.3 131.4 137.2 139 132.8


situation 141.9 146.9 110.0 160.0 130.0 136.7 137.1 131.7




environment 125.8 123.4 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 – March 15th to March 29th, 2011



Indices by city – December 2010 (Wave VI)

42

December 2010




situation 169.8 167.5 162.4 170.3 156.2 184.4 165.9 167.3




environment 161.6 165.1 147.3 158.6 144.3 181.0 158.2 140.0



portfolio 166.7 162.7 140.5 158.4 144.5 181.2 151.0 164.3


December 2010




situation 170.3 154.8 145.7 154.7 148.3 143.5 124.1 148.6




environment 131.3 127.4 124.3 118.8 125.0 124.2 105.6 134.7



portfolio 160.9 161.3 148.6 160.9 156.7 167.7 135.2 152.8




Indices by city – September 2010 (Wave V)

43

September 2010




situation 172.4 169.1 158.4 176.3 162.5 158.3 177.9 170.1




environment 143.8 136.2 148.6 165.7 151.0 127.0 166.2 161.2



portfolio 152.2 165.4 147.1 159.4 150.0 155.9 151.7 165.9


September 2010




situation 148.4 160.9 143.3 176.7 160.6 153.0 145.0 169.4




environment 112.9 107.8 120.0 135.0 128.8 122.7 110.0 116.1



portfolio 162.9 178.1 156.7 170.0 157.6 166.7 187.5 171.0




Indices by city – June 2010 (Wave IV)

44

June 2010




situation 156.3 155.5 161.5 165.4 143.8 149.5 157.8 165.4




environment 149.5 148.8 143.4 155.0 147.5 133.5 118.8 155.0



portfolio 153.6 150.2 146.3 159 147.3 144.1 105.8 159.0


June 2010




situation 150.0 145.0 148.3 148.4 159.4 162.9 165.0 160.0




environment 106.5 113.8 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




Indices by city – February 2010 (Wave III)

45

February 2010




situation 154.8 165.5 137.0 176.4 151.9 158.3 136.9 169.8




environment 148.2 156.1 136.3 157.5 146.6 151.7 88.4 149.3



portfolio 159.0 165.7 134.4 164.2 155.8 146.9 62.1 141.0


February 2010




situation 140.6 145.0 156.7 153.3 167.7 178.3 158.3 178.3




environment 129.7 113.8 125.0 121.7 150.0 136.7 143.3 155.0



portfolio 148.4 147.5 153.3 156.7 137.1 138.3 145.0 141.7




Indices by city – September 2009 (Wave II)

46

September 2009




situation 152.0 154.7 146.4 169.7 159.2 146.8 140.9 133.4




environment 139.5 147.0 134.5 159.5 160.1 131.8 119.0 128.5



portfolio 141.9 148.3 141.5 159.7 155.8 139.4 132.0 128.2


September 2009




situation 154.8 160.0 145.2 148.3 160.0 160.0 154.2 167.7




environment 127.4 134.4 133.9 126.7 143.3 145.0 158.3 162.9



portfolio 162.9 163.3 154.8 156.7 145.0 158.3 125.0 159.7




Indices by city – July 2009 (Wave I)

47

July 2009




situation 144.0 149.0 149.5 166.2 131.1 154.6 102.7 137.9




environment 133.9 132.0 141.8 156.3 126.6 139.9 96.5 133.7



portfolio 135.9 144.3 144.8 159.4 130.2 150.4 99.8 137.9


July 2009




situation 144.0 149.0 149.5 166.2 131.1 154.6 102.7 137.9




environment 133.9 132.0 141.8 156.3 126.6 139.9 96.5 133.7



portfolio 135.9 144.3 144.8 159.4 130.2 150.4 99.8 137.9




Indices – Overall

48

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

Retail 138.3 145.1 147.1 151.7 160.1 159.5 142.0 137.5

Advisor 136.0 151.7 145.9 135.4 144.1 147.2 131.5 124.9

Corporate 133.5 142.5 130.7 134.0 131.8 132.2 123.5 109.0



49

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 economic situation

– 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 RBI‟s 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 22nd July – 4th August, 2011



50

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


51

Respondent Sample

- Retail, Corporate & Advisor



52

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 <=65

– >= 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



53

Retail respondent profile

1,623 retail investors from the selected cities surveyed

Retail – By wallet size

27%

33%

25%

10%

5%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

Retail – By city

14%

13%

12%

12%12%

13%

12%

12%

Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad



54

Corporate respondent profile

Treasury size represents investments excluding strategic equity holdings and hedging investments

Corporate – By City

18%

34%

4%4%

6%

26%

4%4%

Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad

Corporate – By treasury size

4%

18%

24%

18%

36%

INR 10 lakhs – 100

lakhs (INR 1 crore)

INR 1 – 50 crores

INR 50 – 150 crores

INR 150 – 500 crores

INR 500 crores and

above



55

Advisor respondent profile

Advisors include 20 banks, 20 National / Regional Distributors (N/RDs) and 269 IFAs from the selected

cities

“Advisor” sentiment equally weighted across the three categories

IFAs – By City

12%

17%

12%

12%

14%

11%

12%

10%

Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad



56

Advisory services profile

Financial planning & advice (84%) is the top service offered by advisors followed by financial product advice

(76%)

3%

3%

47%

84%

76%

54%

61%

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

Others

None of the above

Portfolio management services

Financial planning & advice

Financial product advice

Capital market advice

Basic tax planning



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.



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. The number of responses to each question is multiplied by the respective confidence-level point and these are aggregated at each Index question level. Sub –indices are calculated for each of these six Index questions, which is the arithmetical mean of the aggregates. The arithmetical mean of the sub –indices forms the Overall Confidence Index for that respondent category. The Advisor Confidence Index gives equal weights to the Bank Confidence Index, ND Confidence Index and the IFA Confidence Index to arrive 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 improvement from 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, 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.

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 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.

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 whole and 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 of the materials reproduced; J. P. Morgan Asset Management be identified as the source; and, the reproduction is not represented as an official version of the materials reproduced, 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 purpose without 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 reproduce

materials 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: Head – Marketing and Communications , JPMorgan Asset Management India Private Limited , J.P. Morgan Tower, Off C.S.T Road, Kalina, Santacruz (East),

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jp morgan -valuenotes investment confidence index wave 8, july 2011

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