Easing global policy

Normalizing policy rates

U.S. & Japan over EM
Continued U.S. housing shortage
Productivity gains
Increased dealmaking

Capital investments
AI: Boom or bust?
Health care disruption
Automation & robotics
Building power infrastructure
Redefining security

Election impacts
Defining Trump 2.0
Sunsetting tax policy
Managing rate volatility
Anti-trust risk
Anti-establishment surge

Portfolio resilience
The wealth check
Finding value in income
Defending against inflation
Reconfigured returns
The gold rush

Investment landscapes
Evergreen alternatives
Sports & streaming
The 21st-century space race
Liability managment
Reimagined cities

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The views expressed herein are based on current conditions, subject to change and may differ from other JPMorgan Chase & Co.
affiliates and employees. The views and strategies may not be appropriate for all investors. Investors should speak to their financial
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2025 OUTLOOK REPORT

2
2025 OUTLOOK REPORT

Foreword
As we approach the end of the year, various headwinds
intersect economies and markets. The global economy is
growing at a good pace. Inflation has cooled. But geopolitical
risks haven’t gone away. In fact, they’ve gotten worse.
Conflicts in the Middle East and in Ukraine continue. In the
U.S., we’re dealing with the results of a contentious election.

Yet markets produced strong gains over 2024. A year ago in

this Outlook, we said that forward-looking returns across
different asset classes looked more promising than they
had been in more than a decade. Turns out that was correct.
Investors are now positioned to build on strength.

This 2025 Outlook, the work of our Global Investment Strategy

group, explores how global monetary policy easing and
accelerating capital investment, especially in AI, will likely
power markets forward. To protect wealth and defend against
increasing macroeconomic instability, relying on income
and adding diversification can strengthen portfolios.

Whatever the markets have in store, we will remain

by your side as your financial partner. Thank you
for continuing to put your trust in J.P. Morgan.

Sincerely,

Kristin Lemkau
CEO, J.P. Morgan Wealth Management

3
2025 OUTLOOK REPORT

Key takeaways
We believe 2025 will be the year of:

01 Easing global policy

We believe policy rates will normalize and economies will expand.

02 Accelerating capital investment

We see continued spending on AI, power, infrastructure and security.

03 Understanding election impacts

In the U.S., we expect less regulation, wider deficits and more tariffs.

04 Renewing portfolio resilience

We are emphasizing income and real assets within portfolios.

05 Evolving investment landscapes

We anticipate opportunities in evergreen alternatives, sports and cities.

4
2025 OUTLOOK REPORT

Contents
Part 01 Normalizing policy rates
U.S. & Japan over emerging markets & China
Easing global policy Continued U.S. housing shortage
Productivity gains
Increased dealmaking

Part 02 AI: Boom or bust?

Health care disruption
Accelerating capital investment Automation & robotics
Building power infrastructure
Redefining security

Part 03 Defining Trump 2.0

Sunsetting tax policy
Understanding election impacts Managing rate volatility
Anti-trust risk
Rising anti-establishment movements

Part 04 The wealth check

Finding value in income
Renewing portfolio resilience Defending against inflation
Reconfigured returns
The gold rush

Part 05 Evergreen alternatives

Sports & streaming
Evolving investment landscapes The 21st-century space race
Liability management
Reimagined cities

Part 06 Asia
Latin America
Global perspectives Europe

5
2025 OUTLOOK REPORT

Introduction
In 2024, the macroeconomic stars aligned to deliver
exceptional market performance. Inflation fell to
palatable rates, GDP growth proved strong, corporate
profit growth accelerated and central banks cut policy
rates. Global stocks returned 20%-plus, while bonds
gained. Global multi-asset portfolios built on their
16.5% gain from 2023 with a total return of 12.5%.

Here’s the good news as you consider an action plan

for 2025: You’re poised to build on strength. The
past year’s market gains provide a solid foundation,
and just as important, the flexibility to weigh
different approaches and fresh perspectives.

6
2025 OUTLOOK REPORT

In our 2025 Outlook, we present a range of ideas – our Outlook 2025 explores the dimensions and
top 25 for ’25 – to help you prepare for the coming year. implications of these themes, and how they
We believe five key themes will drive markets in 2025: might inform your own planning, both through
the end of 2024 and throughout 2025.
• Easing global policy
The global economy is in a better state of balance, A note of caution: We don’t forecast a reprise of the
allowing global central banks to cut rates and past year’s handsome public market gains.
support economic growth. Falling policy rates Valuations already reflect the economic conditions
could impact everything from U.S. housing to that we thought would drive strong returns in
European productivity. Among the questions we 2024. The economy looks to have managed a soft
consider: Should investors follow past “easing landing (the recession obsession, as we called it, has
cycle” playbooks and buy cyclical assets such as faded), and inflation has cooled. In 2025, the balance
emerging markets? Will dealmaking rebound? between tailwinds (continued global economic
expansion, falling interest rates, healthy earnings
• Accelerating capital investment growth) and headwinds (elevated valuations,
Policymakers are focused on bolstering growth, profit- especially in U.S. large-cap stocks, tight spreads in
flush companies have money to spend and three investment-grade and high-yield bonds, increased
powerful trends require enormous capital infusions: macroeconomic volatility and ongoing geopolitical
artificial intelligence (AI), power and energy, and risks) suggest that portfolio returns are likely to
security. How close are robots to becoming a part of outpace cash but also revert to trend-like rates.
daily life? What sector is most exposed to AI disruption?
We suggest that investors consider maintaining
balanced positioning between offense and
• Understanding election impacts
defense, stocks and bonds, and income and
In the wake of the November U.S. elections, investors
capital appreciation. Private equity could
are pondering the trajectory for sovereign debt
benefit from growing capital investment and
and deficits, and considering what election results
revived dealmaking, while infrastructure, real
around the world tell us about the power of anti-
estate and other real assets could potentially
establishment movements. What is the outlook for
insulate against both geopolitical and inflation
tax policy? Will anti-trust sentiment continue?
risks. We believe investors should consider
keeping some capital available to potentially take
• Renewing portfolio resilience
To protect the recent surge in household wealth advantage of opportunities that may arise.
and manage increased macroeconomic volatility,
We identify some of those potential
clients need resilient portfolios. This could mean
opportunities on the following pages.
a greater focus on income, returns that are less
correlated to stocks and bonds and strategies that
provide downside protection without foregoing
potential returns. Where should investors focus?

• Evolving investment landscapes

2025 will be characterized by new frontiers in
an evolving investing landscape. Among them:
evergreen alternatives (investment funds with no
fixed date of maturity) and sports investing. Who
wins in the 21st-century space race? How is the “new
normal” work-life balance changing cityscapes?

7
2025 OUTLOOK REPORT

Part 01— Normalizing policy rates

U.S. & Japan over

Easing Emerging Markets & China

Continued U.S.

global policy
housing shortage

Productivity gains

Increased dealmaking

8
EASING GLOBAL POLICY

We believe 2025 will be the year

of the global easing cycle, which
underpins our first five ideas.
Falling policy rates will support
trend-like economic growth in the
United States and the Eurozone,
but not boost demand so much
that it reignites inflation. In
China, policymakers seem set on
ensuring that growth stabilizes,
especially in response to the
increased likelihood of higher
U.S. tariff rates.

9
EASING GLOBAL POLICY

01
Normalizing policy rates
If 2024 answered the question: “When will policy rates the growth outlook is worse than it is in the United
start to fall?” 2025 will answer the question: “How States. And current yields provide income. In U.S.
low could rates go?” corporate credit and municipal markets, all-in yields
still trade well above 5% on a tax-equivalent basis.
Of the 37 global central banks that we track, 27 are
cutting policy rates, including every G10 central How might lower policy interest rates affect the
bank outside of Japan. We believe policymakers will economy? In the most recent cycle, rate hikes had a
continue to nudge rates lower. In the United States, surprisingly limited impact on the broad economy. Rate
bond market pricing implies an easing cycle that cuts may have a similarly muted impact. The global
ends in the first quarter of 2026 with the policy rate easing cycle will likely support economic growth and
near 3.5%. In Europe, investors anticipate policy rates risk assets such as stocks and high-yield bonds, but
falling below 2% by the end of 2025. We don’t see we don’t think it will spark a surge in borrowing that
many reasons to disagree with the market’s view. pushes growth and inflation to an above-trend rate.

Despite the pivot in central bank policy, longer-term Commercial real estate could be at a turning point,
bond yields have fallen only marginally over the last and we see potential opportunities for net operating
year. There is still value in fixed income – significant income growth in residential housing, industrial and
value if weaker growth were to materialize. This could power-related property, and specialized workspaces
be especially important in European markets, where (e.g., life sciences, health care and media).

27 OF THE27
37OF
CENTRAL BANKS THAT
THE 37 CENTRAL BANKS WETHAT
TRACKWE ARE NOW
TRACK ARELOWERING
NOW LOWERINGINTEREST RATES
Number of central banks with RATES
INTEREST last move as a hike vs. a cut
40
Hiking Cutting Net
30

20

10

-10

-20

-30

-40
’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16 ’18 ’20 ’22 ’24
Sources:
Source: Individual central banks,Individual
FactSet. central
Data asbanks, FactSet.25,
of October Data2024.
as of Note
October
—25, 2024.
this analysis includes 37 central banks.
Note: this analysis includes 37 central banks.

10
EASING GLOBAL POLICY

OECD
OECD ECONOMIES
ECONOMIES ONCE
ARE ONCEAGAIN
AGAIN GROWING
GROWING ATAT A TREND-LIKE PACE
A TREND-LIKE PACE
REAL GDP
Real GROWTH
GDP growth && TREND, QUARTERLY
trend, quarterly SAAR,
SAAR, % %
8%
Real GDP growth

6% Trend real GDP growth

4%

2%

0%

-2%

-4%
’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24
Source: OECD, Haver Analytics. Data as of June 30, 2024.
Sources: OECD, Haver Analytics. Data as of June 30, 2024.

INFLATION
INFLATION HAS
HASRETURNED
RETURNEDTO TOTARGET
TARGET
Headline inflation YoY, % change
HEADLINE INFLATION YOY, % CHANGE
12%
Cycle peak
10% Latest

8%

6%

4%

2%

0%
U.K. Eurozone Australia Canada U.S. (PCE) China Japan

Sources: Bank for International Settlements, Australian Bureau of Statistics, Bureau of

Sources: Bank for International Settlements, Australian Bureau of Statistics, Bureau of Economic Analysis,
Economic Analysis, China National Bureau of Statistics, Haver Analytics. Data as of September
China National Bureau of Statistics, Haver Analytics. Data as of September 30, 2024.
30, 2024.

11
EASING GLOBAL POLICY

02
U.S. & Japan over
emerging markets & China
Amid global central bank easing, some investors will the highest on record), every sector in the S&P 500
be tempted to increase their exposures to emerging is expected to deliver positive earnings growth
markets. In past rate-cutting cycles, falling rates have in 2025. This hasn’t happened since 2018. 3
supported emerging market (EM) assets through
higher growth, increased capital flows and weaker The combination of strong earnings growth and
currencies that boost exports. But we take a more elevated valuations in U.S. large-cap markets
cautious view. We expect developed market (DM) could potentially generate favorable returns.
equities to outperform their EM counterparts in
Meanwhile, Japanese corporations have in recent years
2025, as they have for eight of the past 10 years.
made major strides toward improved corporate
EM economies face a host of challenges. Most governance and more shareholder-friendly practices.
importantly, China confronts a crisis of consumer Corporate buyback announcements in 2024
confidence (only slightly eased by the government’s doubled the previous record.4 This trend should
recently announced stimulus package). Deflating benefit private equity investors in Japan as well.
the country’s property bubble has proven very
While we believe DM equities will outperform EM
painful for households and businesses. A stark sign
equities next year, Taiwan, India, Indonesia and Mexico
of wariness: Chinese retail sales are 16% below their
stand out to us as regions that could deliver solid returns
pre-pandemic trend.1 China also faces the prospect
to shareholders in both public and private markets.
of a renewed trade war with the United States.

More broadly, even when EM companies do deliver 1

Klein, M. C. (2024). Deeper Inside the Chinese Consumer Spending Data. The Overshoot.
2
Goldstein, M. L., & Zhao, L. (2024). Market Valuation: A Deal Breaker? Empirical Research
strong revenue and profits, shareholder dilution means Partners.
that GDP growth does not always translate into earnings 3
Kostin, D. J., Chavez, D., Snider, B., Hammond, R., & Ma, J. (2024). Updating our long-
term return forecast for U.S. equities to incorporate the current high level of market
per share growth or market returns. Volatility in earnings concentration. Goldman Sachs.
and currency valuations also disrupts compounding. 4
Goldman Sachs. Data as of August 19, 2024.

The outlook for developed world equities, especially in

the United States and Japan, looks much more compelling.

U.S. profit margins appear stable at all-time highs. This

decade, S&P 500 companies have returned nearly 75%
of annual earnings to shareholders through dividends
and net buybacks. In the 2000s that share was
only 50%.2 While index concentration in big tech
firms remains a concern (the top 10 companies
account for 36% of S&P 500 market capitalization,

12
EASING GLOBAL POLICY

EARNINGS AND RETURNS

EARNINGS LAGRETURNS
AND GDP GROWTH IN MANY
LAG GDP MAJOR
GROWTH IN EMERGING
MANY MARKETS
MAJOR EMERGING MARKETS
Earnings growth and market return, multiple of GDP growth from 2010 to 2024
EARNINGS GROWTH AND MARKET RETURN, MULTIPLE OF GDP

5x
Earnings growth

Market return
4x
Parity

3x

2x

1x

0x
U.S. U.S. France Canada Taiwan Eurozone U.K. Australia India Brazil Korea China
NASDAQ S&P 500

Sources: Bloomberg Finance L.P., Michael Cembalest, J.P. Morgan Asset Management.
Data as ofFinance
Sources: Bloomberg 2024.L.P.,
Note — Japan
Michael excluded
Cembalest, due Asset
J.P. Morgan to declining GDP.
Management. Data as of 2024.
Note: Japan excluded due to declining GDP.

13
EASING GLOBAL POLICY

03
Continued U.S. housing shortage
Lower mortgage rates could nudge housing sales 3%, or wages would have to rise at their current
higher, but they won’t make homeownership pace for almost nine consecutive years. Restoring
affordable for enough new buyers. housing affordability to levels before the global
financial crisis could take until the end of the
Demand for housing far exceeds available supply. decade in places such as San Diego and Denver,
We estimate that the shortage of new homes and even longer in Las Vegas and Miami.
relative to trend household demand is between
2 million and 2.5 million units. Existing home Home prices may continue to rise, though at a
sales – currently running 25% below the 2017– subdued pace. The dynamic of constrained existing
2019 average pace – won’t surge anytime soon. home turnover and secular demand for housing
Moreover, increasing damages from more frequent bodes well for homebuilder operating margins, which
and extreme weather, combined with inadequate have increased from 21% pre-pandemic to 26% (over
and unaffordable flood and fire insurance, are the same period, earnings per share have nearly
becoming a growing concern for homebuyers. tripled). The largest players have an opportunity to
gain market share. In 2025, we expect continued
To restore affordability to 2019 levels, mortgage profit growth for both large-cap homebuilders and
rates would need to plummet from around 7% to real estate investors who own single-family homes.

14
EASING GLOBAL POLICY
IT COULD TAKE MANY YEARS TO RESTORE HOME AFFORDABILITY
IT COULD
EXPECTED TAKE MANY YEARS
RESTORATION TO RESTORE
OF HOUSING HOME AFFORDABILITY
AFFORDABILITY BASED ON
Expected restoration of housing affordability based on median from 1991 to 2006
MEDIAN FROM 1991 TO 2006
When affordability is restored When affordability is restored assuming
Metro name assuming no change in mortgage rate a 1% drop in mortgage rate

Cleveland Already restored Already restored

Detroit Already restored Already restored

Minneapolis Q4 2026 Q3 2025

Austin Q1 2027 Q1 2026

Washington D.C. Q2 2027 Q1 2026

National Q3 2027 Q1 2026

Charlotte Q4 2027 Q4 2026

San Francisco Q4 2027 Q4 2026

Boston Q2 2028 Q1 2027

Portland Q3 2028 Q2 2027

Atlanta Q1 2029 Q1 2028

San Diego Q1 2029 Q1 2028

Dallas Q2 2029 Q1 2028

New York Q2 2029 Q2 2028

Phoenix Q1 2030 Q1 2029

Seattle Q1 2030 Q1 2029

Denver Q2 2030 Q1 2029

Tampa Q4 2030 Q4 2029

Las Vegas Q3 2031 Q1 2030

Los Angeles Q4 2032 Q4 2031

Miami Q1 2035 Q1 2034

Sources: Federal Home Loan Mortgage Corporation, National Association of Home Builders, National Association of Realtors, Haver Analytics. Data as of December 2023.
Sources: Federal Home Loan Mortgage Corporation, National Association of Home Builders,
National Association of Realtors, Haver Analytics. Data as of December 2023.
Note: Regional affordability calculated using the median home price of the region with a 20% down payment at the prevailing Freddie Mac 30-year fixed mortgage rate. The median family
income is divided by the annualized mortgage payment to determine the housing affordability index. The projection of median family income is grown at the prevailing YoY HP (Hodrick-
Note
Prescott - regional
Lambda affordability
= 500) adjusted calculated
income growth. using inthe
The 1% decrease median
mortgage home
rate is assumedprice of the
at 0.25% region
per quarter. with assumes
Analysis a 20%stable
down payment
home prices. at the prevailing
Freddie Mac 30-year fixed mortgage rate. The median family income is divided by the annualized mortgage payment to
determine the housing affordability index. The projection of median family income is grown at the prevailing YoY HP
(Hodrick-Prescott Lambda=500) adjusted income growth. The 1% decrease in mortgage rate is assumed at 0.25% per
quarter. Home prices are expected to remain stable.
EASING GLOBAL POLICY

04
Productivity gains
Policy easing by the European Central Bank (ECB) will If AI-driven productivity gains are sustained, it could
likely support economic growth, but it probably can’t propel GDP growth without stoking inflation (and
help Europe’s weak productivity. Labor productivity helpfully offset pressure from aging populations).
in Europe is around four percentage points behind This could support equity returns by boosting
where forecasters estimated it would be before revenue and margins. Politically, too, increased
the pandemic. That gap results in about EUR 2.2 productivity could make deficits more manageable,
trillion in lost cumulative output since 2019. This as higher economic growth increases tax income.
is in stark contrast to the United States, which has
slightly exceeded pre-pandemic expectations.5 Europe’s domestic productivity woes do not mean that
investors should ignore the top European companies.
What explains Europe’s lagging productivity? The 50 largest European companies derive only ~40%
We’d point to several causes: Europe’s reliance of their revenues from Europe, and the “national
on external energy sources (natural gas prices champions” within this cohort are dominant global
in Europe are nearly 30x higher than they are in players and best-in-class operators. That said, we
the United States); its less dynamic technology prefer U.S. equities to European equities in 2025.
sector; and its less flexible labor markets.

Perhaps the greatest potential boon for global

productivity over the coming decade will come from
AI, where U.S. companies now enjoy a commanding
lead in research and investment. Private investment 5
Relatively strong U.S. productivity growth has probably not been spurred by AI,
at least not yet. Rather, the labor market churn from 2021 and 2022 may have resulted in
in AI in the United States totaled nearly USD 70 more optimal matching between employee skills and employer tasks. It seems reasonable
billion in 2023. By contrast, Germany, France and to assume that integrating AI technology could lead to a 17% cumulative boost to
productivity over the next 20 years. Read more
Sweden each invested less than USD 2 billion.6 6
Meeker, M. (2024). AI + Universities. BOND.

16
EASING GLOBAL POLICY

PLEASANT SURPRISE:
PLEASANT U.S. PRODUCTIVITY
SURPRISE: HAS EXCEEDED
U.S. PRODUCTIVITY EXPECTATIONS
HAS EXCEEDED
U.S. Labor Productivity Index, 100 = 2017
EXPECTATIONS

116
Congressional Budget Office Jan 2020 projection
114
Actual
112
110
108
106
104
102
100
98
’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24
Sources: Congressional Budget Office (CBO) and the Bureau of Labor Statistics (BLS). Data as of June 30, 2024.
Sources: Congressional Budget Office (CBO) and the Bureau of Labor Statistics (BLS). Data as of June 30, 2024.

EU PRODUCTIVITY HAS FAILED

EU PRODUCTIVITY HASTO MEET LOW
FAILED EXPECTATIONS
TO MEET LOW
EXPECTATIONS
European Union Labor Productivity Index, 100 = 2017

116
European Commission 2019 vintage forecast
114
Actual
112
110
108
106
104
102
100
98
’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24
Source: European Commission. Data as of January 1, 2024.
Source: European Commission. Data as of January 1, 2024.

17
EASING GLOBAL POLICY

05
Increased
dealmaking

18
EASING GLOBAL POLICY
CAPITAL MARKET LIQUIDITY IS JUST STARTING TO RECOVER
TRAILING 12-MONTH
CAPITAL MARKET HIGH YIELD,
LIQUIDITY IS JUST LEVERAGED
STARTING TOLOAN,
RECOVER& IPO
VOLUME
Trailing 12-month high yield, AS A loan
leveraged % OF& GDP
IPO volume as a % of GDP

8%

7%

6%

5%

4%

3%

2%

1%

0%
’99 ’01 ’03 ’05 ’07 ’09 ’11 ’13 ’15 ’17 ’19 ’21 ’23
Sources: J.P. Morgan, Bank of America, Bloomberg Finance L.P. Data as of September
30, 2024.
Sources:Note — liquidity
J.P. Morgan, Bank of defined as IPO, HY
America, Bloomberg bonds,
Finance andasleveraged
L.P. Data loan
of September issuance.
30, 2024.
Note: Liquidity defined as IPO, HY bonds and leveraged loan issuance.

Falling interest rates and a less onerous regulatory But dealmakers now feel more hopeful. Policy
environment could help sustain a nascent revival in rates are heading lower, and the regulatory
dealmaking, which had been essentially frozen since backdrop will likely be more friendly.
2021. Rate hikes, recession risks and geopolitical
tensions left management teams understandably As a backlog of deals stands ready to be cleared,
cautious despite strong corporate earnings. Merger increased private lending should help jump-start
and acquisition activity is at its lowest level since 2013. transactions. Opportunities exist across the capital
structure. Senior secured direct lending will continue
Limited capital market liquidity has been both a to finance private equity sponsor-backed transactions.
cause and a symptom of limited deal flow. In a Companies will apply junior and structured capital
search for liquidity, private equity investors are solutions to support strategic growth, optimize their
increasingly turning to the secondary markets, debt structures and provide interest payment flexibility.
where volumes have reached record levels.
New liquidity “tools” have also emerged in the The likely beneficiaries of a better environment
private credit space, such as portfolio financings for dealmakers? Wall Street banks, private equity
(NAV loans) and single asset recapitalizations. and credit firms, and private business owners.

19
2025 OUTLOOK REPORT

Part 02— AI: Boom or bust?

Accelerating
Health care disruption

Automation & robotics

capital Building power infrastructure

Redefining security

investment

20
ACCELERATING CAPITAL INVESTMENT

Businesses and governments are

primed to spend: 2025 will be
the year of capital investment.
Margins are elevated, profits
and C-suite confidence are on
the rise, and policymakers are
focused on supporting growth.
Three global trends require
enormous investment: AI, power
and energy, and security.

21
ACCELERATING CAPITAL INVESTMENT

06 Yes, U.S. big tech companies have opened the spigot

for AI spending, but these are still early days. We

AI: Boom
think capital investment in AI could take off in the
coming years, driven by rapid improvements in AI
models and corporate adoption.7 Consider: AI could

or bust?
potentially impact all services activity in the economy.

Why are we so optimistic? First, because AI models

are improving at a rapid rate. In 2021, large language
models (LLMs, a type of AI) could answer less than
10% of competition-level math questions accurately.
That share increased to 90% in 2024. 8 The models are
also becoming less expensive: The price per token
for both OpenAI’s higher-performing GPT-4o mini
model and Anthropic’s Claude 3.5 Haiku model are
90%–98% less expensive than their predecessors.

Second, overall corporate capital investment has been

relatively muted, running at a 2.5% annual pace. By
contrast, at the end of the dot-com boom at the turn
of the millennium, corporate capex was running at
a 10% annual pace (on a five-year rolling basis). In
other words, there is plenty of room for corporations
across sectors to increase their AI spending as the
use cases become more apparent – and persuasive.

22
ACCELERATING CAPITAL INVESTMENT
CORPORATE INVESTMENT HAS ROOM TO BOOM
5-YEAR ANNUALIZED CHANGE IN CORPORATE CAPITAL SPENDING, %
CORPORATE INVESTMENT HAS ROOM TO BOOM
5-year annualized change in corporate capital spending, %
25%
Post-war

20%

“Nifty Fifty”
15% conglomerates Personal computing
& internet Energy
Reaganism renaissance
10%
Housing

5%

0%
’45 ’50 ’55 ’60 ’65 ’70 ’75 ’80 ’85 ’90 ’95 ’00 ’05 ’10 ’15 ’20
Source: Bureau of Economic Analysis, Haver Analytics. Data as of December 31,
2023.
Sources: Bureau of Economic Analysis, Haver Analytics. Data as of December 31, 2023.

Third, we see the potential for AI to “turn labor into application layer companies (e.g., Salesforce, Meta,
software,” as Sequoia Capital has put it.9 As models Uber) were founded during the cloud and mobile
improve their ability to reason instead of merely transitions.10 AI could create a similar ecosystem.
generating pre-trained responses, they will help
create opportunities to disrupt the services sector. AI Adoption of AI could falter, of course. Regulation
lawyers, AI software engineers and – dare we say it? – could stifle innovation. Energy sourcing could prove
AI investment strategists could become commonplace. onerous. And the models could run out of the data
they use to train. But our analysis – looking past the
Public markets and their private partners have hype and drawing on the lessons of history – tells us
established a strong presence in the digital that AI offers significant investment opportunity. We
infrastructure of AI. The industrial and utilities see the potential for a clear bull case for the global
companies that provide the physical components economy and equity markets next year and beyond.
and energy needed for AI will also likely continue
to benefit. Finally, the companies that most
effectively improve their cost structures and
increase productivity by incorporating AI tools
into their workstreams should outperform.

In private markets, pure-play AI valuations have 7

Bick, A., Blandin, A., & Deming, D. J. (2024). The Rapid Adoption of Generative AI. National
Bureau of Economic Research.
inflated, but we still see investment opportunities 8
Jensen, G., Narayan, A., Greene, A., & Simon, L. (2024). Is an AI Bubble Ahead of Us or
in the startups that can automate tasks and provide Behind Us? Bridgewater.
9
While we expect AI productivity gains to coincide with a potential increase in labor
cost savings to businesses. Value may also be created disruptions, we think the evidence is compelling for the creation of net new jobs,
in the potential applications that can help harness and we are already seeing corporates take action to fortify talent pipelines through
upskilling and reskilling.
the technology for consumers. Over 20 major 10
Huang, S., & Grady, P. (2024). Generative AI’s Act o1: The Agentic Reasoning Era Begins.

23
ACCELERATING CAPITAL INVESTMENT

07 AI may quickly have an impact on the health care sector.

The chart (on the following page) helps to understand

Health care why. The industries that could be most impacted

by AI have a high share of labor costs in jobs

disruption
that could be helped or displaced by LLMs. For
example, the health care technology industry has
labor costs equivalent to around 35% of its sales.

At the same time, economists estimate that 65% of the

tasks performed by health care technology employees
are exposed to AI disruption. For example, companies
such as Veeva Systems, Teladoc and GoodRx that provide
software solutions across the health care value chain
could both reduce their labor costs and increase their
revenues by incorporating AI into their businesses.11

24
ACCELERATING CAPITAL INVESTMENT

In the pharmaceutical and biotech sectors, AI We also believe GLP-1 drugs will continue to drive
could also potentially improve the quality and revenue growth (glucagon-like peptide drugs control
quantity of drugs that progress from early-stage blood sugar and suppress appetite). According to
trials to market. Right now, only 7% of new drugs our estimates, we think the total addressable market
make it to market. Just a 5% increase in that could grow from 16 million people in the United States
success rate could mean 60 new drugs and USD and the European Union in 2027 to over 40 million
70 billion in incremental revenue over a 10-year people. Beyond GLP-1s, we are focused on identifying
period.12 In life science services, companies could companies in the health care sector that can use AI
use AI to design drug trials more optimally: from to modernize their business models to drive earnings
compound identification to participant selection. growth. The clearest examples right now are in robotic
surgery and imaging technologies used for diagnostics.

WHO LOOKS VULNERABLE?

WHO LOOKS VULNERABLE?
HEALTH CAREHEALTHCARE TECH
TECH COULD BE COULDBY
IMPACTED BEAI
IMPACTED BY AI
SHARE OF LABOR TASKS EXPOSED TO LLMS, %

Healthcare technology
Health care
70% providers &
services
60%

50%
Life sciences
40% tools & services

30%

20% Health care

10% Pharmaceuticals Biotechnology equipment & supplies

0%
0% 5% 10% 15% 20% 25% 30% 35% 40%

LABOR COSTS-TO-SALES

Sources: Empirical Research Partners Analysis of 72 GICS industry groups for large- and small-cap stocks. Eloundou, T., Manning, S., Mishkin, P., and Daniel
Sources: Empirical Research Partners Analysis of 72 GICS industry groups for large and small-cap stocks. Eloundou,
Rock. “GPTs are GPTs: An Early Look at the Labor Market Impact Potential of Large Language Models.” Data as of May 2024.
T., Manning, S., Mishkin, P., and Daniel Rock. "GPTs are GPTs: An Early Look at the Labor Market Impact Potential of
Large Language Models". Data as of May 2024.

11
Data breaches in health care are the most costly of any industry, averaging USD 9.8 million
per breach – about 60% higher than the second-place financial sector – due to vulnerable
legacy technologies and stringent privacy rules. While AI amplifies this threat by enabling
cyber criminals to execute more sophisticated attacks, it has also helped firms reduce
breach costs by 33% when used defensively.
12
Morgan Stanley. (2022). Why Artificial Intelligence Could Speed Drug Discovery.

25
ACCELERATING CAPITAL INVESTMENT

08 Eventually, robots (humanoid and otherwise)

may become a part of our daily lives. Waymo

Automation
is already providing more than 100,000
autonomous taxi rides per week.15

& robotics
Health care and defense are two other areas where
robotics are becoming more prevalent. In October,
Intuitive Surgical delivered 110 of its semi-autonomous,
AI-enabled Da Vinci 5 robotic surgery systems,
trouncing the 70 placements from the previous quarter.
Earlier in the year, the U.S. Air Force announced a
Capital investment in AI will also fast-track the
contract award with Anduril and General Atomics to
adoption of automation and robotics, affecting
develop Autonomous Collaborative Combat Aircraft.
industrial and consumer sectors. U.S. industrial
The Department of Defense expects to spend nearly
companies are set to allocate 25%–30% of their
USD 3 billion per year on the program by 2029.
capital spending to automation over the next five
years, up from 15%-20% over the last five years.13 We see investment opportunities in both public
and private markets: in the semiconductor
This theme isn’t new. Single-purpose robots have
companies that provide the computing power, the
existed for over half a century, and robotics returns
software companies that harness that computing
for investors have been modest so far. But we think
power, the industrial companies that capitalize on
momentum is building for broader applications. As
higher efficiency and the consumer companies
access to training data increases and the cost of
that can deliver a game-changing product.
hardware declines, general purpose robots may be
closer to achieving the ability to reason. Globally,
companies have invested over USD 4 billion in Ajewole, F., Kelkar, A., Moore, D., Shao, E., & Thirtha, M. (2023). Unlocking the industrial
13

potential of robotics and automation. McKinsey & Company.

funding more than 20 “humanoid” robots.14 14
Viswanath, S., Khanna, V., Liang, Y., Srinivas, A., & Cherian, Z. (2024). Robotics won’t have a
ChatGPT Moment. Coatue.
15
Thompson, B. (2024). Taking Waymo, Uber and Waymo.

26
ACCELERATING CAPITAL INVESTMENT

AUTONOMOUS AIRCRAFT
AUTONOMOUS AIRCRAFTSPENDING
SPENDING IS SET TO SURGE
IS SET TO SURGE
DODDOD
spending on selected
SPENDING autonomous
ON SELECTED aircraft programs,
AUTONOMOUS $ billions
AIRCRAFT

$3.5
Collaborative Combat Aircraft (CCA)
$3.0
All other CCA precursor programs
$2.5

$2.0

$1.5

$1.0

$0.5

$0.0
’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24 ’25 ’26 ’27 ’28 ’29
(E) (E) (E) (E) (E)
Source: CSIS analysis
Source: of DOD
CSIS analysis FY15-29
of DOD RDT&E
FY15-29 RDT&E budget
budget requests.
requests. Data as of Data
Augustas of August 6, 2024.
6, 2024.
Note —Note:
the The
FY FY2024
2024CCA figure
CCA figure includes
includes a reported
a reported $150
$150 million million
budget budgetrequest.
reprogramming reprogramming
request.

AUTOMATION AUTOMATION COULD ACCOUNT

COULD ACCOUNT FOR 25%FOROF25% OF
INDUSTRIAL
INDUSTRIAL CAPEX OVER THE NEXT 5 YEARS
CAPEX
Average share of investment
OVERinTHE
automation
NEXT 5byYEARS
sector as a % of capital spending

35% Past 5 years

30% Next 5 years
25%

20%

15%

10%

5%

0%
Logistics and Retail and Life sciences, Automotive Food and
ul l ent consumer health care and beverage
goods pharmaceuticals

Source: McKinsey & Company. Data as of 2022.

Source: McKinsey & Company. Data as of 2022.

27
ACCELERATING CAPITAL INVESTMENT

09 semiconductor fabrication facilities use the same

amount of water as 300,000 households.18 We see

Building
opportunities for water infrastructure and efficiency
solutions in parallel with growing power usage.

power
More power will likely come from nuclear
energy. We note the equity market’s validation of
Constellation Energy’s and Microsoft’s agreement

infrastructure to restart the Three Mile Island nuclear power

plant to supply energy to the tech giant’s data
centers. This should spur further reinvestment in
nuclear energy. Indeed, the surge in the Nuclear
Renaissance Index (+75% year to date) is based on
We think capital investment into the power sector
market speculation that small modular reactors will
is about to ignite for three key reasons: the
be successfully deployed in the next few years.
reindustrialization of U.S. manufacturing, increased
use of electrification in clean energy solutions and While renewable energy sources will continue to grow
surging demand from data centers. Overall, we (the International Energy Agency believes that for every
expect power demand growth in the United States $1 invested in fossil fuels, $2 are invested in clean
to increase by 5x to 7x over the next 3–5 years. energy), latency, transmission and storage costs mean
that natural gas should remain a critical energy source.19
Data center growth is a global phenomenon. The
number of U.S. data centers, accounting for 40% Investors looking to capitalize on the growing
of the global market, is growing ~25% per year. In demand for power can focus on broad infrastructure
Q1 2024, the European, Latin American and Asia- funds, power generation and utility companies.
Pacific data center markets grew inventory by
20%, 15% and 22% year-over-year, respectively.16
16
CBRE. (2024). Global Data Center Trends 2024. CBRE. Thompson, B. (2024). Taking Waymo,
Uber and Waymo.
Increased data center power requires more water 17
Walsh, A. (2023). Behind the Data: Unveiling the Water Footprint of Artificial Intelligence.
for cooling and chip fabrication, often in water- Bluefield Research.
18
Hess, J. C. (2024). Chip Production’s Ecological Footprint: Mapping Climate and
stressed areas. Global data centers are expected Environmental Impact. Interface.
to grow their water usage by 6% annually.17 Large 19
International Energy Agency. (2024). Investment in clean energy this year is set to be twice
the amount going to fossil fuels.

28
ACCELERATING CAPITAL INVESTMENT

THE MARKET HAS VALIDATED NUCLEAR EXPANSION

THE MARKET HAS VALIDATED NUCLEAR EXPANSION
CONSTELLATION ENERGY
Constellation Energy SHARE
share price, $ PRICE, $
$300
Deal with Microsoft to restart
$280 Three Mile Island announced
$260
$240
$220
$200
$180
$160
$140
$120
$100
Jan ’24 Mar ’24 May ’24 Jul ’24 Sep ’24 Nov ’24
Source: FactSet. Data as of October 31, 2024.
Source: FactSet. Data as of October 31, 2024.

DATA
DATACENTERS COULDIGNITE
CENTERS COULD IGNITEA A SURGE
SURGE IN IN POWER
POWER DEMAND
DEMAND
U.S. POWER DEMAND
U.S. power demandAND 2024generation
and 2024 GENERATION CAPACITY,
capacity, TWh TWH

4,400 Non-data centers

4,300 Data centers

’24 generation
4,200

4,100

4,000

3,900
2030 shortfall
3,800 137 TWh

3,700
’14 ’16 ’18 ’20 ’22 ’24(E) ’26(E) ’28(E) ’30(E)
Source: EIA, McKinsey
Sources: & Company,
EIA, McKinsey & Company,Public Power,
Public Power, Bernstein.
Bernstein. Data asData as of 31,
of December December
2023. 31, 2023.

29
ACCELERATING CAPITAL INVESTMENT

ARMED CONFLICTS
ARMED CONFLICTSARE
ARE AT AN 80-YEAR
AT AN 80-YEAR HIGH
HIGH
NUMBER OF GLOBAL
Number of global ARMED CONFLICTS
armed conflicts
60
55
50
45
40
35
30
25
20
15
10
’46 ’51 ’56 ’61 ’66 ’71 ’76 ’81 ’86 ’91 ’96 ’01 ’06 ’11 ’16 ’21
Sources: UCDP, Davies, Shawn, Therese Pattersson, Magnus Öberg, Gleditsch, Nils Petter, Peter Wallensteen, Mikael Eriksson, Margareta Sollenberg, and
Source: UCDP, Davies, Shawn, Therese Pattersson, Magnus Öberg, Gleditsch, Nils Petter, Peter Wallensteen,
Håvard Strand. Data as of December 31, 2023.
Mikael Eriksson, Margareta Sollenberg, and Håvard Strand. Data as of December 31, 2023.

30
ACCELERATING CAPITAL INVESTMENT

10 Europe’s security concerns reflect its reliance on

external sources for critical goods and commodities.

Redefining
The European Union imports over 90% of
digital products and services, depends on Asia
for 75%–90% of wafer fabrication capacity

security
and relies on China for up to 70% of key raw
materials such as nickel, copper and cobalt. 22

Meanwhile, the BRICS+23 economies control 5x the

natural gas reserves of the G7, have 3x the active-
duty military personnel and double the oil reserves
As governments reassess their national security, they
and uranium production.24 Last year, Russia boosted
will likely deliver higher levels of capital investment.
its defense budget by 25% to hit a new record.25
Security covers not just traditional military defense,
but cybersecurity, supply of critical natural resources, In all, we believe global spending on security
energy production, transportation and infrastructure. will be comparable to the annual investment
We think markets do not yet fully appreciate the in cloud computing and e-commerce during
investment prospects that this secular shift will create. the 2010s. Building out semiconductors,
infrastructure and reliable, affordable power
In the United States, the government seems likely
are not only pivotal levers for national security,
to continue incentivizing domestic production of
but also for global economic competition.
critical supplies. Shares in a North Carolina–based
chipmaker surged 40% on the news that it secured We are looking for opportunities in the industrial,
USD 750 million in CHIPs Act funding to build two utilities, materials and energy sectors. All but
new semiconductor plants in the United States. the industrials sector trade at a discount to the
broad market. Investors don’t seem to be giving
Further, we highlight a U.S. government goal to
these companies much credit for future earnings
diversify its reliance on concentrated aerospace
growth, which we believe will be nearly double
and defense specialists20 (which today account for
that of the market over the next few years.
90% of the U.S. weapons production budget),21 and
expand to established commercial companies and In private markets, investors can find
startups with expertise in areas such as AI, machine interesting prospects in smaller companies
learning and 5G technology. The defense market could focused on innovation in technology-enabled
potentially generate revenues and market share for defense systems and cybersecurity.
companies outside the traditional defense space.

The Department of Defense budget has halved as a

share of GDP from the height of the Cold War. Of the
European Union members of NATO, 16 of the 23 are
currently on track to surpass the targeted 2% of GDP 20
Defined as companies whose only customer is the government, or those whose only
commercial exposure is in aerospace.
threshold in 2024. Ten years ago, the average member 21
Allen, G. C., & Berenson, D. (2024). Why Is the U.S. Defense Industrial Base So Isolated
was only at 1.2% of GDP. Global military spending from the U.S. Economy? CSIS.
22
Draghi, M. (2024). The future of European competitiveness. European Commission.
seems to have room to grow, especially in areas 23
List of BRICS+ countries.
such as network-enabled weapons, which could be 24
Seydl, J. (2024). How do geopolitical shocks impact markets? J.P. Morgan.
25
Sauer, P. (2024). Last year, Russia boosted its defense budget by 25% to hit a new record.
human-machine partnerships or fully autonomous. The Guardian.

31
2025 OUTLOOK REPORT

Part 03— Defining Trump 2.0

Understanding
Sunsetting tax policy

Managing rate volatility

election impacts Anti-trust risk

Rising anti-establishment
movements

32
UNDERSTANDING ELECTION IMPACTS

In 2025, investors can shift from

focusing on election outcomes to
weighing election impacts. The results
of elections around the world will
impact the direction of tax policy,
sovereign debt and deficits, trade policy,
anti-trust initiatives and the popularity
of anti-establishment candidates.

33
UNDERSTANDING ELECTION IMPACTS

11
Defining
Trump 2.0

President Trump and the Republican Party’s decisive

victory in the 2024 election sets the stage for Trump
2.0. What could this mean for markets and the
economy? Deregulation, increased merger and
acquisition activity, a focus on domestic economic
outcomes and the slim chance of lower corporate tax
rates provide the bull case. Indeed, the immediate
market reaction to the election results showed that
investors are favoring the U.S. over the rest of the
world, along with small-cap stocks and regional banks.

However, pro-growth initiatives could also lead to

higher inflation and wider budget deficits. Indeed,
U.S. Treasury yields have moved back toward the
highs for the year. Elevated mortgage rates may
continue to stifle activity in the residential housing
market and exacerbate the affordability crisis. Tariff
policy presents perhaps the biggest risk to global
growth. While we do not believe blanket duties on all
imports are likely, tariffs on specific goods or trading
partners are. Retaliation from trading partners would
exacerbate the negative shock to global trade.

The election results make us marginally less positive

on emerging market assets, industrial commodities
and energy prices. Indeed, the negotiation around
the 2017 Tax Cuts and Jobs Acts (TCJA) looms large
in 2025, and the potential economic impacts of
fiscal policy are more likely to be felt in 2026.

34
UNDERSTANDING ELECTION IMPACTS

12 Now that the Republican party controls both

chambers of Congress, we expect most, if not all, of

Sunsetting
the temporary provisions affecting individuals to be
extended for some time. That said, given the tight
margins in the House and the Senate, it may require

tax policy some compromise around areas such as the state and
local tax deduction cap. Further, the reconciliation
process requires legislation to be deficit neutral
over a 10-year period. This means that still lower
Congress will need to focus on tax policy next year. corporate tax rates could face headwinds even with
At the end of 2025, many of the provisions from a Republican president and Republican-controlled
the 2017 TCJA are set to expire (or “sunset”). If Congress. The economic and personal impact of any
Congress does nothing, individual tax rates will tax changes are not likely to be felt before 2026.
revert to 2017 levels, the alternative minimum tax
will impact many more high-income individuals, the We are also watching how tax policy is affecting
20% deduction for pass-through business income migration. Analysis by our Chairman of Market and
will end (affecting many partnerships, S corporations Investment Strategy, Michael Cembalest, shows that
and sole proprietorships) and the lifetime estate, gift in the United States, almost all of the top 20 interstate
and generation-skipping transfer tax exemption will migrations are from high-tax states such as New York,
be cut in half (from around USD 28 million to USD 14 California and Illinois to low- or no-tax states such as
million for a married couple). Importantly, the 21% Florida, Texas, Arizona and Nevada. Indeed, outside
corporate tax rate included in the TCJA was a the United States, we are seeing similar patterns.
permanent change. Families are increasingly moving to places such as
Italy, Switzerland, Dubai, Greece and Spain. Key
In all, if the temporary provisions in the TCJA drivers include the attractiveness of tax policies and
expire, it would result in a 1.8% reduction in concerns about geopolitical turbulence and safety.
after-tax income for all U.S. households and
a 3.1% reduction for the top 1% of earners.26
The Tax Foundation estimates that about 62%
of filers would see an increase in taxes. Oshagbemi, C., & Sheiner, L. (2024). Which provisions of the Tax Cuts and Jobs Act expire
26

in 2025? Brookings.

35
UNDERSTANDING ELECTION IMPACTS

SEVERAL IMPORTANT PROVISIONS FROM THE

SEVERAL IMPORTANT
TCJA WILL EXPIREPROVISIONS
AT THE ENDFROM
OF THE
2025TCJA
WILL EXPIRE AT THE END OF 2025

For most individual taxpayers, the tax brackets would increase (the top rate
ncome ta brac ets
will go from 37% to 39.6%).

TCJA raised the AMT exemption from $54,300 to $70,300 for individuals
and $84,500 to $109,400 for married couples. It also suspended the
lternati e minimum deductibility of many expenses, such as those for some investment
ta management fees. Sunset would restore the deductibility of those
expenses, thereby indirectly subjecting many more taxpayers to the AMT,
which would disallow those deductions.

Under TCJA, a taxpayer may claim an itemized deduction of up to only

0 000 000 or arried ling separatel or t e aggregate o state and
tate and local ta local income taxes paid. Sunset would remove this cap. However, as noted
deduction above, with the reduction of the AMT exemption – under which SALT
payments are not deductible – many taxpayers may not be able to take
advantage of this deduction.

The deduction for interest on “acquisition indebtedness” is limited to the

ortgage interest interest attributable to debt principal of up to $750,000 ($375,000 for
deduction arried ling separatel unset ould restore t e illion 00 000
limitations on debt principal. Also, there may be greater freedom to deduct
interest paid on home equity loans, such as HELOCs.

The QBI deduction was introduced by the TCJA. The provision allows
uali ed business non corporate ta pa ers to ta e a deduction o up to 20 o t eir uali ed
income deduction business income” (QBI) from a partnership, S corporation or sole
proprietorship. Sunset would eliminate this deduction.

From 2018 to 2025, the annual deduction limit for contributions to public
haritable gi ing c arities as increased to 0 o adjusted gross inco e e li it is
scheduled to revert to 50%.

Under the TCJA, the base lifetime exclusion amount for gift and estate tax
as dou led to 0 illion adjusted annuall or in ation n 202 t e
lifetime exclusion amount is $13.61 million for individuals and $27.22 million
state and gi t ta or couples unset could drasticall li it t e a ilit to gi t and or trans er at
death by resetting this amount to probably a little over $7 million for
individuals (about $14 million for married couples) before maximizing the
e clusion and incurring a 0 at ta on t e e cess

Source: “A Look Ahead at Expiring Tax Provisions,” Tax Foundation. Accessed December 12, 2023.

Source: “A Look Ahead at Expiring Tax Provisions,” Tax Foundation. Accessed December 12, 2023

36
UNDERSTANDING ELECTION IMPACTS

BORROWING
BORROWING BINGE: GLOBALBINGE: GLOBAL
SOVEREIGN SOVEREIGN
DEBT DEBT
CONTINUES TOCONTINUES TO
RISE, ESPECIALLY IN THE U.S.
RISE, ESPECIALLY IN THE U.S.
Debt as a % of GDP for advanced economies
DEBT AS A % OF GDP FOR ADVANCED ECONOMIES
160% Advanced economies U.S. debt to GDP ratio, U.S. debt to GDP ratio
debt to GDP ratio no TCJA extension projection, with TCJA extension
140%
120%
100%
80%
60%
40%
20%
0%
’01 ’05 ’09 ’13 ’17 ’21 ’25 (E) ’29 (E) ’33 (E)
Sources: International Monetary Fund. Data as of December 31,
Sources: International Monetary Fund. Data as of December 31, 2023. Congressional Budget Office, Haver Analytics. Data as of June 18, 2024.
2023. Congressional Budget Office, Haver Analytics. Data as of

13 While it has settled, inflation is still higher than it was in

the previous cycle, and it could take just a small fiscal

Managing rate
impulse to ignite accelerating price pressures. Bond
market implied volatility is double what it was before
the global rate-hiking cycle began at the end of 2021.

volatility Passive fixed-income investing can be an efficient way

to buy and hold bonds to maturity, but we believe
active management of interest rate risk (duration)
2025 could be another year when active management and credit risk may offer opportunities for enhanced
in fixed income plays a significant role in investment returns. Owning active fixed-income funds also enables
portfolios. In 2024, our clients added over USD 20 access to more sub-sectors within fixed income (such
billion to fixed income ladders. While we believe as securitized credit and high yield municipal bonds)
starting yields in fixed-income provide value, that are not well represented in indices. In fact, the
especially in the context of an easing cycle, we urge median active fixed income manager has historically
investors to consider adding active fixed-income outperformed its benchmark by between 20 basis
strategies to complement passive strategies. points and 60 basis points over the last five years.27

First, investors need to consider the outlook for Whatever approach you take, step back and see
sovereign debt and deficits across many developed the big picture: Owning bonds is an essential
markets. Global sovereign debt is currently strategy for diversifying against equity risk within a
110% of GDP for advanced economies, and the portfolio. Our clients still have over USD 600 billion
Congressional Budget Office (CBO) projects that (26% of their assets under supervision) invested
the U.S. federal debt held by the public will reach in securities that mature within one year. We
122% of GDP by 2034. Markets could view any believe in owning bonds over cash, and think using
type of expansionary fiscal policy and increased both active and passive strategies is prudent.
government spending as a reason to demand higher
yields for holding long-duration sovereign debt.
27
SimFund, using Morningstar categories for classification. (June 30, 2024).

37
UNDERSTANDING ELECTION IMPACTS

AS PROFIT MARGINS GROW, LABOR'S SHARE OF REVENUE SHRINKS

AS PROFIT MARGINS GROW, LABOR’S SHARE OF REVENUE SHRINKS
ro t argins
22% 86%

U.S. LABOR COMPENSATION AS

A SHARE OF NET VALUE ADDED
U.S. labor share (RHS)

(EXCLUDING TAXES), %
PROFIT MARGINS, %

19% 82%

16% 78%

13% 74%

10% 70%

7% 66%
’85 ’90 ’95 ’00 ’05 ’10 ’15 ’20
Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Haver Analytics. Data as of June 30, 2024.
Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, Haver Analytics. Data as of June 30, 2024.

14 Although we anticipate a rebound in dealmaking and a

reduction in anti-trust action under a Trump administration,

Anti-trust
anti-trust policies are still a longer-term risk for markets.
Rising U.S. corporate profit margins (now 2.5 percentage
points above pre-pandemic levels) and a declining labor

risk
share of corporate incomes could intensify that government
resistance. We may well see continued action by both the
U.S. Department of Justice and the European Commission.

Policymakers and the electorate seem to sense that the

secular decline in labor’s share of business output – left
undisturbed – could lead to more corporate concentration,
less labor bargaining power and a shift to a tax system
that favors capital and corporations over labor income.
In other words, both the electorate and policymakers
could look to diminish, if not reverse, that secular decline
by restraining big corporate mergers and acquisitions.

We do note one important caveat here: As governments

are increasingly viewing data and technology as strategic
assets, some large technology firms have effectively
functioned as tolerated monopolies. This may not
change even if overall anti-trust activity picks up.
UNDERSTANDING ELECTION IMPACTS

15
Rising anti-establishment
movements

39
UNDERSTANDING ELECTION IMPACTS

The past year’s elections include:

The U.S. election may have • European Union Parliament

European Commission President Ursula von der
dominated investor focus
Leyen will serve another term, but several anti-
in the second half of 2024, immigration and euro-skeptic parties made gains.
but the impacts of the global
• France
election super-cycle will be
President Emmanuel Macron salvaged a coalition,
felt in 2025. Around the world, but Marine Le Pen’s National Rally continues to
a clear trend emerged. For the threaten the establishment.

first time since the data were

• United Kingdom
recorded in 1905, every single The Conservatives suffered a landslide defeat.
incumbent governing political
• Japan
party in developed economies
The Liberal Democratic party lost.
that faced re-election in 2024
lost vote share. • Sweden, Finland and New Zealand
Center-left governments lost.

• Australia and Belgium

Center-right governments lost.

• India
Prime Minister Narendra Modi’s BJP lost its majority.

Elsewhere, Russia’s President Vladimir Putin secured a

six-year term in an election with no viable opposition.
In Mexico, President Claudia Sheinbaum
won in a landslide victory that allowed for a
controversial judicial reform and a new law
mandating that wages outpace inflation.

While investors navigate the implications of changes in

governing power globally, they should also monitor
the risk that anti-establishment politicians continue
to pose to markets. Going forward, investors
should not only think about political risk in terms
of right and left, but also establishment and anti-
establishment. In our view, the threat of anti-
establishment parties could lead to increased political
and economic volatility. That in turn underscores
the need to craft resilient investment portfolios.

40
2025 OUTLOOK REPORT

Part 04— The wealth check

Renewing
Finding value in income

Defending against inflation

portfolio
Reconfigured returns

The gold rush

resilience

41
RENEWING PORTFOLIO RESILIENCE

To safeguard the recent surge in

household wealth and defend against
increased macroeconomic volatility
(due to higher inflation, more-active
policymakers and less globalization,
to name a few causal factors),
investors need resilient portfolios. In
our view, three approaches – relying
more on income; adding assets
that may help mitigate the threat
of inflation; and using options and
derivatives strategies to shift risk and
reward profiles – can help portfolios
withstand unexpected shocks.

42
RENEWING PORTFOLIO RESILIENCE

16 Over the past year, U.S. household net worth has

climbed to a record of nearly USD 160 trillion.28

The wealth
European Central Bank data suggests that
household wealth in the Eurozone has grown to
60 trillion euros from less than 50 trillion before

check
the pandemic. Since 2019, millennials (born 1981–
1996) have nearly doubled their net worth, which
is now higher than that of Gen Xers (1965–1980)
or baby boomers (1946–1964) at similar ages.

That’s good news, clearly. But the gains also offer an

opportunity for a strategic reassessment of your
portfolio, which you can conduct from a position
of strength. For some, the opportunity may be
an urgent necessity. Consider: If an investor
allocated to a 60/40 stock-bond portfolio at the
beginning of 2020 and didn’t rebalance, they
would now have an 80/20 allocation. For many
others, major changes may not be necessary.

43
RENEWING PORTFOLIO RESILIENCE

Managing concentrated positions is also critical Now is a good time for investors to reassess their
for portfolio resilience. Our research has found objectives and risk tolerances, and to consider how
that nearly half of all publicly traded companies their various assets align to those goals. Many may
at some point suffer a catastrophic loss in find it prudent to lock in gains and reduce exposure
value, and nearly two-thirds underperform the to fully valued indices, achieving their primary
index. 29 Further, a concentrated position in cash lifestyle goals with less risk. There are several
can also be detrimental to reaching long-term ways to do this tax efficiently, including gifting the
goals or even maintaining purchasing power. longest-term appreciated positions to charity, or
using strategies such as variable prepaid forwards
to monetize and diversify concentrated positions.

MILLENNIALS
MILLENNIALS HAVE NET
HAVE HIGHER HIGHER
WEALTH NETTHAN
WEALTH THAN
BOOMERS
AND GEN X AT BOOMERS
THE SAME AGE
AND GEN X AT THE
Inflation-adjusted net worth by generation at SAME AGE $ thousands
similar ages,

$300

$250

$200

$150

$100

$50

$0
Millennials as of Gen X as of Boomers as of
2019 and 2024 2003 and 2008 1989 and 1992

Source: Federal Reserve, Bureau of Labor Statistics, Rubinson Research. Data as of June 30, 2024.
Sources: Federal Reserve, Bureau of Labor Statistics, Rubinson Research. Data as of June 30, 2024.
NoteNote:
— real worth
Real worth per per household
household measured measured
in 2017 dollars,in 2017using
adjusting dollars, adjusting
CPI. The using wealth
dark bars measure CPI. The dark bars
measure wealth
when each when
generation waseach
23–38generation wasbars
years old. The light 23-38
reflectyears old. each
wealth when Thegeneration
light barswasreflect wealth
28–43 years old. when each
generation was 28-43 years old.

28
Board of Governors of the Federal Reserve System (U.S.), Households; Net Worth,
Level, Federal Reserve Bank of St. Louis, November 8, 2024.
29
Cembalest, M., Manoukian, J., & Datta, K. (2024). The Agony & The Ecstasy: The risks
and rewards of a concentrated stock position, part IV. J.P. Morgan.

44
RENEWING PORTFOLIO RESILIENCE

17
Finding value in income

One way to increase portfolio resilience is to increase

the share of total return that is driven by income.
Many investors will be looking for new sources
of income as cash and Treasury bill yields decline.
If history is any guide, somewhere between USD
600 billion and USD 2.2 trillion of money market
fund assets will move to find a new home.

Core fixed income (investment-grade sovereign,

municipal and corporate debt) is the first place to look
for yield. Investment-grade corporate bonds still yield
over 5%. Credit spreads are tight but are supported
by low downgrade risk and high credit quality.

While returns are subject to market fluctuations,

high yield investors may find opportunities for
attractive returns, potentially exceeding 5%, even
with some spread widening. Additionally, U.S.
taxpayers might consider preferred equities, which
can provide tax-efficient income of around 6%–7%.

And don’t forget about dividend-paying equities,

which trade at a substantial discount relative to the
market. In addition, quality dividend stocks tend to
exhibit only 80% of the volatility of the broad market.
In other words, they may provide a less volatile
investment experience at a potentially lower valuation.

Finally, illiquid investments in sectors such as

direct lending, infrastructure, real estate and
asset-backed finance can offer potential income
opportunities in the mid- to high- single digits, often
exhibiting low correlations to stocks and bonds.

As the global easing cycle continues and risk-free

rates decline, riskier sources of income may become
more attractive as we move through 2025.

45
RENEWING PORTFOLIO RESILIENCE
UP TO $2 TRILLION IN CASH COULD FIND A NEW HOME
UP TO $2 TRILLION
CUMULATIVE IN MONEY
FALL IN CASH COULD
MARKETFIND A NEW
FUND HOMEIN
ASSETS
Cumulative fall in money market fund assets in previous rate-cutting cycles, %
PREVIOUS
0%
-5%
-10%
-$490B
-$626B
-15%
-20% -$470B
-25%
-30%
-35% -$1365B -$2192B
-40%
2001 2008 2020 2025 low 2025 high
rate-cutting rate-cutting rate-cutting estimate estimate
cycle cycle cycle

Source: Source:
Bloomberg Finance
Bloomberg FinanceL.P.
L.P. Data
Data asas of September
of September 30, 2024.
30, 2024.

YIELDWILL
YIELD WILLBECOME
BECOME MORE
MORE VALUABLE
VALUABLE AS POLICY
AS POLICY RATES
RATES FALL
FALLasset classes, %
Pre-tax yields across
14%
12.1% Equities
12%
9.5% Fixed income
10%
7.9% Alternatives
8% 6.5% 6.2%
5.5% Cash
6%
4.6% 4.4% 4.4%
3.9% 3.6%
4% 3.2%
2.7%
2% 1.3%

0%
Preferreds
Commercial mortgages

U.S. investment grade

Global transport

U.S. cash

Global REITs

U.S. 10-year

U.S. real estate

Global infra.

Euro govt. (7–10yr.)

Direct lending

U.S. high yield

International equity

U.S. equity

Sources: BAML, Bloomberg Finance L.P., Clarkson, Cliffwater, Drewry Maritime Consultants, Federal Reserve, FTSE, MSCI, NCREIF,
FactSet, Wells Fargo, J.P. Morgan Asset Management. Data as of August 31, 2024.

Source: Bloomberg Finance L.P. Data as of September 30, 2024.

RENEWING PORTFOLIO RESILIENCE

18
Defending against inflation
Core fixed income is still a critical diversifier in What fits the bill? Historically, real estate, commodities
investment portfolios. But another way to potentially and infrastructure have exhibited low correlations
enhance portfolio resilience is to add assets that to stocks and bonds. At the same time, diversified
could mitigate the threat of inflation. Traditionally hedge fund strategies have proved their worth in
diversified portfolios faced a serious challenge the post-COVID period. Composite hedge funds have
over the last four years, as stocks and bonds outperformed core fixed income by a remarkable
often moved in the same direction – that is, they 20% cumulatively since the end of 2020. On a go-
were positively correlated. In 2022, when inflation forward basis, we anticipate hedge funds can
spiked, both stocks and bonds fell steeply. potentially capture over 80% of the upside of a
traditional 60/40 portfolio, while experiencing
Investors were reminded that while bonds approximately half of the volatility. We are also
can help diversify against growth shocks, they interested in even more specialized assets (such
cannot protect against inflation shocks. Over as royalties) that provide stable cash flows with
the long run, we believe the negative stock- little to no correlation to traditional markets.
bond correlation will hold. But we see a strong
argument for owning assets that can provide
diversification to both equities and fixed income.

47
RENEWING PORTFOLIO RESILIENCE

SEVERAL PRIVATE MARKET ASSETS HAVE OFFERED NEGATIVE

SEVERAL CORRELATIONS
PRIVATE MARKET TO STOCKS
ASSETS AND BONDS
HAVE OFFERED
Correlation of quarterly returns
NEGATIVE CORRELATIONS TO STOCKS ANDfrom Q2 2008 to BONDS
Q1 2024
CORRELATION OF QUARTERLY RETURNS FROM Q2 2008 —
0.7
Global bonds
0.6
Global equities
0.5
0.4
0.3
0.2
0.1
0
-0.1
-0.2
-0.3
U.S. Europe APAC Globa Transport Timber Macro
Core RE Core RE Core RE Core Infra. Hedge Funds

Sources: Bloomberg Finance

Sources: Bloomberg L.P.,L.P.,
Finance Burgiss,
Burgiss,Cliffwater, FTSE,
Cliffwater, FTSE, HFRI,
HFRI, MSCI,MSCI,
NCREIF,NCREIF,
J.P. Morgan Asset Management.
J.P. Morgan Asset Management.DataData asasofofAugust
August 31, 2024.
31, 2024.

48
RENEWING PORTFOLIO RESILIENCE

19
Reconfigured
returns

Here’s a third way to approach portfolio resilience: Structured notes can achieve similar outcomes with
Consider using tools such as options to change greater individual specificity. Historically, we have
the risk and return profile of underlying assets. found that equity-linked structured notes have
This strategy can potentially provide downside delivered two-thirds of the return of broad equity
preservation while preserving some upside potential. markets while also – and this is key – delivering positive
returns in down equity markets. Historically, equity-
Options can potentially preserve capital, provide linked structured notes have also outperformed
niche exposure and generate income. Similarly, preferred equity and high-yield bonds in both up and
active exchange-traded funds (ETFs) can employ down markets. We believe investors could consider
option strategies that seek to generate income from strategies that reconfigure returns to embed downside
an underlying asset class, or to deliver reduced protection while maintaining upside exposure in 2025.
volatility relative to outright equity exposure.

49
RENEWING PORTFOLIO RESILIENCE

20 Gold rallied to new all-time highs in 2024, and we see

a strong case for a continued gold rush in 2025. The

The gold rush

commodity can play an important role in building resilient
portfolios. We expect that gold prices will find continued
support from central banks, particularly in emerging
markets, which have been buying 1,500 tons more gold per
year than their pace before Russia invaded Ukraine. The
People’s Bank of China still only holds 5% of its reserves
in gold relative to the ECB at 60% and the Federal Reserve
(Fed) at 73%. 30 Gold ETF inflows were nonexistent in 2024,
but new demand from retail investors, who face declining
risk-free interest rates in 2025, could push prices higher.

Critically, gold – the original safe-haven asset – can serve

as an attractive hedge against both geopolitical risk
and uncertainty around sovereign debt and deficits. In
a study of roughly 50 geopolitical events since World
War II, we found that gold was a reliable near-term
hedge against equity market volatility. 31 Finally, we
believe the U.S. dollar is structurally overvalued. Gold
is an efficient way to diversify currency exposure.

GOLD HAS OUTPACED MAJOR CURRENCIES, ESPECIALLY

GOLD HAS OUTPACED MAJORTHE CURRENCIES,
YEN ESPECIALLY THE YEN
Gold price
GOLD PRICEindex, 100100
INDEX, = 2021
= 2021
200
JPY
180
EUR
160 USD

140

120

100

80
’21 ’22 ’23 ’24
Source: FactSet.
Source: FactSet.Data asofof
Data as October
October 31, 2024.
31, 2024.

30
Attar, H., & Ademolu-Odeneye, I. (2024). The Next Shift in the Gold Market. Bridgewater.
31
Seydl, J. (2024). How do geopolitical shocks impact markets? J.P. Morgan.

50
2025 OUTLOOK REPORT

Part 05— Evergreen alternatives

Evolving
Sports & streaming

The 21st-century space race

investment Liability management

Reimagined cities

landscapes

51
EVOLVING INVESTMENT LANDSCAPES

Investment innovation
sometimes comes in waves;
2025 will be a year of innovation,
we believe, as the industry
explores new frontiers. While
these opportunities may not
become a core part of your
portfolio, you may find small but
meaningful additions to your
asset holdings.

52
EVOLVING INVESTMENT LANDSCAPES

21
Evergreen
alternatives

One new frontier, open-ended evergreen alternative seasoned investment portfolio; and most importantly,
funds, is rising in popularity. In fact, 50% of our the potential to access liquidity on a periodic (e.g.,
alternative commitments in 2024 were in evergreen monthly or quarterly) cadence. Evergreen funds also
fund structures, up from 33% in the prior year. offer a simpler approach compared with closed-end
While many alternative asset funds have a fixed funds. Getting fully invested at the right strategic
end date or maturity, open-end evergreen funds weight requires only a one-time decision, and your
(with no fixed end date) have started to take off. capital can be reinvested to compound over time.

Evergreen private credit funds amassed assets in the At the same time, we note a few caveats. Evergreen
early 2020s, in part because regulations strategies tend to have higher fees and lower returns
constrained banks’ ability to extend loans. In than closed-end funds that “draw down” their capital
2025, we expect evergreen private equity to from investors. Importantly, redemption schedules of
experience a similar growth trajectory. evergreen funds may be impacted by the occasional
illiquidity of their underlying investments. That could
Today, evergreen private equity is concentrated: be a challenge: Investors tend to want liquidity most
Around 75% of current assets under management are during periods of economic and market stress.
invested in the top 20 strategies. But in 2025, we will be
partnering with several managers to develop strategies We think open-ended evergreen and closed-end
we think can deliver differentiated private equity drawdown strategies can be complementary in
exposure in semi-liquid vehicles. Indeed, there are 50 a diversified investment portfolio. Investors who
funds currently in the SEC registration process that prioritize simplicity may emphasize evergreen strategies,
are expected to launch in the next several months. 32 while those who focus on absolute return might
gravitate more toward traditional drawdown funds.
Evergreen alternatives offer a few key benefits: access
to private investment strategies at lower minimum
investment amounts; the ability to buy into a 32
Flynn, K., McCulloch, B., Hagen, J., Gaskill, L., & Becker, L. (2024). XA Investments
Non-Listed CEF Q2 2024 Market Update. XA Investments.

53
EVOLVING INVESTMENT LANDSCAPES

22 Traditionally, owning a sports team had more

in common with owning a Rembrandt or a

Sports &
collection of classic cars than it did with owning
public and private equities. But as sports leagues
relax their ownership rules, potential sports

streaming
investors can find new frontiers to explore.

The case for investing in sports is simple. First, sporting

events are one of the few media experiences that
reliably attract significant viewership. No wonder
the total value of sports M&A and investment has
increased by 8x over the past five years, while all
public M&A and investment has declined by 40%.33

Second, the barriers to entry remain high for any new

sports franchise, a benefit for any existing franchise
owner. The number of franchises in the United States
is strictly governed by their respective league rules, and
the global hierarchy of leagues seems established. 34

54
EVOLVING INVESTMENT LANDSCAPES

But sports investing comes with challenges. The Ultimately, the bull case for sports investing seems
leagues’ most important historical partners, traditional likely to prevail. The National Football League
broadcast (terrestrial) television networks, seem (NFL) is also loosening its investment rules to allow
to be in inexorable states of decline. We would not more institutional capital, and major changes in
be surprised to see the traditional media players collegiate athletics will likely necessitate capital
consolidate, while the tech-enabled streaming services solutions. We expect deal activity and equity
pay increasing premiums to access sports rights. and credit investment in sports and sports-
related assets to outpace other industries.

PLAY BALL: SPORTS INVESTING CAN BENEFIT

PLAY BALL: SPORTS INVESTING
FROM RELAXEDCAN BENEFIT FROM RELAXED
OWNERSHIP RULES OWNERSHIP RULES
Private equity funds planned investment themes
PRIVATE EQUITY FUNDS PLANNED INVESTMENT

eams ollectables
Majority ownership in sports franchises* Trading cards, memorabilia, NFTs
Minority ownership in sports franchises Apparel
layers alent eal state
Player performance related services** ports tea and stadiu nancing
Sports analytics software renas trac s gol courses
Sports agencies Arena-adjacent property developments
Underwriting player contracts ports adjacent tness ranc ises
edia perations
Media rights and streaming Venue management (tickets, sponsors, concessions, etc.)
ocial edia an engage ent Equipment for arena, event operations and athletes
Media outlets that cater to sports fans Third-party ticketing apps
eagues etting
Emerging sport leagues Fantasy sports
Youth sport academies Betting apps sites
Summer camps Live sports books
ideo games
E-sports (streaming, competitions)
Sports video games

Sources: Michael Cembalest, J.P. Morgan Asset Management. Data as of 2024.

Source:
*While majority ownershipMichael
by privateCembalest,
equity funds isJ.P.
not Morgan Asset Management.
currently permitted in the four largest Data as leagues,
U.S. sport of 2024. *While
some majority
emerging ownership
and international bypermit it.
leagues
private
**Includes player equity
training, funds
coaching andis not currently
development; permitted
physical in biomechanics,
rehabilitation, the 4 largest US sport
nutrition, leagues,
mental some emerging and interna-
strategy, etc.
tional leagues permit it. **Includes player training, coaching and development; physical rehabilitation, biome-

33
Cembalest, M. (2024). A Piece of the Action. J.P. Morgan Asset Management. For more, see
our piece on sports investing here.
34
National Football League and Premier League, followed by the National Basketball
Association, then Major League Baseball, and the National Hockey League, the Women’s
National Basketball Association, Formula 1 and other European football leagues in
some order.

55
EVOLVING INVESTMENT LANDSCAPES

23
The 21st century
space race
The global economy is already reliant on space.
Satellites and other positioning, navigation and
timing technologies are integral to location and
communication services that enable industries
from television to food delivery. Innovation from
companies such as SpaceX has driven down the cost
to launch a satellite by 10x over the past 20 years, and
we expect that satellite enhancements will support
more effective communications and observation
technology. This could be crucial for global connectivity
and could enable breakthroughs in data-intensive
processes such as automation. Other use cases
include imaging to track movements, which could
help manage supply chains, predict and respond to
natural disasters, and track construction projects.

Space will also continue to be a focus for sovereign

security. The U.S. Department of Defense’s budget
requests for space-based systems have increased
from roughly USD 9 billion in 2019 to more than
USD 25 billion in 2025. India landed a spacecraft on
the South Pole of the moon. Japan and the United
States are partnering on more accurate positioning
technology. Peru, Saudi Arabia and Thailand have all
prioritized space in their economic development plans.

Space tourism could grow to be a USD 5 billion per year

industry in the next 10 years. Consulting firm McKinsey
& Co. predicts that the space economy will grow at
more than twice the pace of global GDP for the next
decade, becoming a USD 2 trillion industry by 2035.35

35
Acket-Goemaere, A., Brukardt, R., Klempner, J., Sierra, A., & Stokes, B. (2024). Space: The
$1.8 trillion opportunity for global economic growth. McKinsey & Company.

56
EVOLVING INVESTMENT LANDSCAPES

24
Liability
management

Over the last two years, many borrowers have been applications were at their highest since the summer
carrying interest costs that were based on 5%+ of 2022. Some 70% of our mortgage applications
short-term interest rates. As the market begins to were for adjustable-rate loans, the highest share
anticipate future policy rate cuts, borrowers can lock in at least five years. This suggests that borrowers
in lower rates regardless of whether the rate cuts are doing their best to seek out the lowest possible
materialize. At one point in September, it was possible rates, and they expect rates to fall in the future.
to fix base SOFR interest costs at 2.90%–3.25%
for 2–5 years, given that the markets reflected an We may see other opportunities like this in the
aggressive Federal Reserve cutting cycle. Clients year ahead. Whether or not you engage in liability
can further adjust their borrowing costs using tools management, as borrowing costs fall, we expect to
such as vanilla and structured interest rate swaps, see an uptick in credit demand from home equity
caps and collars to lock in or manage toward even lines of credit (HELOCs), portfolio lines of credit,
lower rates than the market is currently offering. and mortgage purchases and refinances. Falling
rates also matter for estate planning: Intra-family
Mortgage activity also reflects dynamic management loan rates are less onerous, as are hurdle rates
of market conditions – in particular, interest rate for grantor retained annuity trusts (vehicles in
expectations. In September, J.P. Morgan Private which asset appreciation above the hurdle rate is
Bank mortgage purchase applications were at passed to the beneficiary free of estate taxes).
their highest levels since June 2023, and refinance

57
EVOLVING INVESTMENT LANDSCAPES

SHIFTING EXPECTATIONS OF FED POLICY MOVES CAN CREATE

SHIFTINGOPPORTUNITIES
EXPECTATIONSTO OFLOCK
FED POLICY
IN RATESMOVES CAN
CREATE OPPORTUNITIES TO LOCK IN RATES
Expected 3-month interest rate implied by SOFR futures, %
EXPECTED 3-MONTH INTEREST RATE IMPLIED BY SOFR
5.5%
3-month SOFR futures: Now
5.0%
3-month SOFR futures: Mid-September
4.5%

4.0%

3.5%

3.0%

2.5%
’24 ’25 ’26 ’27 ’28 ’29
Source: Bloomberg Finance L.P. Data as of October 23, 2024.
Source: Bloomberg Finance L.P. Data as of October 23, 2024.

58
EVOLVING INVESTMENT LANDSCAPES

25
Reimagined
cities

59
EVOLVING INVESTMENT LANDSCAPES

The physical landscape of cities is shifting. It’s a post- (CBD) rent growth by 2.5x–9x over the past five
pandemic phenomenon with global reach. years. We expect this trend will continue.

Even before COVID, cities were changing. In the Meanwhile, city governments and investors will
United States, aging millennials were migrating to increasingly partner to convert lower-quality, older
more affordable suburban areas. The pandemic and class B and C office buildings to more productive
the proliferation of work from home arrangements uses (e.g., housing or even data centers). Over
supercharged the dynamic. Now, new development 80% of the office space in cities such as Chicago,
in many U.S. cities (including Boston, Indianapolis Frankfurt and Singapore was built before 2015.
and the Dallas/Fort Worth metro area) features
low-rise, garden-style multifamily properties; That said, new construction of LEED (Leadership
office buildings in premier suburbs and fringe in Energy and Environmental Design) certified
urban areas; and redeveloped mix-use retail. class A office space continues to thrive. Some
examples include the Salesforce Tower in Sydney
Globally, rent growth in urban fringe and and CapitaSpring in Singapore. J.P. Morgan’s new
suburban fringe markets such as Gangam (Seoul), headquarters, which is set to open in New York City
Fulton Market (Chicago) and Bahnhofsviertel in the summer of 2025, will be one of the new office
(Frankfurt) has outpaced central business district towers changing the skylines of cities around the world.

OUTSIDE
OUTSIDE CITIES’ CITIES'
CENTRAL CENTRAL
BUSINESS BUSINESS
DISTRICTS, RENT DISTRICTS,
GROWTH IS PICKING UP
RENT5-year
GROWTH IS PICKING
rent growth, % UP
5-YEAR RENT GROWTH, %
40%
35% Submarket
30%
CBD
25%
20%
15%
10%
5%
0%
-5%
Union Market RiNo Gangnam South End Fulton Bahnhofsviertel
(D.C.) (Denver) (Seoul) (Charlotte) Market (Frankfurt)
(Chicago)

Source: JLL Research. Data as of May 2023.

Source: JLL Research. Data as of May 2023.

60
2025 OUTLOOK REPORT

Conclusion
2024 has turned out to be an exceptional year for
investment returns. We are excited to build on
that strength with you and your family in 2025.
Whether it is capitalizing on the opportunity in
accelerating capital investment, ensuring portfolio
resilience through income and real assets or
understanding the potential impacts of the recent
global election cycle, your J.P. Morgan team is here
to help you and your family reach your goals.

61
2025 OUTLOOK REPORT

Part 06— Asia

Global
Latin America

Europe

perspectives

62
GLOBAL PERSPECTIVES

Asia

63
GLOBAL PERSPECTIVES

How to find
opportunities in
emerging markets
Emerging markets have disappointed investors for for investors, it’s profits (and profit growth) that
years. Despite promises of high growth and high matter, so the key question is what factors allow
returns, in aggregate, emerging market (EM) equities economic growth to translate into corporate profits.
remain among the worst-performing asset classes
over the last 15 years. Investor expectations of strong With the Federal Reserve (Fed) cutting rates and China
economic growth were largely met: On average, EM engaging in a new round of stimulus, the outlook for
economies grew 4.3% compared with a 1.7% rate emerging markets is improving. But investors need to
for their developed market (DM) peers. But in many be attentive to the dynamics of particular economies
markets, equity returns have not followed suit. and markets, and quite selective in determining where
and how to invest across the EM spectrum. Note that
Why has growth in some countries spurred this view is focused on long-term investing. Short-term
positive equity returns while in others it hasn’t? tactical opportunities – in Chinese markets this year, for
As we discuss here, the critical nexus is between example – can come and go based on other factors.
economic growth and corporate profits. Ultimately

ECONOMIC GROWTH DOESN’T ALWAYS EQUATE TO

RETURNS IN EMERGING MARKETS
ECONOMIC GROWTH DOESN’T
Annualized nominal GDPALWAYS EQUATE
growth vs. TO RETURNS
local equity index priceIN EMERGING
MARKETS
returns since 2009, local currency, %
ANNUALIZED NOMINAL GDP GROWTH VS. LOCAL EQUITY INDEX PRICE RETURNS
12%
Nominal GDP Equity returns
10%
8%
6%
4%
2%
0%
-2%
Japan

U.A.E (Dubai)
China Onshore

Singapore

Korea

Taiwan

Saudi Arabia
Brazil

Hong Kong

India

Malaysia

Mexico
United States

Indonesia

South Africa

Sources: National sources, MSCI, Bloomberg Finance L.P. Data as of September 30, 2024.
Sources: National sources, MSCI, Bloomberg Financial L.P. Data as of September 30, 2024.

64
GLOBAL PERSPECTIVES

What moves
equity markets

What drives equity returns? Investors are rewarded

when companies grow their profits per share or
return capital through dividends. In general, equities’
movement follows profits (earnings) over the long
run. When earnings grow, equity prices tend to
rise. However, this is where EM equities have lagged
their DM counterparts. While economic growth has
been strong across a number of countries, many
domestic companies have not seen their profits
grow. One of the most glaring examples is China,
where earnings have been flat over the past 10
years despite strong economic growth (see chart).

Three factors explain the relatively weak earnings

growth, in our view.

First, economic models vary regarding the respective

roles of the public and private sectors. Some
countries do well in generating output – building
infrastructure or growing export volumes – but their
models are not conducive to generating corporate
profits. For example, an economy might include hefty
government subsidies that increase uneconomic
competition and drive down prices. A similar dynamic
results in economies that include many state-owned
enterprises (SOEs) that are not as profit-motivated.

The second factor is corporate governance. Even

successful companies that deliver strong revenues
don’t necessarily create profits. And importantly,
they might not create profits on a per-share basis.
Companies may generate significant revenues but
spend those earnings, for example, on wasteful
investment or paying management higher salaries.
GLOBAL PERSPECTIVES

CHINESE
CHINESE STOCKSSTOCKS HAVE
HAVE NOT NOT
KEPT KEPT
PACE PACE
WITH WITH ECONOMIC
ECONOMIC GROWTH
GROWTH
China nominal GDP and MSCI China Index and earnings, 2010 = 100
CHINA NOMINAL GDP AND MSCI CHINA INDEX AND EARNINGS,
350
China GDP
300
MSCI China earnings
250 MSCI China Index

200

150

100

50

0
’06 ’08 ’10 ’12 ’14 ’16 ’18 ’20 ’22 ’24

Sources: National Bureau of Statistics of China, MSCI, Haver Analytics, Bloomberg Finance L.P. Data as of Q3 2024.
Sources: National Bureau of Statistics of China, MSCI, Bloomberg Finance L.P. Data as of Q3 2024.

More frequently, companies are profitable, but they consumption has grown among EM economies,
take “shareholder-unfriendly” actions – issuing more exports remain the most influential determinant for
shares, for example, and thus diluting shareholder corporate profits. Thus, it’s no surprise that emerging
value. Because earnings are measured on a per- markets had their heyday in the mid-2000s when
share basis, if share issuance increases in line with global trade growth was skyrocketing amid hyper-
profits, earnings per share (EPS) never grow. globalization. With trade broadly under pressure
from rising protectionism and shifting supply chains,
The third factor is more macro and relates to the role finding economies that are still able to grow exports
of exports in a particular EM economy, and for in this environment becomes an important factor.
emerging markets overall. Although domestic

66
GLOBAL PERSPECTIVES

A three-factor How can investors find opportunities in the current

environment? We think the Venn diagram offers a

framework useful framework.

for EM investing Look at the economies that fit in the center of the Venn
diagram: a combination of thriving private sectors with
minimal governmental interference, companies that
value shareholders and grow earnings, and growing
exports. Admittedly, few economies fit the bill. And
that’s precisely why investors need to be especially
selective when investing in emerging markets.

Looking at the first factor, economic structure,

the private sector has become the key growth
driver in many economies, with increased
competitiveness spurring an improved corporate
performance. Examples include markets with
a small share of SOEs, such as India, Indonesia,
Taiwan, Korea, South Africa and Türkiye.

SELECTIVITY IS IMPORTANT WHEN

INVESTING IN IN
INVESTING EMERGING MARKETS
SELECTIVITY IS IMPORTANT WHEN
EMERGING MARKETS

A framework for emerging markets investing

A FRAMEWORK FOR EMERGING MARKETS

conomies ith large conomies here

pri ate sector Türkiye companies generate
Brazil high earnings per share
Korea Philippines South Africa
Thailand Malaysia Saudi Arabia
U.A.E.
India
Indonesia
Taiwan
Mexico
Vietnam

conomies ith strong and

gro ing e port industries

China

Source: J.P. Morgan Wealth Management.

67
GLOBAL PERSPECTIVES

POCKETS OF EMERGING
CERTAIN POCKETS OF MARKETS
EMERGING HAVE GROWN
MARKETS PROFITS
HAVE GROWNAT AN
IMPRESSIVE RATE
PROFITS AT AN IMPRESSIVE RATE
EARNINGS
Earnings growthGROWTH
by region,BY REGION,
local LOCAL
currency, CURRENCY,
September SEPTEMBER
2009–September 2024, %

300% 296%
263% 267%
250%
226%
200%

150%
110%
100% 86%

50% 48%
36%

0%
Emerging
Markets

O s ore

Onshore

Korea

Taiwan
China

China

States

Brazil
United

India
Source: Bloomberg Finance L.P. Data
Source: as of September
Bloomberg 30,
Finance L.P. Data as2024. Note:30,
of September Emerging
2024. Markets denoted by
MSCI Emerging
Note: Emerging Markets,
Markets China
denoted by MSCIOffshore
Emerging by MSCIChina
Markets, China, China
Offshore Onshore
by MSCI by CSI
China, China 300,by
Onshore Korea byKorea
CSI 300, KOSPI,
by KOSPI,
Taiwan by Taiex,Taiwan by Taiex,
United Unitedby
States States
S&P by500,
S&P 500, Brazil
Brazil bybyBovespa,
Bovespa, and India
and by SENSEX
India Index. Index.
by SENSEX

When we consider the second factor, corporate We note, too, that China’s export power challenges
governance – and more specifically whether companies many other emerging markets. China’s burgeoning
create shareholder value – India, Brazil, Indonesia, trade surplus and export growth in both low-tech
Taiwan and the United Arab Emirates generate and high-tech products are putting pressure on other
returns either through profit or dividend growth, global manufacturers. Recent reporting showing
and importantly, they tend not to dilute shareholder Korea running a trade deficit with China in kimchi
value. In these countries, companies generally focus highlights the scale of the challenge for emerging
on enhancing profits and returning that value to markets ex-China. Nonetheless, economies such
shareholders; not coincidentally, their companies as Vietnam, India, Taiwan, Poland and Türkiye
tend to grow earnings per share at a good clip. have all been able to gain export market share.

Turning to the third factor, the role of exports, So where should investors turn in the search for
China is the clear standout. Exceptional export that elusive combination of high growth and high
performance in recent years has pushed China’s stock returns? In our three-factor framework,
global market share up to 15% of all global exports. India, Indonesia, Taiwan and Mexico stand out as
From an investor’s perspective, the surge in the most promising hunting grounds for equity
Chinese exports is related to the role of China’s investors. The EM Index may disappoint. But
government in promoting exports. An economy with investors who pick their spots, and their stocks,
large government subsidies and stimulus efforts have the potential to realize attractive returns.
directed at increasing supply may not be a conducive
backdrop for profit margins and earnings growth.

68
GLOBAL PERSPECTIVES

Politics and
monetary policy:
Latin A cautionary tale

America
When the Fed launched its long-awaited first rate cut a
few months ago, a global rate-cutting cycle hit its stride.

How might the cycle play out? To answer that question,

we can look to Latin American monetary policy as a
kind of case study. In some ways, it’s a comforting story.
Economic growth in much of Latin America remains
strong, and inflation is contained. But in other ways,
it’s a cautionary tale. Politics and policy are key here.

How monetary policy and fiscal policy interact will be

especially relevant as many countries move toward
“fiscal activism,” increased government spending and
investment. As investors consider the impact of this
rate-cutting cycle on economies and markets, the
Latin American story can offer useful lessons.

69
GLOBAL PERSPECTIVES

Hyperinflation Latin America famously struggled with hyperinflation

from the 1970s until the mid-1990s, when central

and the lessons banks played a pivotal role in reining it in. Privatizing
state-owned industries, liberalizing trade and imposing

of history austerity measures were also important.

But the establishment of clear and predictable monetary
policies, independent of executive power, proved decisive.

Chile led the way by granting autonomy to its central

bank in 1989. Many other countries followed suit
through the 1990s. Brazil, the region’s biggest
economy, made its central bank independent in 2021.

Conversely, countries that have undermined central

bank independence, such as Argentina and Venezuela,
continue to struggle to keep inflation under control.

LEGAL REFORMS USHERED IN GREATER AUTONOMY

LEGAL REFORMS
FOR LATINUSHERED IN CENTRAL
AMERICAN GREATER AUTONOMY
BANKS
FOR LATIN AMERICAN CENTRAL BANKS
Central bank independence in Latin America before and after
CENTRAL BANK INDEPENDENCE IN LATIN
legal reforms, AMERICA
selected BEFORE AND AFTER LEGAL
countries
ountry e orm ear re re orm ost re orm ountry e orm ear re re orm ost re orm
Argentina 1992 0.4 0.8 Mexico 1993 0.39 0.64
Bolivia 1995 0.3 0.8 Nicaragua 1992 0.45 0.7
Brazil 2021 0.25 * Paraguay 1995 0.38 0.62
Chile 1989 0.1 0.82 Peru 1992 0.43 0.8
Colombia 1992 0.27 0.69 Uruguay 1995 0.18 0.71
Costa Rica 1995 0.44 0.73 Venezuela 1992 0.43 0.73
Dominican Republic 2002 0.37 0.65 United States ** 0.48
Honduras 1997 0.36 0.67 European Union ** 0.86

Source:
Source: World Bank. Data asWorld
of 2017.Bank. Data as of 2017. Note - the index of central bank independence is based on the legal
Note: The indexprovisions of central
of central bank bank laws
independence and
is based onrelated
the legallegislation.
provisions ofThe overall
central value
bank laws andofrelated
the index fluctuates
legislation. on avalue
The overall continuous
of the index fluctuates on a
scalezero
continuous scale from from zerowith
to one, to higher
one, with higher
values values
indicating indicating
stronger stronger
legal central legal centralCountries
bank independence. bank independence.
where subsequent Countries
legislation has reverted these
reforms to somewhere
extentsubsequent legislation
are marked with has reverted these reforms to some extent are marked with an asterisk. *Brazil's
an asterisk.
CB effectively
*Brazil’s CB effectively became independent
became independent in 2021,
in 2021, but there but there
is no updated is no updated score. *In the US and the EU, there have
score.
**In the United States and the European Union, there havebeenbeenno nospecific
specificreform
reforms to changethe
to change the score.
score.

70
GLOBAL PERSPECTIVES

Policy after the

global financial
crisis and COVID

The past 15 years were a time of monetary policy

challenges, but of a different sort. The global financial
crisis (GFC) upended traditional notions of what
central banks could and couldn’t do. To stabilize
the financial system, the Fed and other central
banks took unprecedented actions, including zero
interest rates and quantitative easing (purchasing
government securities and other financial
assets for the central bank balance sheet).

This “monetary activism” provided stability, but in

hindsight, it’s clear that it also boosted risk asset
prices. Essentially, with cash rates close to zero,
investors looking for yield and return had to seek,
and as a result bid up, assets with more risk.

During this period, central banks in Latin America cut

policy rates by over 500 basis points (basis points)
from 3Q08 to 4Q09. They also lowered reserve
requirements and took other actions to boost liquidity,
including providing USD liquidity in FX markets to
alleviate short-term volatility in local currencies.

The COVID shock sparked renewed monetary activism

from many developed economy central banks. Latin
American central banks, for their part, stuck with
more traditional monetary policy. Faced with the
threat of relentless inflation, they raised rates more
swiftly and forcefully than other major central banks.

71
GLOBAL PERSPECTIVES

LATIN AMERICAN CENTRAL BANKS WRESTLED POST-COVID INFLATION

LATIN
UNDERAMERICAN
CONTROL CENTRAL BANKSTHAN
MORE QUICKLY WRESTLED
MANY POST-COVID INFLATION
OF THEIR GLOBAL PEERS
UNDER CONTROL MORE QUICKLY THAN MANY
INFLATION RATE, % OF THEIR GLOBAL PEERS
Inflation rate, %
2020
7.8% 8.0%
2021
2022 5.8%
4.6%
2023 3.5% 3.5%
1.9%
1.0%

Latin America & Caribbean World

DURING COVID,
Source:Source:
International LATIN
Monetary
International AMERICAN
Fund.
Monetary Fund.Data CENTRAL
asofofDecember
Data as December 31, 2023. BANKS
31, 2023.

RAISED RATES MORE SWIFTLY THAN OTHER MAJOR

CENTRAL
DURING COVID, LATIN AMERICAN BANKS
CENTRAL BANKS RAISED RATES MORE
SWIFTLY THAN OTHER MAJOR CENTRAL BANKS
16%
Central bank policy rates, %
14% U.S. Brazil
12% Mexico Chile
10%
EU Colombia
8%
6%
4%
2%
0%
-2% Brazil starts hiking Brazil pauses Brazil starts cutting
June 2021 August 2022 August 2023
’19 ’20 ’21 ’22 ’23 ’24
Source: Bloomberg Finance L.P. Data as of November 7, 2024.
Source: Bloomberg Finance L.P. Data as of November 7, 2024.

Two paths to
inflation control
As a result, Latin American central banks The significant real rate differential versus the
wrestled post-COVID inflation under control United States allowed major Latin American
more quickly than many of their global peers. currencies to appreciate considerably. This was
particularly true for the Mexican peso (MXN), which
By the time the Fed began hiking rates in March 2022, also benefited from supportive macroeconomic
Latin America’s major central banks had already fundamentals (solid growth, contained inflation,
hiked rates an average of 525 bps. When the manageable fiscal and current account deficits).
Fed paused its hiking in September 2023, both
Brazil and Chile were already easing.
GLOBAL PERSPECTIVES

Political pressure, Elsewhere in the region, politics has pressured both

price stability and economic growth. Colombia faces

economic instability one of the highest fiscal deficits in the region, and
President Gustavo Petro’s reform agenda exacerbates
the problem by undermining private investments and
investment certainty. In Mexico, former President
By any measure, Latin America’s monetary policy was Andrés Manuel Lopez Obrador leveraged the Morena
a success. Yet we learn (and not for the first time) that Party’s overwhelming electoral victory to push forward
price stability and prudent monetary policy cannot a radical reform agenda, raising questions about
guarantee economic stability. This is especially the government’s commitment to attracting private
true as economies become more open to foreign investments amid global supply chain relocation.
capital flows and politics drives fiscal policy. Political The onus is now on President Claudia Sheinbaum
rhetoric can easily undermine central banks’ to reel in a rampant fiscal deficit and rebuild the
credibility. Electorally driven fiscal expansion often undermined credibility of Mexico’s rule of law.
undercuts otherwise effective monetary policy.
From their post-COVID lows, the currencies of Brazil,
A few examples: Colombia and Mexico have depreciated by an average
of 16%, and sovereign spreads have widened an
In Brazil, President Luiz Inácio Lula da Silva’s direct average of 31 basis points. At the same time, equity
attacks on the central bank, coupled with the markets have gained, on average, “only” 31% in local
government’s low credibility regarding fiscal targets, currency terms (versus a 67% gain in U.S. markets).
have led to higher inflation expectations. As a result,
even as inflation is a relatively modest 4.4%, Brazil’s As these examples illustrate, political risk has the
central bank (COPOM) has restarted the tightening potential to jeopardize economic stability. In our view,
cycle. It has raised rates by 75 basis points, with 50 investors in Latin American markets may want to leverage
basis points more in hikes expected by year-end, as strong long-term trends such as nearshoring but
the central bank looks to rein in inflation expectations. right-size investments to mitigate the risk of volatility.

73
GLOBAL PERSPECTIVES

Conclusion
As the Fed and other central banks continue their
easing cycles, the Latin American experience serves
as a cautionary tale. Traditional monetary policy
– especially early rate hikes – proved effective in
controlling post-COVID inflation. But more recently,
political pressures have threatened that legacy.
This is a lesson for policymakers everywhere.

74
GLOBAL PERSPECTIVES

Europe

75
GLOBAL PERSPECTIVES

Not all AI profit

is American:
Unlocking Europe’s
growth potential

The global industrial cycle has been in a downturn We think clients can find compelling opportunities
for the better part of two-plus years. It’s akin to long investing in these themes via European companies.
COVID: Pandemic-era supply chain disruption has
been hard to shake off. European companies face In a well-diversified portfolio, the holdings could
challenges on a number of fronts, including labor also complement U.S.-based tech stocks, which
markets, competition and productivity. Few sectors have grown into large overweights in many client
have struggled more than European manufacturing. portfolios, along with a higher exposure to the U.S.
dollar. We think USD is structurally overvalued, which
But look more closely and the outlook is brighter. We strengthens the argument for owning non-U.S. assets.
believe 2025 will be the year of capital investment
by governments and businesses, as policymakers In addition, European companies may benefit from
focus on supporting economic growth and CEOs the stimulus and support measures that China
see opportunities to profitably deploy their implemented recently. If China continues with this
capital. This is a key theme in our Outlook. So even approach in the months and quarters to come, it
as traditional manufacturing has been slowing, could boost revenues for the European firms that are
innovative and profitable European industrial key trading partners. Indeed, after the United States,
companies are well positioned to benefit from China is Europe’s second-largest trading partner.
increasing capital investment in four key areas:

• The AI value chain

• Infrastructure
• Aerospace
• Defense

76
GLOBAL PERSPECTIVES

Powering
through a difficult We recognize the recent
challenging macro backdrop.
macro backdrop Since the GFC, the Eurozone
has slipped behind the United
States in multiple respects.

The European manufacturing Purchasing Manager

Index (PMI) has been below the key 50 threshold
consistently since mid-2022. PMIs in Germany, Europe’s
traditional industrial powerhouse and some 25% of
the Eurozone economy, have been hovering in the low
40s, an anemic showing relative to its recent past.36

For Europe’s energy-intensive industries, challenges

in procuring energy and burdensome government
regulation further complicate the picture.

European policymakers recognize the need for a

more competitive economy. Former European Central
Bank President Mario Draghi’s recently published
report, essentially a blueprint to help the Eurozone
“reignite growth,” offers some thoughtful initiatives.
We hope that some may be adopted over time.

Translating words into action, the European

Commission has committed to investing EUR 20
billion per year in AI by 2030 to ensure Europe
remains competitive in this important area. 37
This is a step in the right direction, we believe.

While headline GDP growth is weak in Europe,

especially in the industrial sector, we think structural
drivers – forces driving durable, non-cyclical
growth – can “power through” the macroeconomic
challenges. Sectors, notably European industrials,
that support structural drivers in AI, aerospace,
infrastructure and defense will likely grow much
faster than the euro area economy overall.

36
Sources: HCOB, Bloomberg Finance L.P. Data as of October 2024.
37
Source: European Commission. Data as of December 31, 2023.

77
GLOBAL PERSPECTIVES

The AI The world will move forward with an ever-increasing

adoption of AI, we believe. In the AI ecosystem, which

value chain includes semiconductor manufacturers and makers

of large language models, European companies
supply critical inputs. In other words, these firms
are part of the AI value chain. They are providing
electrification (AI data centers have a near insatiable
demand for power), renewable energy technologies,
precision machinery and engineering expertise.

Consider: By the end of the decade, the global

energy transition may require an additional USD 1–2
trillion in annual capital expenditure. AI could drive a
tenfold increase in power consumption over the next
three years. Meeting that skyrocketing demand will
require ongoing innovation, and European energy
companies are already working to provide it.

In the real estate sector, European companies

are using AI to enhance energy efficiency and
sustainability in buildings through “smart energy”
management systems. The global smart building
market is expected to grow from USD 80.25
billion in 2022 to USD 205.3 billion by 2031.

78
GLOBAL PERSPECTIVES

AI DATA CENTERS HAVE A NEAR INSATIABLE DEMAND FOR POWER

AI DATA CENTERS HAVE A NEAR INSATIABLE DEMAND FOR POWER
Data center power consumption by provider, gigawatts
DATA CENTER POWER CONSUMPTION BY PROVIDER, GIGAWATTS

CAGR +8.7%
35 Enterprise

30 Co-location companies

25 Hyperscalers
CAGR +9.6%
20
CAGR +11.9%
15 CAGR +13%
10
5
0
’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24 ’25 ’26 ’27 ’28 ’29 ’30

Sources: J.P. Morgan Wealth Management, Bloomberg Finance L.P. Data as of Q2 2024.

SPENDING ON DATA
SPENDING CENTERS
ON DATA IS EXPECTED
CENTERS TOTO
IS EXPECTED DOUBLE
DOUBLE ININTHE NEXT
THE FIVE
NEXT YEARS
FIVE
Global data center capital
YEARSexpenditure, $ billion

600 Server & storage 58

500 Other DC hardware 517
426
400 HVAC* & physical infrastructure 353
296
300 260
214 251
200 181 187 194
131 142 140 148
100
0
’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23 ’24 ’25 ’26 ’27 ’28
(E) (E) (E) (E) (E)
Sources: Dell’Oro, J.P. Morgan estimate. *HVAC stands for heating, ventilation, and air
conditioning. Data as of March 2024.
Sources: Dell’Oro, J.P. Morgan estimate.
*HVAC stands for heating, ventilation and air conditioning. Data as of March 2024.

79
GLOBAL PERSPECTIVES

PRIVATE
PRIVATE INFRASTRUCTURE AND
INFRASTRUCTURE AND REAL
REAL ASSETS
ASSETSHAVE
HAVEHISTORICALLY
HISTORICALLY
OFFERED UNCORRELATED
OFFERED UNCORRELATED RETURNS RETURNS
Public
PUBLIC and private
AND market
PRIVATE correlations,
MARKET quarterly returns
CORRELATIONS, (Q2 2008–Q1
QUARTERLY 2024),(Q2
RETURNS %

U.S. Europe APAC Global Core Equity

Global Global Direct Venture Private Relative
Core Core Core Infra- Transport Timber Long/ Macro
Bonds Equities Lending Capital Equity Value
Real Estate Real Estate Real Estate structure Short

Global Bonds 1.0

Global Equities 0.4 1.0

Financial assets
Low correlation High correlation
U.S. Core
Real Estate
-0.3 0.0 1.0 Global real estate
Europe Core
Real Estate -0.2 0.0 0.7 1.0 Real assets
APAC Core
-0.2 0.0 0.8 0.7 1.0 Private markets
Real Estate
Global Core
-0.1 0.1 0.4 0.3 0.5 1.0
Infrastructure Hedge funds
Transport -0.2 -0.1 0.4 0.2 0.3 -0.1 1.0

Timber -0.2 -0.2 0.3 0.1 0.3 0.2 0.1 1.0

Direct Lending 0.0 0.7 0.2 0.2 0.3 0.3 0.0 -0.2 1.0

Venture Capital 0.1 0.5 0.3 0.5 0.3 0.2 0.0 0.0 0.5 1.0

Private Equity 0.3 0.8 0.3 0.4 0.3 0.2 -0.1 -0.1 0.8 0.8 1.0
Equity
Long/Short 0.3 0.9 -0.1 0.0 -0.1 0.1 -0.1 -0.1 0.7 0.6 0.8 1.0

Relative Value 0.2 0.9 -0.1 0.1 0.0 0.1 -0.2 -0.2 0.9 0.5 0.8 0.9 1.0

Macro 0.0 0.3 0.0 0.1 -0.1 0.0 -0.1 0.0 0.1 0.2 0.2 0.3 0.3 1.0

Sources: J.P. Morgan Asset Management, Bloomberg Finance L.P., Burgiss, Cliffwater, FTSE, HFRI, MSCI, NCREIF.
Sources: J.P. Morgan Asset Management, Bloomberg Finance L.P., Burgiss, Cliffwater, FTSE, HFRI,
Note: Green = low correlation.
MSCI, NCREIF. Note: Green = low correlation.

80
GLOBAL PERSPECTIVES

Infrastructure Increasingly, governments and companies

are focusing on investing in and modernizing
infrastructure, including electricity transmission and
distribution facilities, energy systems and utilities. In
the transportation sector, AI and electrification can
optimize port operations, reduce congestion and
improve logistics. European companies
are players on multiple fronts, with an especially
important role in the energy transition.

81
GLOBAL PERSPECTIVES

Aerospace
European firms are also leading names in an
aerospace sector that may soon be transformed
by electrification and AI. For example, AI-driven
predictive maintenance can reduce downtime
and operating costs. AI can improve safety by
analyzing vast amounts of data to predict and
help prevent potential failures. Many aging fleets
have a substantial need for ongoing upkeep and
replacement. A strong aftermarket looks likely to
continue, alongside a demand for newer, more
advanced and more energy-efficient planes.

Defense
Amid rising geopolitical risks, members of the
North Atlantic Treaty Organization (NATO) are
spending more on defense. Indeed, of the EU
members of NATO, 16 of the 23 are currently on
track to surpass the 2% of GDP threshold in 2024,
up to a cumulative total of EUR 360 billion. Ten
years ago, the average member was only at 1.2%
of GDP. We expect the uptrend to continue, with
substantial expenditures to defense, aerospace,
technology and logistics firms, among others.

Aerospace and AI are essential to these

plans, and European industrial partners will
likely feature in these investments. The main
areas of investment include modernization of
equipment, cybersecurity and infrastructure.

In national defense – as in any global industry –

allocating resources to diverse suppliers can spread
risk and increase resilience. Investing in businesses
aligned with the defense theme looks promising.

82
GLOBAL PERSPECTIVES

Portfolio
strategy
How might these four themes fit in your portfolio?

Growing capital investment related to AI and

technological advancement across the global
economy is a structural, not cyclical, force, in our
view. Investing in the AI value chain via European
companies offers the potential for growth and
geographic diversification. We acknowledge the
“U.S. exceptionalism” that has contributed to the
outperformance of the U.S. tech sector. We also
believe it’s sensible to complement those positions
with international exposure to AI-related themes.

We have confidence that capital investment

in aerospace and defense will continue in the
years ahead. These will be critical enterprises for
economies in an uncertain world, providing long-
term growth opportunities for client portfolios.

Finally, investment in private infrastructure

strategies offers compelling attributes, including
low volatility, consistency of cash and low or
negative correlations to broader asset classes.

83
GLOBAL PERSPECTIVES

Conclusion
European companies will continue to supply critical
inputs to the AI value chain, infrastructure, aerospace
and defense sectors. Especially for clients who have
found themselves with outsized positions in U.S. tech
stocks, we see the potential of a well-diversified global
approach to investing in these four key growth areas.
Europe’s “Old Economy” has had its challenges of late,
but the economy of tomorrow is already taking shape.

84
2025 OUTLOOK REPORT

Our The Global Investment Strategy Group

provides industry-leading insights and
investment advice to help our clients

mission achieve their long-term goals. They

draw on the extensive knowledge and
experience of the Group’s economists,
investment strategists and asset-class
strategists to provide a unique perspective
across the global financial markets.

85
2025 OUTLOOK REPORT

Executive Sponsors Global Investment Strategy Group

Clay Erwin Elyse Ausenbaugh

Global Head of Investments Sales & Trading Global Investment Strategist

Russell Budnick Christopher Baggini

Global Head of Market Strategy & Trading Global Head of Equity Strategy

Grace Peters Nur Cristiani

Global Head of Investment Strategy Head of LatAm Investment Strategy

Anton Pil Madison Faller

Head of Global Alternative Solutions Head of Market Intelligence

Aaron Goldstein
Head of Digital Investment Strategy

Stephen Jury
Global Commodity Strategist

Tom Kennedy
Chief Investment Strategist

Jacob Manoukian
Head of U.S. Investment Strategy

Jay Serpe
Head of Alternative Investments Strategy

Joe Seydl
Senior Markets Economist

Xavier Vegas
Global Head of Credit Strategy

Alex Wolf
Head of Asia Investment Strategy

Erik Wytenus
Head of EMEA Investment Strategy

Samuel Zief
Head of Global FX Strategy

86
DEFINITIONS AND DISCLOSURES

Definitions or higher, with one year or more to maturity and an

outstanding par value of $100 million or more. The

of indices
index encompasses Treasuries, government-related
and corporate securities, MBS (agency fixed-rate pass-
throughs), ABS, and both agency and non-agency CMBS.

and terms Bloomberg U.S. Aggregate Corporate High Yield

Index: An index that tracks the performance of USD-
denominated, high yield, fixed-rate corporate bonds.
Note: Indices are for illustrative purposes only, It includes securities rated Ba1/BB+/BB+ or below
are not investment products, and may not be by Moody’s, Fitch and S&P, excluding bonds from
considered for direct investment. Indices are an issuers classified as emerging markets by Bloomberg.
inherently weak predictive or comparative tool.
Bovespa Index: The Ibovespa Brasil São Paulo
All indices denominated in U.S. dollars Stock Exchange (or Bovespa) Index is a gross
unless noted otherwise. total return index weighted by free float market
cap and is composed of the most liquid stocks
BAML Hybrid Preferred Securities: These are traded on the São Paulo Stock Exchange.
financial instruments issued by Bank of America
Merrill Lynch that combine features of both debt Capital Expenditures (CapEx): Refers to funds a
and equity. They typically offer fixed or floating company allocates to acquire or upgrade physical
dividends and have a higher claim on assets than assets such as property, industrial buildings
common stock, but may lack voting rights. or equipment. These expenditures are often
used to initiate new projects or investments,
Bloomberg Euro Aggregate Government— enhancing the firm’s long-term value.
Treasury (7-10Y) Index: Measures the performance
of euro-denominated government bonds issued by Cliffwater Direct Lending Index: An index
Eurozone countries with maturities between 7 and that measures the performance of direct lending
10 years. It serves as a benchmark for medium-term funds, which provide loans to middle-market
government bond investments in the Eurozone. companies. It offers insights into the risk and return
characteristics of this asset class, reflecting the
Bloomberg Global Aggregate Index: private debt market’s trends and performance.
A comprehensive benchmark for global investment
grade fixed-rate debt markets, encompassing the CML (Commercial Mortgage Loans) —Senior:
U.S. Aggregate, Pan-European Aggregate and Asian- A market-capitalization weighted average of
Pacific Aggregate Indexes. It includes a diverse all mortgages included in the Gilberto-Levy
array of standard and customized subindices Commercial Mortgage Index, reflecting data
categorized by liquidity, sector, quality and maturity. as of the end of the first quarter of 2024.

Bloomberg U.S. Aggregate Bond Index: Consumer Price Index: Measures the average
A comprehensive benchmark for the U.S. investment change over time in the prices paid by urban
grade, dollar-denominated, fixed-rate taxable bond consumers for a comprehensive basket of goods
market. It includes taxable bond issues rated BBB and services. This index covers all expenditure

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DEFINITIONS AND DISCLOSURES

groups and is used to assess inflation and guide sum of the gross value added (output less intermediate
economic policy in a country or region. consumption) of all industry and services sectors of the
economy (at basic prices), plus all taxes less subsidies
CSI 300 Index: The CSI 300 Index is a free-float on products. This concept is adjusted for inflation.
weighted index that consists of 300 A-share stocks
listed on the Shanghai or Shenzhen Stock Exchanges. KOSPI Index: The KOSPI Index is a capitalization-
Index has a base level of 1000 on 12/31/2004. weighted index of all common shares on the
Korea Stock Exchange main board. The Index was
EURO STOXX 50 Index: The EURO STOXX 50 Index, developed with a base value of 100 as of January
Europe’s leading blue-chip index for the Eurozone, 4, 1980. Note: The preferred shares are excluded in
provides a blue-chip representation of supersector calculating the KOSPI Index from June 14, 2002.
leaders in the region. The index covers 50 stocks from
11 Eurozone countries. The index is licensed to financial MSCI All-Country World Index: A free float-
institutions to serve as an underlying for a wide range adjusted, market capitalization-weighted index that
of investment products such as exchange-traded funds measures the equity market performance across
(ETFs), futures, options and structured products. developed and emerging markets globally, offering a
comprehensive overview of international stock trends.
European Union Labor Productivity Index:
Measures the efficiency of labor in the EU by assessing MSCI Australia Index: Measures the performance of the
real employee compensation per employee. This index large- and mid-cap segments of the Australia
evaluates how effectively labor inputs contribute to market. With 57 constituents, the index
economic output, providing insights into the region’s covers approximately 85% of the free float-
economic performance and competitiveness. adjusted market capitalization in Australia.

FTSE EPRA NAREIT Global REITs Index: An index MSCI Brazil Index: Measures the performance
that tracks the performance of publicly traded of large- and mid-cap segments in Brazil, covering
real estate investment trusts (REITs) worldwide, approximately 85% of the Brazilian equity market.
providing a comprehensive view of the global real
estate market across various sectors and regions. MSCI Canada Index: Measures the performance
of the large- and mid-cap segments of the
HFRI (Hedge Fund Research, Inc.) Indices: A Canada market. With 85 constituents, the index
set of indices that track the performance of various covers approximately 85% of the free float-
hedge fund strategies. These indices provide adjusted market capitalization in Canada.
benchmarks for hedge fund performance across
different styles, such as equity hedge, event-driven, MSCI China Index: This index provides
macro and relative value, offering insights into the comprehensive coverage of large- and mid-cap
hedge fund industry’s overall trends and returns. stocks across various Chinese share classes, including
A shares, H shares, B shares, Red chips, P chips
Gross Domestic Product: Gross domestic product and foreign listings such as ADRs. It represents
(GDP) measures the final market value of all goods approximately 85% of the Chinese equity market.
and services produced within a country. It is the most
frequently used indicator of economic activity. The
GDP by industry approach (or output-based GDP) is the

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DEFINITIONS AND DISCLOSURES

MSCI Emerging Markets: The MSCI EM (Emerging MSCI Taiwan Index: Measures the
Markets) Index is a free-float weighted equity index performance of large- and mid-cap segments
that captures large- and mid-cap representation in Taiwan, covering approximately 85% of the
across Emerging Markets (EM) countries. The free float-adjusted market capitalization.
index covers approximately 85% of the free float-
adjusted market capitalization in each country. MSCI United Kingdom Index: Measures the
performance of the large- and mid-cap segments
MSCI Europe Index: A free float-adjusted, market of the U.K. market. With 77 constituents, the index
capitalization index designed to measure equity covers approximately 85% of the free float-adjusted
performance in developed European markets. market capitalization in the United Kingdom.

MSCI France Index: Measures the performance MSCI USA: An index that measures the performance
of the large- and mid-cap segments of the French of the large- and mid-cap segments of the U.S.
market. With 60 constituents, the index covers stock market. It provides a comprehensive view
about 85% of the French equity market. of U.S. equity market trends and dynamics.

MSCI Global Private Infrastructure Asset Index: MSCI World: The MSCI World Index is a free-
An index that tracks the performance of private float weighted equity index. It was developed
infrastructure investments worldwide. It provides with a base value of 100 as of December 31,
a benchmark for evaluating the returns and risks 1969. MXWO includes developed world markets,
associated with infrastructure assets, including and does not include emerging markets.
sectors such as transportation, utilities and energy.
NASDAQ (U.S.): The NASDAQ is a major U.S.
MSCI Global Property Fund Index: Measures stock exchange known for its electronic trading
the performance of publicly traded real estate platform and focus on technology and growth-
investment funds globally. It includes a diverse oriented companies. It hosts the NASDAQ-100 Index,
range of property funds that invest in various which includes 100 of the largest non-financial
types of real estate assets, such as commercial, companies listed on the exchange, making it a
residential, industrial and retail properties. The index key indicator of the tech sector’s performance.
provides investors with a comprehensive view of
the global property fund market, offering insights NCREIF Property Index—ODCE: The NCREIF
into the performance and trends of real estate Open-End Diversified Core Equity (ODCE) Index is a
investments across different regions and sectors. benchmark that tracks the performance of open-end
core real estate funds. It focuses on diversified, income-
MSCI India Index: Measures the performance producing properties in the United States, providing
of large- and mid-cap segments in India, covering insights into the core real estate market’s performance.
approximately 85% of the Indian equity market.
NCREIF Timberland Property Index: The NCREIF
MSCI Korea Index: Measures the performance Timberland Index is a quarterly time series composite
of large- and mid-cap segments in South Korea, return measure of investment performance of a large
covering about 85% of the Korean equity market. pool of individual U.S. timber properties acquired in
the private market for investment purposes only.

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DEFINITIONS AND DISCLOSURES

Personal Consumption Expenditures Index TAIEX Index: The Taiwan Stock Exchange (TWSE), or
(PCE): A comprehensive measure of the prices TAIEX, Index is capitalization-weighted index of all listed
paid for goods and services by U.S. residents or common shares traded on the Taiwan Stock Exchange.
on their behalf. It effectively captures inflation or The index has a base value of 100 based on its 1966
deflation across a broad spectrum of consumer level. The index is also known as the TSEC Index.
expenses and reflects shifts in consumer behavior.
U.S. 10-Year Treasury Yield: The interest rate
Purchasing Managers’ Index: PMI Surveys paid by the U.S. government on its 10-year Treasury
track sentiment among purchasing managers note. It serves as a key benchmark for other
at manufacturing, construction and/or services interest rates and reflects investor sentiment
firms. An overall sentiment index is generally about future economic conditions and inflation.
calculated from the results of queries on production,
U.S. Labor Productivity Index: Measures the
orders, inventories, employment, prices, etc.
efficiency of labor in the U.S. nonfarm business
Sensex Index: The S&P BSE Sensex Index is a sector by calculating real output per hour worked.
capitalization-weighted stock market index that This index reflects how effectively labor inputs are
tracks the performance of 30 well-established and converted into economic output, serving as a key
financially sound companies listed on the Bombay indicator of productivity and economic performance.
Stock Exchange (BSE) in India. It is one of the
oldest and most widely followed equity indices in
India, serving as a barometer for the Indian stock
market and the economy. Sensex has a base date
and value of 100 in 1978–1979. The Index shifted
to free-float methodology since 09/01/03.

S&P 500®: Widely regarded as the premier gauge

of the U.S. equities market, this index includes 500
leading companies across major industries, focusing
on the large-cap segment. It represents approximately
80% of the total market capitalization, making it a
key indicator of overall market performance.

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DEFINITIONS AND DISCLOSURES

but are not limited to, risk of adverse or unanticipated

Important market developments, issuer credit quality risk, risk

of lack of uniform standard pricing, risk of adverse events
involving any underlying reference obligations, risk of high

Information volatility, risk of illiquidity/little to no secondary market,

and conflicts of interest. Before investing in a structured
product, investors should review the accompanying
offering document, prospectus or prospectus supplement
Key Risks to understand the actual terms and key risks associated
with the each individual structured product. Any payments
Outlooks and past performance are no guarantee of future on a structured product are subject to the credit risk of the
results. It is not possible to invest directly in an index. issuer and/or guarantor. Investors may lose their entire
Please refer to “Definition of Indices and Terms” for investment, i.e., incur an unlimited loss. The risks listed
important information. All companies referenced are shown above are not complete. For a more comprehensive list of
for illustrative purposes only, and are not intended as a the risks involved with this particular product, please speak
recommendation or endorsement by J.P. Morgan in to your J.P. Morgan representative. If you are in any doubt
this context. about the risks involved in the product, you may clarify with
the intermediary or seek independent professional advice.
All market and economic data as of October 2024 and
sourced from Bloomberg Finance L.P. and FactSet unless Past performance is no guarantee of future results.
otherwise stated. It is not possible to invest directly in an index.

For illustrative purposes only. Estimates, forecasts and Investments in emerging markets may not be suitable for
comparisons are as of the dates stated in the material. all investors. Emerging markets involve a greater degree
of risk and increased volatility. Changes in currency
High Yield Bonds—High Yield Bonds (with ratings at or exchange rates and differences in accounting and taxation
below BB+/Ba1) carry higher risk since they are rated policies outside the U.S. can raise or lower returns.
below investment grade, or could be unrated, which Some overseas markets may not be as politically and
implies a higher risk of Issuer default. Further, the economically stable as the United States and other nations.
risk of rating downgrades is higher for High Yield Investments in emerging markets can be more volatile.
Bonds in comparison to investment grade bonds.
Investments in commodities may have greater volatility
Investing in alternative assets involves higher risks than than investments in traditional securities. The value
traditional investments and is suitable only for sophisticated of commodities may be affected by changes in overall
investors. Alternative investments involve greater risks market movements, commodity index volatility, changes
than traditional investments and should not be deemed in interest rates, or factors affecting a particular industry
a complete investment program. They are generally not or commodity, such as drought, floods, weather, livestock
tax-efficient, and an investor should consult with his/her disease, embargoes, tariffs and international economic,
tax advisor prior to investing. Alternative investments have political and regulatory developments. Investing in
higher fees than traditional investments and they may also commodities creates an opportunity for increased return
be highly leveraged and engage in speculative investment but, at the same time, creates the possibility for greater loss.
techniques, which can magnify the potential for investment
loss or gain. The value of the investment may fall as well as Not all option strategies are suitable for all investors.
rise and investors may get back less than they invested. Certain strategies may expose investors to significant
potential risks and losses. Investors are urged to
Structured product involves derivatives. Do not invest in it carefully consider whether options or option-related
unless you fully understand and are willing to assume products or strategies are suitable for their needs.
the risks associated with it. The most common risks include,

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DEFINITIONS AND DISCLOSURES

General Risks & Considerations be regarded as an offer, solicitation, recommendation or

advice (whether financial, accounting, legal, tax or other)
Any views, strategies or products discussed in this material given by J.P. Morgan and/or its officers or employees,
may not be appropriate for all individuals and are subject irrespective of whether or not such communication was
to risks. Investors may get back less than they invested, given at your request. J.P. Morgan and its affiliates and
and past performance is not a reliable indicator of future employees do not provide tax, legal or accounting advice.
results. Asset allocation/diversification does not guarantee You should consult your own tax, legal and accounting
a profit or protect against loss. Nothing in this material advisors before engaging in any financial transactions.
should be relied upon in isolation for the purpose of making
an investment decision. You are urged to consider carefully IMPORTANT INFORMATION ABOUT
whether the services, products, asset classes (e.g., equities, YOUR INVESTMENTS AND POTENTIAL
fixed income, alternative investments, commodities, etc.) CONFLICTS OF INTEREST
or strategies discussed are suitable to your needs. You must
also consider the objectives, risks, charges, and expenses Conflicts of interest will arise whenever JPMorgan Chase
associated with an investment service, product or strategy Bank, N.A. or any of its affiliates (together, “J.P. Morgan”)
prior to making an investment decision. For this and more have an actual or perceived economic or other incentive in
complete information, including discussion of your goals/ its management of our clients’ portfolios to act in a way that
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Certain information contained in this material is believed account or hedge fund issued or managed by JPMorgan Chase
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its accuracy, reliability or completeness, or accept any Management Inc.; (2) when a J.P. Morgan entity obtains
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arising out of the use of all or any part of this material. No from an affiliate; (3) when J.P. Morgan receives payment
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update any information in this material in the event that
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or in other contexts, and this material should not be this pool of strategies, our portfolio construction
regarded as a research report. Any projected results and teams select those strategies we believe fit our asset
risks are based solely on hypothetical examples cited, and allocation goals and forward-looking views in order
actual results and risks will vary depending on specific to meet the portfolio’s investment objective.
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considered as guarantees or predictions of future events. As a general matter, we prefer J.P. Morgan managed
strategies. We expect the proportion of J.P. Morgan
Nothing in this document shall be construed as giving managed strategies will be high (in fact, up to 100
rise to any duty of care owed to, or advisory relationship percent) in strategies such as, for example, cash
with, you or any third party. Nothing in this document shall and high-quality fixed income, subject to applicable
law and any account-specific considerations.

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DEFINITIONS AND DISCLOSURES

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
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than cash and liquidity products) in certain portfolios.

The Six Circles Funds are U.S.-registered mutual

funds managed by J.P. Morgan and sub-advised
by third parties. Although considered internally
managed strategies, JPMC does not retain a fee
for fund management or other fund services.

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Information

J.P. Morgan Wealth Management is a business of JPMorgan

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GLOBAL PERSPECTIVES

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