JPM US Equity Income Fund. A strategy that aims to pay dividends for your clients. Whatever you invest

Transcription

1 JPM US Equity Income Fund A strategy that aims to pay dividends for your clients FOR INDEPENDENT FINANCIAL ADVISERS USE ONLY NOT FOR USE BY OR DISTRIBUTION TO RETAIL CLIENTS Whatever you invest

2 JPM US Equity Income Fund A strategy that aims to pay dividends for your clients Dividend investing can increase long-term returns Dividends have historically contributed significantly to overall US stock market returns. We believe our strategy of investing in high quality companies with sustainable dividend yields can generate strong returns over time and help your clients fully participate in the long-term potential of the US stock market. Greater dividend opportunities in the US US companies are increasing their dividends at a faster pace and are more diversified across sectors compared to the UK, where a handful of large companies account for much of the market s yield (Source: Capita Registrars UK Dividend Monitor 2011 and J.P. Morgan Asset Management). Also, we believe a focus on high quality companies with stable earnings can help investors reduce the overall volatility of returns from the US stock market, limiting declines in down markets while still participating in most of the upside during more favourable conditions. Strong returns and low volatility While many investors seek capital appreciation through a rising share price, it is important not to ignore the power of dividends. Historically, dividends have been an important component of total returns, representing 43% of the total return from the US stock market since S&P 500 returns by decade: Dividends compared to capital appreciation 20% 15% 10% Dividends Capital Appreciation 5% 0% -5% -10% s 1940s 1950s 1960s 1970s 1980s 1990s 2000s Source: Standard & Poors, FactSet, Ibbotson/Morningstar, J.P. Morgan Asset Management. Based on Ibbotson/Morningstar total return and price index (capital appreciation) returns. Dividend return is calculated from the difference between total return and price index return. Total return assumes the reinvestment of income.

3 Invest in the best of corporate America American companies influence our daily lives. For example, you re probably reading this on a Microsoft powered computer, or maybe an Apple ipad. You may have heard about this brochure on Twitter, or via Linked In. According to Interbrand, half of the top 100 global brands in 2011 were American, including all of the top ten 1. A day in your life: US brands dominate from dawn to dusk You brush your teeth using an Oral-B toothbrush before washing with Old Spice shower gel and Head & Shoulders shampoo all made by Proctor & Gamble. You put in your Acuvue contact lenses and gargle with Listerine mouthwash, both products supplied by Johnson & Johnson. From your wardrobe you put on your favourite trousers and shirt, both from Gap. You also grab your Nike gym bag and your New Balance trainers for your workout later in the day. You are hungry and in need of a caffeine boost, so you grab a Kenco instant coffee, which is made by Kraft Foods, and eat some Kellogg s Cornflakes. It s cold outside, so you put on your North Face coat, made by VF Corp. Before you leave you set your house alarm and then lock your front door, using products made by Chubb. You drive to work in your car fitted with Run Flat Tyres made by Bridgestone, listening to your treasured Metallica CD, which was distributed by Warner Music Group, a division of Time Warner. 1 Source: Best Global Brands of 2011, Interbrand. US companies make up 49/100 of the top global brands. For illustrative purposes only. Not necessarily a reflection of actual portfolio holdings. Reference to specific companies is for illustrative purposes only and should not be interpreted as recommendations to buy or sell.

4 JPM US Equity Income Fund A strategy that aims to pay dividends for your clients You arrive at the office and take the lift, made by the Otis Elevator Company a division of United Technologies. You log into your computer, which is powered by Microsoft Windows software. You take an urgent message on a Post-it note produced by 3M. While at the office you are covered by Travelers business insurance, and kept safe by Gentex fire detection systems. You pop to Starbucks for a skinny latte, using your American Express credit card to pay. You eat a Cadbury s Flake, made by Kraft Foods, and buy a can of Diet Coke made by Coca Cola. You check your s on your Apple iphone and do some internet shopping using Microsoft internet explorer. Your sandwich is kept fresh in a sturdy air tight lunch box made by Tupperware. You defrost some prawns, which were frozen using technology developed by Air Products and Chemicals, and then prepare a tasty stir fry using your non stick wok coated in Teflon a product developed by Du Pont. You turn up the central heating using your Sundial wireless controller from Honeywell and settle down in front of the TV to watch the latest series on HBO, which is owned by Time Warner. US companies play such an integral part in all our daily lives, we sometimes forget that they are American at all. The JPM US Equity Income Fund shares in the profits of corporate America by investing in high quality US companies that have strong brands, stable profits and the ability to return cash to shareholders through a sustainable dividend. Clare Hart, fund manager, JPM US Equity Income Fund

5 JPM US Equity Income Fund A strategy that aims to pay dividends for your clients High quality exposure to the US The JPM US Equity Income Fund focuses on high quality stocks that are attractively valued and have sustainable dividend yields, providing an ideal way to share in the future returns from the US stock market. Greater opportunities for equity income investors outside the UK Gain exposure to attractive income yields from corporate America Share in the long-term returns from the US stock market Benefit from the insights of our dedicated 29-strong US equity research team Best fund in the IMA North America sector for 2011* *Ranked 1 out of 97 funds in the IMA North America sector as at 31 Dec Source: Citywire Money. The JPM US Equity Income Fund provides compelling access to the dynamic US stock market through its focus on high quality companies that are trading on attractive valuations, and that can maintain a high dividend yield. Clare Hart, fund manager, JPM US Equity Income Fund

6 Key risks Equity investment is subject to specific risks relating to the performance of the individual companies held and the market s perception of their performance. Equities are also subject to systematic risks such as general economic conditions, inflation, interest rates, foreign exchange rates and industry sector risks. In general terms, equities tend to be more volatile than bonds. As the Fund is primarily focused on generating income, the Fund may deviate from its benchmark. Funds that invest predominantly in a single market, asset class or sector may be subject to greater volatility than those funds with a more diversified portfolio. For investors in Share Classes which are not hedged to Sterling, as the underlying assets of the Fund are denominated in a currency other than Sterling, they will therefore be exposed to the currency risk of fluctuations between Sterling and the currency denomination of the underlying assets. Investors in the A GBP Hedged Share Class should be aware that any currency hedging process may not give a precise hedge. Where currency hedging is undertaken, whilst it may protect an investor in Hedged Shares against a decrease in the value of the currency being hedged, it may also prevent the investor from participating in an increase in the value of that currency. This Fund charges the fees of the ACD against capital, which will increase the amount of income available for distribution to Shareholders, but may constrain capital growth. It may also have tax implications for certain investors. Profile of the typical investor The Fund may suit investors looking to add a primarily single country product that offers regular income and the potential for long-term capital growth to an existing diversified portfolio. Investors should have at least a five-year investment horizon. To learn how the JPM US Equity Income Fund can enhance the income potential of your clients portfolios: Visit jpmorganassetmanagement.co.uk/adviser Call Important information This is a promotional document and as such the views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, J.P. Morgan Asset Management s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse e ect on the value, price or income of the product(s) or underlying overseas investments. Both past performance and yield may not be a reliable guide to future performance. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment product(s), there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co and its a.liates worldwide. You should note that if you contact J.P. Morgan Asset Management by telephone those lines may be recorded and monitored for legal, security and training purposes. You should also take note that information and data from communications with you will be collected, stored and processed by J.P. Morgan Asset Management in accordance with the EMEA Privacy Policy which can be accessed through the following website Investment is subject to documentation (Prospectus, Key Investor Information (KIID) and Terms and Conditions). Issued by JPMorgan Asset Management Marketing Limited which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: Registered address: 25 Bank St, Canary Wharf, London E14 5JP. LV JPM /12