JPMorgan Investment Funds. Unaudited Semi-Annual Report 30 June 2014

JPMorgan Investment Funds Unaudited Semi-Annual Report 30 June 2014

This report is an abridged version of the unaudited semi-annual report established in conformity with the Luxembourg Law of 17 December 2010 on Undertakings for Collective Investment. The complete version is available on request from the Company s registered office in Luxembourg and from JPMorgan Funds (Asia) Limited. This report does not constitute an offer of shares. Subscriptions are only valid if made on the basis of the current Hong Kong Offering Document which is available free of charge on request, supplemented by the most recent audited annual report of the Fund and any subsequent unaudited semi-annual report, from JPMorgan Funds (Asia) Limited. Certain of the sub-funds of the Fund are not authorised for offer or distribution in or from Hong Kong. Accordingly, no reference is made to these sub-funds in this unaudited semi-annual report. The attention of the investors is drawn to the fact that certain figures in this unaudited semi-annual report are expressed on a consolidated basis and, thus, include the assets of those sub-funds which are not registered in Hong Kong.

Unaudited Semi-Annual Report Contents Board of Directors 1 Management and Administration 2 Unaudited Financial Statements and Statistical Information Combined Statement of Net Assets 4 Combined Statement of Operations and Changes in Net Assets 6 Statement of Changes in the Number of Shares 8 Statistical Information 10 Notes to the Unaudited Financial Statements 12 Schedules of Investments JPMorgan Investment Funds - Europe Select Equity Fund 20 JPMorgan Investment Funds - Global Convertibles Fund (USD) 23 JPMorgan Investment Funds - Global Dividend Fund 27 JPMorgan Investment Funds - Global Financials Fund 30 JPMorgan Investment Funds - Global High Yield Bond Fund 33 JPMorgan Investment Funds - US Equity Fund 38 Appendix: Unaudited Additional Disclosures Fund Total Expense Ratios 41 Summary of Investment Objectives of the Sub-Funds 43 Performance and Volatility 44 Interest Rate Received/(Charged) on Bank Accounts 46 Sub-Fund Share Classes Subject to Taxe d Abonnement Rate of 0.01% 46 Portfolio Turnover Ratio 46 Calculation Method of the Risk Exposure 47 Historical Statements of Changes in the Number of Shares 48

Board of Directors Chairman Iain O.S. Saunders Duine, Ardfern Argyll PA31 8QN United Kingdom Directors Jacques Elvinger Elvinger, Hoss & Prussen 2, place Winston Churchill B.P. 425 L-2014 Luxembourg Grand Duchy of Luxembourg Jean Frijns Antigonelaan 2 NL-5631 LR Eindhoven The Netherlands Berndt May JPMorgan Asset Management (Europe) S.à r.l. Austrian Branch Führichgasse 8 A-1010 Vienna Austria John Li How Cheong The Directors Office 19 rue de Bitbourg L-1273 Luxembourg Grand Duchy of Luxembourg Peter Thomas Schwicht JPMorgan Asset Management (UK) Limited Finsbury Dials 20 Finsbury Street London EC2Y 9AQ United Kingdom Registered Office 6, route de Trèves L-2633 Senningerberg Grand Duchy of Luxembourg 1

Management and Administration Management Company, Registrar and Transfer Agent, Global Distributor and Domiciliary Agent JPMorgan Asset Management (Europe) S.à r.l. European Bank & Business Centre 6, route de Trèves L-2633 Senningerberg Grand Duchy of Luxembourg Investment Managers J.P. Morgan Investment Management Inc. 245 Park Avenue New York, NY 10167 United States of America JPMorgan Asset Management (Japan) Limited Tokyo Building 7-3 Marunouchi 2-Chome Chiyoda-Ku Tokyo 100-6432, Japan JPMorgan Asset Management (UK) Limited Finsbury Dials 20 Finsbury Street London EC2Y 9AQ United Kingdom JF Asset Management Limited 21st Floor, Chater House 8 Connaught Road Central Hong Kong Highbridge Capital Management, LLC 9 West 57th Street New York, NY 10019 United States of America JPMorgan Asset Management (Singapore) Limited 168 Robinson Road 17th Floor, Capital Tower Singapore 068912 Custodian, Corporate and Administrative Agent J.P. Morgan Bank Luxembourg S.A. European Bank & Business Centre 6, route de Trèves L-2633 Senningerberg Grand Duchy of Luxembourg Auditor PricewaterhouseCoopers, Société coopérative 400, Route d Esch B.P. 1443 L-1014 Luxembourg Grand Duchy of Luxembourg Legal Adviser Elvinger, Hoss & Prussen 2, place Winston Churchill B.P. 425 L-2014 Luxembourg Grand Duchy of Luxembourg 2

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Combined Statement of Net Assets JPMorgan Investment Funds Combined USD Europe Select Equity Fund EUR Assets Investments in Securities at 40,014,727,405 1,332,467,490 Acquisition Cost: 37,756,132,655 1,187,271,935 Investment in TBAs at * 123,424,747 - Cash at Bank and at Brokers 1,034,107,264 8,097,619 Time Deposits and Cash Equivalents 10,794,402 - Amounts Receivable on Sale of Investments 519,019,281 - Amounts Receivable on Sale of TBAs* 315,553,356 - Amounts Receivable on Subscriptions 257,433,889 5,639,283 Interest and Dividends Receivable, Net 255,989,949 2,058,426 Tax Reclaims Receivable 10,673,524 904,594 Fee Waiver** 219,026 - Other Receivables 40,122 - Unrealised Net Gain on Forward Foreign Exchange Contracts 41,976,066 - Unrealised Net Gain on Financial Futures Contracts 1,842,765 12,434 Derivatives Instruments at 49,167,982 - Total Assets 42,634,969,778 1,349,179,846 Liabilities Bank and Broker Overdraft 94,971,762 - Open Short Positions on TBAs* 318,296,957 - Amounts Payable on Purchase of Investments 806,781,969 - Amounts Payable on Purchase of TBAs* 122,591,867 - Amounts Payable on Redemptions 162,717,301 410,230 Management and Advisory Fees Payable 36,601,006 848,984 Performance Fees 13,085,032 - Other Payables 5,533,002 103,250 Unrealised Net Loss on Forward Foreign Exchange Contracts 30,830,713 21,133 Unrealised Net Loss on Financial Futures Contracts 644,705 - Derivatives Instruments at 24,530,488 - Total Liabilities 1,616,584,802 1,383,597 Total Net Assets 41,018,384,976 1,347,796,249 Historical Total Net Assets 31 December 2013 34,107,235,495 970,142,243 31 December 2012 18,688,550,761 442,622,716 31 December 2011 16,126,489,974 231,739,576 31 December 2010 18,277,112,582 229,438,958 * Please refer to Note 2 i). ** Please refer to Note 3 a). The accompanying notes form an integral part of these Financial Statements. 4

Combined Statement of Net Assets (continued) Global Convertibles Fund (USD) USD Global Dividend Fund USD Global Financials Fund USD Global High Yield Bond Fund USD US Equity Fund USD 1,135,493,680 183,163,500 260,437,595 7,413,593,097 612,414,354 1,080,738,508 162,286,515 227,202,394 7,178,104,559 540,228,001 - - - - - - 4,162,853 987,294-16,195,771 - - - - - 8,120,608 3,300,311 - - 8,170,236 - - - - - 3,904,879 466,825 397,529 39,796,958 1,168,617 2,592,970 414,665 759,187 111,036,024 351,629-246,111 58,236-929 - 6,162-373 - 147 310 - - - - - 23,846 3,244,880 413,082 - - - - 49,623 - - - 49,107,577-1,150,112,284 191,760,737 262,663,687 7,616,778,909 638,764,241 54,699,265 - - 37,716,628 35,453 - - - - - 25,438,461 3,780,518 202,354 34,738,938 8,582,185 - - - - - 37,772,655 509,756 299,366 24,928,744 6,976,005 1,237,792 173,616 310,047 5,262,649 665,711 - - - - - 117,194 52,018 324,833 1,340,564 70,373 3,828,353 99,941 - - - - - - - - - - - - - 123,093,720 4,615,849 1,136,600 103,987,523 16,329,727 1,027,018,564 187,144,888 261,527,087 7,512,791,386 622,434,514 721,178,629 179,208,436 301,912,328 6,075,476,844 438,405,266 342,236,907 110,285,255 189,871,700 3,762,379,479 244,581,073 391,447,221 104,125,777 122,485,122 1,428,720,208 252,256,402 511,603,002 52,512,474 185,870,709 1,227,898,130 144,239,604 5

Combined Statement of Operations and Changes in Net Assets For the Period from 1 January 2014 to 30 June 2014 JPMorgan Investment Funds Combined USD Europe Select Equity Fund EUR Net Assets at the Beginning of the Period * 34,054,192,751 970,142,243 Income Dividend Income, Net 249,172,811 24,421,657 Interest Income, Net 444,528,195 55,310 Securities Lending Income 1,683,903 553,205 Bank Interest 84,647 409 Interest on Swap Transactions 14,645,044 - Total Income 710,114,600 25,030,581 Expenses Management and Advisory Fees 206,736,159 4,423,000 Custodian, Corporate, Administration and Domiciliary Agency Fees 6,267,524 296,719 Registrar and Transfer Agency Fees 1,350,432 86,608 Taxe d abonnement 6,430,022 114,413 Overdraft Interest 37,455 112 Interest on Swap Transactions 11,610,048 - Sundry Fees** 9,486,642 91,309 241,918,282 5,012,161 Less: Fee Waiver*** 1,497,473 614 Total Expenses before Performance Fees 240,420,809 5,011,547 Performance Fees 13,085,032 - Total Expenses 253,505,841 5,011,547 Net Investment Income/(Loss) 456,608,759 20,019,034 Net Realised Gain/(Loss) on Sale of Investments 421,248,459 37,587,471 Net Realised Gain/(Loss) on Forward Foreign Exchange Contracts (83,636,617) (88,831) Net Realised Gain/(Loss) on Financial Futures Contracts (18,816,137) 2,765,067 Net Realised Gain/(Loss) on Foreign Exchange 32,077,948 327,671 Net Realised Gain/(Loss) on Derivatives Instruments 26,374,564 - Net Realised Gain/(Loss) for the Period 377,248,217 40,591,378 Net Change in Unrealised Gain/(Loss) on Investments 624,118,506 19,242,371 Net Change in Unrealised Gain/(Loss) on Forward Foreign Exchange Contracts (35,780,740) (60,647) Net Change in Unrealised Gain/(Loss) on Financial Futures Contracts (6,694,435) 44,007 Net Change in Unrealised Gain/(Loss) on Foreign Exchange 3,198,990 (1,405) Net Change in Unrealised Gain/(Loss) on TBAs (1,269,167) - Net Change in Unrealised Gain/(Loss) on Derivatives Instruments (29,481,924) - Net Change in Unrealised Gain/(Loss) for the Period 554,091,230 19,224,326 Increase/(Decrease) in Net Assets as a Result of Operations 1,387,948,208 79,834,738 Movements in Share Capital Subscriptions 17,351,822,542 758,641,555 Redemptions (11,408,307,588) (460,525,470) Increase/(Decrease) in Net Assets as a Result of Movements in Share Capital 5,943,514,954 298,116,085 Dividend Distribution (367,270,937) (296,817) Net Assets at the End of the Period 41,018,384,976 1,347,796,249 * The opening balance was combined using the foreign exchange rate as at 30 June 2014. The same net assets when combined using the foreign exchange ruling as at 31 December 2013 reflected a figure of USD 34,107,235,495. ** Sundry Fees are principally comprised of Directors fees, audit and tax related fees, registration, publication, mailing and printing fees, as well as legal and marketing expenses. *** Please refer to Note 3a). The accompanying notes form an integral part of these Financial Statements. 6

Combined Statement of Operations and Changes in Net Assets (continued) For the Period from 1 January 2014 to 30 June 2014 Global Convertibles Fund (USD) USD Global Dividend Fund USD Global Financials Fund USD Global High Yield Bond Fund USD US Equity Fund USD 721,178,629 179,208,436 301,912,328 6,075,476,844 438,405,266 328,644 4,024,220 3,532,705-3,619,650 6,023,817 1,350 5,588 181,687,736 - - 40,099 - - - - 792 14,558 671 229 - - - 10,644,250-6,352,461 4,066,461 3,552,851 192,332,657 3,619,879 6,513,522 1,053,375 1,833,654 28,602,685 3,259,210 266,968 148,642 110,213 1,005,940 154,070 56,965 35,504 39,027 177,010 46,611 236,431 35,480 63,934 1,563,863 103,462 306 126-15,394 - - - - - - 116,643 93,178 364,130 4,503,225 90,359 7,190,835 1,366,305 2,410,958 35,868,117 3,653,712 2,586 66,510 6,321 7,710 3,051 7,188,249 1,299,795 2,404,637 35,860,407 3,650,661 - - - - - 7,188,249 1,299,795 2,404,637 35,860,407 3,650,661 (835,788) 2,766,666 1,148,214 156,472,250 (30,782) 23,627,934 6,775,664 14,823,339 (3,292,995) 25,328,522 3,498,099 (672,564) 21,018 34,145,453 (656,208) - 17,622 - - 1,124,841 153,132 (78,078) (65,713) 1,222,934 (71,390) - (64,560) - 36,681,799-27,279,165 5,978,084 14,778,644 68,757,191 25,725,765 16,183,184 1,643,103 (13,929,061) 98,461,090 7,125,672 (4,319,759) (610,094) 490,712 (11,061,794) 423,553 - (2,382) - - (167,416) (35,794) (619) (970) (10,264) (17) - - - - - - - - (7,576,981) - 11,827,631 1,030,008 (13,439,319) 79,812,051 7,381,792 38,271,008 9,774,758 2,487,539 305,041,492 33,076,775 652,930,998 45,920,745 111,899,627 3,753,382,904 324,047,663 (385,277,433) (47,103,796) (154,641,190) (2,458,027,718) (173,085,572) 267,653,565 (1,183,051) (42,741,563) 1,295,355,186 150,962,091 (84,638) (655,255) (131,217) (163,082,136) (9,618) 1,027,018,564 187,144,888 261,527,087 7,512,791,386 622,434,514 7

Statement of Changes in the Number of Shares (continued) For the Period from 1 January 2014 to 30 June 2014 Shares Outstanding at the Beginning of the Period Shares Subscribed Shares Redeemed Shares Outstanding at the End of the Period JPMorgan Investment Funds - Europe Select Equity Fund JPM Europe Select Equity A (acc) - EUR 214,985.677 22,473.265 170,126.372 67,332.570 JPM Europe Select Equity A (acc) - USD 175,119.486 227,109.232 74,797.797 327,430.921 JPM Europe Select Equity A (dist) - EUR 564,772.095 52,830.877 525,279.344 92,323.628 JPM Europe Select Equity B (acc) - EUR 449,016.158 252,125.741 295,725.750 405,416.149 JPM Europe Select Equity C (acc) - EUR 1,743,178.282 199,021.997 1,207,707.336 734,492.943 JPM Europe Select Equity C (dist) - GBP 10,992.271 18,845.668-29,837.939 JPM Europe Select Equity D (acc) - EUR 79,096.392 50,193.739 20,716.899 108,573.232 JPM Europe Select Equity D (acc) - USD 10,196.411 9.806 254.987 9,951.230 JPM Europe Select Equity I (acc) - EUR 1,937,061.091 3,486,725.386 341,481.554 5,082,304.923 JPM Europe Select Equity I (acc) - USD 1,335.953 135,766.489 3,041.832 134,060.610 JPM Europe Select Equity I (dist) - EUR 512,177.615 726,194.812 54,517.160 1,183,855.267 JPM Europe Select Equity X (acc) - EUR 664,823.689 282,848.776 14,617.019 933,055.446 JPM Europe Select Equity X (acc) - EUR (hedged) 92,409.764-51,163.981 41,245.783 JPM Europe Select Equity X (dist) - EUR 5,598.714 87,646.592 8,207.736 85,037.570 JPMorgan Investment Funds - Global Convertibles Fund (USD) JPM Global Convertibles (USD) A (acc) - USD 3,084,539.177 2,016,328.272 1,429,297.225 3,671,570.224 JPMorgan Global Convertibles (USD) A (acc) - SGD (hedged) 77,995.687 781,492.899 81,943.223 777,545.363 JPMorgan Global Convertibles (USD) A (acc) - USD 28,867.799 44,190.801 9,018.900 64,039.700 JPM Global Convertibles (USD) A (dist) - USD** - 366,724.767 5,570.000 361,154.767 JPM Global Convertibles (USD) A (mth) - USD 75,564.333 72,294.305 39,125.022 108,733.616 JPM Global Convertibles (USD) B (acc) - USD 769,564.799 393,635.359 276,504.834 886,695.324 JPM Global Convertibles (USD) B (mth) - USD 8,175.000 40,151.596 23,410.000 24,916.596 JPM Global Convertibles (USD) C (acc) - USD 336,226.022 775,160.293 502,706.575 608,679.740 JPM Global Convertibles (USD) D (acc) - USD 201,185.491 141,116.180 28,227.425 314,074.246 JPM Global Convertibles (USD) D (mth) - USD 28,047.053 46,356.472 1,661.350 72,742.175 JPM Global Convertibles (USD) I (acc) - USD 93,623.697 278,727.444 46,309.867 326,041.274 JPM Global Convertibles (USD) X (acc) - USD 1,443.020 1,095.487-2,538.507 JPMorgan Investment Funds - Global Dividend Fund JPM Global Dividend A (acc) - EUR 39,182.901 9,430.581 14,848.945 33,764.537 JPM Global Dividend A (acc) - EUR (hedged) 97,394.332 5,328.988 27,716.456 75,006.864 JPM Global Dividend A (acc) - USD 460,294.148 26,516.502 229,081.338 257,729.312 JPM Global Dividend A (div) - EUR 10,244.743 5,507.117 2,255.875 13,495.985 JPM Global Dividend A (div) - EUR (hedged) 6,845.111 2,561.894 1,756.503 7,650.502 JPM Global Dividend A (div) - USD 6,605.802 10,303.330 135.627 16,773.505 JPM Global Dividend A (inc) - EUR (hedged) 1,964.618 581.711 1,807.656 738.673 JPM Global Dividend A (inc) - USD 87,256.219 19,704.121 6,948.601 100,011.739 JPM Global Dividend B (dist) - EUR 19,792.665 - - 19,792.665 JPM Global Dividend B (inc) - EUR (hedged) 4,096.386 158.102 904.000 3,350.488 JPM Global Dividend C (acc) - EUR 135,303.564 7,672.298 24,504.559 118,471.303 JPM Global Dividend C (div) - EUR 13.484 - - 13.484 JPM Global Dividend D (acc) - EUR (hedged) 173,900.923 115,757.013 62,451.435 227,206.501 JPM Global Dividend D (acc) - USD 34,943.517 18,448.690 12,229.901 41,162.306 JPM Global Dividend D (div) - EUR (hedged) 111,311.495 44,905.610 22,283.932 133,933.173 JPM Global Dividend I (acc) - EUR 2,616.624 2,515.199 4,009.568 1,122.255 JPM Global Dividend I (acc) - EUR (hedged)* 9.949-9.949 - JPM Global Dividend I (acc) - USD 504.011 16,825.841 10.000 17,319.852 JPM Global Dividend I (inc) - EUR (hedged) 9.949 67,456.082-67,466.031 JPM Global Dividend T (acc) - EUR (hedged) 6,135.410 6,433.782 3,055.838 9,513.354 JPM Global Dividend X (acc) - EUR (hedged) 277,673.000 50,614.257 8,751.000 319,536.257 JPM Global Dividend X (dist) - AUD 49,600.000 100.507-49,700.507 JPMorgan Investment Funds - Global Financials Fund JPM Global Financials A (acc) - EUR 208,125.602 96,151.547 35,908.741 268,368.408 JPM Global Financials A (acc) - SGD 25,161.850 32,605.264 2,682.960 55,084.154 JPM Global Financials A (acc) - USD 1,062,581.112 313,677.038 215,661.444 1,160,596.706 JPM Global Financials A (dist) - USD 692,031.109 67,412.802 606,668.528 152,775.383 JPM Global Financials B (acc) - EUR 311,756.771 28,410.573 33,464.344 306,703.000 JPM Global Financials B (acc) - USD 646,008.222 3,425,522.200 3,019,932.812 1,051,597.610 JPM Global Financials C (acc) - USD 481,781.471 118,766.710 437,416.814 163,131.367 JPM Global Financials C (dist) - USD 5,000.000 158,665.688-163,665.688 JPM Global Financials D (acc) - USD 47,793.889 9,400.138 9,460.240 47,733.787 8

Statement of Changes in the Number of Shares (continued) For the Period from 1 January 2014 to 30 June 2014 Shares Outstanding at the Beginning of the Period Shares Subscribed Shares Redeemed Shares Outstanding at the End of the Period JPMorgan Investment Funds - Global High Yield Bond Fund JPM Global High Yield Bond A (acc) - AUD (hedged)** - 104,447.312 47,543.646 56,903.666 JPM Global High Yield Bond A (acc) - CHF (hedged) 9,173.194 3,114.000 1,778.000 10,509.194 JPM Global High Yield Bond A (acc) - EUR (hedged) 857,590.884 228,036.817 338,887.392 746,740.309 JPM Global High Yield Bond A (acc) - USD 4,490,044.049 1,953,434.703 2,686,173.079 3,757,305.673 JPM Global High Yield Bond A (dist) - USD 8,645.000 22,045.914 442.000 30,248.914 JPM Global High Yield Bond A (inc) - EUR (hedged) 877,247.584 303,591.851 157,801.414 1,023,038.021 JPM Global High Yield Bond A (irc) - AUD (hedged) 40,574,061.140 48,792,186.880 16,962,838.341 72,403,409.679 JPM Global High Yield Bond A (irc) - CAD (hedged) 65,411.757 810,002.730 82,807.908 792,606.579 JPM Global High Yield Bond A (irc) - NZD (hedged) 65,369.489 557,684.699 87,971.975 535,082.213 JPM Global High Yield Bond A (irc) - RMB (hedged)** - 124,177.682-124,177.682 JPM Global High Yield Bond A (mth) - HKD 49,301,777.957 42,320,693.460 14,917,188.914 76,705,282.503 JPM Global High Yield Bond A (mth) - SGD 234,266.255 499,174.347 37,394.119 696,046.483 JPM Global High Yield Bond A (mth) - USD 27,875,959.282 19,181,070.543 9,767,748.789 37,289,281.036 JPM Global High Yield Bond B (acc) - EUR (hedged) 202,214.379 83,642.707 132,263.853 153,593.233 JPM Global High Yield Bond B (acc) - USD 324,359.155 273,446.066 193,145.370 404,659.851 JPM Global High Yield Bond B (dist) - EUR (hedged) 17,951.016 3,956.155 5,775.155 16,132.016 JPM Global High Yield Bond B (mth) - USD 213,248.935 12,191.568 204,054.039 21,386.464 JPM Global High Yield Bond C (acc) - EUR (hedged) 1,274,068.903 144,548.553 718,930.999 699,686.457 JPM Global High Yield Bond C (acc) - PLN (hedged) 54,239.518 157,252.200-211,491.718 JPM Global High Yield Bond C (acc) - USD 1,506,656.259 801,920.465 733,416.162 1,575,160.562 JPM Global High Yield Bond C (dist) - USD 412,906.985 123,451.997 9,524.633 526,834.349 JPM Global High Yield Bond C (div) - EUR (hedged) 120,361.775-16,520.000 103,841.775 JPM Global High Yield Bond C (mth) - USD 352,223.610-294,796.761 57,426.849 JPM Global High Yield Bond D (acc) - EUR (hedged) 276,352.511 67,164.612 57,229.582 286,287.541 JPM Global High Yield Bond D (acc) - PLN (hedged) 5,270.111 41,480.230 30,543.529 16,206.812 JPM Global High Yield Bond D (acc) - USD 22,976.779 53,972.997 8,915.484 68,034.292 JPM Global High Yield Bond D (div) - EUR (hedged) 120,797.652 359,113.550 19,764.970 460,146.232 JPM Global High Yield Bond I (acc) - EUR (hedged) 308,318.047 505,385.113 112,934.425 700,768.735 JPM Global High Yield Bond I (acc) - USD 1,843,496.450 1,337,860.484 868,472.128 2,312,884.806 JPM Global High Yield Bond I (dist) - EUR (hedged) 9,185.486 142,399.985 2,319.671 149,265.800 JPM Global High Yield Bond I (dist) - USD 46,694.530 50,639.173 4,759.908 92,573.795 JPM Global High Yield Bond I (inc) - EUR (hedged) 1,017,088.849 131,849.116 188,920.000 960,017.965 JPM Global High Yield Bond I (mth) - USD 697,315.313 953,639.193 32,387.162 1,618,567.344 JPM Global High Yield Bond P (dist) - USD** - 14,845.542-14,845.542 JPM Global High Yield Bond T (acc) - EUR (hedged) 7,126.989 13,802.754 5,562.159 15,367.584 JPM Global High Yield Bond X (acc) - EUR (hedged) 824,404.128 356,983.000 114,867.000 1,066,520.128 JPM Global High Yield Bond X (acc) - USD 1,327,807.925 333,095.216 672,595.903 988,307.238 JPMorgan Investment Funds - US Equity Fund JPM US Equity A (acc) - EUR 385,828.697 589,400.998 62,187.683 913,042.012 JPM US Equity A (acc) - EUR (hedged) 163,225.397 101,883.135 109,420.482 155,688.050 JPM US Equity A (acc) - SGD* 30,456.438-30,456.438 - JPM US Equity A (acc) - USD 1,298,175.627 739,116.569 666,840.259 1,370,451.937 JPM US Equity A (dist) - GBP 745.894 982.890 145.720 1,583.064 JPM US Equity A (dist) - USD 391,336.821 17,821.476 38,594.298 370,563.999 JPM US Equity B (acc) - USD 39,817.443-744.948 39,072.495 JPM US Equity C (acc) - USD 184,170.516 138,828.704 168,667.824 154,331.396 JPM US Equity D (acc) - EUR (hedged) 35,804.927 1,393.083 12,465.498 24,732.512 JPM US Equity D (acc) - USD 187,844.737 12,113.280 34,196.369 165,761.648 JPM US Equity I (acc) - EUR (hedged) 133,976.921 178,529.940 29,348.777 283,158.084 JPM US Equity I (acc) - USD 240,138.004 940,866.401 235,227.533 945,776.872 JPM US Equity I (dist) - GBP 6,781.594 1,292.780 2,036.023 6,038.351 JPM US Equity X (acc) - USD 398,926.774 2,271.611-401,198.385 * Share Class inactive at the end of the period. ** Share Class activated during the period. The accompanying notes form an integral part of these Financial Statements. 9

Statistical Information (continued) Net Asset per Share in Share Class Currency 30 June 2014 31 December 2013 31 December 2012 31 December 2011 31 December 2010 JPMorgan Investment Funds - Europe Select Equity Fund JPM Europe Select Equity A (acc) - EUR 1,130.08 1,062.24 856.06 701.65 808.95 JPM Europe Select Equity A (acc) - USD 160.04 151.85 117.29 94.4 112.31 JPM Europe Select Equity A (dist) - EUR 75.28 71.31 58.21 48.31 56.27 JPM Europe Select Equity B (acc) - EUR 107.96 101.1 80.87 65.79 75.28 JPM Europe Select Equity C (acc) - EUR 115.17 107.69 85.88 69.65 79.47 JPM Europe Select Equity C (dist) - GBP 101.31 100.53 - - - JPM Europe Select Equity D (acc) - EUR 101.79 96.04 77.98 64.39 74.8 JPM Europe Select Equity D (acc) - USD 152.37 145.12 112.93 91.59 109.79 JPM Europe Select Equity I (acc) - EUR 151.08 141.2 112.5 91.17 103.93 JPM Europe Select Equity I (acc) - USD 158.03 149.12 - - - JPM Europe Select Equity I (dist) - EUR 113.13 105.84 - - - JPM Europe Select Equity X (acc) - EUR 161.35 150.3 118.96 95.79 108.49 JPM Europe Select Equity X (acc) - EUR (hedged) 123.25 116.39 91.11 74.51 86.08 JPM Europe Select Equity X (dist) - EUR 108.42 101.21 - - - JPMorgan Investment Funds - Global Convertibles Fund (USD) JPM Global Convertibles (USD) A (acc) - USD 170.65 163.52 141.81 126.66 139.07 JPMorgan Global Convertibles (USD) A (acc) - SGD (hedged) 10. 72 - - - - JPMorgan Global Convertibles (USD) A (acc) - USD 138.97 10.28 - - - JPM Global Convertibles (USD) A (dist) - USD 101.29 133.32 115.91 103.78 114.25 JPM Global Convertibles (USD) A (mth) - USD 116.73 112.29 107.84 - - JPM Global Convertibles (USD) B (acc) - USD 135.01 128.95 111.11 98.6 107.56 JPM Global Convertibles (USD) B (mth) - USD 128.62 123.45 108.25 - - JPM Global Convertibles (USD) C (acc) - USD 175.10 167.2 143.99 127.71 139.25 JPM Global Convertibles (USD) D (acc) - USD 161.43 155.07 135.15 121.32 133.88 JPM Global Convertibles (USD) D (mth) - USD 126.04 121.55 107.63 - - JPM Global Convertibles (USD) I (acc) - USD 140.92 134.51 115.78 102.58 111.72 JPM Global Convertibles (USD) X (acc) - USD 119.12 113.3 105.48 - - JPMorgan Investment Funds - Global Dividend Fund JPM Global Dividend A (acc) - EUR 102.57 96 83.05 75.74 78.56 JPM Global Dividend A (acc) - EUR (hedged) 75.91 72.09 59.18 53.42 57.24 JPM Global Dividend A (acc) - USD 110.52 104.28 86.57 77.53 82.98 JPM Global Dividend A (div) - EUR 95.02 90.57 81.28 76.67 - JPM Global Dividend A (div) - EUR (hedged) 93.72 90.66 77.3 - - JPM Global Dividend A (div) - USD 132.31 126.92 109.1 - - JPM Global Dividend A (inc) - EUR (hedged) 130.66 126.34 106.23 98.24 107.03 JPM Global Dividend A (inc) - USD 136.38 131.11 111.44 102.12 111.09 JPM Global Dividend B (dist) - EUR 90.48 86.58 76.66 70.02 - JPM Global Dividend B (inc) - EUR (hedged) 81.40 77.64 - - - JPM Global Dividend C (acc) - EUR 151.26 140.79 120.47 108.66 111.48 JPM Global Dividend C (acc) - USD* - - 102.96 - - JPM Global Dividend C (div) - EUR 97.88 92.77 82.29 76.74 - JPM Global Dividend D (acc) - EUR (hedged) 72.25 68.88 56.97 51.81 55.93 JPM Global Dividend D (acc) - USD 105.19 99.62 83.32 75.18 81.08 JPM Global Dividend D (div) - EUR (hedged) 92.00 89.36 76.79 - - JPM Global Dividend I (acc) - EUR 82. 10 76. 4 - - - JPM Global Dividend I (acc) - EUR (hedged)* - 76.75 - - - JPM Global Dividend I (acc) - USD 112.18 105.25 - - - JPM Global Dividend I (inc) - EUR (hedged) 80.85 76.75 - - - JPM Global Dividend T (acc) - EUR (hedged) 102.79 97.99 81.04 - - JPM Global Dividend X (acc) - EUR (hedged) 103.49 97.43 78.6 - - JPM Global Dividend X (acc) - USD* - - - 90.63 - JPM Global Dividend X (dist) - AUD 10.29 10.14 - - - JPMorgan Investment Funds - Global Financials Fund JPM Global Financials A (acc) - EUR 57.87 56.84 48 37.8 47.71 JPM Global Financials A (acc) - SGD 20.49 20.54 16.09 13.21 - JPM Global Financials A (acc) - USD 122.56 121.36 98.34 76.06 99.05 JPM Global Financials A (dist) - USD 68.27 68.44 55.72 43.24 56.36 JPM Global Financials B (acc) - EUR 80.80 79.07 - - - JPM Global Financials B (acc) - USD 7.83 7.73 6.21 4.76 6.15 JPM Global Financials C (acc) - USD 134.16 132.29 106.29 81.54 105.31 JPM Global Financials C (dist) - USD 104.08 102.69 - - - JPM Global Financials D (acc) - USD 119.82 119.24 97.6 76.24 100.28 JPM Global Financials X (acc) - USD* - - - 126.86 162.32 10

Statistical Information (continued) Net Asset per Share in Share Class Currency 30 June 2014 31 December 2013 31 December 2012 31 December 2011 31 December 2010 JPMorgan Investment Funds - Global High Yield Bond Fund JPM Global High Yield Bond A (acc) - AUD (hedged) 10. 22 - - - - JPM Global High Yield Bond A (acc) - CHF (hedged) 105.77 101.61 95.7 - - JPM Global High Yield Bond A (acc) - EUR (hedged) 205.81 197.41 185.86 163.1 156.44 JPM Global High Yield Bond A (acc) - USD 151.10 145 136.34 119.17 114.52 JPM Global High Yield Bond A (dist) - USD 106.16 106.82 101.5 - - JPM Global High Yield Bond A (inc) - EUR (hedged) 88.24 88.57 87.71 82.05 83 JPM Global High Yield Bond A (irc) - AUD (hedged) 9. 66 9. 6 - - - JPM Global High Yield Bond A (irc) - CAD (hedged) 10.23 10.16 - - - JPM Global High Yield Bond A (irc) - NZD (hedged) 12. 18 12. 11 - - - JPM Global High Yield Bond A (irc) - RMB (hedged) 10. 13 - - - - JPM Global High Yield Bond A (mth) - HKD 11.60 11.52 11.61 - - JPM Global High Yield Bond A (mth) - SGD 12.82 12.87 12.55 - - JPM Global High Yield Bond A (mth) - USD 104.89 104.1 104.99 98.89 101.97 JPM Global High Yield Bond B (acc) - EUR (hedged) 216.63 207.43 194.61 170.18 162.67 JPM Global High Yield Bond B (acc) - USD 134.63 128.97 120.84 105.26 - JPM Global High Yield Bond B (dist) - EUR (hedged) 78. 75 78. 7 - - - JPM Global High Yield Bond B (mth) - USD 107.38 106.41 106.92 - - JPM Global High Yield Bond C (acc) - EUR (hedged) 227.00 217.03 203.01 176.99 168.67 JPM Global High Yield Bond C (acc) - PLN (hedged) 378.55 358.31 326.49 - - JPM Global High Yield Bond C (acc) - USD 156.87 150.05 140.18 121.73 116.22 JPM Global High Yield Bond C (dist) - USD 113.48 114.56 110.78 - - JPM Global High Yield Bond C (div) - EUR (hedged) 79.50 78.64 78.96 - - JPM Global High Yield Bond C (mth) - USD 105.63 104.5 104.68 - - JPM Global High Yield Bond D (acc) - EUR (hedged) 194.10 186.55 176.33 155.36 149.62 JPM Global High Yield Bond D (acc) - PLN (hedged) 352.00 334.91 325.52 - - JPM Global High Yield Bond D (acc) - USD 135.74 130.53 123.22 108.14 104.33 JPM Global High Yield Bond D (div) - EUR (hedged) 78.04 77.6 78.73 - - JPM Global High Yield Bond I (acc) - EUR (hedged) 79.23 75.73 - - - JPM Global High Yield Bond I (acc) - USD 160.77 153.73 143.5 124.5 118.62 JPM Global High Yield Bond I (dist) - EUR (hedged) 76. 95 74. 35 - - - JPM Global High Yield Bond I (dist) - USD 105.71 102.22 - - - JPM Global High Yield Bond I (inc) - EUR (hedged) 71.68 72.19 71.45 66.87 67.56 JPM Global High Yield Bond I (mth) - USD 102.35 101.2 101.34 - - JPM Global High Yield Bond P (dist) - USD 101.84 - - - - JPM Global High Yield Bond T (acc) - EUR (hedged) 93.58 89.94 85.01 - - JPM Global High Yield Bond X (acc) - EUR (hedged) 153.67 146.53 136.35 118.28 112.14 JPM Global High Yield Bond X (acc) - USD 136.00 129.74 120.55 104.14 - JPMorgan Investment Funds - US Equity Fund JPM US Equity A (acc) - EUR 82.46 77.3 72.63 65.04 64.81 JPM US Equity A (acc) - EUR (hedged) 103.27 97.61 72.63 65.04 64.81 JPM US Equity A (acc) - SGD* - 10. 85 - - - JPM US Equity A (acc) - USD 142.82 134.97 100.55 89.31 88.95 JPM US Equity A (dist) - GBP 114.05 111.14 84.37 78.35 77.89 JPM US Equity A (dist) - USD 112.65 106.48 - - - JPM US Equity B (acc) - USD 113.25 106.63 - - - JPM US Equity C (acc) - USD 151.82 142.73 105.23 92.49 91.15 JPM US Equity D (acc) - EUR (hedged) 99.45 94.23 70.47 63.42 63.51 JPM US Equity D (acc) - USD 137.56 130.32 97.58 87.11 87.19 JPM US Equity I (acc) - EUR (hedged) 86.11 80.94 - - - JPM US Equity I (acc) - USD 117.89 110.8 - - - JPM US Equity I (dist) - GBP 68.40 66.45 - - - JPM US Equity X (acc) - USD 150.25 140.74 103.01 89.85 87.94 * Share Class inactive at end of the period. ** Share Class reactivated during the period. The accompanying notes form an integral part of these Financial Statements. 11

Notes to the Unaudited Financial Statements 1. Organisation JPMorgan Investment Funds (the SICAV ) is an investment company incorporated on 22 December 1994 under the name J.P. Morgan Investment Funds. The name of the SICAV was changed to JPMorgan Fleming Investment Funds on 19 November 2001 and then to JPMorgan Investment Funds on 12 September 2005. It is organised under Part I of the Luxembourg Law of 17 December 2010 on Undertakings for Collective Investment, as a Société Anonyme qualifying as a Société d Investissement à Capital Variable (SICAV)., it comprises 23 Sub-Funds, each relating to a separate investment portfolio consisting of securities, cash and other instruments. On 12 September 2005, JPMorgan Asset Management (Europe) S.à r.l. was appointed by the SICAV to act as Management Company. The Articles of Incorporation were also modified so the SICAV complies with UCITS III regulations. From 1 July 2011, JPMorgan Asset Management (Europe) S.à r.l. is acting as a Chapter 15 Management Company under the Luxembourg Law of 17 December 2010 and complies with UCITS IV regulations. The SICAV is registered with the Registre de Commerce et des Sociétés of Luxembourg, under number B 49 663. Each Sub-Fund may contain A, B, C, D, I, P, T, X and Y Classes of Shares, which may differ in the minimum subscription amount, minimum holding amount, currency and/or eligibility requirements, the fees and expenses, and the dividend policy applicable to them.in addition, each Sub-Fund may contain Classes of Shares named either JPM or JPMorgan. Within each Sub-Fund, individual Classes of Shares may have a currency of denomination that differs from the currency of denomination of the Sub-Fund. The currency of denomination for each Class of Share is indicated by a suffix on the name of the Share Class. 2. Significant Accounting Policies The Financial Statements are prepared in accordance with Luxembourg regulations relating to Undertakings for Collective Investments. a) Investment Valuation Transferable securities which are admitted to an official exchange listing or dealt in on another regulated market are valued on the basis of the latest available price prevailing at the time of calculating the net asset value. If securities are listed or dealt in on several exchanges or markets, the latest available price, or if appropriate, the average price on the principal exchange or market will be applied. Transferable securities not admitted to an official exchange listing nor dealt in on another regulated market are valued at the latest available price.those securities for which no price is available or for which the latest available price is not representative are valued on the basis of their reasonably foreseeable sales price determined with prudence and in good faith by the Board of Directors. Shares or Units in UCITS or other UCIS are valued at the latest available price or net asset value, as reported or provided by such undertakings or their agents. Liquid assets and money market instruments may be valued at nominal values plus any accrued interest or on an amortised cost basis. The financial statements are presented on the basis of the net asset values of the Sub-Funds calculated on 30 June 2014.In accordance with the Prospectus, the net asset values were calculated using the latest exchange rates known at the time of calculation. b) Swing Pricing A Sub-Fund may suffer dilution of the Net Asset per Share due to investors buying or selling Shares in a Sub-Fund at a price that does not reflect the dealing and other costs that arise when security trades are undertaken by the Investment Manager to accommodate cash inflows or outflows. In order to counter this impact, a Swing Pricing mechanism may be adopted to protect the interests of Shareholders of the Fund.If on any Valuation Day, the aggregate net transactions in Shares of a Sub-Fund exceed a pre-determined threshold, as determined and reviewed for each Sub-Fund on a periodic basis by the Management Company, the Net Asset per Share may be adjusted upwards or downwards to reflect net inflows and net outflows respectively. The net inflows and net outflows will be determined by the Management Company based on the latest available information at the time of calculation of the Net Asset per Share.The Swing Pricing mechanism may be applied across all Sub-Funds with the exception of the money market Sub-Funds, as defined by the Prospectus.The extent of the price adjustment will be set by the Management Company to reflect dealing and other costs.such adjustment may vary from Sub-Fund to Sub-Fund and will not exceed 2% of the original Net Asset per Share.The official Net Asset per Share as at year end, disclosed in the Statistical Information section of this report may therefore include a Swing Pricing adjustment, which would not be recognised in the Combined Statement of Net Assets and in the Combined Statement of Operations and Changes in Net Assets. No Sub-Funds were swung as at 30 June 2014. c) Realised and Unrealised Gains and Losses on Investments Investment transactions are accounted for on the trade date (the date the order to buy or sell is executed).for trades into other collective investment schemes, transactions are accounted for on receipt of the trade confirmation from the underlying transfer agents. Realised gains and losses on sales of investments are calculated on the average book cost.the associated foreign exchange movement between the date of purchase and date of sale of investments is included in realised gains and losses on investments.unrealised gains and losses on holdings of investments are calculated on the total book cost and include the associated unrealised gains and losses on foreign exchange. d) Income Recognition Interest income is accrued daily and includes the amortisation of premiums and accretion of discounts, where applicable.bank interest income is recognised on an accrual basis.dividend income is accrued on the ex-dividend date.this income is shown net of any withholding taxes and adjusted accordingly when tax reclaims apply. e) Conversion of Foreign Currencies The books and records of each Sub-Fund are denominated in the base currency of the corresponding Sub-Fund.Amounts denominated in other currencies are translated into the base currency on the following basis: (i) investment valuations and other assets and liabilities initially expressed in other currencies are converted each business day into the base currency using currency exchange rates prevailing on each such business day; (ii) purchases and sales of foreign investments, income and expenses are converted into the base currency using currency exchange rates prevailing on the respective dates of such transactions. Net realised and unrealised gains or losses on foreign exchange represent: (i) foreign exchange gains and losses from the sale and holding of foreign currencies and foreign cash equivalents; (ii) gains and losses between trade date and settlement date on securities transactions; and (iii) gains and losses arising from the difference between amounts of dividends and interest recorded and the amounts actually received. 12

Notes to the Unaudited Financial Statements (continued) The resulting gains and losses on translation are included in Net Realised Gain/(Loss) on Foreign Exchange in the Combined Statement of Operations and Changes in Net Assets. The reference currency of the SICAV as reflected in the combined statements is USD. The principal exchange rates applied as at 30 June 2014 are as follows: 1 USD = 0.731860850 EUR; 1 USD = 101.37500000 JPY. f) Forward Foreign Exchange Contracts Unrealised gains or losses on outstanding forward foreign exchange contracts are valued on the basis of currency exchange rates prevailing at the relevant valuation date.the changes in such amounts are included in the Combined Statement of Operations and Changes in Net Assets under Net Change in Unrealised Gain/(Loss) on Forward Foreign Exchange Contracts.When a contract is closed, the Realised Gain/(Loss) is recorded under Net Realised Gain/(Loss) on Forward Foreign Exchange Contracts in the Combined Statement of Operations and Changes in Net Assets.Unrealised Gains or Losses are recorded under Unrealised Gain/(Loss) on Forward Foreign Exchanges Contracts in the Combined Statement of Net Assets. g) Financial Futures Contracts on Securities and Indices Regulated financial futures contracts are valued at the exchange quoted settlement price.initial margin deposits are made upon entering into the contracts and can be either in cash or securities.during the period the contracts are open, changes in the value of the contracts are recognised as unrealised gains and losses by marking-to-market on a daily basis to reflect the market value of the contracts at the end of each business day s trading.variation margin payments are made or received, depending upon whether losses or gains are incurred.when a contract is closed, the SICAV records a realised gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the initial cost of the contract in Net Realised Gain/(Loss) on Financial Futures Contracts in the Combined Statement of Operations and Changes in Net Assets. Unrealised gains or losses are recorded under Unrealised Net Gain/(Loss) on Financial Futures Contracts in the Combined Statement of Net Assets. Daily margin calls are recorded under Net Realised Gain/(Loss) on Financial Futures Contracts in the Combined Statement of Operations and Changes in Net Assets. h) Option Contracts Options purchased are recorded as investments; options written or sold are recorded as liabilities.when the exercise of an option results in a cash settlement, the difference between the premium and the settlement proceeds is accounted for as a realised gain or loss.when securities are acquired or delivered upon exercise of an option, the acquisition cost or sale proceeds are adjusted by the amount of the premium.when an option is closed, the difference between the premium and the cost to close the position is accounted for as a realised gain or loss.when an option expires, the premium is accounted for as a realised gain for options written or as a realised loss for options purchased. The SICAV writes options on securities, futures, currencies and interest rate swaps ( swaptions ).These options are settled in cash and subject the SICAV to unlimited risk of loss.the SICAV, however, is not subject to credit risk on written options as the counterparty has already performed its obligation by paying the premium at the inception of the contract. As of 30 June 2014, the SICAV had written options contracts outstanding as listed on its Schedule of Investments. For options on futures, where the investment manager is based in the United Kingdom, variation margin payments are made or received daily, depending upon whether losses or gains are incurred on the underlying futures contract. The market values are recorded under Derivative Instruments at in the Combined Statement of Net Assets. i) To Be Announced Securities ( TBAs ) TBAs are related to mortgage backed securities issued by government sponsored agencies.these agencies usually pool mortgage loans and sell interests in the pools created.tbas relate to future pools of these agencies that are bought and sold for future settlement for which either the interest rate or the maturity date is not yet fixed. TBAs are separately disclosed in the Schedule of Investments. Certain Sub-Funds may enter into Dollar Rolls, principally using To Be Announced ( TBA ) Securities, in which the Sub-Funds sell mortgage-backed securities for delivery in the current month and simultaneously contract to repurchase similar, but not identical, securities at an agreed-upon price on a fixed date.the Sub-Funds account for such Dollar Rolls as purchases and sales and receive compensation as consideration for entering into the commitment to repurchase. The Sub-Funds must maintain liquid securities having a value not less than the repurchase price (including accrued interest) for such Dollar Rolls.The market value of the securities that the Sub-Funds are required to purchase may decline below the agreed upon repurchase price of those securities. Certain Sub-Funds had TBAs outstanding as of 30 June 2014, which are included in Investment in TBAs at and Open Short Positions on TBAs in the Combined Statement of Net Assets. j) Interest Rate Swaps An interest rate swap is a bilateral agreement in which each of the parties agree to exchange a series of interest payments for another series of interest payments (usually fixed/floating) based on a notional amount that serves as a computation basis and that is usually not exchanged. The market values are recorded under Derivative Instruments at in the Combined Statement of Net Assets.The changes in such amounts are recorded under Net Change in Unrealised Gain/(Loss) on Derivative Instruments and the Realised under Net Realised Gain/(Loss) on Derivative Instruments in the Combined Statement of Operations and Changes in Net Assets. k) Total Return Swaps The SICAV may enter into swap contracts in which the SICAV and the counterparty agree to exchange payments where one or both parties pay the returns generated by a security, instrument, basket or index thereof.the payments made by the SICAV to the counterparty and vice versa are calculated by reference to a specific security, index, or instruments and an agreed upon notional amount.any such underlying security or instrument must be a transferable security and any such index must be an index of a regulated market. A Total Return Swap on a basket of equities will exchange the total performance on the specific basket of equities, selected by the Investment Manager against a reference rate plus a spread.the total performance includes interest, dividends, gains and losses on the underlying securities during the contract period according to the type of underlying.the risk of this type of instrument will depend on the uncertain evolution, at the time of the contract conclusion, of the performance of the underlying.these underlying securities are listed on a primary exchange. 13

Notes to the Unaudited Financial Statements (continued) The value of the underlying securities shall be taken into account for the calculation of the investment restrictions applicable to individual issuers.the relevant indices include, but are not limited to, currencies, interest rates, prices and total return on interest rates indices, fixed income indices and stock indices. The market values are recorded under Derivative Instruments at in the Combined Statement of Net Assets.The changes in such amounts are included in the Combined Statement of Operations and Changes in Net Assets under Net Change in Unrealised Gain/(Loss) on Derivative Instruments. When a contract is closed, the Realised Gain/(Loss) is recorded under Net Realised Gain/(Loss) on Derivative Instruments in the Combined Statement of Operations and Changes in Net Assets. l) Credit Default Swaps A Credit Default Swap is a credit derivative transaction in which two parties enter into an agreement, whereby one party pays the other a periodic payment for the specified life of the agreement.the other party makes no payments unless a credit event, relating to a predetermined reference asset, occurs.if such an event occurs, the party will then make a payment to the first party, and the swap will terminate.the value of the underlying securities shall be taken into account for the calculation of the investment restrictions applicable to individual issuers. The market values are recorded under Derivative Instruments at in the Combined Statement of Net Assets.The changes in such amounts are recorded under Net Change in Unrealised Gain/(Loss) on Derivative Instruments and the Realised under Net Realised Gain/(Loss) on Derivative Instruments in the Combined Statement of Operations and Changes in Net Assets. m) Forward Starting Variance Swap A variance swap is an instrument which allows the SICAV to trade future realized (or historical) volatility of an underlying asset against its current implied volatility.the market values are recorded under Derivatives Instruments at in the Combined Statement of Net Assets.The changes in such amounts are recorded under Net Change in Unrealised Gain/(Loss) on Derivatives Instruments and the Realised Gain/(Loss) when contracts are closed are recorded under Net Realised Gain/(Loss) on Derivatives Instruments in the Combined Statement of Operations and Changes in Net Assets. 3. Fees and Expenses The Operating and Administrative Expenses cover: (i) Expenses directly contracted by the Fund, including but not limited to the Custodian fees, auditing fees and expenses, the Luxembourg taxe d abonnement, Directors fees and reasonable out-of-pocket expenses incurred by the Directors. (ii) A fund servicing fee paid to the Management Company for administrative and related services which will be the remaining amount of the Operating and Administrative Expenses after deduction of the expenses detailed under section i) above.the Management Company then bears all expenses incurred inthe day to day operation and administration of the Fund, including but not limited to formation expenses such as organisation and registration costs; accounting expenses covering fund accounting and administrative services; transfer agency expenses covering registrar and transfer agency services; the Administrative Agent and Domiciliary Agent services; the fees and reasonable out-of-pocket expenses of the paying agents and representatives; legal fees and expenses; ongoing registration, listing and quotation fees, including translation expenses; the cost of publication of the Share prices and postage, telephone, facsimile transmission and other electronic means of communication; and the costs and expenses of preparing, printing and distributing the Prospectus, Key Investor Information Documents or any offering document, financial reports and other documents made available to Shareholders. Operating and Administrative Expenses do not include Transaction Fees and Extraordinary Expenses. The change in the structure of the Operating and Administrative Expenses does not affect the current fixed percentage level on all Sub-Funds for Share Classes - A, B, C, D, P, T or the capped Operating and Administrative Expenses level on all other Sub-Funds for Share Classes I not mentioned above and X Share Classes as disclosed in Appendix III of the Prospectus. a) All Sub-Funds - Share Classes A, B, C, D and T The fees and expenses charged to these Classes of shares are set at a fixed percentage of the total net assets of each Class of shares.this fixed percentage covers all fees and expenses connected with the management of these Classes of shares, including Investment Management Fees, shareholder servicing fees and Other Operating and Administrative Expenses, which include but are not limited to Custody, Registrar and Transfer Agent Fees; it does not cover taxes paid on investment, brokerage expenses, extraordinary costs or performance fees, if any.no other costs are charged to these Classes of shares, and the Management Company absorbs any difference that may arise between the actual costs of the operations of these Classes of shares and the fixed percentage.to the extent that the actual operating costs are less than the fixed percentage, the excess is paid to the Management Company and included within Management and Advisory Fees.To the extent that actual operating costs exceed the fixed percentage, the amount borne by the Management Company will be separately disclosed as a Fee Waiver in the Combined Statement of Net Assets and the Combined Statement of Operations and Changes in Net Assets. This fixed annual rate of fees and expenses is categorised as a Total Expense Ratio.The fixed annual rates of fees for each Class of shares are shown in the Appendix. b) All Sub-Funds - Share Class I and P The maximum total fees and expenses to be borne by Class I shareholders of any Sub-Fund will not exceed a capped percentage of the total net assets attributable to that Class.These capped fees and expenses comprise Investment Management Fees plus other Operating and Administrative Expenses, limited to Custody, Fiduciary, Accounting, Transfer Agency Fees, Taxes and Sundry Expenses; it does not cover performance fees, if any. This capped annual rate of fees and expenses is categorised as a Capped Expense Ratio.The capped annual rates of fees for each Class of shares are shown in the Appendix. c) All Sub-Funds - Share Class X and Y The Class X and Y shares of each Sub-Fund are charged a pro-rata share of the Custody and Accounting Fees allocable to that Sub-Fund. The Management Company pays all other Operating and Administrative Expenses allocable to such Class to the exclusion of performance fees, if any.the maximum Operating and Administrative Expenses to be borne by the Class X and Class Y shareholders of any Sub-Fund will not exceed a capped percentage of the total net assets attributable to that Class, as set out in the Appendix. The Annual Management Fee that would normally be payable in respect of the X and Y Share Class are administratively levied and collected by the Global Distributor directly from the shareholder or through the relevant J.P.Morgan Chase & Co. entity. 14