U.S. Technology Leaders Strategy Advisory PDF - J.P. Morgan

STRATEGY PROFILE | DECEMBER 31, 2020

ADVISORY PROGRAM

U.S. Technology Leaders Strategy

A growth-focused approach to investing in technology

Seeks to invest in companies that are aligned with the megatrends in technology regardless of sector or market capitalization.

Experience

? Portfolio Manager Joe Wilson has over 14 years of experience.

? Leverages an experienced global team to conduct deep fundamental research and establish differentiated insights.

Portfolio

? Actively managed concentrated portfolio of innovative technology companies with underappreciated growth opportunities.

? Fundamental, bottom-up approach to high conviction stock selection.

Results

? The Strategy has performed in line with or outperformed its benchmark since inception.

Growth of $100,000 since inception, net of fees $800 $700

Strategy, net $679,327

$600

$500

$400

$300 $200

Benchmark $526,054

$100

$0 10/11 2013 2014 2015 2016 2017 2018 2019 2020 12/20

Chart Source: J.P. Morgan. As of 12/31/20. The Benchmark is an index or blend of indices provided for information purposes. Past performance is no guarantee of future results. See "Important Information" on back page for disclosures related to net performance and the composite.

The evolution of technology

New technologies, disruptors and changes in consumer behavior all contribute to changing leaders in the space.

1980s

MAINFRAME

1990s

PERSONAL COMPUTER

2000s

INTERNET

2010s

MOBILITY/CLOUD

2020

ARTIFICIAL INTELLIGENCE

Megatrends will create tailwinds

Transformational and disruptive technologies in early stages of adoption drive investment opportunities.

Cloud computing/ digital transformation

Artificial intelligence/ machine learning

Autonomous cars/machines

Electronic payments over-the-top streaming

5G

Source for "The evolution of technology": Bloomberg Finance L.P., FactSet, J.P. Morgan Asset Management. As of 9/30/19. Source for " Megatrends will create tailwinds": J.P. Morgan Asset Management.

INVESTMENT AND INSURANCE PRODUCTS ARE: ? NOT FDIC INSURED ? NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ? NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR

ANY OF ITS AFFILIATES ? SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED

Finding the right companies

Companies aligned with the megatrends in technology typically possess the following:

A disruptive business model

A large addressable market

A unique sustainable advantage

A proven management team

Sell discipline is as important as buy discipline

Seek to reduce or eliminate a position when:

?

Sup

Demand for software is strong and just getting started

Cloud infrastructure, productivity enhancements and simplifying the implementation of spending are all driving digital transformation.

ENGAGEMENT

Hupmly achnacianpi?talPmayarnoallg&emacecnotun?

DIGITAL TRANSFORMATION

ting

A N A LY T I C S usilnientsselilingteelnlicgeence

Marketing ? Mobile

CUSTOMER

?SaWleesbs

&

IENCE So iciteal

?

LocaAtritiofinci?a B DATA

?

EXPE

4

Fundamental research identifies a divergence from the original investment thesis

4

4

The long-term risk/ reward tradeoff deteriorates

A more attractive investment opportunity is identified

R

We believe a portfolio of technology companies where magnitude and/or duration of growth is

underappreciated by the market should outperform over the long term.

-- JOE WILSON

Experienced portfolio management

? Responsible for the tech sector for J.P. Morgan's Large Cap Growth portfolios.

? Joe's background includes buy-side and a sell-side research.

Joe Wilson

Portfolio Manager

? 14 years of industry experience, 5 at J.P. Morgan

Composite performance

Annual returns and internal dispersion (%)

2020

2019

2018

2017

2016

Gross

90.3

42.5

6.2

47.3

8.6

Net

89.0

41.6

5.4

46.0

7.4

Benchmark

48.6

38.1

0.9

35.8

17.8

Internal Dispersion

0.7

0.5

0.2

0.2

0.1

Past performance is no guarantee of future results. You may not get back what you invest.

Inception date: 10/31/11. Since inception performance is calculated from the first month of the uninterrupted composite track record.

Source: J.P. Morgan. Data as of 12/31/20. Benchmark is Russell 1000 Equal Weight Technology Total Return Index.

Historical returns and volatility (%)

1 mo YTD 1 yr 3 yrs

Gross

8.4 90.3 90.3 42.3

Net

8.4 89.0 89.0 41.3

Benchmark 7.2 48.6 48.6 27.5

Since 5 yrs inception Volatility

35.7 24.2

19.6

34.6 23.2

19.6

27.1 19.9

18.1

Product Fee (annualized)

0.375%

In addition to Advisory fees and other fees, your Account will also bear its proportionate share of the fees and expenses incurred by certain investments, as briefly discussed on the back page.

IMPORTANT INFORMATION

J.P. Morgan is committed to making our products and services accessible to meet the financial services needs of all our clients. If you are a person with a disability and need additional support , please contact your J.P. Morgan team or email us at accessibility.support@ for assistance.

U.S. Technology Leaders Strategy (the "Strategy" or the "Portfolio") is a discretionary strategy managed by JPMorgan Chase Bank, N.A. ("JPMCB") for J.P. Morgan Private Bank clients, as part of the J.P. Morgan Advisory Program.

Performance results, if shown, reflect returns for unrestricted, fully discretionary accounts invested the Strategy in the United States through J.P. Morgan Advisory Programs offered by JPMCB to Private Bank clients. Net performance reflects results net of actual client fees paid to J.P. Morgan by JPMCB Private Bank clients (see Composite Net Returns). A particular client's fees may be more or less than the actual fees reflected.

Strategy Description: The U.S. Technology Leaders Strategy seeks to allocate to concentrated equity investments expected to produce capital gains over a longer-term horizon. Investments are expected to be in companies aligned with technology megatrends, without regard to sector and capitalization.

Important Information About Your Investments and Potential Conflicts of Interest

Conflicts of interest will arise whenever JPMCB or any of its affiliates (together, "J.P. Morgan") have an actual or perceived economic or other incentive in its management of our clients' portfolios to act in a way that benefits J.P. Morgan. Conflicts will result, for example (to the extent the following activities are permitted in your account): (1) when J.P. Morgan invests in an investment product, such as a mutual fund, structured product, separately managed account or hedge fund issued or managed by JPMCB or an affiliate; (2) when a J.P. Morgan entity obtains services, including trade execution and trade clearing, from an affiliate; (3) when J.P. Morgan receives payment as a result of purchasing an investment product for a client's account; or (4) when J.P. Morgan receives payment for providing services (including shareholder servicing, recordkeeping or custody) with respect to investment products purchased for a client's portfolio. Other conflicts will result because of relationships that J.P. Morgan has with other clients or when J.P. Morgan acts for its own account.

Investment strategies are selected from both J.P. Morgan and third-party asset managers and are subject to a review process by our manager research teams. From this pool of strategies, our portfolio construction teams select those strategies we believe fit our asset allocation goals and forward-looking views in order to meet the portfolio's investment objective. As a general matter, we prefer J.P. Morgan managed strategies.

We expect the proportion of J.P. Morgan managed strategies will be high (in fact, up to 100 percent) in strategies such as, for example, cash and high-quality fixed income, subject to applicable law and any account-specific considerations.

While our internally managed strategies generally align well with our forward-looking views, and we are familiar with the investment processes as well as the risk and compliance philosophy of the firm, it is important to note that J.P. Morgan receives more overall fees when internally managed strategies are included. We offer the option of choosing to exclude J.P. Morgan managed strategies (other than cash and liquidity products) in certain portfolios.

Risk Considerations: Strategy investments are subject to the risks associated with investments in equity securities including depositary receipts and will not necessarily be profitable. As the Strategy is to invest in a concentrated Portfolio of equity securities including depositary receipts, investors in the Strategy should have a higher tolerance for risk of loss of capital. In addition to the risks, investors in the Strategy should be prepared to accept higher volatility and greater concentration in the Strategy compared to investing in a more diversified Portfolio. The Portfolio may include securities of foreign issuers. Such securities may be issued directly by the issuing company or may take the form of depositary receipts. Depositary receipts do not eliminate the risks involved in owning shares of foreign issuers. Since depositary receipts track the shares in the home country their value will be affected by political and economic

conditions in the home country. Depositary receipts dividends will be paid in the applicable foreign currency and may be subject to tax in the applicable foreign country. The depositary receipts issuer will convert amounts received to U.S. dollars, subjecting you to currency risks and conversion costs.

Past performance is no guarantee of future results. Investing in securities involves risk of loss of income and capital that clients should be prepared to bear. The investment performance and success of any particular investment cannot be predicted or guaranteed, and the value of a client's investments will fluctuate due to market conditions and other factors. Investments are subject to various risks, including but not limited to, market, liquidity, currency, economic, and political risks, and will not necessarily be profitable. There is no guarantee of any specific level of performance or guarantee that investment decisions, strategies or overall investment advice will be successful or that the client's investment objectives will be met. JPMCB requires clients to open a separate account for each investment strategy selected. Clients that wish to pursue multiple investment strategies as part of their overall strategy must open a separate account for each investment strategy. In managing the Strategy, JPMCB will not consider assets owned by a client outside of a particular account. Diversification and strategic asset allocation do not guarantee a profit nor protect against a loss in declining markets. All investments are subject to risk, including the loss of principal.

The composite consists of the unrestricted, fully discretionary accounts invested in the Strategy in the U.S. through the J.P. Morgan Advisory Programs offered by JPMCB to Private Bank clients.

Certain accounts may be excluded based on objective criteria such as account value, balances, cash flow, and opening or closing dates. The composite itself is not a financial product and, accordingly, you cannot directly invest in the composite. Additional information about the construction of the composite is available upon request.

The composite returns are the asset-weighted average of the portfolio time-weighted returns. Performance is calculated and presented in U.S. dollars. Composite returns reflect the reinvestment of dividends and other income. Performance returns for periods greater than one year are annualized returns (and returns for periods less than one year are not annualized). The Strategy did not achieve this performance each year, but averaged this return each year during the period. Different portfolios managed using the same Strategy can have different results due to, for example: (1) the period of time in which the portfolios are invested; (2) the timing of contributions and withdrawals; (3) portfolio size; (4) fees paid on portfolios; and (5) restrictions or limitations on portfolio holdings.

Definitions

Benchmarks represent an index or blend of indices and provided for informational purposes.

Composite Gross returns reflect fees paid by any funds in which the portfolios invest (i.e., fees embedded in the valuation of underlying funds) and certain transaction fees.

Composite Net returns reflect those fund fees and also the actual client fees paid to J.P. Morgan for the portfolios, including fees for certain J.P. Morgan services, any product fees, and transaction fees.

Internal dispersion measures the spread of annual returns of individual portfolios within a composite. It is calculated using the equal-weighted standard deviation of the gross returns of portfolios that were included in the composite for the full year.

Internal dispersion is not shown for calendar years for which data is not available to calculate a statistically meaningful internal dispersion number, including calendars years with five or fewer portfolios in the composite for the full year.

Important: Internal dispersion for the composite, if shown, only reflects dispersion between unrestricted, fully discretionary accounts invested in the Strategy in the U.S. through the J.P. Morgan Advisory Programs offered by JPMCB to Private Bank clients.

Volatility measures the extent to which returns vary over time. Volatility is calculated using the standard deviation of returns and shown since inception as annualized standard deviation.

Indices are for illustrative purposes only, are not investment products, and may not be considered for direct investment. Indices are unmanaged. Index returns do not reflect the deduction of any fees or expenses, and assume reinvestment of dividends and interest. Indices are an inherently weak

predictive or comparative tool. All indices denominated in U.S. dollars unless noted otherwise.

Russell 1000 Equal Weight Technology Total Return Index: The Russell 1000 Equal Weight Technology Total Return is an equal-weighted index of all the constituents within the Technology sector of the parent index, Russell 1000 Index, measuring all components' price movements and reinvested cash distributions. Indices are unmanaged. They provide a hypothetical representation for use as a benchmark and are provided for informational purposes only. The index might not be a meaningful comparison to the composite returns for the strategy. For example, the strategy could invest in far fewer securities, so that it is more volatile and subject to more risk than an index. Index returns and composite returns could materially differ. Past performance of an index does not guarantee future results. An index is not an actual security. You cannot invest directly in an index. Index returns do not reflect the deduction of any fees or expenses and assume reinvestment of dividends and interest.

JPMCB Advisory Program Fees

If you establish a portfolio to invest in a strategy offered by JPMCB, you will pay some or all of the following types of fees:

? A management fee, which covers J.P. Morgan services such as manager selection, performance reporting and custody of assets;

? Product fees, such as fees paid by any funds in which the portfolio invests (i.e., fees embedded in the valuation of underlying funds) and any additional fees payable for portfolio management services provided by J.P. Morgan or a third-party manager in a separately managed account; and

? Brokerage fees and costs for executing securities transactions (although fixed income securities may have trading costs embedded in the price paid for securities) and out-of-pocket expenses incurred on behalf of the portfolio.

Please see the Fee Schedule or Portfolio Schedule for details on the fee rates that would apply to your portfolio and how we calculate fees.

General Disclosures

Material contained herein is intended as informational and not suitable for all clients. Please contact your J.P. Morgan team member to discuss your particular situation.

Opinions expressed herein are those of the manager and may differ from those of other J.P. Morgan employees and affiliates. This information in no way constitutes J.P. Morgan research and should not be treated as such.

Certain information contained herein has been obtained from sources deemed to be reliable, but we do not guarantee its accuracy or completeness, and is subject to change. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice.

There can be no assurance that the professionals currently employed by J.P. Morgan will continue to be employed by J.P. Morgan, or that the past performance or success of any such professional serves as an indicator of such professional's future performance or success.

Commentary provided is based on a representative portfolio. The representative portfolio might not reflect the experience of all portfolios in the composite and could change over time.

This material is confidential and intended for your personal use. It should not be circulated to or used by any other person, or duplicated for non-personal use, without permission from J.P. Morgan.

References in this report to "J.P. Morgan" are to JPMorgan Chase & Co., its subsidiaries and affiliates worldwide. "J.P. Morgan Private Bank" is the brand name for the private banking business conducted by J.P. Morgan. If you have any questions or no longer wish to receive these communications, please contact your usual J.P. Morgan team member.

? 2021 JPMorgan Chase & Co. All rights reserved.

SP-USTL-ADVISORY | 2/21

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download