0. J.P. Morgan Private Bank

1. Agenda Overview of J.P. Morgan Private Bank Investment Management
Banking and Lending Credit
Trust and Estate
Appendix

2. J.P. Morgan is a leading global financial services firm*
Leadership
Extended more than $1.8 trillion in new credit in 2012 alone to consumers, businesses, municipalities, and non-profit organizations
Originated more than 920,000 mortgages, provided credit cards to over 6.7 million people in Since 2009 offered more than 1.4 million mortgage modifications; through modifications and short-sales effectively $10 billion in total principal forgiven and interest payments reduced by approximately $2 billion
Acquired Bear Stearns; established lending facility to AIG; advanced $138 billion to ensure investors would be able to access cash following Lehman insolvency; contributed to the $70 billion liquidity fund to backstop the broker-dealer community; acquired WaMu; created Special Purpose Vehicle to provide liquidity to the money market fund industry
Repaid in full $25 billion TARP funds, with interest, in June 2009 and $88.4 million in warrants were auctioned to the public in December 2009, eliminating the government’s stake in the firm
Fortress Balance
Sheet
About $2.4 trillion in total assets
Stable and consistent source of funding through $1.2 trillion in total deposits
Basel I Tier 1 Common Ratio is 11.0%; Basel III Tier 1 Common Ratio is 8.7%
Diversification of
Earnings
Four separate lines of business, as well as a corporate unit catering to clients across the globe
Operations in more than 60 countries, with half of earnings coming from outside the United States
Lines of
Business
Corporate & Investment Bank: Premier global investment bank, with complete, integrated product offerings
Asset Management: Leading global asset management firm, with $1.4 trillion in assets under management
Commercial Bank: Serves over 24,000 clients in the U.S., including corporations, municipalities, financial institutions, and not-for-profit entities
Consumer & Community Banking: Serves 30 million consumers and businesses in the U.S. through personal services at 5,500 branches and 17,000 ATMs, as well as online, mobile and telephone banking
Size and
Ratings
One of the largest U.S. banks by market capitalization: $185 billion (as of 2/1/2013)
JPMorgan Chase Bank, N.A., is rated Aa3 by Moody’s and A+ by S&P, among the strongest in the industry¹
* All data as of 1/1/2013 unless otherwise noted
¹ Long-term debt for JPMorgan Chase Bank, N.A. as of 2/1/13

3. J.P. Morgan Private Bank A client-first business, focused on creating better outcomes
Global resources delivered locally
Big when it matters, small when it counts: Boutique within a large organization with access to best-in-class managers and innovative solutions tailored to private client needs
Dedicated team (banker, investment specialist, capital advisors and client service professionals) brings to you J.P. Morgan’s intellectual capital and global network
We are a client of J.P. Morgan Investment Bank and Institutional Management — not a distribution arm
Expertise as a practitioner
In the markets every day as an investment manager
Unique vantage point gained from operating an investment management business strengthens our ability to pick best-in-class managers
Developed exceptional breadth of client-focused, innovative solutions
Work with you across the investment spectrum, from managed to non-discretionary
Holistic Mindset
We’re a client-first business, focused on creating better outcomes
Over 160 year track record of providing investment discretion and oversight
Act as your “chief investment officer” overseeing all areas of your wealth and advising on your complete balance sheet — from liquidity needs to investments to liabilities — as well as on ways to preserve and pass on your wealth
Risk Management Culture
Risk management is not only a department at J.P. Morgan; it is deeply embedded into every aspect of our business
We employ proprietary risk management tools and models to build more efficient portfolios
Oversight committees assess risk at all phases of portfolio development and management
Fortress balance sheet and capital strength position us to meet your long-term safety needs
Brokerage Firm 3

4. J.P. Morgan offers clients a broad range of services
The Private Bank at J.P. Morgan
Investing
Lending
Services for Trusts and Estates
Wealth Advisory
Investment process is designed to result in portfolios with the highest return relative to risk taken and that adhere to an absolute return orientation
Access to a select group of high quality third-party and J.P. Morgan asset managers that have been extensively screened and are carefully chosen and monitored
Investment specialists work with clients to construct and oversee portfolios of complementary investment offerings designed around short and long-term investment objectives
Private Bank Capital Advisors provide access to a full range of borrowing alternatives, and have particular expertise in large and/or complex loan transactions
Ability to leverage:
Restricted stock
Concentrated stock
Options
Art
Real estate
Access to broad lending capabilities of J.P. Morgan
160 years’ experience managing estates and trusts and estates for ultra-high-net-worth families
Operating in over 30 jurisdictions
Senior Trust Officers: an average of 20 years of experience; many having spent the majority of their careers at J.P. Morgan
In-house income tax group focused on income tax planning and compliance for estate and trust accounts; deep understanding of state fiduciary income tax issues
Best-in-class expertise administering complex, illiquid assets
Operating businesses
Real estate
Farm and ranch
Aircraft and yachts
Art
Intellectual property
Highly-qualified and experienced Wealth Advisor works with clients and their advisors to develop and implement tax-efficient wealth transfer techniques
U.S. Wealth Advisors are former partner-level estate planning attorneys with significant big firm experience; cutting-edge and frequent “idea flow” among Wealth Advisors brings clients the best ideas and strategies from around the world
Advice Lab supports the firm as a tax and wealth transfer “R&D” group:
Sophisticated modeling of estate planning and investment structures
Proprietary wealth transfer structures
Source of intellectual capital for professional advisors
J.P. Morgan uses an integrated team-based approach to fulfilling client needs.
We have the ability to service all of our client's needs due to the depth of our organization. Our model allows us to look across both sides of a client's balance sheet and bring in specialists with expertise in the areas of banking, wealth advisory, trusts & estates, credit and investments.
Note: Total client assets include both discretionary and non-discretionary assets, excluding loans

5. Our Integrated Team of specialists focuses on helping you achieve your goals
Your J.P. Morgan Integrated Team takes the time to thoroughly understand your situation and helps to identify and articulate your needs every step of the way
You and your family
Risk tolerance & suitability
Balance sheet
Family background
Goals, expectations and constraints
Total wealth, including assets, liabilities and anticipated cash in/outflows
Investment preferences
Income / liquidity needs
Investment time horizon
Investment experience, comfort level with markets
Risk appetite
Loss sensitivity
Opportunistic vs. risk averse
Concentrated positions
Financial assets (with J.P. Morgan and other financial institutions)
Ownership structures
Liabilities
Current investment portfolio
Non-financial assets
Base currency
Wealth Advisor
Develops strategies for acquiring, managing and transferring wealth
Client Family
Global Investor
Provides advice and implementation for all investment needs
Banker
Oversees relationship providing strategic advice and access to specialists
Trust Officer
As trustee or executor, helps to efficiently manage trusts and estates
Credit Specialist
Customizes loans, typically on a secured basis
Client Service Team
Manages day-to-day administrative services 5

6. Agenda Overview of J.P. Morgan Private Bank Investment Management
Banking and Lending Credit
Trust and Estate
Appendix

7. We are organized around serving and meeting your needs
Strategy Team
Solutions Team
Who They Are
Global Chief Investment Officer
Portfolio Construction Team
Asset Allocation Team
Investment Strategists
Risk Management Team
Investment R&D Lab
What They Do
Leverage global market and economic insights to formulate powerful investment strategies for high-net-worth investors
Formulate strategic and tactical positioning around the financial markets
Create proprietary tools to build efficient portfolios
Synthesize best thinking across all asset classes
Advantage
Every decision made through private client lens
Constant review and analysis of market and economic conditions
Who They Are
Asset class specialists in Fixed Income, Foreign Exchange, Commodities, Equities, Alternatives
Deep experience with manager research, selection and monitoring
What They Do
Continuously search for, monitor and re-evaluate asset managers (internal and external) through rigorous due diligence process
Devise innovative solutions to take advantage of Strategy Team’s insights and enable implementation of portfolio strategy
Develop first-to-market financial instruments receiving industry recognition
Advantage
Access to innovative market solutions (internally and externally)
Access to mix of leading asset managers, many exclusive, that best match your risk/return profile
Your Portfolio
Global Investment Specialists
What resources are available to you? How do we work together to provide you with the best investment advice and capabilities?
3 groups within our global investments group form “3 legs of a stool” that are independent of each other, but necessary to work together
Global Strategy Team
CIO, economists, strategists for asset classes
All unbiased and INDEPENDENT
Formulate strategy keeping CLIENT’S best interest in mind
Completely independent of any product generation
Global Solutions Team
Takes the strategy “mandate” and craft solutions for clients in a variety of ways (“flavors”), dependent upon risk profiles and goals
Determine how best to express strategic / tactical views for various risk profiles
Create structures (F.I. – infl. Protection, muni issuer)
“Deal of the Year” winner consistently
Investment Advisor – me, in this case.
I will be the one who ultimately knows you the best and can implement your investment plan with the most appropriate strategies. It is my job to ensure that your portfolios most accurately reflects our strategic and tactical investment advice
Bring strategy, implementation and customization to the client
Communicate frequently
Who They Are
Your dedicated relationship professionals-- members of your J.P. Morgan team
What They Do
Help you identify and articulate your risk tolerance
Orchestrate investment process―strategic and tactical
Link investment activities to your overall wealth plan
Synthesize and present Strategy and Solutions Teams’ output
Buy solutions--not sell products
Review portfolio regularly
Advantage
What’s right for you?
Make it personal for you

8. Strategic asset allocation is the primary generator of your portfolio return and risk
Historical Performance of
Strategic Asset Allocation
Source of Return
Process
Jan 1994 – Dec 2012
Historical Statistics
Annualized Return
6.7%
7.5%
Allocation Volatility
9.4%
Sharpe Ratio
0.42
0.59
Allocation Characteristics
% Negative months
37.3%
32.9%
Maximum drawdown
-34.6%
-28.7%
Worst 3 month return
-20.5%
-19.9%
Market Participation
Beta
0.60
0.47
Up capture
62.1%
52.7%
Down capture
59.8%
43.4%
Traditional 60/40
Balanced Strategic Asset Allocation
Performance adjustment resulting from a manager's outperformance relative to the asset class benchmark
Manager
Alpha
Adjustment to strategic allocation for purposes of return enhancement or risk reduction
Tactical
asset allocation
Starts with Capital Market Assumptions1
Defines a portfolio’s market exposures over the long term (10 to 15 years)
Typically employs diverse asset classes, managers, alternative strategies and structured solutions to help maximize returns for a given risk level
Provides a foundation to make tactical and implementation decisions in the context of your investment strategy
Strategic asset allocation
Source: J.P. Morgan, Ibbotson, Bloomberg, Venture Economics.
The presented information does not represent actual investments, actual transactions or historical returns in the accounts of J.P. Morgan clients. Because the asset allocations were selected after the testing period and with the benefit of hindsight, the hypothetical returns shown may be higher or lower than the returns of a portfolio that would have actually been recommended during the time period shown. Indices are not investment products and may not be considered for investment. Past performance is no guarantee of future results. It is not possible to invest directly in an index. See slide “Important information regarding the simulated historical performance.” 60/40 = 60% Developed World Equity / 40% Global Aggregate Bonds. Balanced Strategic Asset Allocation as represented by the J.P. Morgan Private Bank Balanced with Alternatives model as of December Private Equity is proxied with US Large Cap from Sep – Dec Investment strategies shown may not be suitable for all investors. Speak with your J.P. Morgan representative concerning your personal investment needs and allocation requirements.

9. Our strategic asset allocation considers all opportunities — public and private
As markets evolve and become more complex, we position portfolios to achieve an appropriate degree of diversification, managed dynamically based on our view and where we are in a market cycle.
Our diversified asset allocation approach1
Core Fixed Income seeks to provide stability and balance over cycles of inflation, growth and monetary policy, through the use of active and passive strategies and structured solutions
Currencies (including term debt and other non-USD currency exposure) help achieve broad USD diversification
Cash serves as a source of liquidity to implement tactical shifts rapidly
Developed Markets Equity combines fundamental, quantitative and passive investment strategies, as well as structured investments, in an effort to capture the greatest risk-adjusted reward available in the public markets
Extended credit
(such as leveraged loans, high yield) looks to capture income, particularly in slower growth environments
Single-strategy hedge funds (including macro, event-driven, distressed debt) provide access to unique managers and styles with dynamic flexibility to rotate among them
Emerging market equities provide exposure to rapid economic growth, while diversifying equity risk
Diversified hedge funds utilized in an effort to help boost returns, protect from market downside, and diversify away from broad stock and bond market risks
Private Investments (equity and debt) enable us to tap the outperformance potential offered by non-public companies otherwise unavailable through public markets or mutual funds
1 Asset allocation, consisting of both traditional and alternative asset classes, is for illustrative purposes only, and represents a longer-term strategic allocation for J.P. Morgan private clients with a “balanced orientation” (that is, a portfolio designed to balance the upside return potential of risk assets while moderating the downside potential of broad market declines through a meaningful exposure to low volatility and stable return assets) as of January See risks on page 20. 9

10. Tactical shifts seek to capitalize on market dislocations, complementing our strategic asset allocation
We make timely short-term allocation shifts to bridge the gap between long-term market assumptions and current market conditions
From Strategic to Tactical Asset Allocation*
Tactical Asset Allocation attempts to capitalize on cross-market dislocations (6 to 18 months)
Enhances our potential to improve the risk-adjusted returns of the overall portfolio
Acts as a form of valuation-based rebalancing
Accomplished by over / underweighting asset classes, sectors, geographies, currencies and manager styles
Includes active / passive, traditional / alternative, more / less liquid, local / global and J.P. Morgan / third-party managers
Tactical considerations
Implement within the context of strategic asset allocation
Size tactical allocations according to portfolio risk parameters
May include taxes and transaction costs in decision process
Strategic
Tactical
Fixed Income
and Cash
30%
Fixed Income
and Cash
35%
Equities
31%
Equities
40%
Alternative
Investments
30%
Alternative
Investments
34%
Tactical Overweights and Underweights*
Overweight
Source: J.P. Morgan.
*Strategic and tactical allocations represent those of the J.P. Morgan Balanced Model Portfolio as of April These are subject to change and may not be suitable for all clients. A tactical tilt is any deviation from our long-term strategic allocation. The model portfolio can be implemented across brokerage or managed accounts , based on the unique objectives of each client and is serviced through distinct legal entities licensed for specific activities.
Underweight

11. Agenda J.P. Morgan Private Bank Overview
Investment Management Overview
Capital Advisory and Banking Capabilities
Wealth Advisory and Trust & Estates
Appendix

12. Effective cash management begins with evaluating liquidity needs and developing an approach that addresses short- and long-term cash objectives
Segment Balances by Liquidity Needs and Risk Profile
Characteristics
DAY-TO-DAY
Cash typically used for daily needs, may be subject to unforeseen expenses
Requires preservation of principal
Same-day liquidity
Day-to-Day Balances
(Horizon < 6 months)
Solution: Checking account*
RESERVE
Investment horizon of 6-9 months or longer
Fairly static, same-day access not needed
Cash set aside for possible investments, large purchases
Reserve Balances
(Horizon 6 month – 1 year)
Solution: Savings* and money market funds
Strategic Balances
(Horizon > 1 year)
Solution: Titanium CDs*, short-term governments, agencies and corporate
STRATEGIC
No short-term forecasted use
Investment horizon of one year or longer
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
*Deposit products and services offered by JPMorgan Chase Bank, N.A. Member FDIC
For illustrative purposes only. The views and strategies described herein may not be suitable for all investors. This information is not intended as an offer or solicitation for the purchase or sale of any financial instrument and is being provided merely to illustrate a particular investment strategy.
Securities are offered by J.P. Morgan Securities, Inc., member FINRA, NYSE and SIPC

13. Leverage capabilities enable you to:
Credit Solutions
Taking advantage of both sides of your balance sheet can provide financial flexibility to respond to time-sensitive opportunities or enhance wealth planning strategies.
Leverage capabilities enable you to:
Address cash-flow timing issues
Provide liquidity
Create flexibility and capacity in your capital structures
Expand investment opportunities
Maintain current exposure to the market rather than
liquidate assets
Fund large purchases
Make tax payments
Preserve cash for emergency expenses or other needs
Lines of credit are extended at the discretion of J.P. Morgan, and J.P. Morgan has no commitment to extend a line of credit or make loans available under the line of credit. Any extension of credit is subject to credit approval by the lender in accordance with the terms contained in definitive loan documents. 

14. We offer a full set of credit solutions customized to your specific needs
Securities-based Lending
Lines of credit secured by marketable securities
Revolving & term facilities
Concentrated stock lending
Restricted/insider stock lending
Margin lending
Customized financing
Secured & unsecured lines of credit
Interest rate hedging
Cross-border financing
Loans for wealth transfer strategies
Art-secured financing
Aircraft financing
Financing acquisitions of sports teams and other illiquid corporate assets
Foreign currency loans
Specialized lending, including medical practices and law firms
Letters of credit
Lending at J.P. Morgan
home financing
Mortgages
Fixed-rate mortgages
Adjustable-rate mortgages (ARMs)
Interest-only adjustable-rate mortgages (ARMs)
Refinancing
Home Equity Lines of Credit (HELOC)
Home Equity Loans
Construction Lending
Levered investing
Recommended for higher quality investments with lower price volatility & higher liquidity levels
Suitable investments for leverage may include:
Equity strategies
Fixed income strategies
All lines of credit are extended at the discretion of J.P. Morgan, and J.P. Morgan has no commitment to extend a line of credit or make loans available under the line of credit. Any extension of credit is subject to credit approval by the lender in accordance with the terms contained in definitive loan documents. Loans collateralized by securities involve certain risks and may not be suitable for all investors. Market conditions can magnify any potential for loss. If the market declines, you may be required to deposit additional securities and/or cash into your account. The securities in your account may be sold to meet a collateral/ maintenance call, and J.P. Morgan may sell your securities without contacting you. In exercising its remedies, J.P. Morgan will not be required to marshal assets or act in accordance with any fiduciary duty it otherwise might have. Some or all of the securities sold to meet a margin/maintenance call may be sold at prices higher than their initial cost, which may result in adverse tax consequences. You should consult your tax advisor in order to fully understand the tax implications associated with pledging securities in connection with a margin loan. Please read your client agreement carefully so that you understand your obligations. The views and strategies described herein may not be suitable for all investors.  This information is not intended as an offer or solicitation for the purchase or sale of any financial instrument.  JPMorgan Chase & Co. and its subsidiaries do not render accounting, legal or tax advice.  Estate planning requires legal assistance. You should consult with your independent advisors concerning such matters. 
JPMorgan Chase Bank, N.A.  Member FDIC.

15. We can provide lending solutions to help you achieve a variety of objectives
Recent and noteworthy transactions
One-Stop Residential Construction Loan
$2.6 million 2 year non-revolving line of credit secured by residential real estate with commitment for permanent 30 year mortgage financing at the completion of a personal residence
Working Capital Line of Credit
$3.0 million
12 month line of credit secured by all business assets to a professional services firm. Proceeds used for working capital and business liquidity purposes
Purchase of Private Company Shares
$1.8 million 1 year non-revolving line of credit secured by single stock business to purchase additional shares of stock to increase company ownership position
Concentrated Stock Line of Credit
$1.5 million
12 month line of credit secured by client’s holdings in a publicly traded, single stock position used to liquefy concentrated balance sheet and enable diversification into other investible assets without selling out of single stock position
Owner Occupied Commercial Real Estate
$10 million
7 year term loan secured by commercial real estate used to fund the purchase of the commercial building for operations of a privately held business. Combined with interest rate swap to take advantage of current low rates
General Liquidity Line
$3.5 million 1 year revolving line of credit secured by marketable securities used for general liquidity needs. Line also used to finance portion of a significant tax obligation
Purchase of Precious Metals
$1.2 million 1 year revolving line of credit secured by unallocated silver used to purchase silver and other precious metals utilizing J.P. Morgan’s commodities platform
Unsecured Line of Credit
$1.0 million 12 month line of credit to owner of successful Middle Market company. Proceeds used for improvements to primary residence and general liquidity needs
Implementation of Gifting Strategy
$5 million 1 year revolving line of credit secured by marketable securities used to fund Delaware Dynasty Managed Trust to take advantage of $5 million gift tax exemption
JPMorgan Chase Bank, N.A.  Member FDIC.
Not a commitment to lend.

16. Agenda Overview of J.P. Morgan Private Bank Investment Management
Banking and Lending Credit
Trust and Estate
Appendix

17. You Heirs Charity Taxes
Wealth can pass to one of four places - an effective plan can help get it to the “right” place
You
Heirs
Ensuring sufficient income and liquidity to achieve desired lifestyle
Giving and selling assets to children, grandchildren and other family members
Charity
Taxes
Achieving philanthropic goals while maximizing benefits to one’s family
Minimizing taxes so that more assets get to the other three destinations

18. J.P. Morgan: The preeminent name in trusts and estates
Our experience
Over 160 years advising the world’s wealthiest families
Global footprint with offices in 9 countries and 21 U.S. states
Over $130 billion of assets under supervision and over $60 billion of assets under management
U.S. fiduciary offices
Arizona
Indiana
Pennsylvania
California
Kentucky
Texas
Colorado
Louisiana
Washington DC
Connecticut
Michigan
West Virginia
Delaware
New Jersey
Wisconsin
Florida
New York
Georgia
Ohio
Illinois
Oklahoma
Our resources
Over 700 team members worldwide
Trust Officers average over 20 years of industry experience
Leading Delaware capabilities through the J.P. Morgan Trust Company of Delaware
20-year history in Delaware with a team of 40 professionals administering more than $40 billion in trust assets
Our approach
Client focus and customized approach – Establishing prompt, continuing and responsive communication with beneficiaries and co-trustees regarding needs in relation to the trust
Bringing creative and effective solutions – Creating innovative client solutions, which have become industry standards; e.g. bringing absolute return investing to portfolios, and developing new approaches to distributions
Investment advisory with the goal of maximizing risk-adjusted returns – Access to insights drawn from firm-wide global investment experts and the Private Bank investment strategy team, as well as proprietary analytical modeling and portfolio construction, incorporating taxes and cash flows
Staying ahead of change – Quickly responding to changes in markets, monitoring tax laws and regulations and addressing changes to legislation and legal precedent
Stability, continuity, permanence
We have the honor of serving some families for four generations, spanning over 100 years
We are a recognized national industry leader, often selected by courts to manage difficult fiduciary situations
Global fiduciary offices
United Kingdom
Switzerland
France
The Bahamas
Italy
Singapore
Hong Kong
United States
Spain
As of March 2009, we have relationships with 51% of the Forbes 400 list of US billionaires.
36 of our advisors are on Barron’s Top Financial Advisors List. (As of February 2009).
We are a leading provider of alternative investments with more than $20B in private equity assets and $26B in hedge fund assets for private clients.
We provide highly personal service combined with close and regular communication.
Compensation is based on performance; no team member is paid on commission.
Our Investment philosophy:
The Private Bank has an Investment Team and Portfolio Construction team dedicated to private clients.
Dedicated due diligence teams in NY and London evaluate and monitor managers.
Customized structured investments in equities, fixed income, commodities and FX.
Co-investment opportunities in private equity and real estate.
Our insights
Research centers focusing on family wealth, foundations, executive compensation, legislation, and tax-efficient planning
Global network of 65 wealth advisors creates innovative planning solutions
Philanthropic Services distributes over $300 million annually on behalf of clients and their charitable foundations
Deep resources available for specialized assets, e.g., direct real estate, oil and gas, ranch properties
Source: JPMorgan Chase & Co. Neither JPMorgan Chase & Co. nor any of its affiliates offer tax or legal advice. Such advice should be obtained from your professional, legal or tax advisors Note: Data as of 1Q13 unless noted otherwise 18

19. J.P. Morgan’s Wealth Advisors guide you in the planning of your legacy
Wealth Advisors understand your situation and what you wish to accomplish based upon your:
Assets
Wealth transfer and philanthropic objectives
Need for income or liquidity
Tax jurisdiction
Transfer ownership
Meet liquidity needs
Minimize taxes
Diversify assets
Structuring legacies for families
Structuring charitable legacies
Insurance solutions for liquidity (estate taxes) and succession planning for closely held businesses
An explanation of advantages available in states with favorable trust laws (i.e. Delaware)
perpetual trusts
progressive laws for investment and administration
confidentiality
Tax Advisor
J.P. Morgan Wealth Advisor
Legal Advisor
Wealth Advisors assist in developing strategies that:
Client
Wealth Transfer
The range of advice includes:
Wealth Advisors integrate the advice of your personal tax and legal advisors into your overall wealth transfer framework
Though Delaware has a rule against perpetuities, the rule permits assets other than real estate to be held in perpetuity.  Real Estate may be held in perpetuity if it is held indirectly through another entity (e.g., LLC, corporation, partnership, etc.)

20. Risk considerations
Leverage as a return-enhancement strategy: As a tactical investment strategy, leverage may be dialed up or down over time, according to market conditions. A leveraged investment strategy is relatively attractive in a low interest rate environment when the cost of borrowing is modest, though using leverage in a rising-rate environment may also be effective at an appropriate level. However, even in a low-rate environment, not all investments are suitable leverage candidates. Generally, we recommend you consider adding leverage to those investments with lower price volatility and higher liquidity levels.
Leverage may add risk to a portfolio.  Adding leverage to an investment can magnify gains as well as losses. Please consider the following:
Margin calls J.P. Morgan establishes a maximum loan-to-value ratio for investments (i.e., the maximum amount of a loan collateralized by that financial investment). If the market declines, and the value of the underlying asset moves lower than the lending value required to support the loan, J.P. Morgan will request additional funds to maintain the required lending value amount. A “margin call” requirement can be met either with cash or additional securities. In exercising its remedies, J.P. Morgan will not be required to marshal assets or act in accordance with any fiduciary duty it otherwise might have.
Increased collateral requirements At any time, and without prior written notice, J.P. Morgan can decrease the advance rate for an investment securing a loan, thereby triggering a margin call. Loans collateralized by securities involve certain risks and may not be suitable for all investors. If the market declines, you may be required to deposit additional securities and/or cash into your account.
Sale of securities In the event that a margin call is not met, J.P. Morgan has the right to sell securities held in the accounts to satisfy the obligation, as well as the right to decide which assets to sell. J.P. Morgan will attempt to notify a client before a collateral sale is made. However, we are not required to do so. Some or all of the securities sold to meet a margin/maintenance call may be sold at prices higher than their initial cost, which may result in adverse tax consequences. You should consult your tax advisor in order to fully understand the tax implications associated with pledging securities in connection with a margin loan. Please read your Customer Agreement carefully so that you understand your obligations.
Higher borrowing costs Borrowing costs may increase over time if short-term interest rates move higher.
Equities: Changes in economic and market conditions, interest rate risk, and lack of liquidity may affect equity performance. Investments in equity structures entail certain risk factors. Any payment on the Notes, including any repayment of principal, is subject to the creditworthiness of the Issuer and is not guaranteed by any third party and an Investor can lose some or all of their investment. Structured notes should be considered a "hold until maturity" product. Owning the Notes is not the same as owning the constituent Currency/Equity/Commodity position. For additional risk factors, please see the Pricing Supplement.
Fixed Income: Continued deterioration in macroeconomic conditions could lead to poor liquidity in the name, lower price and/or credit downgrades. All securities mentioned below are potentially subject to significant mark to market volatility based on movements in either the interest rate or credit markets at any time. Note: All pricing and yields are subject to change at any time based on market conditions. Please call the desk to confirm final pricing on all bonds. U.S. Onshore - BLUE SKYs – Please confirm Blue Sky eligibility before soliciting to a U.S. Onshore client.
FX & Commodities: Risks include and are not limited to political, economic, and market conditions.
Alternatives: Economy, currency, tax and market conditions, including market liquidity may increase the risks of these investments and may impact performance of the funds.
The views and strategies described herein may not be suitable for all investors and more complete information is available which discusses risks, liquidity, and other matters of interest. Any investment associated with leverage will include additional risks such as implied volatility, exposure to rising interest rates (borrowing costs) and margin calls, which may occur if the underlying investment declines below its minimum lending values. Leverage will have the effect of magnifying losses or gains. Please note that lines of credit are extended at the discretion of J.P. Morgan, and J.P. Morgan has no commitment to extend a line of credit or make loans available under the line of credit. Margin calls may include sale of the asset serving as collateral if the collateral value declines below the amount required to secure the line of credit. In exercising its remedies, J.P. Morgan will not be required to marshal assets or act in accordance with any fiduciary duty it otherwise might have.
An investment in structured products involves substantial risks, and potential investors should clearly understand the risks involved. Investing in structured products is not suitable for all clients, and intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment, which can include lack of liquidity in that there may be no secondary market and none expected to develop; restrictions on transferring interests in the investment; absence of information regarding valuations and pricing; and potentially higher fees than other investment strategies. Client does not receive dividends from the underlying security or securities. The investment should be considered a “hold until maturity” product and subject to issuer credit risk. Early unwinds could result in lower than expected returns relative to expected return at maturity and are subject to the sole discretion of the Issuer.

21. Important Information
IRS Circular 230 Disclosure: J.P. Morgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with J.P. Morgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
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Bank products and services are offered by J.P. Morgan Chase Bank, N.A. and its affiliates. Securities products and services are offered by J.P. Morgan Securities Inc., member NYSE, FINRA and SIPC.
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. J.P. Morgan Securities Inc. or its brokerage affiliates may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as an underwriter, placement agent, advisor or lender to such issuer. The views and strategies described herein may not be suitable for all investors. The discussion of loans or other extensions of credit in this material is for illustrative purposes only. No commitment to lend by J.P. Morgan should be construed or implied. This material is distributed with the understanding that we are not rendering accounting, legal or tax advice. Estate planning requires legal assistance. You should consult with your independent advisors concerning such matters.
We believe the information contained in this material to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice. This material should not be regarded as research or a J.P. Morgan research report. Opinions expressed herein may differ from the opinions expressed by other areas of J.P. Morgan, including research. The investment strategies and views stated here may differ from those expressed for other purposes or in other contexts by other J.P. Morgan market strategists.
J.P. Morgan Securities Inc. may act as a market maker in markets relevant to structured products or option products and may engage in hedging or other operations in such markets relevant to its structured products or options exposures. Structured products and options are not insured by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, or any other governmental agency.
In discussion of options and other strategies, results and risks are based solely on hypothetical examples cited; actual results and risks will vary depending on specific circumstances. Investors are urged to consider carefully whether option or option-related products in general, as well as the products or strategies discussed herein are suitable to their needs. In actual transactions, the client’s counterparty for OTC derivatives applications is J.P. Morgan Chase Bank, N.A., London branch. For a copy of the “Characteristics and Risks of Standardized Options” booklet, please contact your J.P. Morgan Advisor.
Real estate, hedge funds, and other private investments may not be suitable for all individual investors, may present significant risks, and may be sold or redeemed at more or less than the original amount invested. Private investments are offered only by offering memoranda, which more fully describe the possible risks. There are no assurances that the stated investment objectives of any investment product will be met. Hedge funds (or funds of hedge funds): often engage in leveraging and other speculative investment practices that may increase the risk of investment loss; can be highly illiquid; are not required to provide periodic pricing or valuation information to investors; may involve complex tax structures and delays in distributing important tax information; are not subject to the same regulatory requirements as mutual funds; and often charge high fees. Further, any number of conflicts of interest may exist in the context of the management and/or operation of any hedge fund.
J.P. Morgan Funds are distributed by J.P. Morgan Distribution Services, Inc., which is an affiliate of J.P. Morgan Chase & Co. Affiliates of J.P. Morgan Chase & Co. receive fees for providing various services to the funds. Call J.P. Morgan Distribution Services at or visit for the prospectus. Investors should carefully consider the investment objectives, risks, charges and expenses of the mutual funds before investing. The prospectus contains this and other information about the mutual fund and should be read carefully before investing.
As applicable, portions of mutual fund performance information may be provided by Lipper, a Reuters company, subject to the following: © 2008 Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
Past performance is no guarantee of future results.
Additional information is available upon request.
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