jpmorgan - valuenotes investor confidence index wave vii, march 2010

J.P. Morgan Asset Management – ValueNotes Investment Confidence Survey – March 15th to March 29th, 2011

J.P. Morgan Asset Management – ValueNotes

Investment Confidence Index – Wave VII, March 2011

…India‟s only Investor and Advisor focused sentiment indicator

J.P. Morgan Asset Management Standard Template 2009.ppt


1

J.P. Morgan Asset Management – ValueNotes Investment Confidence Index

Background

Introduction to the indices

Survey methodology

Respondent profile

Investor and advisor confidence – Key findings

Investment activity – Retail investors and corporate treasuries

Other sentiment influencers



Background

The inaugural Investor Confidence Index was launched in the UK in the early 1990s

Subsequently launched in Germany, France and other European countries

In Asia, similar Investor Confidence Indices launched by the firm in Hong Kong, Japan and Taiwan

The Hong Kong Investor Confidence Index has just completed its 18th wave (4Q 2010) and continues to evoke

much interest

The J.P. Morgan Asset Management – ValueNotes Investment Confidence Index (ICI) was launched in India in

July 2009

2



J.P. Morgan Asset Management – ValueNotes

Investment Confidence Index

The definitive indicator of investment confidence levels across key investment centers

Focused on three important investor segments: retail investors, corporates and the advisor community

(distributors)

Key objectives

– To quantify confidence in the investment environment

– To study investment behavior and sentiment over time based on key factors

– To evaluate trends in such behavior

– To study short-term and long-term changes in investment outlook

3



Quarterly indices tracking sentiment across the investment community

Investment Confidence Index: A composite index reflecting the combined sentiment of retail investors,

corporates and distributors

Retail Investor Confidence Index: Based on a survey of retail investors across India

Corporate Investor Confidence Index: Based on a survey of corporate treasuries across India

Advisor Confidence Index: Based on a survey of distributors of financial products

– Banks, National/Regional Distributors (N/RDs) and Independent Financial Advisors (IFAs)

4



5

Survey Methodology: face to face, online and telephonic interviews

Screener questions capture respondent profile

Six „index‟ questions - capture respondents‟ confidence, over the next six

months

1) Improvement in the Indian economic situation

2) Improvement in the general Investment market environment and atmosphere

3) Improvement in the global economic situation

4) Increase in the BSE Sensex

5) Appreciation in personal/clients‟ investment portfolio

6) Increase in personal/clients‟ investments

Other sentiment drivers

Delhi

Ahmedabad

MumbaiPune

Kolkata

ChennaiBengaluru

Hyderabad



6

Index Construction Methodology

Each Index question assigned a point between 0 and 200

All six Index questions carry equal weight

Investment Confidence Index equally weights retail, corporate and advisor indices

Advisor Confidence Index equally weights the Bank Confidence Index, N/RD Confidence Index and the IFA

Confidence Index

Indices constructed in a similar manner from the six “Index” questions posed to all

0 50 100 150 200

Extremely LikelySomewhat LikelyMore or Less the Same as CurrentSomewhat UnlikelyExtremely Unlikely



7

Respondent Sample – Wave VII, March 2011

84.9% of retail investors invested in stocks and/or mutual funds over the last 12 months

City Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

Retail 12% 14% 12% 12% 12% 13% 12% 13%

IFAs 14% 13% 12% 12% 12% 12% 13% 12%

Corporate 24% 36% 10% 4% 10% 12% 2% 2%

Wallet Size

(INR)2 to 5 lakhs 5 to 10 lakhs 10 to 25 lakhs 25 to 50 lakhs 50 lakhs +

Retail 27% 32% 22% 11% 8%

Treasury size

(INR)

10 lakhs to 1

crore

1 crore to 50

crores

50 to 150

crores

150 to 500

crores500 crores +

Corporate 10% 12% 10% 12% 56%

Category Retail CorporateIFAs

(Advisors)

Banks

(Advisors)

NRDs

(Advisors)

Number of respondents 1,630 50 244 20 20


8

Investor and Advisor Confidence, Wave VII, March 2011

- Key Findings



9

Investment Confidence Index (ICI) slumps to an all-time low

Investment Confidence Index

Investment Confidence Index stands at 132.3 in March 2011, down 14 points from last quarter

Touches lowest level since inception in July 2009


132.3

146.3

145.4

140.4

141.2

146.4

135.9

0 50 100 150 200

Mar 2011

Dec 2010

Sep 2010

Jun 2010

Feb 2010

Sep 2009

Jul 2009



10

India Inc. turns cautious

Confidence dips across all investor categories; retail investor takes the biggest beating of 17.5 points

Retail vs. Corporate vs. Advisors

Extremely LikelySomewhat LikelyMore or Less the Same as CurrentSomewhat Unlikely

131.5

123.5

142.0

147.2

132.2

159.5

144.1

131.8

160.1

135.4

134.0

151.7

145.9

130.7

147.1

151.7

142.5

145.1

136.0

133.5

138.3

50 100 150 200

Advisor

Corporate

RetailJul 2009

Sep 2009

Feb 2010

Jun 2010

Sep 2010

Dec 2010

Mar 2011

Neutral

Corporate confidence lowest in March 2011



11

Advisors gung-ho on clients’ increasing investments

Retail investors (146) seem more optimistic than corporates (130) and advisors (129) about the Indian economy

Corporate investors (107) and advisors (110) don‟t expect an improvement in the global economic environment


157

138

132

110

123

129

136

135

117

107

116

130

144

142

141

133

142

149

50 100 150 200

Change in amount

of investments

Appreciation in

investment portfolio

Increase in BSE Sensex

Improvement in global

economic environment

Improvement in investment market

environment and atmosphere

Improvement in Indian

economic situation

Retail

Corporate

Advisor

Neutral



12

Confidence plunges across all categories of advisors

IFAs vs. Banks vs. N/RDs

N/RDs hit an all-time low with a confidence level of 125.8 points, fall 21.4 points


125.8

129.6

139.0

147.2

147.5

146.9

140.4

135.0

156.9

126.9

139.6

139.7

142.5

149.6

147.2

157.5

150.2

135.0

137.9

145.7

134.9

0 50 100 150 200

N/RDs

Banks

IFA

Jul 2009

Sep 2009

Feb 2010

Jun 2010

Sep 2010

Dec 2010

Mar 2011

Neutral



13

Advisors still hopeful that clients will increase investments

N/RDs (165) and IFAs (164) expect higher client inflows than Banks (143)


126

165

135

123

100

113

120

130

143

138

135

115

118

130

139

164

142

137

116

138

137

50 100 150 200

Advisor Confidence Index

Change in amount

of investments

Appreciation in

investment portfolio

Increase in BSE Sensex

Improvement in global

economic environment


environment and atmosphere

Improvement in Indian economic situation

IFA

Banks

N/RDs



14

Corporate confidence from the Retail & Hospitality sector slumps

Confidence among corporates in the manufacturing sector on the rise (130) while among the retail investors it

slips 10 points this quarter

Corporate confidence from the BFSI and Services sectors has been on the decline since June „10

152 155150

159 159 163

149156

139 143149

140 137 137145145

132

159

147

161 162 161 161163 163 159 160 161

80

120

160

200

IT/BPO/Outsourcing Realty & Infrastructure Manufacturing Retail & Hospitality Medical/BioTech. BFSI Services

Retail (Jun 2010) Retail (Sep 2010)Retail (Dec 2010) Retail (Mar 2011)

Retail confidence (Jun 2010) -152 Retail confidence (Sep 2010) -160

Retail confidence (Dec 2010) -160 Retail confidence (Mar 2011) - 142

114

153

128136

122

142 146 146

127

154 157

126138 135

122117108

130

96

142

120 119127 123

150 149138

167

80

120

160

200

IT/BPO/Outsourcing Realty & Infrastructure Manufacturing Retail & Hospitality Medical/BioTech. BFSI Services

Corporate (Jun 2010) Corporate (Sep 2010)Corporate (Dec 2010) Corporate (Mar 2011)

Corporate confidence (Jun 2010) -134 Corporate confidence (Sep 2010) -132

Corporate confidence (Dec 2010) -132 Corporate confidence (Mar 2011) -124



15

Confidence falls in all cities; IFAs from Chennai and Hyderabad only

exceptions

Chennai investors (152) and IFAs (159) most confident

Retail confidence in Pune takes the biggest plunge of 40 points in March 2011, keeping the investors wary

156149

159151 156 152

163 168165

149162

147 152151

130 133

152 147136 135

150153159

147 144

129

177163

169165176

160

80

120

160

200

Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

Retail (Jun 2010) Retail (Sep 2010)Retail (Dec 2010) Retail (Mar 2011)

Retail Confidence (Jun 2010) -152 Retail Confidence (Sep 2010) -160

Retail Confidence (Dec 2010) -160 Retail Confidence (Mar 2011) - 142

143 142 138150

156150

166158 157 156

162159 154

139146

152 152

126

146145 146

130

150

131 137 139133136

144 146135 134

80

120

160

200

Delhi / NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

IFA (Jun 2010) IFA (Sep 2010)IFA (Dec 2010) IFA (Mar 2011)

IFA Confidence (Jun 2010) - 134 IFA confidence (Sep 2010) - 139

IFA Confidence (Dec 2010) -132 IFA confidence (Mar 2011) - 124



16

Uncertainty looms large among older investors

Investors aged 60 to 65 record lowest confidence ever (124) while investors aged 55 to 60 years see the

sharpest decline of 26 points over December 2010

Middle aged investors (40 – 45 years) are most confident at 149 points

153

157

142

138

154

159

147

154

141

156

160

132

158159

162159

161 160 161

155155

161 164 160

157

153

157

151

140

140

143143

149

136

125 124

120

130

140

150

160

170

Age 22 to 25 Age 25 to 30 Age 30 to 35 Age 35 to 40 Age 40 to 45 Age 45 to 50 Age 50 to 55 Age 55 to 60 Age 60 to 65

Jun 2010 Sep 2010 Dec 2010 Mar 2011Retail Confidence (Jun 2010) - 152

Retail Confidence (Dec 2010) -160

Retail Confidence (Sep 2010) - 160

Retail Confidence (Mar 2011) - 142



17

Wallet-size does not appear to influence confidence

Retail investors of all wallet sizes continue to exhibit similar confidence levels ranging between 138 and 144

after sentiment drops from December 2010 levels for all

Smaller Investors (INR 2 to 5 lakhs) slump the most and to the lowest to stand at 138 points

154 152 151148

153

159 160 161 162 161158 160 159

162 162

138

142 144 144146

100

120

140

160

180

INR 2 to 5 lakhs INR 5 to 10 lakhs INR 10 to 25 lakhs INR 25 to 50 lakhs INR 50 lakhs and above

Jun 2010 Sep 2010

Dec 2010 Mar 2011

Retail Confidence (Jun 2010) - 152

Retail Confidence (Dec 2010) -160

Retail Confidence (Sep 2010) -160

Retail Confidence (Mar 2011) - 142



18

Fewer investors expect both – more income and additional investments

Investors this quarter are less confident about their income increasing as well as increase in their investments

(58%), down by 11 percentage points as compared to December 2010

64% 74% 69% 58%

8% 7% 10% 10%

1%1% 0%

1%

10%8% 11% 15%

9% 7% 7% 11%

1%1% 0%

1%

3%

1% 1%3%

2%1% 1%

2%

2%0% 1%

1%

0

1

2

4

0 1 2 4

Jun 2010

Sep 2010

Dec 2010

Mar 2011

Increase

Same

DecreaseInc

rea

se

/ D

ec

rea

se

in

am

ou

nt

of

inv

es

tme

nts

Unlikely to increase Remain the same Likely to increase

Increase / Decrease in personal income



19

Investment activity across key instruments slides further

Instruments with most activity such as savings account, insurance, stocks and gold witness a significant drop

this quarter compared to June 2010 levels

Time deposits (36%) and mutual funds (48%) take a beating of 18 and 27 percentage points, respectively

Retail investment activity in the past 12 months

97%

65%

83%

45%50%

6%

92%

52%

69%

35% 36%

5%

95%

54% 56%

35% 36%

7%

86%

36%

56%

21%26%

8%

0%

20%

40%

60%

80%

100%

Savings account Time deposit Insurance and Retirement

products

Property Gold and other bullion Foreign currencies

Jun 2010 Sep 2010Dec 2010 Mar 2011

75% 75%

24%13%

5%12%

3%

76%

60%

18% 12%3%

18%

1%

68% 66%

23%13%

4%12%

2%

59%48%

18% 15%2%

13%1%

0%

20%

40%

60%

80%

100%

Stocks Mutual Funds Bonds Certificate of

deposits

Warrants Derivatives* Others

* Other stock market derivative products (e.g. futures, options)



20

Investor strategy – Currently conservative, aggressive in the future

Current investment strategy for most retail investors is to preserve capital (39%) and to maintain a cautious

outlook towards their investments (29%)

Investors expected to turn more aggressive (57%) with their investment strategies in the next six months

Current investment strategy

14%

43%

34%

8% 1%

Extremely aggressive

Somewhat aggressive

No change

Somewhat conservative

Extremely conservative

15%

39%

29%

17%

Risk Averse

Preserve Capital

Cautious

Investments

Willing to take risks

Investment strategy in coming 6 months



21

Corporate activity in Term deposits witnesses a steady increase

Corporate investment activity in the past 12 months

Investment activity in debt mutual funds shows a marginal increase (2 percentage points) after its slide in

September and December 2010

Investment activity in bonds (48%) drops 11 percentage points after a spike in the last quarter

* Other stock market derivative products (e.g. futures, options)

60%

31% 35%

100%

29% 35%

56%

30% 32%

94%

24% 26%

67%

43% 47%

90%

37%45%

74%

32%44%

92%

38%46%

0%

20%

40%

60%

80%

100%

Term deposits Inter-corporate deposits Commercial Papers Debt Mutual Funds Equity Mutual Funds Stocks

Jun 2010 Sep 2010Dec 2010 Mar 2011

35% 37%

8%15%

10%0%

30% 28%

8% 6%4%

8%

59%

45%

24%25%

14%0%

48%

38%

16%10% 6%

2%0%

20%

40%

60%

80%

100%

Bonds Certificate of deposits Warrants Derivatives* Structured products Others



22

MMFs find favour with treasuries again

Corporate investments in debt mutual funds in the past 12 months

Fixed Maturity Plans (60%) down 9 percentage points this quarter after a steady increase in the previous 9

months

Money Market Funds (86%) bounce back this quarter to become the most preferred Debt mutual fund among

corporate treasuries

33%

87%

31% 33%

13% 12%

32%

88%

54%

34%

20%

12%

35%

67% 69%

39%

25%

0%

46%

86%

60%

40%

32%

0%0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bond funds Money Market

Funds

Fixed Maturity

Plans

Floating Rate

Debt Funds

GILT funds Others

Jun 2010 Sep 2010 Dec 2010 Mar 2011



23

Majority advisors think long term is ‘3 – 5 years’

Long term investments for corporates is a shorter time span compared to advisors and retail investors; 28%

interpret 2 – 3 years and 24% interpret 1 – 2 years

Advisors (65%) and retail investors (32%) interpret long term investment period to be between 3 and 5 years

2%

13%

28%

32%

17%

4%3%

6%

24%

28%

24%

14%

2% 2%0%1%

12%

65%

18%

4%

0%0%

10%

20%

30%

40%

50%

60%

70%

Less than 1 year 1 year – 2 years 2 years – 3 years 3 years – 5 years 5 years – 10 years Over 10 years Cant Say

Retail Corporate Advisor



24

Financial community unanimous on expected ROI from equity funds

A majority of advisors and corporates (50% each) expect an annual return of 10 – 15% from equity funds with

an investment horizon of more than three years

A sizeable percentage of retail investors (31%) are conservative expecting a return of 5 – 10%

8%

31%35%

16%

7%

3%2%

6%

50%

18%

4%

20%

0%

2%

50%

37%

11%

0%0%

10%

20%

30%

40%

50%

60%

70%

0 - 5% 5 - 10% 10 - 15% 15 - 20% Above 20% Cant Say



25

Other sentiment drivers

- Sensex, economic signals, union budget, expectations on income



26

Sensex to hover between 19,000 – 20,000 in Sep’ 2011

Retail investors (28%) and advisors (42%) suggest that the Sensex will trade marginally higher between 19,000

– 20,000 in September 2011

Advisors (37%) and retail investors (26%) were highly optimistic about the Sensex levels in March 2011

suggesting it will trade between 20,000 – 21,000 while it traded between 17,800 – 19,200

Advisors more confident of BSE Sensex trading at higher levels in September 2011

Retail investors and advisors optimistic of BSE Sensex levels in March 2011

2%3% 4%

21% 26% 24%

8%3% 5% 1%

0%1%2% 4%

6%

23%

37%

17%

6%1% 2% 0% 0% 0%

-5%

5%

15%

25%

35%

16,000-

17,000

17,000-

18,000

18,000-

19,000

19,000-

20,000

20,000-

21,000

21,000-

22,000

22,000-

23,000

23,000-

24,000

24,000-

25,000

25,000-

26,000

26,000-

27,000

27,000&

Above

Retail AdvisorBSE Sensex

during the

Survey

BSE

Sensex in

Sep 2010

3% 2% 4%9%

15%

28%

16% 10%4%

2% 2%

0%0% 3% 0%8%

19%

42%

22%

3%0% 0% 0%

0%

-5%

5%

15%

25%

35%

45%

14,000-

15,000

15,000-

16,000

16,000-

17,000

17,000-

18,000

18,000-

19,000

19,000-

20,000

20,000-

21,000

21,000-

22,000

22,000-

23,000

23,000-

24,000

24,000-

25,000

25,000-

26,000

Retail AdvisorBSE Sensex

during the

Survey



27

GDP Growth a catalyst to the Indian economy

Corporates (46%) most positive on GDP growth compared to retail investors (25%) and advisors (26%)

Corporates (22%) consider increase in Industrial output as the second-most positive indicator while their outlook on corporate profitability is the lowest (4%) among the three categories

15%

25%

19%

13% 13%

5%

9%

1%4%

46%

12%

8%

2%4%

22%

2%

24%26%

21%

6%4% 3%

10%7%

0%

10%

20%

30%

40%

50%

60%

Resurgence in

corporate profits

GDP growth

meeting/exceeding

expectations

RBI‟s continued

monetary

measures

Government's fiscal

measures

Increase in

employment

opportunities

Increased credit

offtake from the

private sector

Increase in

Industrial output /

Exports

Others

Retail Corporate Advisors



28

GDP growth remains the most +ve indicator through the year

RBI‟s monetary measures (21%) sees a revival among advisors after a gradual decline in the previous nine

months

December 2010

September 2010

March 2011

June 2010

15%

25%19%

4%

46%

12%

24% 26%21%

0%

20%

40%

60%

Resurgence in

corporate profits

GDP growth

meeting/exceeding

expectations

RBI‟s continued

monetary measures

25%16% 13%14%

34%

16%11%

37%

7%

0%

20%

40%

60%

Resurgence in

corporate profits

GDP growth

meeting/exceeding

expectations

RBI‟s continued

monetary measures

19% 20% 17%12%

53%

6%14%

49%

6%

0%

20%

40%

60%

Resurgence in

corporate profits

GDP growth

meeting/exceeding

expectations

RBI‟s continued

monetary measures

Retail

Corporate

Advisors

15%25% 29%

13%

46%

8%17%

41%

9%

0%

20%

40%

60%

Resurgence in

corporate profits

GDP growth

meeting/exceeding

expectations

RBI‟s continued

monetary measures

Retail

Corporate

Advisors



29

Inflation woes continue to grip corporates and advisors

A substantial percentage of corporates (70%) and advisors (60%) are wary of inflation this quarter

Retail investors cite both inflation (26%) and corruption (22%) as a cause of concern

26%

16%

8%

22%

5%

17%

6%

1%

70%

6%

0%

12%8%

4%0% 0%

60%

5%0%

22%

4%8%

1% 1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Inflation Impact of changing

climate globally

Increased

protectionism in

developed

economies

Corruption Middle East

political crisis

High govt

borrowings / high

fiscal deficit

General downward

trend in the stock

market

Others

Retail Corporate Advisors



30

Financial community anxious about inflation

Fear of global economic and political factors affecting the growth of the Indian economy has subdued over the

year among the financial community

December 2010

September 2010June 2010

March 2011

5%

26% 22%

8%

70%

12%4%

60%

22%

0%

20%

40%

60%

80%

Middle East political

crisis

Inflation Corruption

13%19% 19%

8%

63%

8%

28%

48%

16%

0%

20%

40%

60%

80%

Fear of global economic

instability

Inflation Corruption

Retail

Corporate

Advisors

26% 26%16%

30% 30%

8%

36% 40%

14%

0%

20%

40%

60%

80%

Fear of resurgence of

US / global recession

Inflation High govt borrowings /

high fiscal deficit

7%

35%

20%15%

48%

6%

29%40%

7%

0%

20%

40%

60%

80%

Impact of Eurozone

Debt crisis

Inflation High govt borrowings /

high fiscal deficit

Retail

Corporate

Advisors



31

Union Budget FY 2011-12 satisfactory – India Inc.

2% 4% 3%

8%

16%

7%

34%

42%

54%

47%

38% 34%

9%0% 1%

0%

20%

40%

60%

80%

100%


Very Satisfied

Satisfied

Neutral

Dissatisfied

Very Dissatisfied

Retail investors (56%) most satisfied with 9% of respondents indicate they are “very satisfied” with the Union

Budget

Among corporates and advisors a higher percentage, 42% and 54% respectively, are neutral



32

Retail investors happy about paying lesser tax

1%4%

10%

17%20%21%

26%

18%

38%

12%

4%

12%10%

6% 7%

21%18%

11%

26%

7%10%

0%

20%

40%

60%

Tax exemption limit

raised

Extension of Tax

saving infrastructure

bonds

Reduction in

corporate tax

surcharge

Increase in the

number of services

falling under service

tax

Five Fold Strategy

against black money

Central excise duty

and service tax

remain unchanged

Others


Advisors (26%) are joyous about the reduction in corporate tax surcharge while corporates (38%) feel that the

unaltered central excise duty and service tax is the most important.

A reasonable percentage of retail investors (10%), corporates (12%) and advisors (18%) suggest that the Five

fold strategy against black money is an important part of the union budget



33

Corporates expect to ride higher on profits

A significant 42% of the corporates believe that their profits (NPAT) are 'extremely likely' to increase

Retail investors‟ expectation (75%) of a surging income remains high despite falling 6% points over Dec 2010

Retail Investor increase in personal income Corporate treasuries in profits (NPAT)

1% 0% 0% 0% 0% 0% 0% 0%2% 1% 1% 2% 4% 4% 0% 2%

19%15% 17%

23%

13%

20%

16%

22%

46%

46%49%

53%

50%40%

71%

34%

31%37% 32%

22%

33% 36%

14%

42%

0%

20%

40%

60%

80%

100%

Retail (Jun

2010)

Retail (Sep

2010)

Retail (Dec

2010)

Retail (Mar

2011)

Corporate (Jun

2010)

Corporate

(Sep 2010)

Corporate

(Dec 2010)

Corporate (Mar

2011)

Extremely likely

Somewhat likely

More or less

the same

Somewhat

unlikely

Extremely unlikely


34

Key investment influencers

- International markets, information sources, expected retirement age, advisory

services, capital investments



35

Advisors recommend China; retail investors opt for Asia and USA

51% retail investors and 43% advisors show an interest in investing in international markets

Of the 43% advisors, 35% would recommend their clients to invest in China while only 18% of retails investors

of the 51% think alike. Retail investors look at Asia (28%) and USA (26%) as a preferred international

investment destination

26%

17%

11%

28%

18%

12%

0%

29%

13%

6%

15%

35%

22%

4%

0%

10%

20%

30%

40%

50%

USA Europe Japan Asia Mainland China Emerging markets Others

Retail Advisors



36

Banks and IFAs recommend China; N/RDs prefer USA

44% IFAs, 30% Banks and 55% N/RDs will recommend investors investing in markets other than India

Of the 55% of N/RDs, 44% select USA as their favoured international market followed by China (33%)

10%

6%

23%

28%26%

4%7%

0%

21%

43%

7%

0%

22%

11%

0%

33% 33%

11%

20% 21%

44%

0%

10%

20%

30%

40%

50%

60%

USA Europe Japan Asia Mainland China Emerging markets Others

IFA Banks N/RDs



37

Personal network preferred over broker services

Broker services (18%), which was the most sought after source of information till December 2010, slipped 9

percentage points this wave

Knowledge based sources get an impetus with personal research and news & financial media witnessing an

increase of 5 percentage points each in the current quarter

27%

21%

8%

12%

4%

18%

10%

15%

8%

27%

16%

8%6%

11%

8%

18% 18%

5%

11% 10%

13%

28%

12%

5%

8%

24% 24%25%

0%

5%

10%

15%

20%

25%

30%

Broker services Financial advisor Bank relationship

manager

News & financial

media

Online resources Personal network Personal research

Jun 2010 Sep 2010 Dec 2010 Mar 2011



38

Investors cite 55-60 years as the retirement age

36% and 35% of retail investors expect to retire between 55 to 60 years and 60 to 65 years, respectively

8% each of investors expect to retire between 50 to 55 years and 65 to 70 years of age

0% 3%8%

36%

35%

8%

2%2%

6%

Below 45

Age 45 to 50

Age 50 to 55

Age 55 to 60

Age 60 to 65

Age 65 to 70

Age over 70

Already retired

Can't say



39

Corporates with INR 150 – 500 crores treasury size likely to undertake

capital investments

40% of treasuries (INR 50 - 150 crores) are definite to invest in capital intensive projects in the next 6 – 12

months

Capital investment projects expected in the next 6 – 12 months

0% 0% 0% 0% 7%

40%

17%20%

0% 7%

0%

33%

0% 33%

29%

20%

33%

40%

50%

43%

40%

17%

40%

17% 14%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

INR 10 lakhs to 1 crore INR 1 – 50 crores INR 50 – 150 crores INR 150 – 500 crores INR 500 crores and

above

Extremely likely

Somewhat likely

More or less the

same

Somewhat unlikely

Extremely unlikely


40

Thank you


41

Annexure

Indices by city – March 2011 (Wave VII)

42

March 2011

Delhi/NCR Mumbai Kolkata Chennai Bengaluru Pune Hyderabad Ahmedabad

Retail Confidence Index 151.5 130.2 133.5 151.9 147.2 136.5 135.4 150.0

Improvement in Indian economic

situation 154.2 132.9 143.5 156.7 161.6 143.2 144.8 159.2


environment and atmosphere 151.7 128.3 134.8 152.7 144.1 138.8 135.7 148.8

Improvement in global economic

environment 147.3 107.1 128.8 155.2 152.5 119.5 120.7 137.1

Increase in BSE Sensex 151.7 123.8 130.5 154.2 143.6 136.1 142.1 144.2

Appreciation in investment

portfolio153.5 139.8 130.3 143.6 143.3 139.0 134.0 153.2

Change in amount of investments 150.2 149.0 133.0 146.1 137.9 142.2 135.2 157.8

March 2011


IFA Confidence Index 145.2 145.6 130.3 150.3 131.4 137.2 139 132.8


situation 141.9 146.9 110.0 160.0 130.0 136.7 137.1 131.7




environment 125.8 123.4 96.7 131.7 105.0 116.7 106.5 120.0



portfolio150.0 148.4 153.3 145.0 125.0 138.3 145.2 131.7





Indices by city – December 2010 (Wave VI)

43

December 2010




situation 169.8 167.5 162.4 170.3 156.2 184.4 165.9 167.3




environment 161.6 165.1 147.3 158.6 144.3 181.0 158.2 140.0



portfolio166.7 162.7 140.5 158.4 144.5 181.2 151.0 164.3


December 2010


IFA Confidence Index 158.9 154.0 139.0 145.8 151.7 152.2 125.9 146.1


situation 170.3 154.8 145.7 154.7 148.3 143.5 124.1 148.6




environment 131.3 127.4 124.3 118.8 125.0 124.2 105.6 134.7



portfolio160.9 161.3 148.6 160.9 156.7 167.7 135.2 152.8




Indices by city – September 2010 (Wave V)

44

September 2010




situation 172.4 169.1 158.4 176.3 162.5 158.3 177.9 170.1




environment 143.8 136.2 148.6 165.7 151.0 127.0 166.2 161.2



portfolio152.2 165.4 147.1 159.4 150.0 155.9 151.7 165.9


September 2010




situation 148.4 160.9 143.3 176.7 160.6 153.0 145.0 169.4




environment 112.9 107.8 120.0 135.0 128.8 122.7 110.0 116.1



portfolio162.9 178.1 156.7 170.0 157.6 166.7 187.5 171.0




Indices by city – June 2010 (Wave IV)

45

June 2010




situation 156.3 155.5 161.5 165.4 143.8 149.5 157.8 165.4




environment 149.5 148.8 143.4 155.0 147.5 133.5 118.8 155.0



portfolio153.6 150.2 146.3 159 147.3 144.1 105.8 159.0


June 2010




situation 150.0 145.0 148.3 148.4 159.4 162.9 165.0 160.0




environment 106.5 113.8 96.7 106.3 142.2 143.5 135.0 141.7



portfolio151.6 147.5 155.0 151.6 148.4 135.5 130.0 138.3




Indices by city – February 2010 (Wave III)

46

February 2010




situation 154.8 165.5 137.0 176.4 151.9 158.3 136.9 169.8




environment 148.2 156.1 136.3 157.5 146.6 151.7 88.4 149.3



portfolio159.0 165.7 134.4 164.2 155.8 146.9 62.1 141.0


February 2010




situation 140.6 145.0 156.7 153.3 167.7 178.3 158.3 178.3




environment 129.7 113.8 125.0 121.7 150.0 136.7 143.3 155.0



portfolio148.4 147.5 153.3 156.7 137.1 138.3 145.0 141.7




Indices by city – September 2009 (Wave II)

47

September 2009




situation 152.0 154.7 146.4 169.7 159.2 146.8 140.9 133.4




environment 139.5 147.0 134.5 159.5 160.1 131.8 119.0 128.5



portfolio141.9 148.3 141.5 159.7 155.8 139.4 132.0 128.2


September 2009




situation 154.8 160.0 145.2 148.3 160.0 160.0 154.2 167.7




environment 127.4 134.4 133.9 126.7 143.3 145.0 158.3 162.9



portfolio162.9 163.3 154.8 156.7 145.0 158.3 125.0 159.7




Indices by city – July 2009 (Wave I)

48

July 2009




situation 144.0 149.0 149.5 166.2 131.1 154.6 102.7 137.9




environment 133.9 132.0 141.8 156.3 126.6 139.9 96.5 133.7



portfolio135.9 144.3 144.8 159.4 130.2 150.4 99.8 137.9


July 2009




situation 144.0 149.0 149.5 166.2 131.1 154.6 102.7 137.9




environment 133.9 132.0 141.8 156.3 126.6 139.9 96.5 133.7



portfolio135.9 144.3 144.8 159.4 130.2 150.4 99.8 137.9




Indices – Overall

49

Jul 2009 Sep 2009 Feb 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011

Retail 138.3 145.1 147.1 151.7 160.1 159.5 142.0

Advisor 136.0 151.7 145.9 135.4 144.1 147.2 131.5

Corporate 133.5 142.5 130.7 134.0 131.8 132.2 123.5



50

Survey Methodology

Screeners to capture respondent profile

– Retail: Gender, location, age, occupational status, sector of engagement, liquid assets, investment activity in the past year

– Corporate: Treasury size, years of treasury experience and treasury activity in the past year

– Advisors: Extent of distribution reach, location (for IFAs)

Six index questions to compute indices - respondents‟ confidence, over the next six months

– Improvement in the Indian economic situation, general Investment market environment and atmosphere, global economic situation

– BSE Sensex increasing from current levels

– Prospect of self (retail and corporate) / clients‟ (advisors) investment portfolio appreciating and

– Increase / decrease in investments (self - retail and corporate, clients‟ – advisors)

Other questions – primary source of investment information, new capital investment projects, types of financial advisory services

rendered, preferred investment destination, positive and negative economic indicators, interpretation of a „long term‟ investment,

expected percentage of annual return, likelihood of non-investment income increasing, and range BSE Sensex will trade at in

September 2011, opinion on Union Budget FY 11-12 and its most important aspect.

Interviews - face-to-face, online and telephone – with investors and advisors in Delhi / NCR,

Kolkata, Ahmedabad, Mumbai, Pune, Hyderabad, Bengaluru and Chennai

…current survey conducted between 15h March – 29th March, 2011



51

Index Construction Methodology

Each Index question assigned a point between 0 and 200

– Extremely likely - 200 points

– Somewhat likely – 150 points

– More or less the same as current – 100 points

– Somewhat unlikely – 50 points

– Extremely unlikely – 0 points

All six Index questions carry equal weight

– Sub – indices computed for each Index question, weighted by number of responses

– Average of the six sub – indices is the overall Index for the category / segment / city

The Advisor Confidence Index equally weights the Bank Confidence Index, N/RDs Confidence Index and the

IFA Confidence Index

Three indices constructed in a similar manner from the six “Index” questions posed to all

…indices at any point, can range from “0” to “200”; 200 being the highest possible confidence


52

Respondent Sample

- Retail, Corporate & Advisor



53

Eligibility

Retail

– Employees from media, advertising & marketing, PR, research and financial websites excluded

– Employees and immediate relatives of J.P. Morgan Asset Management and ValueNotes not eligible for participation

– Investment experience > 2 years

– Age >=22 and <=65

– >= INR 2 lakhs in wallet size

– Invested in stocks, mutual funds, bonds, foreign currency, certificate of deposits, warrants or derivative products in the last year

– Actively save for investments, whether regularly or once in a while

Corporate

– Treasury size > =INR 10 lakhs

– Treasury experience >= 2 years

Advisors

– Distribute financial products

– >= 2 years of experience in financial services

– N/RDs with nation – wide reach



54

Retail respondent profile

1,630 retail investors from the selected cities surveyed

Retail – By City

12%

14%

12%

12%12%

13%

12%

13%

Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad

Retail – By wallet size

27%

32%

22%

11%

8%INR 2 to 5 lakhs

INR 5 to 10 lakhs

INR 10 to 25 lakhs

INR 25 to 50 lakhs

INR 50 lakhs and

above



55

Corporate respondent profile

Treasury size represents investments excluding strategic equity holdings and hedging investments

Corporate – By City

24%

36%

10%

4%

10%

12%2%

2%Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad

Corporate – By treasury size

10%

12%

10%

12%

56%

INR 10 lakhs – 100

lakhs (INR 1 crore)

INR 1 – 50 crores

INR 50 – 150 crores

INR 150 – 500 crores

INR 500 crores and

above



56

Advisor respondent profile

Advisors include 20 banks, 20 National / Regional Distributors (N/RDs) and 244 IFAs from the selected

cities

“Advisor” sentiment equally weighted across the three categories

IFAs – By City

14%

13%

12%

12%12%

12%

13%

12%

Delhi / NCR

Mumbai

Kolkata

Chennai

Bengaluru

Pune

Hyderabad

Ahmedabad



57

Advisory services profile

Financial planning & advice (85%) is the top service offered by advisors followed by financial product advice

(75%)

3%

0%

49%

85%

75%

52%

60%

0% 20% 40% 60% 80% 100%

Others

None of the above

Portfolio management services

Financial planning & advice

Financial product advice

Capital market advice

Basic tax planning



Disclaimers / Risk Factors

Statutory details: Sponsor: JPMorgan Asset Management (Asia) Inc. Trustee: JPMorgan Mutual Fund India Private Limited, a

company incorporated under the Companies Act, 1956. Asset Management Company: JPMorgan Asset Management India

Private Limited, a company incorporated under the Companies Act, 1956. JPMorgan Mutual Fund has been established as a Trust

under the Indian Trusts Act, 1882, by JPMorgan Asset Management (Asia) Inc., liability restricted to initial contribution of Rs.1

lakh.

Risk Factors / Disclaimers: Mutual fund investments are subject to market risks. Please read the Offer Document,

Statement of Additional Information and Scheme Information Document carefully before investing.

The information contained herein is provided based on a public survey. Although we endeavour to ensure that the information is as

current and accurate as possible, errors do occasionally occur. Therefore, we cannot guarantee the accuracy and adequacy of the

information. Readers should, wherever possible, verify the information before acting on it.

This information is based on our assumptions and interpretations of the survey conducted. No part of our compensation was, is, or

will be directly or indirectly related to the specific recommendations or views expressed herein. Be aware that our assumptions and

interpretations are partially based on our observation of participants‟ past behavior. Do not base your actions on the material so

provided. These observations will change if different assumptions and interpretations are applied for the purpose of preparing this

survey report.



Research Methodology

Retail investors, corporate investors and advisors were surveyed through a combination of face-to-face interviews, online surveys (through www.valuenotes.com) and telephone interviews. The surveys were conducted in selected Indian cities -Delhi / NCR, Kolkata, Ahmedabad, Mumbai, Pune, Hyderabad, Bengaluru and Chennai. The number of responses to each question is multiplied by the respective confidence-level point and these are aggregated at each Index question level. Sub –indices are calculated for each of these six Index questions, which is the arithmetical mean of the aggregates. The arithmetical mean of the sub –indices forms the Overall Confidence Index for that respondent category. The Advisor Confidence Index gives equal weights to the Bank Confidence Index, ND Confidence Index and the IFA Confidence Index to arrive at the overall advisor sentiment. The Confidence Index, at any given point can vary between 0 and 200. 200 denotes the highest level of confidence in improvement from current conditions, 100 denotes a neutral sentiment and 0 denotes an extremely negative outlook.

Accuracy or Adequacy of Information

The information contained herein is provided based on a public survey. Although we endeavour to ensure that the information is as current and accurate as possible, errors do occasionally occur. Therefore, we cannot guarantee the accuracy and adequacy of the information. Readers should, wherever possible, verify the information before acting on it.

Interpretations and assumptions which may differ from person to person

This information is based on our assumptions and interpretations of the survey conducted. No part of our compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed herein. Be aware that our assumptions and interpretations are partially based on our observation of participants‟ past behavior. Do not base your actions on the material so provided. These observations will change if different assumptions and interpretations are applied for the purpose of preparing this survey report.

Reproduction of material is prohibited unless approval is taken

Information provided in this survey report is with the intent that it be readily available for personal and public non-commercial use and may be reproduced, in part or in whole and by any means, without charge or further permission from J. P. Morgan Asset Management. We only ask that –Users exercise due diligence in ensuring the accuracy of the materials reproduced; J. P. Morgan Asset Management be identified as the source; and, the reproduction is not represented as an official version of the materials reproduced, nor as having been made, in affiliation with or with the endorsement of J. P. Morgan Asset Management. Our Corporate logo may not be used for any purpose without explicit authorization.

Reproduction of material included in this survey report, in whole or in part, for the purposes of commercial distribution is prohibited except with written permission from J. P. Morgan Asset Management. Through the permission granting process, J. P. Morgan Asset Management helps ensure individuals/organizations wishing to reproduce materials for commercial purposes have access to the most accurate, up-to-date versions. To obtain permission to reproduce materials on this site for commercial purposes, please contact: Head –Marketing and Communications, JPMorgan Asset Management India Private Limited, Kalpataru Synergy, 3rdFloor, West Wing, Santacruz –East, Mumbai –400 055 Tel: +91 22 6783 7202

jpmorgan - valuenotes investor confidence index wave vii, march 2010

Economy & Finance

bank confidence index

nrd confidence index

india advisor confidence

investment environment

investment outlook

composite index

ifaconfidence index

key investment centers