Global Asset Allocation
03 January 2014
The J.P. Morgan View
US is leading
 Asset allocation –– Improved US activity data and reduced monetary and
fiscal risks keep us long both risk and growth globally, overweight US risk
assets, and underweight its bonds against the rest of the world.
 Economics –– Over the past month, our 2014 US growth forecast has been
raised from 2.4% to 2.8%, on a stronger H2 for 2013. Global growth is
unchanged at 2.9% on softer data elsewhere.
 Fixed Income –– Take profit on 3s10s UK gilt steepener. Stay long Euro
area periphery vs. core, and German bunds vs. US Treasuries.
 Equities –– The rise in the global manufacturing PMI boosts our OW in
Cyclical vs. Defensive sectors.
 Credit –– US HG themes for 2014 are OW financials vs. non-financials and
OW the long end of the spread curve.
 FX –– Dollar is gaining broadly and will likely rally further.
 Commodities –– Expect 5% total return on the GSCI in 2014 driven by
strong roll returns in energy.
 Click here for video.
 Equity and credit markets have been on a tear into year end, and bonds
have been backing up badly, even as the new year is starting with some
profit taking. The second half of December delivered strong US activity data
and positive surprises from US fiscal and monetary policy.
 Only two days into 2014, we face the luxury problem that each of the
themes we laid out in our 2014 outlooks (p. 5) is already fully in play and is
becoming increasingly priced in. This leaves us with Momentum as the main
force to fuel our long-risk strategy. We have argued before that in the case
of equities & credit, this momentum force is not merely technical, but also
reflects positive two-way interaction with fundamentals. Higher asset prices
boost wealth & confidence that in turn stimulate spending that should further
support risk prices. The opposite can be said of bonds and currencies, where
one should thus hold a much shorter investment horizon. In line, we take
profit on some of our bearish bond trades and go tactically flat in the US.
 The 2013 rally in risk assets was all driven by fading risk perceptions and
not by any improvement in growth expectations. Instead, over the year, we
cut our global 2013 and 2014 projections each by ¼%, all due to EM.
Continuing to rely only on further falls in uncertainty does, of course, have
its natural limits as there are fewer and fewer concerns remaining among
investors. Here also, one would have to rely on the simple passage of time
for uncertainty to fade further and confidence to build.
 Over the past month or so however, we have seen reason to signal upside
risk bias on global growth as indicated by the steady rise in PMIs. Over the
past few weeks, this has translated into outright upgrades for US growth
with 2014 now at 2.8%, versus only 2.4% expected a month ago. This has
not shown up in the rest of the world where slightly weaker data are keeping
our global 2014 projection unchanged at 2.9%.
Global Asset Allocation
Jan Loeys
AC
(1-212) 834-5874
jan.loeys@jpmorgan.com
JPMorgan Chase Bank NA
John Normand
(44-20) 7134-1816
john.normand@jpmorgan.com
J.P. Morgan Securities plc
Nikolaos Panigirtzoglou
(44-20) 7134-7815
nikolaos.panigirtzoglou@jpmorgan.com
J.P. Morgan Securities plc
Matthew Lehmann
(1-212) 834-8315
matthew.m.lehmann@jpmorgan.com
J.P. Morgan Securities LLC
2013 returns
%, equities are in lighter color.
Topix*
47
S&P500
MSCI AC World*
MSCI Europe*
US High Yield
Europe Fixed Inc*
MSCI EM*
US cash
Global Gov Bonds**
US High Grade
US Fixed Income
GSCI TR
EM $ Corp.
EM Local Bonds**
EMBIG
EM FX
Gold
-27
-15 -10 -5 0 5 10 15 20 25
Source: J.P. Morgan, Bloomberg.
Note: Returns in USD. *Local currency. **Hedged
into USD. Euro Fixed Income is iBoxx Overall Index.
US HG, HY, EMBIG and EM $ Corp are JPM
indices. EM FX is EMCI in $.
See page 7 for analyst certification and important disclosures.
www.jpmorganmarkets.com
Jan Loeys
(1-212) 834-5874
jan.loeys@jpmorgan.com
Global Asset Allocation
The J.P. Morgan View
03 January 2014
 A US upgrade counts for more than that of any other country, though.
This is not merely because the US is the largest economy, but more so because
the dollar financial markets make up half of world outstandings. And with
many countries pegging, or shadowing the US dollar, the impact of US growth
and policy surprises goes way beyond its 22% share in world GDP. Given a
tendency for upgrades to be followed by more upgrades, we feel comfortable
staying in bullish growth trades: long equities and credit, short bonds, and
overweight Cyclicals. We also stay overweight US equities and the dollar
against the rest of the world, and the reverse in fixed income.
 A second theme we have been pushing is that the Fed is not in a tightening
mode and is more in a policy switching mode, from balance sheet expansion
(QE) to Rate Guidance. We did not expect this switch to go 100% smoothly
and thus stayed short duration, long dollars, and UW EM. In the event, the Fed
communicated its tapering decision quite convincingly and did little damage to
markets, but our positions got bailed out by stronger US activity data. EM
assets performed better than we had feared. We thus cover the underweight of
EM versus DM duration (see below). But with positive momentum on US
growth views, we stay long the dollar against vulnerable EM FX, and
overweight US equities. EM credit spreads --sovereign and corporate -- have
rallied in line with US names, but not more so. We were fearful of the impact
of tapering, but had decided not to underweight EM names given the high
carry cost. We are watching supply and EM activity data to decide whether to
move from neutral to long EM spread product.
2014 US GDP growth forecasts: J.P. Morgan vs.
consensus
%.
3.1
2.8
Consensus
2.5
JPM
2.2
Potential
1.9
1.6
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Source: J.P. Morgan, Blue Chip Economics, Consensus Economics
2014 Global GDP growth forecasts: J.P. Morgan vs.
consensus
%.
3.4
3.2
Consensus
Fixed Income
 Bond yields rose across developed markets after the Fed announced on Dec 18
that it would begin reducing asset purchases in January. We had expected an
announcement in the January meeting, and that the Fed would provide stronger
guidance (USFIMS, Dec 13). With the macro outlook continuing to improve,
we keep a short duration bias in US Treasuries. But given the rise in yields
in recent weeks, we see a risk of a pull back and are neutral duration outright.
We prefer to be short duration through a 2s10s steepener and cross-market
against Bunds.
 Similarly, we held a bearish bias on UK duration given improvement in the
macroeconomic outlook, and expressed this through a 3s10s steepener. In our
mind, the key downside risk is that output and labor market data improve
faster than the market expects. We now expect UK unemployment to decline
below the 7% threshold set out by the BoE by the end of Q1 (UK:
Unemployment to drop below 7% in 1Q14, earlier rate hike likely, Allan
Monks, Dec 18). This creates a risk of further repricing at the front end, and
thus we prefer to take profit on 3s10s UK steepener.
 In the Euro area, inflationary pressures remain very subdued (see The ECB in
2014: stuck at the zero nominal bound, David Mackie and Greg Fuzesi, Jan 3).
With this in mind, we remain long duration in German bunds at the short end.
At the same time the macro outlook does show signs of improvement,
including yesterday’s manufacturing PMI. Stay overweight peripheral vs. core
government bonds.
 We expect EM local bonds to slightly outperform DM bonds on a currency
hedged basis in 2014, largely due to carry. We saw near-term risk from the
planned switch by the Fed from QE to forward guidance having adverse
impact on EM bonds, and were tactically underweight EM bonds vs. DM
bonds currency hedged. With the announcement of tapering behind us, the
rationale of this tactical trade has gone, and we close the trade at a slight loss.
2
3.0
2.8
JPM
Potential
2.6
Jan-13 Mar-13 May-13 Jul-13
Sep-13 Nov-13
Source: J.P. Morgan, Blue Chip Economics, Consensus Economics
More details in ...
Global Data Watch, Bruce Kasman, David Hensley and
Joe Lupton
Global Markets Outlook and Strategy, Jan Loeys et al.
US Fixed Income Markets, Matt Jozoff, and Jay Barry
Global Fixed Income Markets, Fabio Bassi et al.
Emerging Markets Outlook and Strategy, Joyce Chang
Key trades and risk: Emerging Market Equity Strategy,
Adrian Mowat et al.
US Equity Strategy FLASH, Tom Lee et al.
European Equity Strategy, Mislav Matejka., et al.
Flows & Liquidity, Nikos Panigirtzoglou et al.
Jan Loeys
(1-212) 834-5874
jan.loeys@jpmorgan.com
Global Asset Allocation
The J.P. Morgan View
03 January 2014
Equities
 We maintain our bullish stance overall and within equities we overweight
Japan and the US. These are the regions in which we see most upside on
economic and earnings growth this year. We note that this view is working
well, with both regions among the top performers over the past month.
 Japanese equities are being boosted by expectations of additional BoJ stimulus
in April. US equities are being boosted by an improving economy and upward
revisions to US growth forecasts.
 EM equities continue to underperform and EM equity funds witnessed
outflows for the 10th consecutive week to January 1. EM GDP decelerated
0.4% in 2013, to a below trend pace of 4.5%. Our Global Economic Outlook
continues to expect subpar EM growth this year, which coupled with Fed
tapering, raises the risk of further EM equity underperformance this year.
 We keep our OW in global Cyclicals vs. Defensives, which we re-entered a
few months ago based on strong PMI momentum. Our global manufacturing
PMI rose to 53.3 in December, up from 53.1 in November. The improvement
in the PMI in the last quarter was the best since Q2 2011. This is boosting our
OW of Cyclical vs. Defensive equity sectors globally.
Equity returns in 2013
%
MSCI EM
Euro Stoxx 50
FTSE 100
FTSE MIB Index
Stoxx Europe 600
MSCI AC World
IBEX 35 Index
DAX Index
S&P 500
TOPIX
-10%
0%
10%
20%
30%
40%
50%
60%
Source: Bloomberg
Credit
 2013 was a solid year for US HG bonds as spreads tightened 26bp, with 20bp
of this tightening happening in the last two months. Spreads ended the year at
135bp, and HG bond yields closed Dec 31 at 4.22%, up 0.74% YTD.
Excluding EM bonds which were 8bp wider in 2013, our index spread
tightened by 30bp last year to 123bp. Our spread target for 2014 is 130bp,
which we published in late November when the index was at 152bp. The
strong market performance has come faster than we expected. This is because
UST yields are higher (ending the year at 3.00% vs. our forecast of 2.85%),
growth was stronger than expected, there was less uncertainty in Washington,
and most importantly, the Fed communication on the end of tapering was very
successful (JPM Daily Credit Strategy & CDS/CDX am update, Eric
Beinstein, Jan 2).
 The main themes for this year in US HG are to OW financials vs. nonfinancials as financials continue to delever while non-financials are levering
up, and to overweight the long end of the spread curve. We expect the 10s30s
spread curve to flatten further from here. The successful Fed tapering and
improved US economic outlook are also supportive of EM in the near term,
providing domestic EM issues do not dominate the improved macro outlook.
Foreign Exchange
 The past three weeks have been characterized by a widening of front-end yield
spreads between the US and the rest of the world and a stronger USD (+0.7%
on trade-weighted basis). The strengthening of the USD has come against
other funding currencies within the G10 (CHF, JPY and EUR are all weaker
versus USD) and against most EM FX, particularly those that are vulnerable
to higher US rates (TRY, ZAR and THB have led the underperformance). The
outperformers have been the Scandis (notably SEK) and GBP. Select pairs
have tested historical extremes in recent weeks: USD/JPY traded above 105
(its 5-year high), EUR/USD and cable traded above their 2-year highs briefly,
AUD/NZD reached its 5-year lows and USD/TRY made new record lows.
 In the FX 2014 Outlook, we were looking for a stronger USD against
More details in ...
US Credit Markets Outlook and Strategy, Eric Beinstein
et al.
EM Corporate Weekly Monitor, Yang-Myung Hong et al.
High Yield Credit Markets Weekly, Peter Acciavatti et al.
European Credit Outlook & Strategy, Steven Dulake et
al.
Emerging Markets Cross Product Strategy Weekly, Eric
Beinstein et al.
3
Jan Loeys
(1-212) 834-5874
jan.loeys@jpmorgan.com
Global Asset Allocation
The J.P. Morgan View
03 January 2014
currencies where the central banks are easing/ staying accommodative (JPY,
EUR, AUD) and against externally challenged EM FX (TRY, MYR, IDR).
Among the crosses, we were in favor of lower AUD/NZD and higher
NOK/SEK. We expected Sterling to be well supported as the economy
challenges the BoE’s forward guidance and tests the 7% unemployment
threshold as early as in 1Q14. In EM, we looked for the global cyclical uplift
to benefit KRW and TWD. These views have largely tracked in recent weeks
but a notable exception is EUR/USD, which strengthened into year-end to
above the 1.38 level versus our own forecast of 1.32 at mid-year.
 The themes outlined above should continue to hold well. Euro is screening
expensive on our fair value models on all crosses except CHF and we look for
a correction in the coming weeks (we are positioned for this in USD/CZK via
options). USD/JPY should head higher still given the divergent monetary
policies of the BoJ and the Fed (we target 106 by year-end), although on a
tactical basis the pair could see a pullback given record spec shorts on JPY.
We stay positioned for a lower AUD/NZD and higher NOK/SEK and
GBP/JPY. As US yields increase further, outflows from countries that were
beneficiaries of the low interest rate environment should weaken further (we
are long USD/TRY and USD/IDR). KRW should outperform in Asia as it is
not vulnerable to higher US rates and should benefit from the boost to exports
from the global cyclical upturn.
FX weekly changes
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
-2.0%
USD JPY EUR GBP CHF CAD AUD
TWI
Source: Bloomberg, J.P. Morgan
Commodities
 Commodities, proxied by the GSCI index, finished 2013 down 2%. Energy
was up 3% but precious metals, base metals and agriculture were down 28%,
14% and 18% respectively. For 2014, we expect better performance for
commodities and we forecast a 4.9% total return for the GSCI. This return
should be driven largely by energy and from the backwardation (inverted
future curve) that we expect to persist through the coming year. Spot
commodity returns are likely to once again be lackluster. Agriculture prices
should continue to fall on higher supply while precious metals stabilize and
base metals move modestly higher as global manufacturing continues to
improve (Commodity Markets Outlook and Strategy: 2014 Outlook—And the
walls come a-tumblin’ down, Colin Fenton et al., Dec 30, 2013).
 Our oil strategists have outlined the main risks to their oil outlook for 2014.
Two of these risks are bullish for oil prices; if Venezuela suffers more supply
losses or if restarting Sudanese production stalls. However, all the other risks
are bearish for oil prices. These include: a faster than expected recovery of
Libyan production; the US lifts its export ban on crude oil; US refineries are
unable to resolve bottlenecks quickly enough to adjust for new shale oil
output; Iraqi production finally surges; Iranian sanctions are removed; Syrian
production resumes; and lastly, refinery demand falls and US crude
inventories build further (Oil Market Weekly: Ten risks guiding the 2014
Outlook, Colin Fenton et al., Jan 2).
 We are also more positive on gold for 2014 as we expect that the trade policy
blocking Indian gold imports will weaken somewhat and we also anticipate
that outflows from gold ETFs will stabilize in the coming year, and begin to
rise in 2H2014. A slower pace of gold mine growth in 2014 and 2015 is likely
as lower prices feed into project delays and lower capex. We also still believe
that central banks will be net buyers of gold in 2014 and 2015. All this should
see prices stabilize and move modestly higher to round $1285/oz by the end of
the year.
4
More details in ...
FX Markets Weekly, John Normand et al.
Commodity Markets Outlook & Strategy,
Colin Fenton et al.
Oil Markets Monthly, Colin Fenton et al.
Natural Gas Weekly, Scott Speaker and Shikha
Chaturvedi
Metals Monthly, Natasha Kaneva et al.
Agriculture Weekly, Elizabeth Volynsky.
Global Asset Allocation
The J.P. Morgan View
03 January 2014
Jan Loeys
(1-212) 834-5874
jan.loeys@jpmorgan.com
Forecasts & Strategy
Interest rates
United States
Fed funds rate
10-year yields
Euro area
Refi rate
10-year yields
United Kingdom
Repo rate
10-year yields
Japan
Overnight call rate
10-year yields
Emerging markets GBI-EM - Yield
Current
Mar-14
Jun-14
Sep-14
Dec-14
0.125
3.00
0.25
1.94
0.50
3.03
0.05
0.74
6.88
0.125
3.10
0.25
1.85
0.50
3.15
0.05
0.60
0.125
3.25
0.25
2.00
0.50
3.35
0.05
0.60
0.125
3.50
0.25
2.15
0.50
3.55
0.05
0.70
0.125
3.65
0.25
2.25
0.50
3.70
0.05
0.80
7.50
Credit Markets
US high grade (bp over UST)
Euro high grade (asset swap sprd)
USD high yield (bp vs. UST)
Euro high yield (bp over Bunds)
EMBIG (bp vs. UST)
EM Corporates (bp vs. UST)
134
98
440
351
328
332
130
100
425
400
300
325
Foreign Exchange
EUR/USD
USD/JPY
GBP/USD
AUD/USD
USD/BRL
USD/CNY
USD/KRW
USD/TRY
Commodities
Brent ($/bbl)
Gold ($/oz)
Copper ($/metric ton)
2013 Equity Sector Performance*
Energy
Materials
Industrials
Discretionary
Staples
Healthcare
Financials
Information Tech.
Telecommunications
Utilities
Overall
1.36
105
1.64
0.90
2.38
6.05
1055
2.18
1.33
104
1.63
0.93
2.40
6.08
1070
2.20
Current
14Q1
107
1237
7404
110
1255
7210
US
20.1%
18.4%
32.9%
37.1%
23.4%
36.6%
30.4%
22.4%
8.4%
10.8%
27.4%
OW
OW
OW
OW
UW
OW
OW
OW
N
UW
Europe
5.8%
-3.6%
19.2%
23.7%
10.1%
21.3%
19.5%
21.4%
32.8%
9.2%
16.1%
1.32
100
1.61
0.92
2.45
6.05
1040
2.15
1.32
102
1.61
0.91
2.50
6.03
1030
2.15
1.30
106
1.60
0.9
2.50
6.00
1020
2.15
Quarterly Averages
14Q2
14Q3
102
1250
7100
14Q4
105
1260
6750
Japan
N
19.3% UW
UW 40.5% UW
N
44.9% OW
OW 58.6% OW
N
50.6% OW
OW 43.5% UW
OW 64.2% OW
OW 50.0% UW
UW 110.8% OW
N
41.1% UW
46.8%
105
1285
6950
EM$
-11.0%
-18.8%
-2.7%
3.6%
-4.7%
6.7%
-4.3%
12.6%
-3.8%
-4.9%
-3.4%
N
UW
OW
N
UW
N
N
OW
UW
N
Investment themes and impacts
From QE to Rate Guidance
FOMC is not in tightening mode and only wants
to change method. Steeper curve. Hurts EM and
QE assets.
The Bernanke/Yellen put is alive and well
Fed underwrites broad economy. Boost for
economic risk premia: equities and credit. Neutral
for bonds.
The power of zero return on cash
Not new, but not going away and still the major
driver of asset reflation
Upside bias on global growth
Signaled by rise in PMIs. Boost from rising
wealth. Capex may finally accelerate. Good for
Cyclicals and metals; bad for bonds.
Where is the reform?
China and Japan have a long list and will achieve
a decent amount. OW Asia Pac stocks.
Cycle at mid-age
Low macro vol. Bonds in slow bear market; credit
spread tightening close to over. HY preferred.
Equities outperform bonds. Confidence rises.
Momentum
Still best asset allocation signal. Long equities
versus bonds and commodities; neutral credit.
Source: J.P. Morgan, GMOS, Nov 6, 2013
Tactical overview
Direction
Earn risk
Asset
and vol
allocation premia.
Country
Sector
EU
OW Equities, HY
credit vs bonds,
cash and Comm’s
JA, US,
EM Asia
EU vs.
US; DM
vs EM
Cyclicals; Small
Caps; Value.
Equities
Long
Bonds
Short
Credit
OW
UW EM
HY, FINs; BBB’s
vs. A’s. UW Belly
FX
Bullish
USD.
UW EM
vs USD
Long CNY; GBP,
MXN; short JPY,
AUD. TRY, IDR,
CZK, INR.
Comd’s
UW given
no yield
Source: J.P. Morgan
Euro periphery.
UW Belly.
Long gasoline vs
Brent. Short Ags
Source: J.P. Morgan
5
Global Asset Allocation
The J.P. Morgan View
03 January 2014
Jan Loeys
(1-212) 834-5874
jan.loeys@jpmorgan.com
Global Economic Outlook Summary
Real GDP
Real GDP
% over a year ago
% over previous period, saar
2013
2014
2015
3Q13
4Q13
Consumer prices
% over a year ago
1Q14
2Q14
3Q14
4Q14
4Q13
2.5
1.9
2.3
1.5
2.0
3.2
4.5
4.0
4.0
6.0
8.0
-5.0
2.5
2.2
2.4
4.0
1.8
3.2
4.7
4.0
3.2
5.0
9.0
-2.5
3.0
2.5
3.1
1.5
3.0
4.0
4.7
4.5
3.5
5.0
4.0
1.0
3.0
2.7
3.0
1.0
2.6
4.5
4.5
4.5
3.6
6.0
3.0
2.0
1.2
1.0
4.6
11.0
5.8
2.1
2.5
2.3
3.5
2.9
8.7
52.7
5.1 
4.0
1.8
3.4 
5.9
7.2
3.4
4.6
2.5
5.0
3.5
5.5
8.5
9.1 
3.4
3.8
2.7
-4.5
3.5
1.4
5.9
6.8
5.0
4.4
3.5
5.0
3.8
5.3
7.6
4.5
3.7
4.0
4.4
1.2
2.8
2.7 
6.0
7.2
5.5
4.0
3.5
5.0
3.8
5.0
5.7
-1.2
4.0
4.2
4.7
1.7
3.7
3.5 
6.2
7.2
6.0
4.3
4.0
4.5
3.5
5.0
5.7
6.6 
4.2
4.0
United States
Canada
Latin America
Argentina
Brazil
Chile
Colombia
Ecuador
Mexico
Peru
Uruguay
Venezuela
1.9 
1.7
2.6
4.9
2.3
4.3
4.2
3.0
1.4
5.0
4.0
1.5
2.8 
2.1
2.6
1.5
2.1
3.7
4.8
4.0
3.4
5.5
4.0
-1.0
2.9
2.6
2.9
2.0
2.2
4.2
4.5
4.0
3.8
5.5
4.0
2.5
4.1
2.7
0.6 
-0.7 
-1.9
5.4
4.5
2.0
3.4
3.2
-2.8
2.5
2.5 
1.5
3.1
0.5
3.0
3.2
4.7
3.0
4.2
7.0
-3.0
0.0
Asia/Pacific
Japan
Australia
New Zealand
EM Asia
China
India
EM Asia ex China/India
Hong Kong
Indonesia
Korea
Malaysia
Philippines
Singapore
Taiwan
Thailand
4.5
1.7
2.4
2.6 
6.1
7.6
4.6
3.7
2.8
5.5
2.8
4.5
6.9
3.7 
1.9
2.6
4.5
1.4
2.7
2.7 
6.1
7.4
5.0
4.1
3.2
4.9
3.8
5.5
6.0
4.1 
3.1
3.0
4.5
1.2
3.0
2.8 
6.3
7.2
6.5
4.3
2.5
5.3
3.9
5.1
5.5
4.4
3.8
4.2
5.0
1.1
2.3
5.6
7.2
9.1
6.0
4.0
2.0
5.0
4.3
6.8
5.3
1.3
1.1
5.2
5.2
3.8
3.2
1.6
6.2
7.8
5.3
3.5
4.0
4.5
3.8
5.5
2.0
-2.8
3.5
3.5
Western Europe
Euro area
Germany
France
Italy
Spain
Norway
Sweden
United Kingdom
EMEA EM
Czech Republic
Hungary
Israel
Poland
Romania
Russia
South Africa
Turkey
0.0
-0.4
0.5
0.1
-1.8
-1.3
1.8
0.6
1.9
1.9
-1.4
1.1
3.5
1.4
2.6
1.5
1.9
3.8
1.3
1.0
1.8
0.5
0.8
0.7
2.1
1.4
3.0
2.4
1.9
2.3
3.7
2.8
2.3
1.8
3.0
3.0
1.9
1.7
2.2
1.3
1.6
1.3
2.5
2.6
3.1
3.0
2.2
2.5
3.8
3.2
3.0
2.5
3.2
4.0
0.7
0.3
1.3
-0.6
-0.1
0.5
1.9
-1.6
3.1
2.2
-0.3
3.6
2.2
2.4
6.6
1.6
0.7
3.5
1.2
0.8
1.5
0.0
0.5
0.3
1.8
1.3
3.5
2.5
0.9
2.5
4.9
2.5
1.2
3.0
3.9
0.4
1.4
1.0
2.0
0.5
1.0
0.5
2.1
2.1
3.0
1.9
1.7
2.0
3.2
2.5
1.8
1.3
3.1
2.0
1.3
1.0
1.5
0.5
1.5
1.0
2.3
2.3
2.5
2.2
2.4
2.0
3.3
2.5
2.0
1.5
3.0
2.8
1.7
1.5
2.0
1.0
1.5
1.5
2.5
2.5
2.5
2.9
3.6
1.8
3.6
3.0
1.9
2.0
3.5
4.5
Global
Developed markets
Emerging markets
2.3
1.1
4.4
2.9
2.0 
4.6
3.2
2.2
4.9
3.1
2.2
4.7 
3.1 
2.1 
4.7 
3.0
2.2
4.3 
2.2
1.0
4.3 
3.1
2.2
4.7
Source: J.P. Morgan
6








2Q14
4Q14
4Q15
1.8 
1.4
4.6
11.0
5.6
2.5
3.0
2.0
3.7
2.8
8.1
59.5
1.8 
1.6
4.9
18.0
5.9
2.8
2.9
3.3
4.1
2.6
7.8
40.2
3.1
1.2
2.7
1.8
4.0
3.0
10.2
3.2
4.4
7.9
1.1
2.6
3.4
2.2 
0.7
1.6
3.9
3.2
2.9
2.4
4.3
3.5
9.5
3.4
4.0
6.2
2.2
2.9
4.1
3.7 
1.4
2.6
3.5
2.9
2.0
2.2
3.9
3.1
9.0
3.2
3.3
4.6
2.9
3.1
3.6
2.8 
1.5
2.9
3.3
2.6
2.6
2.3
3.7
3.1
7.0
3.5
3.5
4.6
2.9
5.2
3.7
2.6 
1.9
3.8
1.9
1.5
2.0
1.0
1.5
1.5
2.5
2.5
3.5
3.3
4.4
2.5
4.5
3.5
1.2
2.5
3.5
5.0
1.1
0.8
1.4
0.7
0.6
0.2
2.5
0.1
2.2
4.9
1.2
0.7
2.0
0.7
2.0
6.4
5.4
7.5 
1.1
0.9
1.5
1.1
0.4
0.2
2.3
0.8
2.3
4.7 
0.6
1.5
2.3
1.5
1.3
5.6
6.0
7.4 
1.2
1.0
1.5
1.1
0.7
0.1
2.0
1.3
2.3
4.4 
1.7
2.5
2.0
1.9
3.5
4.5
5.9
7.1 
1.2
1.0
1.6
1.1
0.7
-0.2
1.9
1.8
2.2
4.2
1.5
3.1
2.2
2.4
3.5
4.6
5.7
5.5
3.3 
2.4
4.9
2.3
1.2
4.3
2.7 
1.7
4.4
2.6 
1.7
4.2
2.5
1.8
4.0
1.9
1.9
4.4
20.0
5.5
3.4
3.0
4.0
3.1
2.5
7.3
34.0
Jan Loeys
(1-212) 834-5874
jan.loeys@jpmorgan.com
Global Asset Allocation
The J.P. Morgan View
03 January 2014
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Jan Loeys
(1-212) 834-5874
jan.loeys@jpmorgan.com
Global Asset Allocation
The J.P. Morgan View
03 January 2014
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8