Epstein Secrets

organ EM equity portfolio inflows Left axis shows EM equity portfolio flows in Sbn. 200 150 100 0 -50 -10a 05 06 07 08 09 10 It Source: IF. Blomberg. EM equity nortfolioflows $bn 60% 50% 40% 30% 20% 10% 0% -10% MSCI Skin ISCI Wald -20% 12 More details in ... US Credit Markets Outlook

ur cmngbbal growth forecast. Consensus YTD 2012 and expected 2013 returns by asset class %. U Is unItedged into USD. H means hedged 2013E 2012 MSCI EM 15.0 17.4 EM Local Fl (U) 10.0 8.9 EMFX 10.0 7.5 GSCI 10.0 0.1 MSCI World 10.0 16.0 US HY 7.5 16.2 CEMBI 7.0 16.7 EMBIG 7.0 18.5 JACI

ico} ico} SSR ERE EERE ES SSR eRe EER EES Source: Bloomberg Source: Bloomberg 4 Global Cross Asset Strategy -

ssell and Nikkei on a tear higher. This is not how we were positioned so we need to ask the question of whether and what we need to change. Table 2: MSCI EM Asia at a 2PE point discount to other equity markets Chart 27: Japan relatively cheap at 14.1x fwd earnings Ase iM MSCIJapan MSCIEurope — MSCIUS 50 f

1 1 1 1 1 i i 5 10 15 20 Source: J.P. Morgan, Bloomberg. See blue box on page 2 for description. www.mo

3% 12.2% Shanghai SE 2117 42% Utilities 47% 8.2% -20.4% 5.2% *Levels/returns as of Nov 08, 2012 Overall 15.6% 13.2% 4.4% 12.2% Local currency except MSCI EM $ Source: J.P. Morgan HOUSE_OVERSIGHT_026576 --- PAGE BREAK --- Global Asset Allocation The J.P. Morgan View 09 November 2012 Jan Loeys (1-212)

EM* EMBIG Gold -10 10 20 30 Source: J.P. Morgan, Bloomberg. See blue box on page 2 for description. www.jpmo

such as Mexico and Malaysia. See "Consensus Asset Allocation", Adrian Mowat and team, Mar 26th. Open overweights in Mexican and Malaysia equities vs MSCI EM. • For long-term investors we just released our quarterly publication "Trade opportunities for long term investors" Mar 27. We monetize risk premia i