prospectus –april 2010 jpmorgan investment funds iii to efama's... · jpmorgan investment...

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JPMorgan Investment FundsSociété d’Investissement à Capital Variable Luxembourg

Prospectus –April 2010

JPMORGAN INVESTMENT FUNDS (the “Fund”) has been authorisedunder Part I of the Luxembourg law of 20 December 2002 relatingto collective investment undertakings (“loi relative aux organismesde placement collectif”, the “Luxembourg Law”) and qualifies as anUndertaking for Collective Investments in Transferable Securities(“UCITS”) under the amended EC Directive 85/611 of 20 December,1985, and may therefore be offered for sale in European Union(“EU”) Member States (subject to registration in countries otherthan Luxembourg). In addition, applications to register the Fundmay be made in other countries.

None of the Shares have been or will be registered under theUnited States Securities Act of 1933, as amended (the “1933 Act”)or under the securities laws of any state or political subdivision ofthe United States of America or any of its territories, possessionsor other areas subject to its jurisdiction including theCommonwealth of Puerto Rico (the “United States”). The Fund hasnot been and will not be registered under the United StatesInvestment Company Act of 1940, as amended, nor under anyother US federal laws. Accordingly, except as provided for below,no Shares are being offered to US Persons or persons who are inthe United States at the time the Shares are offered or sold. Forthe purposes of this Prospectus, a US Person includes, but is notlimited to, a person (including a partnership, corporation,limited liability company or similar entity) that is a citizen or aresident of the United States of America or is organised orincorporated under the laws of the United States of America.Shares will only be offered to a US Person at the sole discretionof either the Directors or the Management Company. Certainrestrictions also apply to any subsequent transfer of Shares inthe United States or to US Persons (please see the compulsoryredemption provisions under “Minimum Subscription andHolding Amounts and Eligibility for Shares” in “The Shares –1. Subscription, Redemption and Switching of Shares” below).Should a Shareholder become a US Person, they may be subjectto US withholding taxes and tax reporting.

If you are in any doubt as to your status, you should consult yourfinancial or other professional adviser.

Shares are offered on the basis of the information contained in thisProspectus and the documents referred to therein.

The Directors, whose names are set out under “Board ofDirectors”, have taken all reasonable care to ensure that theinformation contained in this Prospectus is, to the best of theirknowledge and belief, in accordance with the facts and does notomit anything material to such information. The Directors acceptresponsibility accordingly.

Prospective investors should review this Prospectus carefully andin its entirety and consult with their legal, tax and financialadvisers in relation to (i) the legal and regulatory requirementswithin their own countries for the subscribing, purchasing, holding,switching, redeeming or disposing of Shares; (ii) any foreignexchange restrictions to which they are subject in their owncountries in relation to the subscribing, purchasing, holding,switching, redeeming or disposing of Shares; (iii) the legal, tax,financial or other consequences of subscribing for, purchasing,holding, switching, redeeming or disposing of Shares; and (iv) anyother consequences of such activities.

The distribution of this Prospectus and supplementarydocumentation and the offering of Shares may be restricted incertain jurisdictions; persons into whose possession this Prospectuscomes are required to inform themselves about and to observe anysuch restrictions. This Prospectus does not constitute an offer byanyone in any jurisdiction in which such offer is not authorised, orto any person to whom it is unlawful to make such offer.

Investors should note that not all the protections provided undertheir relevant regulatory regime may apply and there may be noright to compensation under such regulatory regime, if suchscheme exists.

The distribution of this Prospectus in certain jurisdictions mayrequire that it be translated into an appropriate language. Unlesscontrary to local law in the jurisdiction concerned, in the event ofany inconsistency or ambiguity in relation to the meaning of anyword or phrase in any translation, the English version shall alwaysprevail.

Any information or representation given or made by any personwhich is not contained herein or in any other document which maybe available for inspection by the public should be regarded asunauthorised and should accordingly not be relied upon. Neitherthe delivery of this Prospectus nor the offer, issue or sale of Sharesin the Fund shall under any circumstances constitute arepresentation that the information given in this Prospectus iscorrect as at any time subsequent to the date hereof.

Certain Shares of the Fund are or will on issue be listed on theLuxembourg Stock Exchange as described more particularly herein.

The most recent annual report and the latest semi-annual report, ifpublished thereafter, form an integral part of this Prospectus.These documents and the Simplified Prospectus(es) published bythe Fund are available at the registered office of the Fund andfrom its local sales agents listed in “Appendix I – Information forInvestors in Certain Countries”.

The Management Company or JPMorgan Chase & Co. may usetelephone recording procedures to record, inter alia, transactionorders or instructions. By giving such instructions or orders bytelephone, the counterparty to such transactions is deemed toconsent to the tape-recording of conversations between suchcounterparty and the Management Company or JPMorgan Chase &Co. and to the use of such tape recordings by the ManagementCompany and/or JPMorgan Chase & Co. in legal proceedings orotherwise at their discretion.

The Management Company shall not divulge any confidentialinformation concerning the investor unless required to do so by lawor regulation. The investor agrees that personal details contained inthe application form and arising from the business relationship withthe Management Company may be stored, modified or used in anyother way by the Management Company or JPMorgan Chase & Co.for the purpose of administering and developing the businessrelationship with the investor. To this end data may be transmittedto JPMorgan Chase & Co., financial advisers working with theManagement Company, as well as to other companies beingappointed to support the business relationship (e.g. externalprocessing centers, dispatch or paying agents).

ContentsPrincipal Features and Glossary 4

Board of Directors 8

Management and Administration 8

Investment Policies 91. Specific Investment Policy of each Sub-Fund 9 2. Securities Lending 93. Pooling 9 4. Investment Considerations 9

The Shares 111. Subscription, Redemption and Switching of Shares 11

(a) Subscription of Shares 13(b) Redemption of Shares 13(c) Switching of Shares 14

2. Listing of Shares 143. Transfer of Shares 144. Restrictions on subscriptions and switches into certain Sub-Funds 14

General Information 151. Organisation 152. Meetings 15 3. Reports and Accounts 154. Allocation of assets and liabilities among the Sub-Funds 155. Pooling 166. Determination of the Net Asset Value of Shares 167. Calculation of Bid and Offer Prices 178. Temporary Suspension of Issues, Redemptions and Switches 179. Liquidation of the Fund 1710. Merger or Liquidation of Sub-Funds 1811. Conflicts of Interest 1812. Material Contracts 1913. Documents 19

Dividend Policy 20

Management and Administration 211. Board of Directors 212. Management Company and Domiciliary Agent 213. Investment Managers 214. Custodian, Corporate and Administrative Agent 225. Commission Sharing Arrangements 226. Brokerage Arrangements 22

Management and Fund Charges 231. Explanation of the Charging Structures 232. Annual Management and Advisory Fee 233. Operating and Administrative Expenses 234. Transaction Fees 245. Extraordinary Expenses 246. Performance Fees 247. Reporting of Fees and Expenses 24

Contents 1

Taxation 251. The Fund 252. Shareholders 253. European Union Tax Considerations 254 Taxation of China A Shares 26

Appendix I – Information for Investors in Certain Countries 271. Ireland 272. Italy 273. The Netherlands 274. Spain 275. United Kingdom 28

Appendix II – Investment Restrictions and Powers 29I Financial Derivative Instruments 32II Financial Techniques and Instruments 35

Appendix III – Sub-Fund Details 361. Classes of Shares 362. Risk Management Process 373. Equity Sub-Funds 38JPMorgan Investment Funds – JF Asia ex-Japan Fund 38JPMorgan Investment Funds – Europe Recovery Fund 39JPMorgan Investment Funds – Europe Select Equity Fund 40JPMorgan Investment Funds – Europe Strategic Dividend Fund 41JPMorgan Investment Funds – Global Dividend Fund 42JPMorgan Investment Funds – Global Financials Fund 43JPMorgan Investment Funds – Global Select 130/30 Fund 44JPMorgan Investment Funds – Global Select Equity Fund 46JPMorgan Investment Funds – Highbridge Statistical Market Neutral Fund 47JPMorgan Investment Funds – Japan 50 Equity Fund 49JPMorgan Investment Funds – Japan Behavioural Finance Equity Fund 50JPMorgan Investment Funds – Japan Focus Fund 51JPMorgan Investment Funds – Japan Select Equity Fund 53JPMorgan Investment Funds – Japan Strategic Value Fund 54JPMorgan Investment Funds – US Dividend Fund 55JPMorgan Investment Funds – US Equity Fund 56JPMorgan Investment Funds – US Market Neutral Fund 57JPMorgan Investment Funds – US Select Equity Fund 59

4. Total Return Sub-Funds 60JPMorgan Investment Funds – Global Total Return Fund 60

5. Balanced Sub-Funds 62JPMorgan Investment Funds – Blue and Green Fund 62JPMorgan Investment Funds – Global Balanced Fund (EUR) 64JPMorgan Investment Funds – Global Balanced Fund (USD) 65JPMorgan Investment Funds – Global Capital Appreciation Fund 66JPMorgan Investment Funds – Global Capital Preservation Fund (EUR) 68JPMorgan Investment Funds – Global Capital Preservation Fund (USD) 70JPMorgan Investment Funds – Global Income Fund 72

6. Convertibles Sub-Funds 74JPMorgan Investment Funds – Global Convertibles Fund (USD) 74

2 Contents

7. Bond Sub-Funds 75JPMorgan Investment Funds – Emerging Markets Corporate Bond Portfolio Fund I 75JPMorgan Investment Funds – Europe Bond Fund 77JPMorgan Investment Funds – Global Bond Fund (EUR) 79JPMorgan Investment Funds – Global Bond Fund (USD) 81JPMorgan Investment Funds – Global Enhanced Bond Fund 83JPMorgan Investment Funds – Global High Yield Bond Fund 85JPMorgan Investment Funds – Income Opportunity Fund 87JPMorgan Investment Funds – US Bond Fund 89

8. Money Market Sub-Funds 91JPMorgan Investment Funds – Euro Liquid Market Fund 91

Appendix IV – Risk Factors 92

Appendix V – Calculation of Performance Fees 971. Calculation of Performance Fee by application of a High Water Mark 972. Calculation of Performance Fee by application of a Claw-Back Mechanism 98

Contents 3

Principal Features and GlossaryThe following summary is qualified in its entirety by reference to the more detailed information included elsewhere in this Prospectus.

Articles The Articles of Incorporation of the Fund as amended from time to time.

Asset backed securities (ABS) Asset Backed Securities (ABS) are securities that entitle the holder to receive payments that are primarilydependent upon the cash flow arising from a specified pool of financial assets.

Benchmark The benchmark where listed in section 4 of “Appendix III – Sub-Fund Details” for each Sub-Fund is a pointof reference against which the performance of the Sub-Fund may be measured, unless otherwise stated.The benchmark may also be a guide to market capitalisation of the targeted underlying companies, andwhere applicable this will be stated in the Sub-Fund’s Investment Policy. The degree of correlation with thebenchmark may vary from Sub-Fund to Sub-Fund, depending on factors such as the risk profile,investment objective and investment restrictions of the Sub-Fund, and the concentration of constituents inthe benchmark. Where a Sub-Fund’s benchmark is part of the investment policy, this is stated in theinvestment objective and policy of the Sub-Fund in “Appendix III – Sub-Fund Details” and the Sub-Fund willbe seeking to outperform such benchmark. Benchmarks used in the calculation of the performance feesare stated under each Sub-Fund in “Appendix III – Sub-Fund Details” and where Sub-Funds’ currencyexposure is managed with reference to a benchmark; the benchmarks are stated in “Appendix III – Sub-Fund Details”. Where “Not yet determined” appears in place of the benchmark in “Appendix III – Sub-FundDetails”, the Sub-Fund has not yet been launched.

The description “Total Return Net” is applied to a benchmark when the return is quoted net of tax ondividends, “Total Return Gross” is applied to a benchmark when the return quoted is gross of tax ondividends, and “Price Index” is applied when the return excludes dividend income.

Bid and Offer Prices Shares of each Share Class are issued at the Offer Price of such Share Class determined on the applicableValuation Day in accordance with the relevant provisions under “7. Calculation of Bid and Offer Prices”within “General Information”.

Subject to certain restrictions specified herein, Shareholders may at any time request redemptions of theirShares at the Bid Price of the relevant Share Class determined on the applicable Valuation Day inaccordance with the relevant provisions under “7. Calculation of Bid and Offer Prices” within “GeneralInformation”.

BRL Brazilian Real.

Business Day Unless otherwise specified in “Appendix III – Sub-Fund Details”, a week day other than New Year’s Day,Easter Monday, Christmas Day and the day prior to and following Christmas Day.

China A Shares and Most companies listed on Chinese stock exchanges will offer two different share classes: A shares andChina B Shares B shares. China A Shares are traded in Renminbi on the Shanghai and Shenzhen stock exchanges by

companies incorporated in mainland China and may only be purchased by Chinese domestic investors andQualified Foreign Institutional Investors. China B Shares are quoted in foreign currencies (such as the USD)on the Shanghai and Shenzhen stock exchanges and are open to both domestic and foreign investments.

CSSF Commission de Surveillance du Secteur Financier – The regulatory and supervisory authority of the Fundin Luxembourg.

Custodian The assets of the Fund are held under the custody or control of J.P. Morgan Bank Luxembourg S.A.

Dealing Basis Forward pricing (a forward price is a price calculated at the valuation point following the Fund’s deal cutoff time).

Directors The Board of Directors of the Fund (the “Board”, the “Directors” or the “Board of Directors”).

Distributor The person or entity duly appointed from time to time by the Management Company to distribute orarrange for the distribution of Shares.

Dividends Distribution of net income attributable to Share Classes of the Fund, as set out in the Prospectus under“Dividend Policy”.

Documents of the Fund The Articles, Prospectus, Simplified Prospectus(es), supplementary documents and financial reports.

4 Principal Features and Glossary

Eligible State Any EU Member State, any member state of the Organisation for Economic Co-operation and Development(“OECD”), and any other state which the Directors deem appropriate with regard to the investmentobjectives of each Sub-Fund. Eligible States in this category include countries in Africa, the Americas, Asia,Australasia and Europe.

EU Member State A member state of the European Union.

EUR/Euro The official single European currency adopted by a number of EU Member States participating in theEconomic and Monetary Union (as defined in European Union legislation).

FATF Financial Action Task Force (also referred to as Groupe d’Action Financière Internationale “GAFI”). The FATFincludes 34 members: 32 countries and jurisdictions (15 of the EU Member States; Argentina; Australia;Brazil; Canada; Hong Kong/China; Iceland; Japan; Mexico; New Zealand; Norway; Russian Federation;Singapore; South Africa; Switzerland; Turkey and the United States of America); and two internationalorganisations (the European Commission and the Gulf Co-operation Council).

Financial Year The financial year of the Fund ends on 31 December each year.

Fund The Fund is an investment company organised under Luxembourg Law as a société anonyme qualifying asa société d’investissement à capital variable (“SICAV”). The Fund comprises several Sub-Funds. Each Sub-Fund may have one or more classes of Shares. The Fund is authorised under Part I of the Luxembourg lawof 20 December 2002 relating to collective investment undertakings and qualifies as an Undertaking forCollective Investments in Transferable Securities (“UCITS”) under the amended EC Directive 85/611 of 20December 1985.

GBP United Kingdom Pounds Sterling.

Hedged Share Classes Where a Share Class is described as hedged (a “Hedged Share Class”), the intention will be to hedge thevalue of the net assets in the Reference Currency of the Sub-Fund or the currency exposure of certain (but not necessarily all) assets of the relevant Sub-Fund into either the Reference Currency of the Hedged Share Class, or into an alternative currency as specified in the relevant Share Class’ namementioned in the full list of available Share Classes which may be found on the websitewww.jpmorganassetmanagement.lu or may be obtained at the registered office of the Fund or of theManagement Company.

It is generally intended to carry out such hedging through the utilisation of various techniques, includingentering into Over The Counter (“OTC”) currency forward contracts and foreign exchange swapagreements. In cases where the underlying currency is not liquid, or where the underlying currency isclosely linked to another currency, proxy hedging may be used.

All costs and expenses incurred in affecting the hedging process will be borne on a pro rata basis by allHedged Share Classes denominated in the same currency issued within the same Sub-Fund.

Investors should be aware that any currency hedging process may not give a precise hedge. Furthermore,there is no guarantee that the hedging will be totally successful. Investors in the Hedged Share Classesmay have exposure to currencies other than the currency of the Hedged Share Class.

Historical Performance Past performance information for each Sub-Fund is contained in that Sub-Fund’s Simplified Prospectus,which is available at the registered office of the Fund.

Institutional Investor(s) An investor, within the meaning of Article 129 of the Luxembourg Law of December 2002, which currentlyincludes insurance companies, pension funds, credit establishments and other professionals in the financialsector investing either on their own behalf or on behalf of their clients who are also investors within themeaning of this definition or under discretionary management, Luxembourg and foreign collectiveinvestment schemes and qualified holding companies. Further description of an Institutional Investor canbe found under “1. Classes of Shares, a) Eligibility Requirements” in “Appendix III – Sub-Fund Details”.

Investment Manager The Management Company has delegated investment management and advisory functions for each Sub-Fund to one of the Investment Managers listed in the Management and Administration section below andas further specified in respect of each Sub-Fund in “Appendix III – Sub-Fund Details”.

ISDA The International Swaps and Derivatives Association is the global trade association representingparticipants in the privately negotiated derivatives industry.

Principal Features and Glossary 5

JPMorgan Chase & Co. The Management Company’s ultimate holding company, whose principal office is located at 270 ParkAvenue, New York, N.Y. 10017-2070, USA and that company’s direct and indirect subsidiaries and affiliatesworldwide.

JPY Japanese Yen.

Legal Structure Open-ended investment company with separate Sub-Funds incorporated in the Grand Duchy ofLuxembourg.

LIBID (London Interbank Bid Rate). The bid rate that a bank is willing to pay to attract a deposit from anotherbank in the London interbank market.

LIBOR (London Interbank Offered Rate). The rate of interest at which banks borrow funds, in marketable size,from other banks in the London interbank market.

Listing of Shares At the discretion of the Management Company, Share Classes of the Sub-Funds (excluding Class X Shares)may be listed on the Luxembourg Stock Exchange.

Management Company JPMorgan Asset Management (Europe) S.à r.l. has been designated by the Directors of the Fund asManagement Company to provide investment management, administration and marketing functions to theFund with the possibility to delegate part of such functions to third parties.

Minimum Investment The minimum investment levels for initial and subsequent investments are specified under “MinimumInitial and Subsequent Subscription Amounts, and Holding Amounts” in “Appendix III – Sub-Fund Details”below.

Mortgage-backed A security representing an interest in a pool of loans secured by mortgages. Principal and interest security (MBS) payments on the underlying mortgages are used to pay principal and interest on the security.

Net Asset Value per Share In relation to any Shares of any Share Class, the value per Share determined in accordance with therelevant provisions described under the heading “Determination of the Net Asset Value of Shares” as setout in the section “General Information”.

Reference Currency The reference currency of a Sub-Fund (or a Share Class thereof, if applicable) which, however, does notnecessarily correspond to the currency in which the Sub-Fund’s assets are invested at any point in time.Where currency is used in the name of a Sub-Fund, this merely refers to the reference currency of theSub-Fund and does not indicate a currency bias within the portfolio. Individual Share Classes may havedifferent currency denominations which denote the currency in which the Net Asset Value per Share isexpressed. These differ from Hedged Share Classes which are described above.

REITs A Real Estate Investment Trust or REIT is an entity that is dedicated to owning, and in most cases,managing real estate. This may include, but is not limited to, real estate in the residential (apartments),commercial (shopping centers, offices) and industrial (factories, warehouses) sectors. Certain REITs mayalso engage in real estate financing transactions and other real estate development activities. A closed-ended REIT which complies with the provisions of article 2 of the Grand Ducal Regulation dated 8 February2008, the units of which are listed on a Regulated Market is classified as a transferable security listed on aRegulated Market thereby qualifying as an eligible investment for a UCITS under the Luxembourg Law.However, investments in open-ended REITs and in closed-ended REITs which are not listed on a RegulatedMarket, are currently limited to 10% of the net assets of a Sub-Fund under Luxembourg Law (together withany other investments made in accordance with investment restriction “1) b)” in “Appendix II – InvestmentRestrictions and Powers”). The legal structure of a REIT, its investment restrictions and the regulatory andtaxation regimes to which it is subject will differ depending on the jurisdiction in which it is established.

Regulated Market The market defined in item 14 of Article 4 of the European Parliament and the Council Directive2004/39/EC of 21 April 2004 on markets in financial instruments, as well as any other market in an EligibleState which is regulated, operates regularly and is recognised and open to the public.

Risk Considerations As more fully described under “Appendix IV – Risk Factors”, investors should note that the value of aninvestment in the Shares may fluctuate and the value of Shares subscribed by an investor is notguaranteed.

SEK Swedish Krona.

Shares Shares of each Sub-Fund will be offered in registered form. All Shares must be fully paid for and fractionswill be issued up to 3 decimal places. Registered Shares will be issued and confirmed by means of acontract note dispatched to the investor, following the issue of the Shares. No Share certificates will beissued. Shares may also be held and transferred through accounts maintained with clearing systems.

6 Principal Features and Glossary

Share Class(es)/ Pursuant to the Articles of the Fund, the Board of Directors may decide to issue, within each Sub-Fund, Class(es) of Shares separate classes of Shares (hereinafter referred to as a “Share Class” or “Class of Shares”, as appropriate)

whose assets will be commonly invested but where a specific initial or redemption charge structure, feestructure, minimum subscription amount, currency or dividend policy may be applied. If different ShareClasses are issued within a Sub-Fund, the details of each Share Class are described in the relevant sectionof “Appendix III – Sub-Fund Details”.

Share Dealing Shares are available for subscription, switching and redemption on each Valuation Day (except New Year’sEve) for the relevant Sub-Fund or Sub-Funds, subject to the limitations and charges set out in the section“The Shares”.

Shareholder A holder of Shares.

Simplified Prospectus(es) In accordance with the requirements of the Luxembourg Law and applicable CSSF circulars, the Fundpublishes, in addition to this Prospectus, a Simplified Prospectus for each Sub-Fund which contains theinformation required by Schedule C of Annexe I to the aforesaid law. The Simplified Prospectus includesamongst others, information on the past performance of each Sub-Fund, which will be updated on anannual basis.

Switching of Shares As more fully described under “The Shares – (c) Switching of Shares” below, unless specifically indicated tothe contrary in the relevant section of “Appendix III – Sub-Fund Details”, and subject to compliance withany conditions (including any minimum subscription amount) of the Share Class into which switching is tobe effected, Shareholders may at any time request switching of their Shares into Shares of anotherexisting Share Class of that or another Sub-Fund, or to Shares of any other UCITS or other UCIs managedby a member of JPMorgan Chase & Co., on the basis of the Bid Price of the original Share Class and the netasset value of the other Share Class. A switch charge may be applicable, as more fully described under“The Shares – (c) Switching of Shares” below.

Sub-Fund A specific portfolio of assets and liabilities within the Fund having its own net asset value and representedby a separate Class or Classes of Shares, which are distinguished mainly by their specific investment policyand objective and/or by the currency in which they are denominated. The specifications of each Sub-Fundare described in the relevant section of “Appendix III – Sub-Fund Details”. The Board may, at any time,decide to create additional Sub-Funds and, in such case, “Appendix III – Sub-Fund Details” will be updated.

TBAs (To-Be-Announced) A forward contract on a generic pool of mortgage-backed securities. The specific MBS pools areannounced and allocated prior to delivery date.

UCI An Undertaking for Collective Investment.

UCITS An Undertaking for Collective Investment in Transferable Securities governed by the amended EC Directive85/611 of 20 December 1985.

USD United States Dollars.

Valuation Day The Net Asset Value per Share of each Share Class is determined on each day that is a valuation day forthat Sub-Fund. Unless otherwise specified in the relevant section of “Appendix III – Sub-Fund Details”, a“Valuation Day” is a Business Day other than a day on which any exchange or market on which asubstantial portion of the relevant Sub-Fund’s investments is traded, is closed. When dealings on any suchexchange or market are restricted or suspended, the Management Company may, in consideration ofprevailing market conditions or other relevant factors, determine whether a Business Day shall be aValuation Day or non-valuation day. Requests for issue, redemption, transfer and switching of Shares ofany Share Class are accepted by the Fund in Luxembourg on any Valuation Day of the relevant Sub-Fund.By derogation to the above, on New Year’s Eve, provided that such day is not a Saturday or Sunday, the NetAsset Value per Share of each Share Class in respect of this day shall be made available at the registeredoffice of the Fund although no deals will be processed on that day. A list of expected non-valuation days isavailable from the Management Company on request.

Value at Risk (VaR) Value at Risk (VaR) provides a measure of the potential loss that could arise over a given time intervalunder normal market conditions, and at a given confidence level.

All references herein to time are to Luxembourg time unless otherwise indicated.

Words importing the singular shall, where the context permits, include the plural and vice versa.

Principal Features and Glossary 7

8 Board of Directors, Management and Administration

Board of DirectorsChairmanIain O. S. Saunders, Banker, Duine, Ardfern, Argyll PA31 8QN, United Kingdom

Deputy ChairmanPierre Jaans, Economist, 3, rue de Kahler, L-8356 Garnich, GrandDuchy of Luxembourg

DirectorsJacques Elvinger, Partner, Elvinger, Hoss and Prussen, 2, place Winston Churchill, L-2014 Luxembourg, Grand Duchy of Luxembourg

Jean Frijns, Professor, Finance and Investments, Antigonelaan 2,NL-5631L R Eindhoven, The Netherlands

Andrea L. Hazen, Managing Director, JPMorgan Asset Management (UK) Limited, Finsbury Dials, 20 Finsbury Street, London, EC2Y 9AQ, United Kingdom

Berndt May, Managing Director, JPMorgan Asset Management(Europe) S.à r.l., Austrian Branch, Führichgasse 8, 1010 Wien, Austria.

Robert van der Meer, Professor of Finance, 9A, Lange Vijverberg,NL-2513 AC The Hague, The Netherlands

Management and Administration Management Company and Domiciliary AgentJPMorgan Asset Management (Europe) S.à r.l., European Bank andBusiness Centre, 6, route de Trèves, L-2633 Senningerberg,Grand Duchy of Luxembourg

Investment ManagersJPMorgan Asset Management (UK) Limited, having its principalplace of business at Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ, United Kingdom (authorisedand regulated by the Financial Services Authority (FSA))

J.P. Morgan Investment Management Inc.,245 Park Avenue, New York, NY 10167, United States of America

JPMorgan Asset Management (Japan) Limited, Tokyo Building, 7-3,Marunouchi 2-chome Chiyoda-ku, Tokyo 100-6432, Japan

JF Asset Management Limited, 21st floor, Chater House,8 Connaught Road, Central, Hong Kong

JPMorgan Asset Management (Singapore) Limited, 168 RobinsonRoad, 17th Floor, Capital Tower, Singapore 068912

Highbridge Capital Management, LLC, 9 West 57th Street, NewYork, NY 10019, United States of America

or such other company as the Management Company may appointas investment adviser and manager to a specific Sub-Fund andwhich is identified as such in the relevant section of the “AppendixIII – Sub-Fund Details” of this Prospectus.

Custodian, Corporate and Administrative AgentJ.P. Morgan Bank Luxembourg S.A., European Bank & BusinessCentre, 6, route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg

AuditorsPricewaterhouseCoopers S.à r.l., 400, route d’Esch, B.P. 1443, L-1014 Luxembourg, Grand Duchy of Luxembourg

Luxembourg Legal AdvisersElvinger, Hoss and Prussen, 2, place Winston Churchill, B.P. 425 Luxembourg, Grand Duchy of Luxembourg

JPMorgan Investment FundsSociété d’Investissement à Capital VariableRegistered office: 6, route de Trèves, L-2633 Senningerberg, Grand Duchy of LuxembourgR.C.S. Luxembourg B 49 663

Investment Policies 9

Investment Policies1. Specific Investment Policy of each Sub-Fund The Board of Directors has determined the investment policy andobjective of each of the Sub-Funds as described in “Appendix III –Sub-Fund Details” to this Prospectus. There can be no assurancethat the investment objective for any Sub-Fund will be attained.Pursuit of the investment policy and objective of any Sub-Fundmust be in compliance with the limits and restrictions set forth in“Appendix II – Investment Restrictions and Powers”.

2. Securities LendingEach Sub-Fund may engage in securities lending in compliancewith the limits and restrictions set forth in “Appendix II –Investment Restrictions and Powers”.

In respect of third parties, including members of JPMorgan Chase& Co., organising or structuring securities lending arrangements oracting as agents in relation to securities lending transactions, theFund may share with such third parties the revenues arising fromthe securities lending transactions as may be agreed between theFund and such third parties from time to time. The Board ofDirectors will ensure that revenues arising from securities lendingarrangements are in accordance with usual market practice andthat the Fund retains an appropriate share thereof. The netrevenues of the Fund arising from securities lending transactionsare specified in the semi-annual and annual reports published bythe Fund.

3. PoolingWhere the investment policies of the Sub-Funds (and applicable lawsand regulations) so permit, and for the purpose of effectivemanagement, the Board of Directors, in accordance with theArticles, may pool the management of all or part of the assets of theSub-Funds concerned so that each Sub-Fund will participate in therelevant pool of assets in proportion to the assets contributedthereto by the relevant Sub-Fund. For further details, see under“5. Pooling” in the section “General Information”.

4. Investment ConsiderationsInvesting in less developed or emerging marketsInvestors should note that certain of the Sub-Funds may invest inless developed or emerging markets as described in the relevantsection of “Appendix III – Sub-Fund Details” for such Sub-Funds.These markets may be volatile and illiquid and the investments ofthe Sub-Funds in such markets may be considered speculative andsubject to significant delays in settlement. The risk of significantfluctuations in the net asset value and of the suspension ofredemptions in those Sub-Funds may be higher than for Sub-Fundsinvesting in major world markets. In addition, there may be ahigher than usual risk of political, economic, social and religiousinstability and adverse changes in government regulations andlaws in less developed or emerging markets. The assets of Sub-Funds investing in such markets, as well as the income derivedfrom the Sub-Fund, may also be affected unfavourably byfluctuations in currency rates and exchange control and taxregulations and consequently the net asset value of Shares ofthese Sub-Funds may be subject to significant volatility. Some ofthese markets may not be subject to accounting, auditing and

financial reporting standards and practices comparable to those ofmore developed countries and the securities markets of suchmarkets may be subject to unexpected closure. In addition, theremay be less government supervision, legal regulation and less welldefined tax laws and procedures than in countries with moredeveloped securities markets.

Investors should consult a professional adviser as to the suitabilityfor them of an investment in any Sub-Fund and in particular anySub-Fund investing in less developed or emerging markets.Subscriptions to Sub-Funds investing in such markets should beconsidered only by investors who are aware of, and able to bear, therisks related thereto and such investments should be made on along-term basis.

Investing in Equity SecuritiesInvesting in equity securities may offer a higher rate of return thanthose in short term and longer term debt securities. However, therisks associated with investments in equity securities may also behigher, because the investment performance of equity securitiesdepends upon factors which are difficult to predict. Such factorsinclude the possibility of sudden or prolonged market declines andrisks associated with individual companies. The fundamental riskassociated with any equity portfolio is the risk that the value of theinvestments it holds might decrease in value. Equity security valuesmay fluctuate in response to the activities of an individualcompany or in response to general market and/or economicconditions. Historically, equity securities have provided greaterlong-term returns and have entailed greater short-term risks thanother investment choices.

Foreign Currency Exchange TransactionsSub-Funds may buy and sell securities and receive interest anddividends in currencies other than the currency in which therelevant Sub-Fund’s Shares are denominated and accordingly suchSub-Funds may enter from time to time into currency exchangetransactions either on a spot (i.e. cash) basis or by buying currencyexchange forward contracts.

Neither spot transactions nor forward currency exchange contractseliminate fluctuations in the prices of a Sub-Fund’s securities or inforeign exchange rates, or prevent loss if the prices of thesesecurities should decline.

A Sub-Fund may enter into currency exchange transactions in anattempt to protect against changes in a country’s currencyexchange rates between the trade and settlement dates of specificsecurities transactions or anticipated securities transactions. ASub-Fund may also enter into forward contracts to hedge against achange in such currency exchange rates that would cause a declinein the value of existing investments denominated or principallytraded in a currency other than the reference currency of that Sub-Fund. To do this, the Sub-Fund would enter into a forward contractto sell the currency in which the investment is denominated orprincipally traded in exchange for the reference currency of theSub-Fund.

Although these transactions are intended to minimise the risk ofloss due to a decline in the value of the hedged currency, at the

10 Investment Policies

same time they limit any potential gain that might be realisedshould the value of the hedged currency increase. The precisematching of the forward contract amounts and the value of thesecurities involved will not generally be possible because thefuture value of such securities will change as a consequence ofmarket movements in the value of such securities between thedate when the forward contract is entered into and the date whenit matures. Therefore the successful execution of a hedgingstrategy which matches exactly the profile of the investments ofany Sub-Fund cannot be assured.

Investing in fixed and floating rate Debt SecuritiesInvestment in fixed and floating rate debt securities is subject tointerest rate, sector, security and credit risks. Information relatingto the credit quality of the fixed and floating rate debt securities ofa particular Sub-Fund is given in “Appendix III - Sub-Fund Details”.Lower-rated securities will usually offer higher yields than higher-rated securities to compensate for the reduced creditworthinessand increased risk of default that these securities carry. Lower-rated securities generally tend to reflect short-term corporate andmarket developments to a greater extent than higher-ratedsecurities which react primarily to fluctuations in the general levelof interest rates. There are fewer investors in lower-ratedsecurities, and it may be harder to buy and sell securities at anoptimum time.

Investors should note that credit ratings may not necessarilyreflect the true risk of an investment and that the InvestmentManager may use its own set of credit rating criteria to perform hiscredit analysis, which may differ from the criteria used by thecredit rating agencies.

For the purpose of applying the credit rating to investmentdecisions, the Investment Manager considers that all securitieswithin one category are equivalent. For example, a minimum creditrequirement of A means that all securities rated A or Acomplemented by any signs or numbers, regardless of the creditrating agency, would be considered equivalent.

In instances where two or more credit ratings are published byindependent credit rating agencies for a specific security and differ,the higher of these ratings shall be adopted.

The volume of transactions effected in certain international bondmarkets may be appreciably below that of the world’s largestmarkets, such as the United States. Accordingly, a Sub-Fund’sinvestments in such markets may be less liquid and their pricesmay be more volatile than comparable investments in securitiestrading in markets with larger trading volumes. Moreover, thesettlement periods in certain markets may be longer than in otherswhich may affect portfolio liquidity.

The Shares 11

The SharesThe Management Company may create within each Sub-Funddifferent classes of Shares (each a “Share Class”) whose assets willbe commonly invested pursuant to the specific investment policy ofthe relevant Sub-Fund. A distinct fee structure, currency ofdenomination, dividend policy or other specific feature may applyand a separate Net Asset Value per Share will be calculated foreach Share Class. The range of available Share Classes and theirfeatures are described in “Appendix III – Sub-Fund Details”.

Subject to the restrictions described below, Shares are freelytransferable and are each entitled to participate equally in theprofits and liquidation proceeds attributable to the relevant ShareClass. The rules governing such allocation are set forth below. TheShares, which are of no par value and which must be fully paidupon issue, carry no preferential or pre-emptive rights, and eachone is entitled to one vote at all general meetings of Shareholdersand at all meetings of the Sub-Fund in which Shares are held.Shares redeemed by the Fund become null and void.

The Board of Directors may restrict or prevent the ownership ofShares by any person, firm or corporation, if such ownership maybe against the interests of the Fund or of the majority ofShareholders or of any Sub-Fund or Share Class therein. Where itappears that a person who should be precluded from holdingShares, either alone or in conjunction with any other person, is abeneficial owner of Shares, the Management Company maycompulsorily redeem all Shares so owned in accordance with theprovisions of the Articles.

The Management Company may, in its absolute discretion, delaythe acceptance of any subscription for Shares of a Share Classrestricted to Institutional Investors until such date as it hasreceived sufficient evidence of the qualification of the investor asan Institutional Investor. If it appears at any time that a holder of aShare Class restricted to Institutional Investors is not anInstitutional Investor, the Management Company will either redeemthe relevant Shares in accordance with the provisions under “(b)Redemption of Shares” within “1. Subscription, Redemption andSwitching of Shares” below, or switch such Shares into a ShareClass that is not restricted to Institutional Investors (provided thereexists such a Share Class with similar characteristics) and notify therelevant Shareholder of such switch.

1. Subscription, Redemption and Switching of Shares

General Information

Types of ShareShares will be issued in registered form and will be non-certificated. Fractional entitlements to Shares will be rounded to 3decimal places. Shares may also be held and transferred throughaccounts maintained with clearing systems.

Subscription, Redemption and Switch RequestsRequests for subscription, redemption and switching of Sharesshould be sent to one of the sales agents or distributors(hereinafter referred to as “Sales Agents” and “Distributors”) or tothe Management Company at its registered office in Luxembourg.Addresses for Sales Agents in certain countries can be found in

“Appendix I – Information for Investors in Certain Countries”.Requests may also be accepted by facsimile transmission or at thediscretion of the Management Company other means oftelecommunication. An application form can be obtained from theManagement Company or from the websitewww.jpmorganassetmanagement.com.

Unless otherwise specified in “Appendix III – Sub-Fund Details” forany Sub-Fund, requests for subscriptions, redemptions andswitches from or to any Sub-Fund will be dealt with on theValuation Day on which they are received, provided they arereceived prior to 2.30 p.m. Luxembourg time on that ValuationDay. Requests received after such time will be accepted on the nextValuation Day. As a result, requests for the subscription,redemption and switching of Shares shall be dealt with on anunknown net asset value basis before the determination of the NetAsset Value for that day.

The Management Company may permit different dealing cut-offtimes for certain types of investors, such as investors injurisdictions where a different time zone so justifies. If permitted,the dealing cut-off time applied must always precede the timewhen the applicable Net Asset Value is determined. Different cut-off times may either be specifically agreed upon with the relevantDistributor or may be published in any supplement to theProspectus or other marketing document used in the jurisdictionconcerned.

The Fund does not permit market timing (as set out in CSSFcircular 04/146) or related excessive, short-term trading practices.The Management Company has the right to reject any request forthe subscription or switching of Shares from any investor engagingin such practices or suspected of engaging in such practices and totake such further action as it may deem appropriate or necessary.

Subscription, redemption and switching of Shares of a given Sub-Fund shall be suspended whenever the determination of the NetAsset Value per Share of such Sub-Fund is suspended by the Fund(see “General Information – Temporary Suspension of Issues,Redemptions and Switches”).

The Management Company may enter into agreements with certainDistributors or Sales Agents pursuant to which they agree to act asor appoint nominees for investors subscribing for Shares throughtheir facilities. In such capacity the Distributor or Sales Agent mayeffect subscriptions, switches and redemptions of Shares in thenominee name on behalf of individual investors and request theregistration of such transactions on the register of Shareholders ofthe Fund in the nominee name. The appointed nominee maintainsits own records and provides the investors with individualisedinformation as to its holdings of Shares in the Fund. Except wherelocal law or custom prohibits the practice, investors may investdirectly in the Fund and not avail themselves of a nominee service.Unless otherwise provided by local law, any Shareholder holdingShares in a nominee account with a Distributor has the right toclaim, at any time, direct title to such Shares.

Deferral of Redemptions and SwitchesIf the total requests for redemptions and switches out of a Sub-Fundon any Valuation Day exceeds 10% of the total number of Shares inissue of that Sub-Fund, the Management Company may decide that

12 The Shares

redemption and switching requests in excess of 10% shall bedeferred until the next Valuation Day. On the next Valuation Day, orValuation Days until completion of the original requests, deferredrequests will be dealt with in priority to later requests.

SettlementsIf, on the settlement date, banks are not open for business, or aninterbank settlement system is not operational, in the country ofthe currency of the relevant Share Class, then settlement will be onthe next Business Day on which those banks and settlementsystems are open.

Confirmation of completed subscriptions, redemptions andswitches will normally be despatched on the Business Dayfollowing the execution of the transaction.

No redemption payments will be made until the original applicationform and relevant subscription monies have been received fromthe Shareholder and all the necessary anti-money launderingchecks have been completed. Redemption proceeds will be paid onreceipt of faxed instructions where such payment is made into theaccount specified by the Shareholder in the original applicationform submitted. However, any amendments to the Shareholder’sregistration details and payment instructions can only be effectedupon receipt of original documentation.

Withdrawal of Requests for Subscription, Redemption andSwitching of SharesA Shareholder may withdraw a request for subscription,redemption or switching of Shares in the event of a suspension ofthe determination of the Net Asset Value of the Shares and, in suchevent, a withdrawal will be effective only if written notification isreceived by the Management Company before the termination ofthe period of suspension. If the subscription, redemption or switchrequest is not withdrawn, the Fund shall proceed to subscribe,redeem, or switch on the first applicable Valuation Day followingthe end of the suspension of the determination of the Net AssetValue of the Shares. All other requests to withdraw a subscription,redemption or switch request are at the sole discretion of theManagement Company, and will only be considered if receivedbefore 2.30 p.m. Luxembourg time on the relevant Valuation Day.

Minimum Subscription and Holding Amounts and Eligibility forSharesThe Board of Directors have set minimum initial and subsequentsubscription amounts and minimum holding amounts for eachShare Class, as detailed under “1. Classes of Shares, b) MinimumInitial and Subsequent Subscription Amount, and Minimum HoldingAmount” in “Appendix III – Sub-Fund Details”.

The Management Company has the discretion, from time to time,to waive or reduce any applicable minimum subscription amounts.The relevant minimum subscription amount shall not apply wherethe Shares are subscribed for by companies affiliated withJPMorgan Chase & Co. or by third party investment managers orDistributors approved by JPMorgan Chase & Co. who aresubscribing as a nominee.

Where a Shareholder of a given Share Class accumulates a holdingof sufficient size to satisfy the minimum subscription requirementsof a ‘parallel Share Class’ within that Sub-Fund with lower fees and

expenses, the Shareholder may request that the ManagementCompany, in its absolute discretion, switch the holding into Sharesin the ‘parallel Share Class’. A ‘parallel Shares Class’ within a Sub-Fund is one that is identical except for the minimum subscriptionamount and expenses applicable to it.

The right to redeem or switch Shares is subject to compliance withany conditions (including any minimum subscription or holdingamounts and eligibility requirements) applicable to the Share Classfrom which the redemption or switch is being made, and also theShare Class into which the switch is to be effected (the “New ShareClass”). In the case of a transfer of Shares, whilst there is nochange in actual Share Class, the minimum subscription andholding amounts will apply to the investment of the existing andnew Shareholder after the transfer.

The Board of Directors may also, at any time, decide tocompulsorily redeem all Shares from Shareholders whose holdingis less than the minimum holding amount specified under“1. Classes of Shares, b) Minimum Initial and SubsequentSubscription Amount, and Minimum Holding Amount” in “AppendixIII – Sub-Fund Details” or who fail to satisfy any other applicableeligibility requirements set out above or stated under “1. Classes ofShares, a) Eligibility Requirements” in “Appendix III – Sub-FundDetails”. In such case the Shareholder concerned will receive onemonth’s prior notice so as to be able to increase its holding abovesuch amount or otherwise satisfy the eligibility requirements.

Unless waived by the Management Company, if a redemption orswitch request would result in the amount remaining invested by aShareholder falling below the minimum holding amount of thatShare Class, such request will be treated as a request to redeem orswitch, as appropriate, the Shareholder’s total holding in thatShare Class. If the request is to transfer Shares, then that requestmay be refused by the Management Company.

If, as a result of a switch or transfer request, the value of aShareholder’s holding in the New Share Class would be less thanthe relevant minimum subscription amount, the ManagementCompany may decide not to accept the request.

Shareholders are required to notify the Management Companyimmediately in the event that they are or become US Persons orhold Shares for the account or benefit of US Persons or holdShares in breach of any law or regulation or otherwise incircumstances having, or which may have, adverse regulatory, taxor fiscal consequences for the Fund or the Shareholders orotherwise be detrimental to the interests of the Fund. If theManagement Company becomes aware that a Shareholder isholding Shares in breach of any law or regulation or otherwise incircumstances having, or which may have, adverse regulatory, taxor fiscal consequences for the Fund or the Shareholders or wouldotherwise be detrimental to the interests of the Fund or that theShareholder has become or is a US Person, the ManagementCompany may, in its sole discretion, redeem the Shares of theShareholder in accordance with the provisions of the Articles.Should a Shareholder become a US Person they may be subject toUS withholding taxes and tax reporting.

Further information in relation to the subscription, redemption andswitching of Shares is set out below.

The Shares 13

(a) Subscription of SharesSubscriptions for Shares can be made on any day that is aValuation Day for the relevant Sub-Fund. Shares will be allotted atthe Offer Price of the relevant Share Class (as described in“General Information, Calculation of Bid and Offer Prices”)determined on the Valuation Day on which the request has beenaccepted.

The initial launch date or offering period for each newly createdShare Class or Sub-Fund can be found on the websitewww.jpmorganassetmanagement.lu.

Shares are normally only issued on receipt of cleared funds. In thecase of subscriptions from approved Distributors or Sales Agentsauthorised by the Management Company the issue of Shares isconditional upon the receipt of settlement in cleared funds within apreviously agreed period not normally exceeding 3 Business Daysafter acceptance of the request for subscription. This period maybe increased to up to 5 Business Days for deals placed throughcertain Distributors or Sales Agents approved by the ManagementCompany, such as JPMorgan Funds (Asia) Limited in Hong Kong.

If timely settlement is not made the subscription may lapse and becancelled at the cost of the applicant or its financial intermediary.Failure to make good settlement by the settlement date may resultin the Management Company bringing an action against thedefaulting investor or its financial intermediary or deducting anycosts or losses incurred by the Management Company against anyexisting holding of the applicant in the Fund. In all cases any moneyreturnable to the investor will be held by the Management Companywithout payment of interest pending receipt of the remittance.

Payment for Shares must be received by the ManagementCompany in the reference currency of the relevant Share Class.Request for subscriptions in any other major freely convertiblecurrency will only be accepted if so determined by theManagement Company. A currency exchange service forsubscriptions is provided by the Management Company on behalfof, and at the cost of, such requesting investors. Furtherinformation is available from the Management Company onrequest.

Investors are advised to refer to the Terms and Conditionsapplicable to subscriptions, which may be obtained by contactingthe Management Company.

The Fund reserves the right to accept or refuse any subscription inwhole or in part and for any reason. The Fund may also limit thedistribution of a given Share Class or Sub-Fund to specificcountries.

Contribution in KindThe Management Company may from time to time acceptsubscriptions for Shares against a contribution in kind of securitiesor other assets that could be acquired by the relevant Sub-Fundpursuant to its investment policy and restrictions. Any suchcontribution in kind will be valued in an auditor’s report drawn upin accordance with the requirements of Luxembourg law. Allsupplemental costs associated with contributions in kind will beborne by the Shareholder making the contribution in kind or suchother party as agreed by the Management Company.

Anti-Money Laundering ProceduresThe Luxembourg law of 19 February 1973 (as amended), the law of5 April 1993 (as amended), the law of 12 November 2004 asamended, the Grand Ducal Regulation of 29 July 2008 andassociated circulars of the Luxembourg supervisory authority,outline obligations to prevent the use of undertakings for collectiveinvestment, such as the Fund, for money laundering purposes.Within this context the Management Company has a procedure inplace for the identification of investors which inter alia requires thatthe application form of an investor must be accompanied by suchdocuments set out in the current version of the application form.

Such information provided to the Management Company will beheld and used in accordance with Luxembourg Privacy laws. In allcases the Management Company reserves the right to requestadditional information and documentation including translations,certifications and updated versions of such documents to satisfyitself that the identification requirements under Luxembourg lawhave been fulfilled.

(b) Redemption of SharesRequests for the redemption of Shares can be made on any daythat is a Valuation Day for the relevant Sub-Fund. Redemptions willbe effected at the Bid Price of the relevant Share Class determinedon the Valuation Day on which the request has been accepted.

Redemption requests will only be executed if cleared funds inrespect of the subscription for those Shares have been received.

The Management Company may carry out any authenticationprocedures that it considers appropriate relating to a redemptionrequest. This aims to mitigate the risk of error and fraud for theFund, its agents or Shareholders. Where it has not been possible tocomplete any authentication procedures to its satisfaction, theManagement Company may delay the processing of paymentinstructions until authentication procedures have been satisfied.This will not affect the Valuation Day on which the redemptionrequest is accepted and the Bid Price to be applied. Neither theManagement Company nor the Fund shall be held responsible tothe Shareholder or anyone if it delays execution or declines toexecute redemption instructions in these circumstances.

Redemption payments will normally be paid in the ReferenceCurrency of the Share Class by bank transfer within 3 BusinessDays of the relevant Valuation Day (unless otherwise specified in“Appendix III – Sub-Fund Details”). This period may be increased upto 5 Business Days for deals placed through certain Distributors orSales Agents approved by the Management Company, such asJPMorgan Funds (Asia) Limited in Hong Kong. Neither the Fund northe Management Company are responsible for any delays orcharges incurred at any receiving bank or settlement system. AShareholder may request, at its own cost and subject to agreementby the Management Company, that their redemption proceeds bepaid in a currency other than the Reference Currency of therelevant Share Class.

If, in exceptional circumstances, redemption proceeds cannot bepaid within the period specified above, payment will be made assoon as reasonably practicable thereafter (not exceeding, however,10 Business Days from the relevant Valuation Day) at the Bid Pricecalculated on the relevant Valuation Day.

A redemption charge may be applied, or may be waived in wholeor in part at the discretion of the Management Company. If aredemption charge is applied in relation to any particular Sub-Fund, it will be disclosed in “Appendix III – Sub-Fund Details”. TheManagement Company is entitled to receive the redemption charge(if any). The redemption charge (if any) will be the same for allredemptions effected on the same Valuation Day.

Redemption in KindThe Management Company may request that a Shareholderaccepts “redemption in kind” i.e. receives a portfolio of securitiesfrom the Sub-Fund equivalent in value to the redemption proceeds.The Shareholder is free to refuse the redemption in kind. Wherethe Shareholder agrees to accept a redemption in kind it willreceive a selection of the Sub-Fund’s holdings having due regard tothe principle of equal treatment to all Shareholders. TheManagement Company may also, at its sole discretion, acceptredemption in kind requests from Shareholders. The value of theredemption in kind will be certified by an auditor’s certificate. Allsupplemental costs associated with redemptions in kind will beborne by the Shareholder requesting the redemption in kind orsuch other party as agreed by the Management Company.

(c) Switching of SharesSubject to the eligibility requirements and minimum holdingamounts described in “Appendix III – Sub-Fund Details”, andsubject to any suspension of the determination of the Net AssetValues per Share concerned, Shareholders have the right to switchall or part of their Shares of any Share Class of a Sub-Fund (the“Original Share Class”) into Shares of another Share Class (the“New Share Class”) of that or another Sub-Fund, or whenpermitted by the Management Company, to Shares of any otherUCITS or other UCIs managed by a member of JPMorgan Chase &Co., by applying for switching in the same manner as for thesubscription and redemption of Shares.

If the switching request is received before 2.30 p.m. Luxembourgtime on a day that is a common Valuation Day for the OriginalShare Class and the New Share Class (the “Common ValuationDay”), the number of Shares issued upon switching will be basedupon the Bid Price of the Original Share Class and the Net AssetValue of the New Share Class, plus a switching charge (as detailedbelow). If the switching request is received before 2.30 p.m.Luxembourg time on a day that is not a Common Valuation Day forthe relevant Share Classes (or if there is no Common ValuationDay), the switch will be made on the basis of the Bid Price of theOriginal Share Class and the Net Asset Value of the New ShareClass calculated on the next relevant Valuation Days of each of thetwo Share Classes concerned, plus a switching charge (as detailedbelow). Requests received after 2.30 p.m. Luxembourg time on anyValuation Day will be deferred to the next Valuation Day in thesame manner as for the subscription and redemption of Shares.

The Management Company may apply a switching charge notexceeding 1% of the Net Asset Value of the Shares in the NewShare Class. Where a Shareholder requests a switch into a NewShare Class with a higher initial charge, then the additional initialcharge payable for the New Share Class may be charged. TheManagement Company is entitled to any charges arising fromswitches and any rounding adjustment.

Notwithstanding the above, requests for switching of Sharesbetween the JPMorgan Investment Funds – Emerging MarketsCorporate Bond Portfolio Fund I and other Sub-Funds of the Fundare not permitted. Requests for switching of Shares between theJPMorgan Investment Funds – Emerging Markets Corporate BondPortfolio Fund I and any other UCITS or other UCIs managed by amember of JPMorgan Chase & Co. are not permitted.

2. Listing of SharesAt the discretion of the Management Company, Share Classes ofthe Sub-Funds (excluding Class X Shares) may be listed on theLuxembourg Stock Exchange. For so long as the Shares of any Sub-Fund are listed on the Luxembourg Stock Exchange, the Fund shallcomply with the requirements of the Luxembourg Stock Exchangerelating to those Shares.

3. Transfer of SharesThe transfer of Shares may normally be effected by delivery to therelevant Distributor, Sales Agent or the Management Company ofan instrument of transfer in appropriate form. On the receipt of thetransfer request, and after reviewing the endorsement(s),signature(s) may be required to be certified by an approved bank,stock broker or public notary.

The right to transfer Shares is subject to the minimum investmentand holding requirements as detailed in “Minimum Subscriptionand Holding Amounts and Eligibility for Shares” in the “GeneralInformation” section of “1. Subscription, Redemption and Switchingof Shares”.

Shareholders are advised to contact the relevant Distributor, SalesAgent or the Management Company prior to requesting a transferto ensure that they have the correct documentation for thetransaction.

4. Restrictions on subscriptions and switches into certain Sub-Funds

A Sub-Fund, or Share Class, may be closed to new subscriptions or switches in (but not to redemptions or switches out) if, in the opinion of the Management Company, closing is necessary to protect the interests of existing Shareholders.Without limiting the circumstances where closing may beappropriate, one such circumstance would be where the Sub-Fund has reached a size such that the capacity of the market and/or the capacity of the Investment Manager has been reached, and where to permit further inflows would bedetrimental to the performance of the Sub-Fund. Any Sub-Fund, or Share Class, may be closed to new subscriptions or switches in without notice to Shareholders. Once closed, a Sub-Fund, orShare Class, will not be re-opened until, in the opinion of theManagement Company, the circumstances which required closure no longer prevail.

Where closures to new subscriptions or switches in occur, thewebsite www.jpmorganassetmanagement.com will be amended to indicate the change in status of the applicable Sub-Fund orShare Class. Investors should confirm with the ManagementCompany or check the website for the current status of Sub-Funds or Share Classes.

14 The Shares

General Information1. OrganisationThe Fund is an investment company organised as a sociétéanonyme under the laws of the Grand Duchy of Luxembourg andqualifies as a société d’investissement à capital variable (SICAV).The Fund was incorporated in Luxembourg on 22 December 1994for an unlimited period. Its Articles were published in theMémorial, Recueil des Sociétés et Associations (“Mémorial”) on 10February 1995. The Fund is registered with the Registre deCommerce et des Sociétés, Luxembourg, under number B 49 663.Amendments to the Articles were published in the Mémorial, on 9September 1996, 19 November 2001 and 7 October 2005.

Consolidated Articles and a notice in respect of the issue andredemption of the Shares by the Fund are on file with the Registrede Commerce et des Sociétés in Luxembourg.

The minimum capital requirement of the Fund set out byLuxembourg Law.

The rights of Shareholders and of creditors concerning a Sub-Fundof the Fund or which have arisen in connection with the creationoperation or liquidation of a Sub-Fund are exclusively limited tothe assets of that Sub-Fund.

2. MeetingsThe annual general meeting of Shareholders (the “AnnualMeeting”) will be held at the registered office of the Fund inLuxembourg on the last Friday of the month of April annually at12.00 noon or, if any such day is not a bank business day inLuxembourg, on the next following bank business day. Notices ofall general meetings will be published in the Mémorial, to theextent required by Luxembourg Law, in the D’Wort and in suchother newspaper as the Board of Directors shall determine and willbe sent to the holders of registered Shares by post prior to themeeting at their addresses shown on the register of Shareholders.Such notices will include the agenda and will specify the time andplace of the meeting and the conditions of admission. They willalso refer to the rules of quorum and majorities required byLuxembourg Law and laid down in Articles 67 and 67-1 of theLuxembourg Law of 10 August 1915 on commercial companies (asamended) and in the Articles of the Fund.

Each whole Share confers the right to one vote. The vote on thepayment of a dividend (if any) on a particular Sub-Fund or ShareClass requires a separate majority vote from the meeting ofShareholders of the Sub-Fund or Share Class concerned. TheManagement Company will register registered Shares jointly in thenames of not more than four Shareholders should they so require.In such case the rights attached to such a Share must be exercisedjointly by ALL those parties in whose name it is registered exceptwhen (i) voting at an Annual Meeting where only the first namedShareholder may vote, (ii) the Shareholders have indicated theirdesire to have individual signatory powers, or (iii) unless one ormore persons (such as an attorney or executor) is/are appointed todo so. Any change in the Articles affecting the rights of a Sub-Fundor Share Class must be approved by a resolution of both thegeneral meeting of the Fund and the Shareholders of the Sub-Fundor Share Class concerned.

3. Reports and AccountsThe financial year of the Fund ends on 31 December each year.Audited annual reports shall be published within 4 monthsfollowing the end of the accounting year and unaudited semi-annual reports shall be published within 2 months following theperiod to which they refer. Both the annual and semi-annualreports of the Fund can be downloaded from the websitewww.jpmorganassetmanagement.com/jpmif or may be obtained,free of charge, on request by contacting the Management Companyat its registered office. Such reports form an integral part ofthis Prospectus.

The reference currency of the Fund is US dollars. The aforesaidreports will comprise consolidated accounts of the Fund expressedin US dollars as well as individual information on each Sub-Fundexpressed in the reference currency of each Sub-Fund.

4. Allocation of assets and liabilities among the Sub-FundsThe assets and liabilities will be allocated among the Sub-Funds inthe following manner:

(a) the proceeds from the issue of each Share of each Sub-Fundare to be applied in the books of the Fund to the pool of assetsestablished for that Sub-Fund and the assets and liabilities andincome and expenditure attributable thereto are applied tosuch pool subject to the provisions set forth hereafter;

(b) where any asset is derived from another asset, such derivativeasset is applied in the books of the Fund to the same pool asthe asset from which it was derived and on each revaluation ofan asset, the increase or diminution in value is applied to therelevant pool;

(c) where the Fund incurs a liability which relates to any asset of aparticular pool or to any action taken in connection with anasset of a particular pool, such liability is allocated to therelevant pool;

(d) in the case where any asset or liability of the Fund cannot beconsidered as being attributable to a particular pool, suchasset or liability is allocated to all the pools in equal parts or, ifthe amounts so justify, pro rata to the net asset values of therelevant Sub-Funds;

(e) upon the payment of dividends to the holders of Shares in anySub-Fund, the net asset value of such Sub-Fund shall bereduced by the amount of such dividends.

Under the Articles of the Fund, the Board of Directors may decideto create within each Sub-Fund one or more Share Class whoseassets will be commonly invested pursuant to the specificinvestment policy of the Sub-Fund concerned but where a specificinitial or redemption charge structure, fee structure, minimumsubscription amount, hedging policy or dividend policy may beapplied to each Share Class. A separate net asset value, which willdiffer as a consequence of these variable factors, will be calculatedfor each Share Class. If one or more Share Class has have beencreated within the same Sub-Fund, the allocation rules set outabove shall apply, as appropriate, to such Share Classes.

General Information 15

16 General Information

5. PoolingFor the purpose of effective management, and subject to theprovisions of the Articles and to applicable laws and regulations,the Board of Directors may invest and manage all or any part ofthe portfolio of assets established for two or more Sub-Funds (forthe purposes hereof “Participating Sub-Funds”) on a pooled basis.Any such asset pool shall be formed by transferring to it cash orother assets (subject to such assets being appropriate with respectto the investment policy of the pool concerned) from each of theParticipating Sub-Funds. Thereafter, the Board of Directors mayfrom time to time make further transfers to each asset pool.Assets may also be transferred back to a Participating Sub-Fundup to the amount of the participation of the Share Classconcerned. The Share of a Participating Sub-Fund in an asset poolshall be measured by reference to notional units of equal value inthe asset pool. On formation of an asset pool, the Board ofDirectors shall, in their discretion, determine the initial value ofnotional units (which shall be expressed in such currency as theBoard of Directors consider appropriate) and shall allocate to eachParticipating Sub-Fund units having an aggregate value equal tothe amount of cash (or to the value of other assets) contributed.Thereafter, the value of the notional unit shall be determined bydividing the net asset value of the asset pool by the number ofnotional units subsisting.

When additional cash or assets are contributed to or withdrawnfrom an asset pool, the allocation of units of the Participating Sub-Fund concerned will be increased or reduced, as the case may be,by a number of units determined by dividing the amount of cash orthe value of assets contributed or withdrawn by the current valueof a unit. Where a contribution is made in cash, it will be treatedfor the purpose of this calculation as reduced by an amount whichthe Board of Directors consider appropriate to reflect fiscalcharges and dealing and purchase costs which may be incurred ininvesting the cash concerned; in the case of cash withdrawal, acorresponding addition will be made to reflect costs which may beincurred in realising securities or other assets of the asset pool.

Dividends, interest and other distributions of an income naturereceived in respect of the assets in an asset pool will beimmediately credited to the Participating Sub-Funds in proportionto their respective participation in the asset pool at the time ofreceipt. Upon the dissolution of the Fund, the assets in an assetpool will be allocated to the Participating Sub-Funds in proportionto their respective participation in the asset pool.

6. Determination of the Net Asset Value of SharesThe net asset value of the Shares of each Share Class isdetermined in its reference currency on each Valuation Day bydividing the net assets attributable to each Share Class by thenumber of Shares of such Share Class then outstanding, roundedto the nearest two decimal places. The net assets of each ShareClass are made up of the value of the assets attributable to suchShare Class less the total liabilities attributable to such Share Classcalculated at such time as the Management Company shall haveset for such purpose.

The value of the assets of the Fund shall be determined as follows:

(a) the value of any cash on hand or on deposit, bills and demandnotes and accounts receivable, prepaid expenses, cashdividends and interest declared or accrued as aforesaid, andnot yet received shall be deemed to be the full amount thereof,unless, however, the same is unlikely to be paid or received infull, in which case the value thereof shall be determined aftermaking such discount as the Management Company mayconsider appropriate in such case to reflect the true valuethereof;

(b) the value of securities and/or financial derivative instrumentswhich are quoted or dealt in on any stock exchange shall bebased on the latest available price on the relevant stockexchange;

(c) securities and/or financial derivative instruments dealt in onanother regulated market are valued on the basis of the latestavailable price on such market;

(d) for non-quoted securities or securities not traded or dealt in onany stock exchange or other regulated market, as well asquoted or non-quoted securities on such other market forwhich no valuation price is available, or securities for which thequoted prices are not representative of the fair market value,the value thereof shall be determined prudently and in goodfaith by the Management Company on the basis of foreseeablesales prices;

(e) financial derivative instruments which are not listed on anyofficial stock exchange or traded on any other organisedmarket will be valued in a reliable and verifiable manner on adaily basis and in accordance with market practice;

(f) swaps are valued at their fair value based on the underlyingsecurities (at close of business or intraday) as well as on thecharacteristics of the underlying commitments;

(g) shares or units in UCITS and other UCIs shall be valued at theirlast available net asset value; as reported by suchundertakings;

(h) liquid assets and money market instruments may be valued atnominal value plus any accrued interest or on an amortisedcost basis. All other assets, where practice allows, may bevalued in the same manner.

The value of assets denominated in a currency other than thereference currency of a Sub-Fund shall be determined by takinginto account the rate of exchange prevailing at the time of thedetermination of the net asset value.

Swing Pricing AdjustmentA Sub-Fund may suffer dilution of the Net Asset Value per Sharedue to investors buying or selling Shares in a Sub-Fund at a pricethat does not reflect the dealing and other costs that arise whensecurity trades are undertaken by the Investment Manager toaccommodate cash inflows or outflows.

In order to counter this impact, a swing pricing mechanism may beadopted to protect the interests of Shareholders of the Fund. If onany Valuation Day, the aggregate net transactions in Shares of a


Sub-Fund exceed a pre-determined threshold, as determined andreviewed for each Sub-Fund on a periodic basis by theManagement Company, the Net Asset Value per Share may beadjusted upwards or downwards to reflect net inflows and netoutflows respectively. The net inflows and net outflows will bedetermined by the Management Company based on the latestavailable information at the time of calculation of the Net AssetValue per Share. The swing pricing mechanism may be appliedacross all Sub-Funds with the exception of JPMorgan InvestmentFunds – Blue and Green Fund, JPMorgan Investment Funds –Highbridge Statistical Market Neutral Fund and the money marketSub-Funds. The extent of the price adjustment will be set by theManagement Company to reflect dealing and other costs. Suchadjustment may vary from Sub-Fund to Sub-Fund and will notexceed 2% of the original Net Asset Value per Share.

Pricing Underlying Securities at Bid or OfferThe Management Company may consider it in the interests of theShareholders (or potential Shareholders) to value securities ateither their bid or offer prices, given the prevailing marketconditions and/or the level of subscriptions or redemptions relativeto the size of the relevant Sub-Fund. In addition the Net AssetValue may be adjusted for such sum as may represent theappropriate provision for dealing charges that may be incurred bya Sub-Fund, provided always that such sum shall not exceed 1% ofthe Net Asset Value of the Sub-Fund at such time. Under thesecircumstances, swing pricing would not be applied to the Net AssetValue.

Alternative Valuation PrinciplesThe Management Company, in circumstances where the interests ofthe Shareholders or the Company so justify, may take appropriatemeasures such as applying other appropriate valuation principlesto certain or all of the assets of the Sub-Funds and/or the assets ofa given Share Class if the aforesaid valuation methods appearimpossible or inappropriate. Alternatively, the ManagementCompany may, in the same circumstances, adjust the Net AssetValue per Share of a Sub-Fund prior to publication to reflect whatis believed to be the fair value of the portfolio as at the point ofvaluation. If an adjustment is made, it will be applied consistentlyto all Share Classes in the same Sub-Fund.

Publication of PricesThe Net Asset Value per Share of each Share Class and the Bid andOffer Prices thereof are available at the registered office of the Fundand are on the website www.jpmorganassetmanagement.com.

7. Calculation of Bid and Offer PricesThe Offer Price per Share of each Share Class is calculated byadding an initial charge, if any, to the Net Asset Value per Share.The initial charge will be calculated as a percentage of the NetAsset Value per Share not exceeding the levels shown in “Appendix III – Sub-Fund Details”.

The Bid Price per Share of each Share Class is calculated bydeducting a redemption charge, if any, from the Net Asset Valueper Share. The redemption charge will be calculated as a

percentage of the Net Asset Value per Share, not exceeding thelevels shown in “Appendix III – Sub-Fund Details”.

For publication purposes the Bid and Offer prices will be roundedto the same number of decimal places as the Net Asset Value perShare of the relevant Sub-Fund.

8. Temporary Suspension of Issues, Redemptions and Switches The determination of the net asset value of Shares of one or moreShare Classes may be suspended during:

(a) any period when any of the principal markets or stockexchanges on which a substantial portion of the investments ofthe Sub-Fund concerned is quoted or dealt in, is closedotherwise than for ordinary holidays, or during which dealingstherein are restricted or suspended; or

(b) the existence of any state of affairs which constitutes anemergency as a result of which disposal or valuation of assetsof the Sub-Fund concerned would be impracticable; or

(c) any breakdown in the means of communication or computationnormally employed in determining the price or value of theassets of the Sub-Fund concerned or the current prices orvalues on any market or stock exchange; or

(d) any period when the Fund is unable to repatriate funds for thepurpose of making payments on the redemption of Shares orduring which any transfer of funds involved in the realisationor acquisition of investments or payments due on redemptionof Shares cannot in the opinion of the Board of Directors beeffected at normal rates of exchange; or

(e) any other circumstance or circumstances where a failure to doso might result in the Fund or its Shareholders incurring anyliability to taxation or suffering other pecuniary disadvantagesor other detriment which the Fund or its Shareholders mightnot otherwise have suffered.

The Board of Directors has the power to suspend the issue,redemption and switching of Shares in one or more Share Classesfor any period during which the determination of the Net AssetValue per Share of the Sub-Fund(s) concerned is suspended by theFund by virtue of the powers described above. Anyredemption/switch request made or in abeyance during such asuspension period may be withdrawn by written notice to bereceived by the Fund before the end of such suspension period.Should such withdrawal not be effected, the Shares in questionshall be redeemed/switched on the first Valuation Day followingthe termination of the suspension period. In the event of suchperiod being extended, notice shall be published in newspapers inthe countries where the Fund’s Shares are sold. Investors who haverequested the issue, redemption or switching of Shares shall beinformed of such suspension when such request is made.

9. Liquidation of the FundThe Fund is incorporated for an unlimited period and liquidationshall normally be decided upon by an extraordinary general

18 General Information

meeting of Shareholders. Such a meeting must be convened if thenet assets of the Fund become less than two thirds of theminimum capital required by Luxembourg Law.

Should the Fund be liquidated, such liquidation shall be carried outin accordance with the provisions of the Luxembourg Law whichspecifies the steps to be taken to enable Shareholders toparticipate in the liquidation distributions and in this connectionprovides for deposit in escrow at the Caisse de Consignation inLuxembourg of any such amounts which it has not been possible todistribute to the Shareholders at the close of liquidation. Amountsnot claimed within the prescribed period are liable to be forfeitedin accordance with the provisions of Luxembourg Law. The netliquidation proceeds of each Sub-Fund shall be distributed to theShareholders of each Class of the relevant Sub-Fund in proportionto their respective holdings of such Class.

10. Merger or Liquidation of Sub-FundsThe Board of Directors may decide to liquidate any Sub-Fund if thenet assets of such Sub-Fund fall below 20,000,000 (twenty million)US dollars or if a change in the economic or political situationrelating to the Sub-Fund concerned would justify such liquidation.The decision to liquidate will be published by the Fund prior to theeffective date of the liquidation and the publication will indicatethe reasons for, and the procedures of, the liquidation operations.Unless the Board of Directors otherwise decides in the interests of,or to keep equal treatment between, the Shareholders, theShareholders of the Sub-Fund concerned may continue to requestredemption or switch of their Shares free of charge. Assets whichare not distributed upon the close of the liquidation of the Sub-Fund will be transferred to the Caisse de Consignation on behalf ofthose entitled within the delays prescribed by Luxembourg lawsand regulations and shall be forfeited in accordance withLuxembourg law.

Under the same circumstances as provided above, the Board ofDirectors may decide to close down any Sub-Fund or Share Classby merger into another Sub-Fund (the “new Sub-Fund”), Class (the“new Share Class”) or Luxembourg domiciled Undertaking forCollective Investment. In addition, such merger may be decided bythe Board of Directors if required by the interests of theShareholders of any of the Sub-Funds or Share Classes concerned.Such decision will be published in the same manner as described inthe preceding paragraph and, in addition, the publication willcontain information in relation to the new Sub-Fund, Share Class orUndertaking for Collective Investment. Such publication will bemade within one month before the date on which the mergerbecomes effective in order to enable Shareholders to requestredemption of their Shares, free of charge, before the operationinvolving contribution into the new Sub-Fund, Share Class orUndertaking for Collective Investment becomes effective.

Apart from exceptional circumstances, no subscriptions will beaccepted after publication/notification of a merger or liquidation.

11. Conflicts of InterestThe Management Company, the Investment Managers, which aremembers of JPMorgan Chase & Co., the Sales Agents, Corporateand Administrative Agent and the Custodian may from time to timeact as management company, investment manager or adviser,sales agent, administrator, registrar, custodian or trustee inrelation to, or be otherwise involved in, other funds or UCITS andother UCIs which have similar investment objectives to those of theFund or any Sub-Fund. It is therefore possible that any of themmay, in the due course of their business, have potential conflicts ofinterest with the Fund or any Sub-Fund. In such event, each will atall times have regard to its obligations under any agreements towhich it is party or by which it is bound in relation to the Fund orany Sub-Fund. In particular, but without limitation to its obligationsto act in the best interests of the Shareholders when undertakingany dealings or investments where conflicts of interest may arise,each will respectively endeavour to ensure that such conflicts areresolved fairly. More specifically, the Management Company, underthe rules of conduct applicable to it, must try to avoid conflicts ofinterests and, when they cannot be avoided, ensure that its clients(including the Fund) are fairly treated.

There is no prohibition on the Fund entering into any transactionswith the Management Company or any Investment Manager whichare members of JPMorgan Chase & Co., the Sales Agents, or theCustodian or with any of their affiliates, provided that suchtransactions are carried out as if effected on normal commercialterms negotiated at arm’s length. In such case, in addition to themanagement fees the Investment Managers earn for managing theFund, they may also have an arrangement with the issuer, dealerand/or distributor of any products entitling them to a share in therevenue from such products that they purchase on behalf of theFund. In addition, there is no prohibition on Investment Managersthat are members of JPMorgan Chase & Co. to purchase anyproducts on behalf of the Fund where the issuer, dealer and/ordistributor of such products are their affiliates provided that suchtransactions are carried out as if effected on normal commercialterms negotiated at arm’s length, in the best interest of the Fund.The Management Company, Investment Managers or any of theiraffiliates acting in a fiduciary capacity with respect to their clientaccounts may recommend to or direct its clients to buy and sellShares of the Fund. If a client defaults on its obligation to repayindebtedness to J.P. Morgan that is secured by Shares in the Fund,and J.P. Morgan forecloses on such interest, J.P. Morgan wouldbecome a Shareholder of the Fund. As a consequence, J.P. Morganand its affiliates could hold a relatively large proportion of Sharesand voting rights in the Fund.

Affiliates of JPMorgan Chase & Co. act as counterparties for certainforward foreign exchange and financial futures contracts. TheManagement Company and Custodian, Corporate andAdministrative Agent and the Principal Paying Agents of the Fundare considered as related parties.


12. Material ContractsThe following material contracts have been or shall be entered into:

(a) An Agreement effective from 12 September 2005, between theFund and JPMorgan Asset Management (Europe) S.à r.l.pursuant to which the latter was appointed ManagementCompany of the Fund. This Agreement is entered into for anunlimited period and may be terminated by either party uponthree months’ written notice.

(b) An Agreement dated 29 August 1996, (as amended) betweenthe Fund and J.P. Morgan Bank Luxembourg S.A. pursuant towhich the latter was appointed custodian of the assets of theFund. The Agreement is entered into for an unlimited periodand may be terminated by either party upon three months’written notice.

(c) An Administration Agreement effective from 12 September2005, between JPMorgan Asset Management (Europe) S.à r.l.and J.P. Morgan Bank Luxembourg S.A. pursuant to which thelatter has been delegated the function of providing net assetvalue calculations, company secretarial and paying agencyservices (the “Administration Agreement”). The AdministrationAgreement is entered into for an unlimited period and may beterminated by either party upon three months’ written notice.

13. DocumentsCopies of the contracts mentioned above are available forinspection, and copies of the Articles, the current Prospectus, thecurrent Simplified Prospectus(es) and the latest financial reportsmay be obtained free of charge during normal office hours at theregistered office of the Fund in Luxembourg. The Articles andreports form an integral part of this Prospectus.

20 Dividend Policy

Dividend PolicyShare Classes with the suffix “(acc)” are accumulation ShareClasses and will not normally pay dividends.

Distribution Share Classes will normally pay dividends as describedbelow.

Declaration of DividendsDividends will either be declared as annual dividends by theAnnual General Meeting of Shareholders or as interim dividends bythe Board of Directors.

Dividends may be paid by the Fund more frequently in respect ofsome or all Share Classes, from time to time, or be paid atdifferent times of the year to those listed below, as deemedappropriate by the Directors.

The declaration and payment of dividends is subject to thedividend policy referred to below.

Different Categories of distribution Share ClassesShare Classes suffixed “(dist)” and suffixed “(inc)”It is intended that all those Share Classes with the suffix “(dist)”will pay dividends if appropriate so that these Share Classes of theFund continue to qualify as “distributing” for the purposes ofUnited Kingdom tax legislation relating to offshore funds for theyear ending 31 December 2010. In subsequent years these ShareClasses may pay dividends and may also seek to meet theconditions to qualify as “reporting” for the purposes of the UnitedKingdom tax legislation. See section “5. United Kingdom” in“Appendix I – Information for Investors in Certain Countries” for further details..

Share Classes with the suffix “(inc)” may pay dividends but will notqualify as “distributing” for the purposes of United Kingdom taxlegislation relating to offshore funds for the year ending 31 December 2010.

Except where otherwise indicated in “Appendix III - Sub-FundDetails”, payment of dividends on these Share Classes will normallybe made in March of each year.

Share Classes with the suffix “(dist)” or “(inc)” in issue at thedividend record date will be eligible for any dividends, which willnormally be reinvested. Shareholders in these Share Classes mayelect in writing to receive a dividend payment, in which casepayment will normally be made in the currency of the relevantShare Class.

Dividends to be reinvested for Share Classes with the suffix “(inc)”and “(dist)” will be paid to the Custodian who will reinvest themoney on behalf of Shareholders in additional Shares of the sameShare Class. Such Shares will be issued on the payment date at theNet Asset Value per Share of the relevant Share Class. Fractionalentitlements to registered Shares will be recognised to threedecimal places.

Share Classes suffixed “(div)”Share Classes with the suffix “(div)” in issue at the dividend recorddate will be eligible for any dividends which will be paid directly tothe Shareholders rather than reinvested (as is the case with the“(dist)” or “(inc)” Share Classes described above).

Where this Share Class is available for a Sub-Fund, Shareholdersshould refer to the “Dividend Policy” section included in theindividual Sub-Fund details pages in “Appendix III - Sub-FundDetails” for further details on the level and frequency of suchdistributions.

Share Classes with the suffix “(div)” Share Classes will not qualifyas “distributing” for the purposes of United Kingdom tax legislationrelating to offshore funds for the year ending 31 December 2010.

Payments will normally be made in the currency of the relevantShare Class, unless otherwise indicated in “Appendix III - Sub-FundDetails”.

Share Classes suffixed “(mth)”Share Classes with the suffix “(mth)” will normally distribute all, orsubstantially all, of the net investment income on a monthly basis,based on the net investment income earned over the course of theprior month for Shares in issue at the dividend record date. Thepayment of dividends will normally be made to Shareholders in thecurrency of the relevant Share Class. They will not qualify as“distributing” for the purposes of United Kingdom tax legislationrelating to offshore funds for the year ending 31 December 2010.

Dividends for these Share Classes will normally be declaredtowards the middle of each month and the dividend payments willnormally be made before the end of each month. The ManagementCompany reserves the right to fix a minimum amount per ShareClass below which the actual payment of the dividend would not beeconomically efficient for the Fund. These payments will bedeferred to the following month or reinvested in further Shares ofthe same Share Class and not paid directly to the Shareholders.

The Net Asset Value of “(mth)” Share Classes may fluctuate morethan other Share Classes due to more frequent distribution ofincome.

Share Classes with the suffix “(mth)” will only be available toinvestors subscribing, and remaining subscribed, through specificAsian distribution networks.

Authentication ProcedureThe Management Company may carry out any authenticationprocedures that it considers appropriate relating to dividendpayments. This aims to mitigate the risk of error and fraud for theFund, its agents or Shareholders. Where it has not been possible tocomplete authentication procedures to its satisfaction, theManagement Company may delay the processing of paymentinstructions to a date later than the envisaged dividend paymentdate, when authentication procedures have been satisfied.

If the Management Company is not satisfied with any verificationor confirmation, it may decline to execute the relevant dividendpayment until satisfaction is obtained. Neither the ManagementCompany nor the Fund shall be held responsible to theShareholder or anyone if it delays execution or declines to executedividend payments in these circumstances.

Dividends remaining unclaimed five years after the dividend record date will be forfeited and will accrue for the benefit of therelevant Sub-Fund.

Management and Administration 21

Management and Administration1. Board of DirectorsThe Directors of the Fund are responsible for its management andcontrol including the determination of investment policies and ofinvestment restrictions and powers. The Board is composed of theindividuals identified under the section “Board of Directors”.

Directors that are employees of JPMorgan Chase & Co. or its director indirect subsidiaries or affiliates waive their Directors’ fees. TheBoard each year reviews and recommends Directors’ fees forapproval by Shareholders at the Annual Meeting. Such Directors’fees form part of the Fund’s Operating and AdministrativeExpenses. For some Share Classes, the Operating andAdministrative Expenses are capped at a maximum figure. Pleaserefer to “Management and Fund Charges” for further information.

The Directors have appointed the Management Company togenerally administer the business and affairs of the Fund, subjectto the overall control and supervision of the Directors.

2. Management Company and Domiciliary AgentThe Board of Directors of the Fund has designated JPMorgan AssetManagement (Europe) S.à r.l. as Management Company of the Fundto perform investment management, administration and marketingfunctions for the Fund and as domiciliary agent to the Fund.

The Management Company was incorporated as a “SociétéAnonyme” in Luxembourg on 20 April 1988 under the name ofFleming Fund Management (Luxembourg) S.A. The ManagementCompany became a “Société à responsabilité limitée” (S.à r.l.) on28 July 2000, amended its name to J. P. Morgan Fleming AssetManagement (Europe) S.à r.l. on 22 February 2001 and amended itto JPMorgan Asset Management (Europe) S.à r.l. on 03 May 2005.JPMorgan Asset Management (Europe) S.à r.l. has an authorisedand issued share capital of EUR 10,000,000.

JPMorgan Asset Management (Europe) S.à r.l. was authorised on25 May 2005 as a management company managing UCITSgoverned by the EC Directive 2001/107 and therefore complies withthe conditions set out in Chapter 13 of the Luxembourg Law. Thecorporate object of JPMorgan Asset Management (Europe) S.à r.l. isto provide investment management, administration and marketingservices to undertakings for collective investment.

Board of Directors of the Management CompanyThe managers of the Management Company are:

James B. Broderick, Managing Director, JPMorgan AssetManagement (UK) Limited, Finsbury Dials, 20 Finsbury Street,London, EC2Y 9AQ, United Kingdom.

Jon P. Griffin, Managing Director, JPMorgan Asset Management(Europe) S.à r.l., 6, route de Trèves, L-2633 Senningerberg, GrandDuchy of Luxembourg.

Graham Goodhew, Vice President, JPMorgan Asset Management(Europe) S.à r.l., 6, route de Trèves, L-2633 Senningerberg, GrandDuchy of Luxembourg.

Jean Jacques Lava, Vice President, JPMorgan Asset Management(Europe) S.à r.l., 6, route de Trèves, L-2633 Senningerberg, GrandDuchy of Luxembourg.

Roland Vogel, Managing Director, J.P. Morgan (Suisse) SA,Dreikonigstrasse 21, 8002 Zurich, Switzerland.

Daniel J. Watkins, Vice President, JPMorgan Asset Management(UK) Limited, Finsbury Dials, 20 Finsbury Street, London EC2Y 9AQ,United Kingdom.

The Board of Managers of the Management Company hasappointed Jon Griffin, Graham Goodhew, Ian Davies and AndrewTaylor as conducting persons, responsible for the day to daymanagement of the Management Company in accordance witharticle 78 of the Luxembourg Law.

In its capacity as Management Company and Domiciliary Agent,JPMorgan Asset Management (Europe) S.à r.l. is responsible for thegeneral administration of the Fund.

The Management Company is entitled to receive the initial charge,redemption charge and any charge on switches and any roundingadjustments, as detailed herein. It may pay all or part of thecharges it receives as a commission or discount to financialintermediaries or Distributors.

The Management Company has been permitted by the Fund todelegate its investment management functions to investmentmanagers authorised by the Fund, comprising the InvestmentManagers listed in the Management and Administration section atthe front of this Prospectus.

The Management Company is responsible for the centraladministration of the Fund and acts as its domiciliary agent. TheManagement Company has been permitted by the Fund to delegatecertain administrative functions to specialised service providersbased in Luxembourg. In that context, the Management Companyhas delegated corporate and administrative functions to J.P.Morgan Bank Luxembourg S.A.

In the context of its marketing function, the Management Companymay enter into agreements with Distributors pursuant to which theDistributors agree to act as intermediaries or nominees forinvestors subscribing for Shares through their facilities.

The Management Company will monitor on a continued basis theactivities of the third parties to which it has delegated functions.The agreements entered into between the Management Companyand the relevant third parties provide that the ManagementCompany can give at any time further instructions to such thirdparties, and that it can withdraw their mandate with immediateeffect if this is in the interest of the Shareholders. TheManagement Company’s liability towards the Fund is not affectedby the fact that it has delegated certain functions to third parties.

The names of other Funds for which JPMorgan Asset Management(Europe) S.à r.l has been appointed as Management Company areavailable on request.

22 Management and Administration

3. Investment ManagersThe Management Company has delegated investment managerfunctions to the Investment Managers set out in the Managementand Administration section at the front of this Prospectus. TheInvestment Managers shall manage the investments of the Sub-Funds in accordance with stated investment objectives andrestrictions and, on a discretionary basis, acquire and dispose ofsecurities of the Sub-Funds. The terms of the appointment of theinvestment managers are specified in the investment managementagreements. Investment Managers are entitled to receive asremuneration for their services hereunder such fee payable by theManagement Company as is set out in the relevant investmentmanagement agreement or as may otherwise be agreed upon fromtime to time. The Investment Managers may be part of JPMorganChase & Co. JPMorgan Chase & Co., has a number of direct andindirect subsidiaries engaged globally in providing a wide range offinancial services, including JPMorgan Chase Bank, N.A., a nationalbanking association, member of the Federal Reserve System,whose main office is at 1111 Polaris Parkway, Columbus, Ohio43240, USA., and all its branch offices and direct and indirectsubsidiaries in and outside of the United States.

Each of the Investment Managers may, in its discretion, purchaseand sell securities through dealers who provide research, statisticaland other information to the Investment Managers. Suchsupplemental information received from a dealer is in addition tothe services required to be performed by the Investment Managersunder the relevant investment management agreement and theexpenses which the Investment Manager incurs while providingadvisory services to the Fund will not necessarily be reduced as aresult of the receipt of such information. In addition, theInvestment Managers may enter into transactions or arrangementswith other members of JPMorgan Chase & Co.

Subject to Management Company and/or Board approval and otherregulatory notifications and/or approvals, the Investment Managermay sub-delegate the management of any Sub-Fund for which ithas been appointed as investment manager, to one or severalinvestment sub-managers (including but not limited to othercompanies in JPMorgan Chase & Co) as described further in“Appendix III - Sub-Fund Details”.

4. Custodian, Corporate and Administrative AgentJ.P. Morgan Bank Luxembourg S.A. has been appointed ascustodian of all of the Fund’s assets, comprising securities, moneymarket instruments, cash and other assets. It may entrust thephysical custody of securities and other assets, mainly securitiestraded abroad, listed on a foreign stock market or accepted byclearing institutions for their transactions, to such institutions or toone or more of its banking correspondents.

J.P. Morgan Bank Luxembourg S.A. must:

(a) ensure that the issue, redemption, switch and cancellation ofShares effected by or on behalf of the Fund are carried out inaccordance with the law and the Articles;

(b) ensure that in transactions involving the assets of the Fund,the consideration is remitted to it within the usual time limits;

(c) ensure that the income of the Fund is applied in accordancewith its Articles.

J.P. Morgan Bank Luxembourg S.A. was incorporated inLuxembourg as a société anonyme on 16 May 1973 and has itsregistered office at 6, route de Trèves, L-2633 Senningerberg,Grand Duchy of Luxembourg. It has engaged in banking activitiessince its incorporation.

In its capacity as Corporate and Administrative Agent, J.P. MorganBank Luxembourg S.A. has been delegated by the ManagementCompany to provide the following services, together with certainancillary services connected thereto, for and on behalf of theManagement Company and subject to its supervision andoversight: legal and fund management accounting services;valuation of the portfolio and pricing of the Shares (including taxreturns); maintenance of the Shareholder register; distribution ofincome; Share issues and redemptions; contract settlements andrecord keeping.

5. Commission Sharing ArrangementsThe Investment Managers may enter into commission sharingarrangements only where there is a direct and identifiable benefitto the clients of the Investment Managers, including the Fund, andwhere the Investment Managers are satisfied that the transactionsgenerating the shared commissions are made in good faith, instrict compliance with applicable regulatory requirements and inthe best interests of the Fund and the Shareholders. Any sucharrangements must be made by the Investment Managers onterms commensurate with best market practice. Due to their localregulatory rights, certain Investment Managers may make use ofsoft commission to pay for research or execution services. Otherjurisdictions may have other arrangements in place to pay for suchservices in accordance with local regulatory obligations.

6. Brokerage ArrangementsThe Investment Managers may appoint one or several primebrokers to provide brokerage and dealing services to the Fund.

In relation to the purchases and sale transaction that the brokerswill settle for the Fund, the brokers may provide financing to theFund and may hold assets and cash on behalf of the Fund inconnection with such settlement and financing transactions. Assecurity for the payment and performance of its obligations andliabilities to the brokers, the Fund will advance to the brokers,collateral in the form of securities or cash.

Management and Fund Charges 23

Management and Fund Charges 1. Explanation of the Charging StructuresInvestment in the Fund is generally offered via six chargingstructures, as represented by the A, B, C, D, I and X Share Classes.The Share Classes are differentiated primarily based on theminimum investment requirement, in the case of A, B, C and DShare Classes, the minimum account maintenance requirementsand Shareholder’s client relationship with JPMorgan Chase & Co., inthe case of X Share Classes, or both minimum investmentrequirements and the Shareholder’s client relationship withJPMorgan Chase & Co. in the case of I Share Classes.

The X Share Classes are designed to accommodate an alternativecharging structure whereby an Annual Management and AdvisoryFee normally charged to the Fund and then passed on in the Shareprice is instead administratively levied and collected by theManagement Company or the appropriate JPMorgan Chase and Co.entity directly from the Shareholder. Certain Sub-Funds or ShareClasses may incorporate a performance fee as further detailedbelow.

The Fund seeks to preserve Shareholders from fluctuations in itsOperating and Administrative Expenses (as this term is definedbelow) and has agreed with the Management Company that theexcess of such Expenses above the annual rate specified for certainShare Classes, will be borne by the Management Company, as setout below. Operating and Administrative Expenses are allocated tothe Sub-Funds to which they are attributable or among allSub-Funds and Share Classes pro rata to their respective net assets(or in a fair and reasonable manner determined by the Directors ofthe Fund). The allocation of Operating and Administrative Expensesis audited annually by the independent auditors of the Fund.Operating and Administrative Expenses are accrued daily withineach Sub-Fund’s Share Classes according to the applicablecharging structure of each Class.

Except where otherwise indicated in “Appendix III - Sub-FundDetails”, Operating and Administrative Expenses borne by the A, B,C and D Share Classes of all Sub-Funds (and I Share Classes of theJPMorgan Investment Funds – Euro Liquid Market Fund) are set ata fixed rate specified in “Appendix III - Sub-Fund Details” and theManagement Company bears the portion of such Operating andAdministrative Expenses which exceed the rates specified.Conversely, the Management Company is entitled to retain anyamount by which the fixed rate of Operating and AdministrationExpenses to be borne by the relevant Share Class, as set out in“Appendix III - Sub-Fund Details”, exceeds the actual expensesincurred by such Share Class.

For some Share Classes, the Operating and AdministrativeExpenses are capped at a maximum figure. Where this occurs it isdisclosed in “Appendix III - Sub-Fund Details” and any excess ofOperating and Administrative Expenses allocable to that ShareClass over the maximum figure stated in “Appendix III - Sub-FundDetails” is borne by the Management Company.

Any exceptions to the charging structures detailed above are notedin “Appendix III - Sub-Fund Details”.

All fees, charges, expenses and costs to be borne by the Fund willbe subject, where applicable to the addition of VAT or anyanalogous taxation where applicable.

2. Annual Management and Advisory FeeThe Fund pays to the Management Company an annualmanagement fee calculated as a percentage of the average dailynet assets of each Sub-Fund or Share Class under its management(“Annual Management and Advisory Fee”). The AnnualManagement and Advisory Fee is accrued daily and payablemonthly in arrears at the rate specified in “Appendix III - Sub-FundDetails”. The Management Company may from time to time, and atits absolute discretion, decide to reduce such rate (which mightbecome 0.0%). Annual Management and Advisory Fees payable bythe X Share Classes of the Sub-Funds are administratively leviedand collected by the Management Company or the appropriateJPMorgan Chase & Co. entity directly from the Shareholder. CertainSub-Funds or Share Classes may incorporate a Performance Fee asfurther detailed below.

Subject to the investment restrictions described below, Sub-Fundsmay invest in UCITS and other UCIs managed by the ManagementCompany, the Investment Managers or any other member ofJPMorgan Chase & Co. In accordance with section 5 b) of “AppendixII - “Investment Restrictions and Powers”, no double-charging offees will occur. The avoidance of a double-charge of the AnnualManagement and Advisory Fee on such assets is achieved by eithera) excluding the assets from the net assets on which the AnnualManagement and Advisory Fee are calculated or b) investing inUCITS or other UCIs via Share Classes that do not accrue an AnnualManagement and Advisory Fee or other equivalent fees payable tothe relevant Investment Manager’s group; or c) the AnnualManagement and Advisory Fee being netted off by a rebate to theFund or Sub-Fund of the annual management and advisory fee (orequivalent) charged to the underlying UCITS or other UCIs; or d)charging only the difference between the Annual Management andAdvisory Fee of the Fund or Sub-Fund as per “Appendix III - Sub-Fund Details” and the Annual Management and Advisory Fee (orequivalent) charged to the underlying UCITS or other UCIs.

3. Operating and Administrative ExpensesThe Fund bears all its ordinary operating expenses (“Operating andAdministrative Expenses”) including but not limited to formationexpenses such as organisation and registration costs; ongoingcustody fees covering transaction and safekeeping charges payableto the Custodian (“Custody Fees”); fiduciary fees payable to theCustodian (“Fiduciary Fees”); accounting fees covering fundaccounting and administration services payable to the Custodian(“Accounting Fees”); transfer agency fees covering registrar andtransfer agency services and payable to the Management Company(“Transfer Agency Fees”); the Luxembourg asset-based taxed’abonnement, up to the maximum rate referred to under“Taxation” below (“Taxe d’abonnement”); Directors’ fees andreasonable out-of-pocket expenses incurred by the Fund’sDirectors; legal and auditing fees and expenses; ongoingregistration and listing fees, including translation expenses; andthe costs and expenses of preparing, printing, and distributing theFund’s Prospectus, financial reports and other documents madeavailable to its Shareholders. Operating and Administrative

24 Management and Fund Charges

Expenses do not include Transaction Fees and ExtraordinaryExpenses (as defined below).

The Fund’s formation expenses and the expenses relating to thecreation of new Sub-Funds may be capitalised and amortised overa period not exceeding five years, as permitted by LuxembourgLaw.

4. Transaction FeesEach Sub-Fund bears the costs and expenses of buying and sellingportfolio securities and financial instruments, brokerage fees andcommissions, interest or taxes payable, and other transaction-related expenses (“Transaction Fees”).

Transaction Fees are accounted for on a cash basis and are paidwhen incurred or invoiced from the net assets of the Sub-Fund towhich they are attributable. Transaction Fees are allocated acrosseach Sub-Fund’s Share Classes.

Subscription, redemption and switch charges of the UCITS andother UCIs managed by the Management Company, the InvestmentManager or any other member of JPMorgan Chase & Co. into whicha Sub-Fund may invest will be waived.

5. Extraordinary ExpensesThe Fund bears any extraordinary expenses including, withoutlimitation, litigation expenses and the full amount of any tax, levy,duty or similar charge imposed on the Fund or its assets thatwould not be considered as ordinary expenses (“ExtraordinaryExpenses”).

Extraordinary Expenses are accounted for on a cash basis and arepaid when incurred or invoiced from the net assets of the Sub-Funds to which they are attributable. Extraordinary Expenses areallocated across each Sub-Fund’s Share Classes.

6. Performance FeesFor certain Sub-Funds within the Fund, the Management Company isentitled to receive a performance fee (“Performance Fee” as definedin “Appendix V – Calculation of Performance Fees”) in addition toother fees and expenses. The Management Company is entitled to aPerformance Fee if, in any accounting year, the performance of the Sub-Fund exceeds the return from the benchmark during the sameperiod, subject to the operation of a Claw-Back Mechanism or of aHigh Water Mark. The Performance Fee mechanism, PerformanceFee Rate (as defined in “Appendix V – Calculation of PerformanceFees”) and the performance fee benchmarks are specified in“Appendix III – Sub-Fund Details” for each relevant Sub-Fund. Fulldetails on how the Performance Fee is accrued and chargedappear under “Appendix V - Calculation of Performance Fees”.

Sub-Funds may invest in UCITS and other UCIs managed by theManagement Company, the Investment Managers or any othermember of the JPMorgan Chase & Co. In accordance with section 5b) of “Appendix II - Investment Restrictions and Powers”, nodouble-charging of Annual Management and Advisory Fees willoccur. The avoidance of a double-charge of the Performance Fee isachieved by either a) where a Sub-Fund invests in such UCITS andother UCIs, and these UCITS or UCIs charge performance fees, theSub-Fund will not charge Performance Fees or b) where a Sub-Fund charges a Performance Fee, it will not invest in such UCITSand/or UCIs that charge performance fees

7. Reporting of Fees and ExpensesThe aggregate amount of all fees and expenses paid or payable byeach Sub-Fund (other than Transaction Fees) are reported in theunaudited semi-annual and audited annual financial reports of theFund.

Taxation 25

TaxationThe following summary is based on the law and practice currentlyin force in the Grand Duchy of Luxembourg. It is therefore subjectto any future changes. Investors should, however, consult theirprofessional advisers on the possible tax or other consequences ofbuying, holding, transferring or selling the Fund’s Shares under thelaws of their countries of citizenship, residence or domicile. Thefollowing is based on the Directors’ understanding of the law andpractice in force at the date of this document and applies toinvestors acquiring Shares in the Fund as an investment. Pleaserefer to Appendix I “Information for Investors in Certain Countries”for further information on the requirements in your country.

1. The FundUnder current law and practice, the Fund is not liable to anyLuxembourg income tax, nor are dividends paid by the Fund liableto any Luxembourg withholding tax. However, the Fund is liable inLuxembourg to a subscription tax (“taxe d’abonnement”) of 0.05%per annum of its net assets, such tax being payable quarterly andcalculated on the total net asset value of the Fund at the end ofthe relevant quarter. No tax is levied on the portion of the assetsof the Fund invested in units of other Luxembourg collectiveinvestment undertakings provided such units have already beensubject to such tax. No stamp duty or other tax is payable inLuxembourg on the issue of Shares in the Fund except a tax,payable once only, which was paid upon incorporation. Up to amaximum of 0.05%, the aforementioned subscription tax isincluded in the fees and expenses referred to under “Managementand Fund Charges” above.

Interest income, dividend income and capital gains received by theFund in respect of some of its securities and cash deposits may besubject to non-recoverable withholding taxes at varying rates inthe countries of origin.

A reduced tax rate of 0.01% per annum of the net assets will beapplicable to Share Classes which are only sold to and held byInstitutional Investors. In addition, those Sub-Funds which investexclusively in deposits and money market instruments inaccordance with the Luxembourg Law regarding undertakings forcollective investment are liable to the same reduced tax rate of0.01% per annum of their net assets.

No tax is payable in Luxembourg on realised or unrealised capitalappreciation of the assets of the Fund. Although the Fund’srealised capital gains, whether short- or long-term, are notexpected to become taxable in another country, the Shareholdersmust be aware and recognise that such a possibility is not totallyexcluded.

The Fund is subject to an annual tax of 0.08% on the part of thenet asset value of the Shares placed through Belgian financialintermediaries. The tax is payable to the Kingdom of Belgium aslong as the Fund is registered for public distribution in suchcountry.

2. ShareholdersShareholders are not normally subject to any capital gains,income, gift, estate, inheritance or other taxes in Luxembourg

except for Shareholders domiciled, resident or having apermanent establishment in Luxembourg, and except for certainformer residents of Luxembourg and non-residents if owning morethan 10% of the share capital of the Fund, disposing of it in wholeor part within six months of acquisition. Also see “European UnionTax Considerations” section below.

3. European Union Tax ConsiderationsThe Council of the EU has, on 3 June 2003, adopted CouncilDirective 2003/48/EC on taxation of savings income in the form ofinterest payments (the “Directive”). Under the Directive, MemberStates of the EU will be required to provide the tax authorities ofanother EU Member State with information on payments ofinterest or other similar income paid by a paying agent (asdefined by the Directive) within its jurisdiction to an individualresident in that other EU Member State. Austria, Belgium andLuxembourg have opted instead for a tax withholding system for atransitional period in relation to such payments. Switzerland,Monaco, Liechtenstein, Andorra and San Marino and the ChannelIslands, the Isle of Man and the dependent or associatedterritories in the Caribbean, have also introduced measuresequivalent to information reporting or, during the abovetransitional period, withholding tax.

The Directive has been implemented in Luxembourg by a lawdated 21 June 2005 (the “EUSD Law”).

Dividends distributed by a Sub-Fund of the Fund will be subject tothe Directive and the EUSD Law if more than 15% of such Sub-Fund’s assets are invested in debt claims (as defined in the EUSDLaw) and proceeds realised by Shareholders on the redemption orsale of Shares in a Sub-Fund will be subject to the Directive andthe EUSD Law if more than 40% of such Sub-Fund’s assets areinvested in debt claims (such Sub-Funds, hereafter “Affected Sub-Funds”).

The applicable withholding tax will be at a rate of 20% until30 June 2011 and 35% from 1 July 2011 onwards.

Consequently, if in relation to an Affected Sub-Fund aLuxembourg paying agent makes a payment of dividends orredemption proceeds directly to a Shareholder who is anindividual resident or deemed resident for tax purposes in anotherEU Member State or certain of the above mentioned dependent orassociated territories, such payment will, subject to the nextparagraph below, be subject to withholding tax at the rateindicated above.

No withholding tax will be withheld by the Luxembourg payingagent if the relevant individual either (i) has expressly authorisedthe paying agent to report information to the tax authorities inaccordance with the provisions of the EUSD Law or (ii) hasprovided the paying agent with a certificate drawn up in theformat required by the EUSD Law by the competent authorities ofhis State or residence for tax purposes.

The Fund reserves the right to reject any application for Shares ifthe information provided by any prospective investor does notmeet the standards required by the EUSD Law as a result of theDirective.

26 Taxation

The foregoing is only a summary of the implications of theDirective and the EUSD Law, is based on the currentinterpretation thereof and does not purport to be complete inall respects. It does not constitute investment or tax advice andinvestors should therefore seek advice from their financial ortax adviser on the full implications for themselves of theDirective and the EUSD Law.

4. Taxation of China A SharesThe Management Company reserves the right to provide for capitalgains tax on Sub-Funds investing in China A Shares. The tax rulesapplied by the People’s Republic of China (PRC) taxation authoritiesin this area are unclear. As the provision made by the ManagementCompany is based on current market practice and the ManagementCompany’s understanding of the tax rules, any changes to marketpractice or interpretation of PRC tax rules may impact thisprovision and may result in this provision being higher or lowerthan required.

Appendix I 27

Appendix I – Information for Investors inCertain Countries

GeneralInvestors in each country where a Sub-Fund has been registeredwith the relevant regulatory authority can obtain the Prospectus,the Simplified Prospectus(es), the Articles and the most recentannual report (and if subsequently published, the semi-annualreport) from the Sales Agent in that country at no cost. Financialstatements appearing in the annual reports are audited byindependent auditors.

Investors will find below information relating to Sales Agents incertain countries.

1. IrelandGeneralInvestment in the Fund carries with it a degree of risk. The value ofShares and the income from them may go down as well as up, andinvestors may not get back the amount invested. Investment in theFund may not be suitable for all investors. This document shouldnot be regarded as a recommendation to buy, sell or otherwisemaintain any particular investment or Shareholding. Investorsneeding advice should consult an appropriate financial adviser.

Facilities AgentBNY Mellon Fund Services (Ireland) Limited has been appointed toact as Facilities Agent for the Fund in Ireland and it has agreed toprovide facilities at its offices at Guild House, Guild Street, P.O. Box4935, IFSC, Dublin 1, Ireland where:

(a) a Shareholder may redeem his or her Shares and from whichpayment of the proceeds on redemption may be obtained; and

(b) information can be obtained orally and in writing about theFund’s most recently published Net Asset Value per Share.Copies of the following documents in English can be obtained orinspected, free of charge, at the above address:

(i) the Articles of the Fund and any amendments thereto;

(ii) the latest Prospectus;

(iii) the latest Simplified Prospectuses; and

(iv) the latest annual and semi-annual reports.

The Directors of the Fund intend to conduct the affairs of the Fund so that it does not become resident in Ireland for taxation purposes. Accordingly, provided the Fund does not exercise a trade within Ireland or carry on a trade in Irelandthrough a branch or agency, the Fund will not be subject to Irish taxon its income and gains other than on certain Irish source incomeand gains.

The Shares of the Fund should constitute a “material interest” in anoffshore fund located in a qualifying location for the purposes ofChapter 4 (Sections 747B to 747F) of Part 27 of the TaxesConsolidation Act, 1997 (as amended). Subject to personalcircumstances, Shareholders resident in Ireland for taxationpurposes will be liable to Irish income tax or corporation tax inrespect of any income distributions of the Fund (whether distributedor reinvested in new Shares).

Furthermore, the attention of individuals resident or ordinarilyresident in Ireland for tax purposes is drawn to certain anti-avoidance legislation in particular Chapter 1 of Part 33 of the TaxesConsolidation Act, 1997 (as amended), which may render themliable to income tax in respect of undistributed income or profits ofthe Fund and also Chapter 4 of Part 19 of the Taxes ConsolidationAct, 1997 (as amended) could be material to any person who holds5% or more of the Shares in the Fund if, at the same time, the Fundis controlled in such a manner as to render it a company thatwould, were it to have been resident in Ireland, be a “close”company for Irish taxation purposes.

Attention is drawn to the fact that special rules may apply toparticular types of Shareholders (such as financial institutions).Persons who are resident but not domiciled in Ireland may be ableto claim the remittance basis of taxation, in which case the liabilityto tax will only arise as and when income or gains from the Fundare received in Ireland. Investors should seek their own professionaladvice as to the tax consequences before investing in Shares in theFund. Taxation law and practice, and the levels of taxation maychange from time to time.

Further information about the Fund and the relevant dealingprocedures may be obtained from the Facilities Agent.

2. ItalyThe Fund has appointed JPMorgan Asset Management (Europe) S.à r.l., Milan Branch, Via Catena 4, I – 20121 Milan as marketingagent.

In addition to the fees and expenses indicated in the Prospectus,Italian Shareholders will be charged fees relating to Paying Agentactivities as defined and specified in the latest version of the Italianapplication form.

Regular Savings Plans, redemption and switch programmes may beavailable in Italy. Further information can be found in the latestversion of the Italian Application Form which can be obtained fromauthorised Distributors.

For further information please refer to the Italian applicationform.

3. The NetherlandsFor information on the Fund or with questions on the subscriptionand redemption of Shares in the Fund, Dutch investors shouldcontact JPMorgan Asset Management (Europe) S.à r.l., theNetherlands Branch, WTC Tower B, 11th Floor, Strawinskylaan 1135,1077XX, Amsterdam, The Netherlands.

All information relevant to investors will be published in a nationalnewspaper. The Fund will publish information on amongst otherschanges of the investment policy of the Sub-Funds, changes to theintrinsic value of the Shares in the Sub-Funds, payment of dividendsand the date and place of Shareholders’ meetings.

4. SpainThe Fund has appointed JPMorgan Asset Management (Europe)S.à r.l, Spanish Branch, 29 José Ortega y Gasset, 2a planta, 28006Madrid, Spain as sales agent. Further information for Spanishinvestors is included in the Spanish marketing memorandum whichhas been filed with the Comisión Nacional del Mercado de Valores(“CNMV”) and is available from the Spanish sales agent.

28 Appendix I

5. United KingdomThe Fund has been authorised under Part I of the Luxembourg lawof 20 December 2002 relating to undertakings for collectiveinvestment (“loi relative aux organismes de placement collectif,” the“Luxembourg Law”) and is organised in the form of an umbrellascheme. The Fund qualifies as a UCITS fund under the amended ECDirective 85/611 of 20 December 1985. The Fund is registered withthe CSSF and was constituted on 22 December 1994. With priorapproval of the CSSF, the Fund may from time to time create anadditional Sub-fund or Sub-funds.

The attention of potential investors in the UK is drawn to thedescription of risk factors connected with an investment in the Fundin the section “Appendix IV - Risk Factors”.

The Fund is a recognised scheme in the UK for the purposes of theFinancial Services and Markets Act 2000 (“FSMA”) by virtue ofsection 264 of FSMA. The content of this Prospectus has beenapproved for the purposes of section 21 of FSMA by the Fund, whichas a scheme recognised under section 264 of FSMA is an authorisedperson and as such is regulated by the Financial Services Authority(“FSA”). The Prospectus may accordingly be distributed in the UKwithout restriction. Copies of this Prospectus have been delivered tothe FSA as required under FSMA.

The Fund has appointed JPMorgan Asset Management MarketingLimited, having its principal place of business at Finsbury Dials,20 Finsbury Street, London EC2Y 9AQ as facilities marketing andsales agent. Copies of the following documents in English can beobtained or inspected, free of charge, at the above address

(a) the Articles of the Fund and any amendments thereto;

(b) the latest Prospectus;

(c) the latest Simplified Prospectuses; and

(d) the latest annual and semi-annual reports.

Investors may redeem, arrange for redemption and obtain paymentin respect of Shares by contacting the marketing and sales agent.

Financial Services Compensation SchemePersons interested in purchasing Shares in the Fund should notethat rules and regulations made under the Financial Services andMarkets Act 2000 of the United Kingdom for the protection ofinvestors do not apply to the Fund and that the Financial ServicesCompensation Scheme established by the Financial ServicesAuthority may not apply in relation to any investment in the Fund.

Taxation of United Kingdom resident ShareholdersThe Fund is intended to be managed and controlled in such a waythat it should not be treated as resident in the UK for UK taxpurposes.

(i) UK taxation of dividends paid by the FundIndividual investors resident in the UK for tax purposes will beliable to UK income tax on dividends received (or deemed to bereceived) by them in respect of distribution Shares. Dividendsfrom certain Sub-Funds may be reclassified as interest for thosesubject to UK income tax. Corporate investors within the chargeto UK corporation tax will be exempt from taxation on dividendsreceived (or deemed to be received) by them. Holdings incertain Sub-Funds may be subject to the UK loan relationshiprules for UK corporate investors.

(ii) UK taxation of gains in respect of Shares in the FundYear Ending 31 December 2010Shares in the Fund will constitute “a material interest in anoffshore fund” for the purposes of sections 757-764 of theIncome and Corporation Taxes Act 1988 (“Taxes Act”) (“theOffshore Funds Provisions”). As a result, any gains arising on aredemption or other disposal of Shares by UK resident orordinarily resident investors (whether individual or corporate)will be chargeable to UK income tax or corporation tax asincome and not to UK capital gains tax or corporation tax oncapital gains unless the Share Class concerned (designated by“dist”) is certified by HM Revenue & Customs as a “distributingshare class” and has held such status throughout the periodduring which the Shares have been held.

Please also see “Dividend Policy” section which confirms thatcertain Share Classes of the Fund intend to seek continuingqualification as distributing for the purposes of the OffshoreFund Provisions.

Year Ending 31 December 2011 and BeyondUnder the new tax regime for UK investors investing in offshorefunds, shares in the Fund will constitute an offshore fund forthe purposes of Section 40A Finance Act 2008. As a result, anygains arising on a redemption or other disposal of Shares whichdo not have “UK Reporting Fund Status” by UK resident orordinarily resident investors (whether individual or corporate)will be chargeable to UK income tax or corporation tax asincome and not to UK capital gains tax or corporation tax oncapital gains.

(iii) MiscellaneousThe attention of individuals ordinarily resident in the UK isdrawn to section 714 et seq of the Income Tax Act 2007 whichmay in certain circumstances render them liable to income taxin respect of undistributed income of the Fund. However, it isunderstood that HM Revenue & Customs does not ordinarilyinvoke these provisions where the Offshore Funds Provisionsapply.

The above position reflects the Directors’ understanding of thecurrent UK tax laws, regulations and practice. UK resident investorsshould seek their own professional advice as to tax matters andother relevant considerations. Please note that persons makinginvestment in the Fund may not receive back the whole of theirinvestment.

Investors can obtain information about the most recentlypublished Net Asset Value of Shares in the Fund, and send anywritten complaints about the operation of the Fund forsubmission to the Fund’s registered office via the sales agentdetailed above.

The foregoing is based on the Directors’ understanding of the lawand practice currently in force in the countries referred to aboveand is subject to changes therein. It should not be taken asconstituting legal or tax advice and, investors should obtaininformation and, if necessary, should consult their professionaladvisers on the possible tax or other consequences of buying,holding, transferring or selling Shares under the laws of theircountries of origin, citizenship, residence or domicile.

Appendix II 29

Appendix II – Investment Restrictions and Powers

Pursuit of the investment objective and policy of any Sub-Fundmust be in compliance with the limits and restrictions set forth inthis Appendix. Such limits and restrictions are subject at all timesto any regulations and guidance issued from time to time by theCSSF or any other appropriate regulatory body.

General Investment Rules1) a) The Fund may exclusively invest in:

i) Transferable securities and money market instrumentsadmitted to official listing on a Stock Exchange; and/or

ii) Transferable securities and money market instrumentsdealt in on another Regulated Market; and/or

iii) Recently issued transferable securities and moneymarket instruments, provided that the terms of issueinclude an undertaking that application will be madefor admission to official listing on a Regulated Marketand such admission is secured within a year of theissue; and/or

iv) Units of UCITS authorised according to Directive85/611/EEC and/or other undertakings for collectiveinvestment (“UCI”) within the meaning of the first andsecond indent of Article 1, paragraph (2) of Directive85/611/EEC, whether situated in an EU Member Stateor not, provided that:

– such other UCIs have been authorised under thelaws of any member country of the EuropeanUnion or under the laws of Canada, Hong Kong,Japan, Norway, Switzerland or the United States ofAmerica,

– the level of protection for unitholders in such otherUCIs is equivalent to that provided for unitholdersin a UCITS, and in particular that the rules onassets segregation, borrowing, lending, anduncovered sales of transferable securities andmoney market instruments are equivalent to therequirements of the amended EC Directive 85/611,

– the business of such other UCIs is reported in half-yearly and annual reports to enable an assessmentof the assets and liabilities, income and operationsover the reporting period,

– no more than 10% of the assets of the UCITS or ofthe other UCIs, whose acquisition is contemplated,can, according to their constitutional documents, inaggregate be invested in units of other UCITS orother UCIs; and/or

v) Deposits with credit institutions which are repayable ondemand or have the right to be withdrawn, andmaturing in no more that 12 months, provided that thecredit institution has its registered office in a countrywhich is an OECD Member State and a FATF State;and/or

vi) Financial derivative instruments, including equivalentcash-settled instruments, dealt in on a RegulatedMarket referred to in sub-paragraphs i) and ii) above,and/or financial derivative instruments dealt in over-the-counter ("OTC derivatives"), provided that:

– the underlying consists of instruments covered bythis section 1) a), financial indices, interest rates,foreign exchange rates or currencies, in which theSub-Funds may invest according to theirinvestment objective;

– the counterparties to OTC derivative transactionsare institutions subject to prudential supervision,and belonging to the categories approved by theLuxembourg supervisory authority;

– the OTC derivatives are subject to reliable andverifiable valuation on a daily basis and can besold, liquidated or closed by an offsettingtransaction at any time at their fair value at theBoard’s initiative.

and/or

vii) Money market instruments other than those dealt in ona Regulated Market, if the issue or the issuer of suchinstruments are themselves regulated for the purposeof protecting investors and savings, and provided thatsuch instruments are:

a. issued or guaranteed by a central, regional or localauthority or by a central bank of an EU MemberState, the European Central Bank, the EU or theEuropean Investment Bank, a non-EU MemberState or, in case of a Federal State, by one of themembers making up the federation, or by a publicinternational body to which one or more EUMember States belong; or

b. issued by an undertaking, any securities of whichare dealt in on Regulated Markets referred to in 1)a) i) and ii) above; or

c. issued or guaranteed by a credit institution whichhas its registered office in a country which is anOECD Member State and a FATF State; or

d. issued by other bodies belonging to the categoriesapproved by the CSSF provided that investments insuch instruments are subject to investor protectionequivalent to that laid down in a. b. or c. above andprovided that the issuer is a company whosecapital and reserves amount to at least ten millionEuro (EUR 10,000,000) and which presents andpublishes its annual accounts in accordance withthe fourth Directive 78/660/EEC, is an entity which,within a group of companies, is dedicated to thefinancing of the group or is an entity which isdedicated to the financing of securitisation vehicleswhich benefit from a banking liquidity line.

30 Appendix II

b) In addition, the Fund may invest a maximum of 10% of theassets of any Sub-Fund in transferable securities andmoney market instruments other than those referred tounder a) above.

2) The Fund may hold ancillary liquid assets.

3) a) i) The Fund will invest no more than 10% of the assets ofany Sub-Fund in transferable securities or moneymarket instruments issued by the same issuing body.

The Fund may not invest more than 20% of the totalassets of such Sub-Fund in deposits made with thesame body.

The risk exposure to a counterparty of a Sub-Fund inan OTC derivative transaction may not exceed 10% ofits assets when the counterparty is a credit institutionreferred to in 1) a) v) above or 5% of its assets in othercases.

ii) The total value of the transferable securities andmoney market instruments held by the Fund on behalfof the Sub-Fund in the issuing bodies in each of whichit invests more than 5% of the assets of such Sub-Fundmust not exceed 40% of the value of the assets of suchSub-Fund.

This limitation does not apply to deposits and OTCderivative transactions made with financial institutionssubject to prudential supervision.

Notwithstanding the individual limits laid down inparagraph 3) a) i), the Fund may not combine for eachSub-Fund:

– investments in transferable securities or moneymarket instruments issued by, and/or

– deposits made with, and/or

– exposures arising from OTC derivative transactionsundertaken with a single body,

in excess of 20% of its assets.

iii) The limit of 10% laid down in sub-paragraph 3) a) i)above will be increased to a maximum of 35% inrespect of transferable securities or money marketinstruments which are issued or guaranteed by an EUMember State, its local authorities or agencies, or byanother Eligible State or by public international bodiesof which one or more EU Member States are members.

iv) The limit laid down in the first paragraph of 3) a) i)may be of a maximum of 25% for certain debtinstruments when they are issued by a creditinstitution which has its registered office in the EU andis subject by law, to special public supervision designedto protect unitholders. In particular, sums derivingfrom the issue of these debt instruments must be

invested in accordance with the law, in assets which,during the whole period of validity of the debtinstruments, are capable of covering claims attached tosaid instruments and which, in case of bankruptcy ofthe issuer, would be used on a priority basis for therepayment of the principal and payment of accruedinterest.

If a Sub-Fund invests more than 5% of its assets in thedebt instruments referred to in the above paragraphand issued by one issuer, the total value of suchinvestments may not exceed 80% of the value of theassets of the Sub-Fund.

v) The transferable securities and money marketinstruments referred to paragraphs iii) and iv) aboveshall not be included in the calculation of the limit of40% stated in paragraph 3) a) ii) above.

vi) The limits set out in sub-paragraphs i), ii) iii) and iv)may not be aggregated and, accordingly, investmentsin transferable securities or money market instrumentsissued by the same issuing body, in deposits orderivative instruments made with this body carried outin accordance with sub-paragraphs i), ii) iii) and iv)above may not, in any event, exceed a total of 35% ofany Sub-Fund’s assets;

Companies which are part of the same group for thepurposes of the establishment of consolidatedaccounts, as defined in accordance with directive83/349/EEC or in accordance with recognisedinternational accounting rules, are regarded as a singlebody for the purpose of calculating the limits containedin section 3) a).

A Sub-Fund may cumulatively invest up to 20% of theassets in transferable securities and money marketinstruments within the same group.

b) i) Without prejudice to the limits laid down in section 4below, the limits laid down in section 3 a) above areraised to a maximum of 20% for investments in sharesand /or debt securities issued by the same body when,according to the prospectus, the aim of the Sub-Funds’investment policy is to replicate the composition of acertain stock or debt securities index which isrecognised by the CSSF, on the following basis:

– the composition of the index is sufficientlydiversified,

– the index represents an adequate benchmark forthe market to which it refers,

– it is published in an appropriate manner.

ii) The limit laid down in 3) b) i) above is raised to 35%where that proves to be justified by exceptional marketconditions in particular in regulated markets wherecertain transferable securities or money market

Appendix II 31

instruments are highly dominant. The investment up tothis limit is only permitted for a single issuer.

iii) Notwithstanding the provisions outlined in section 3a), the Fund is authorised to invest up to 100% of theassets of any Sub-Fund, in accordance with theprinciple of risk spreading, in transferable securitiesand money market instruments issued or guaranteedby an EU Member State, by its local authorities oragencies, or by another member state of the OECD orby public international bodies of which one or moreEU Member States are members, provided that suchSub-Fund must hold securities from at least sixdifferent issues and securities from one issue do notaccount for more than 30% of the total assets of suchSub-Fund.

4) a) The Fund may not acquire:

i) Shares carrying voting rights which should enable it toexercise significant influence over the management ofan issuing body; or

ii) More than:

a. 10% of the non-voting shares of the same issuer;and/or

b. 10% of the debt securities of the same issuer;and/or

c. 25% of the units of the same UCITS and/or otherUCI; and/or

d. 10% of the money market instruments of the sameissuer;

The limits under 4) a) ii) b. c. and d. may be disregarded atthe time of acquisition, if at that time the gross amount ofthe debt securities, or of money market instruments orunits or the net amount of the instruments in issue cannotbe calculated.

b) Paragraphs 4 a) i) and 4 a) ii) above are waived as regards:

i) Transferable securities and money market instrumentsissued or guaranteed by an EU Member State or itslocal authorities;

ii) Transferable securities and money market instrumentsissued or guaranteed by a non-member state of theEU;

iii) Transferable securities and money market instrumentsissued by public international bodies of which one ormore EU Member States are members;

iv) Shares held by a Sub-Fund in the capital of a companyincorporated in a non-member state of the EU whichinvests its assets mainly in the securities of issuingbodies having their registered office in that State,

where under the legislation of that state, such aholding represents the only way in which the Sub-Fundcan invest in the issuing bodies of that State. Thisderogation, however, shall apply only if in itsinvestment policy the company from the non-MemberState of the EU complies with the limits laid down in 3)a), 4) a) i) and ii), and 5).

v) Shares held by one or more investment companies inthe capital of subsidiary companies which, exclusivelyon its or their behalf carry on only the business ofmanagement, advice or marketing in the countrywhere the subsidiary is located, in regard to theredemption of Shares at the request of Shareholders.

5) a) The Fund may acquire units of the UCITS and/or other UCIsas defined under paragraph (1) a) (iv), provided that nomore than 10% in total of a Sub-Fund’s assets be investedin the units of UCITS and/or other UCIs. In respect of theyear ending 31 December 2010 only and with regards tothose Sub-Funds containing Share Classes with the suffix“(dist)” that qualify as “distributing” for the purposes ofUnited Kingdom tax legislation relating to offshore funds(as detailed in “Dividend Policy”), these will also not investmore than 5% of their assets in non-UK UCITS and othernon-UK UCIs that do not themselves qualify as“distributing” for the purposes of United Kingdom taxlegislation.

b) The Management Company will waive any subscription orredemption fees, or any Annual Management and AdvisoryFee of the UCITS and/or other UCIs into which the Fundmay invest and which:

i) it manages itself either directly or indirectly; or

ii) are managed by a company with which it is related byvirtue of:

a. common management, or

b. common control, or

c. a direct or indirect interest of more than 10percent of the capital of the votes.

The Fund will indicate in its annual report the totalmanagement Annual Management and Advisory Feecharged both to the relevant Sub-Fund and to the UCITSand other UCIs in which such Sub-Fund has invested duringthe relevant period.

c) The underlying investments held by the UCITS or otherUCIs in which the Fund invests do not have to beconsidered for the purpose of the investment restrictionsset forth under 3) a) above.

d) Where a Sub-Fund may, pursuant to its investment policy,invest indirectly through total return swaps in units ofUCITS and other UCIs, the 5% and 10% limits set forth in a)above shall also be applicable in that the potential losses

32 Appendix II

resulting from such swap contracts, together with directinvestments in UCITS and other UCIs, shall not exceed 5%or 10% (as appropriate) in total of the relevant Sub-Fund’snet assets. In case such UCITS are Sub-Funds of the Fund,the swap contract must provide for cash settlement.

6) In addition the Fund will not:

a) Make investments in – or enter into transactions involving –precious metals, commodities, commodities contracts, orcertificates representing these;

b) Purchase or sell real estate or any option, right or interesttherein, provided the Fund may invest in transferable securitiessecured by real estate or interests therein or issued bycompanies which invest in real estate or interests therein;

c) Carry out uncovered sales of transferable securities orother financial instruments, money market instruments orUCITS and/or other UCIs referred to above;

d) Make loans to – or act as guarantor on behalf of – thirdparties, provided that this restriction shall not prevent theFund from:

i) Lending of its portfolio securities and

ii) Acquiring transferable securities, money marketinstruments or other financial instruments referred toin paragraph 1) a) iv), vi) and vii), which are not fullypaid.

e) Borrow for the account of any Sub-Fund amounts in excessof 10% of the total assets of that Sub-Fund, any suchborrowings to be effected on a temporary basis. However,the Fund may acquire foreign currency by means of a back-to-back loan;

f) Mortgage, pledge, hypothecate or otherwise encumber assecurity for indebtedness any securities held for theaccount of any Sub-Fund, except as may be necessary inconnection with the borrowings mentioned above, andthen such mortgaging, pledging, or hypothecating may notexceed 10% of the asset value of each Sub-Fund. Inconnection with OTC transactions including amongstothers, swap transactions, option and forward exchange orfutures transactions, the deposit of securities or otherassets in a separate account shall not be considered amortgage, pledge or hypothecation for this purpose;

g) Underwrite or sub-underwrite securities of other issuers;

h) Make investments in any transferable securities involvingthe assumption of unlimited liability.

7) To the extent that an issuer is a legal entity with multiplecompartments where the assets of a compartment areexclusively reserved to the investors in such compartment andto those creditors whose claim has arisen in connection withthe creation, operation or liquidation of that compartment,each compartment is to be considered to be a separate issuer

for the purpose of the application of the risk-spreading rulesset out in 3) a); 3) b) i) and ii); and 5) above.

8) During the first six months following its launch, a new Sub-Fund may derogate from restrictions 3) and 5) while ensuringobservance of the principle of risk-spreading.

9) Each Sub Fund must ensure an adequate spread of investmentrisks by sufficient diversification.

10) The Fund will in addition comply with such further restrictionsas may be required by the regulatory authorities in which theShares are marketed.

11) The Fund need not comply with the investment limitpercentages when exercising subscription rights attached tosecurities which form part of its assets.

If the percentage limitations set forth in the above restrictions areexceeded for reasons beyond the control of the Fund or as a resultof the exercise of subscription rights, it must adopt as a priorityobjective for its sales transactions the remedying of that situation,taking due account of the interests of its Shareholders.

I Financial Derivative Instruments1. GeneralAs specified in 1 a) vi) above, the Fund may in respect of each Sub-Fund invest in financial derivative instruments, including but notlimited to financial futures contracts, options (on equities, interestrates, indices, bonds, currencies, commodity indices or otherinstruments), forward contracts (including foreign exchangecontracts), swaps (including total return swaps, foreign exchangeswaps, commodity index swaps, interest rate swaps, and swaps onbaskets of equities), credit derivatives (including credit defaultderivatives, credit default swaps and credit spread derivatives),warrants, mortgage TBAs, and structured financial derivativeinstruments such as credit-linked and equity-linked securities.

The use of financial derivative instruments may not cause the Fundto stray from the investment objectives set out in “Appendix III –Sub-Fund Details”. If any Sub-Fund intends to make use of financialderivative instruments for any purpose other than efficientportfolio management or to hedge against market or currencyrisks, this will be specified in “Appendix III - Sub-Fund Details”.

Each Sub-Fund may invest in financial derivative instrumentswithin the limits laid down in restriction 3) a) v) and vi) above,provided that the exposure to the underlying assets does notexceed in aggregate the investment limits laid down in restrictions3) a) i) to vi) above. When a Sub-Fund invests in index-basedfinancial derivative instruments, these investments do not have tobe combined to the limits laid down in restriction 3) a) above.When a transferable security or money market instrument embedsa derivative, the latter must be taken into account when complyingwith the requirements of this restriction.

2. Global ExposureThe global exposure relating to financial derivative instruments iscalculated taking into account the current value of the underlying

Appendix II 33

assets, counterparty risk, foreseeable market movements and thetime available to liquidate the positions.

The Fund shall ensure that the global exposure of each Sub-Fundrelating to financial derivative instruments does not exceed thetotal net assets of that Sub-Fund. The Sub-Fund’s global exposureshall consequently not exceed 200% of its total net assets. Inaddition, this global exposure may not be increased by more than10% by means of temporary borrowings1 (as referred to in section6 (e) above) so that the Sub-Fund’s overall risk exposure may notexceed 210% of any Sub-Fund’s total net assets under anycircumstances.

The global exposure relating to financial derivative instrumentsmay be calculated through the VaR methodology or thecommitment approach.

2.1 VaR MethodologyCertain Sub-Funds apply a Value-at-Risk (VaR) approach tocalculate their global exposure, and this will be specified in theirrespective investment policies in “Appendix III - Sub-Fund Details”.In respect of such Sub-Funds, the limits and restrictions a) to f) inthe section “Commitment Approach” below shall not be applicablealthough they may use similar strategies and hedging techniques.The VaR approach is measured at a 99% confidence level andbased on a time horizon of one month. The holding period relatingto financial derivative instruments, for the purpose of calculatingglobal exposure, is one month.

2.2 Commitment ApproachUnless otherwise specified in “Appendix III - Sub-Fund Details”, theSub-Funds calculate their global exposure resulting from the use offinancial derivative instruments on a commitment basis. Such Sub-Funds will make use of financial derivative instruments in amanner not to materially alter a Sub-Fund’s risk profile over whatwould be the case if financial derivative instruments were not used.

When using the financial derivative instruments described in thepreceding paragraphs within this section, those Sub-Funds usingthe commitment approach must comply with the limits andrestrictions in items a) to f) below:

a) With respect to options on securities:

i) the Fund may not invest in put or call options on securitiesunless:

– such options are quoted on a stock exchange or tradedon a regulated market; and

– the acquisition price of such options does not exceed,in terms of premium, 15% of the total net assets of therelevant Sub-Fund;

ii) the Fund may write call options on securities that it doesnot own. However, the aggregate of the exercise prices ofsuch call options must not exceed 25% of the net assetvalue of the relevant Sub-Fund;

iii) the Fund may write put options on securities. However, therelevant Sub-Fund must hold sufficient liquid assets to

cover the aggregate of the exercise prices of such optionswritten.

b) The Fund may enter into forward currency contracts or writecall options or purchase put options on currencies providedhowever that the transactions made in one currency in respectof one Sub-Fund may in principle not exceed the valuation ofthe aggregate assets of such Sub-Fund denominated in thatcurrency (or currencies which are likely to fluctuate in thesame manner) nor exceed the period during which such assetsare held.

By derogation to the above, Sub-Funds may be managed byreference to a benchmark to hedge currency risk. Thesebenchmarks are appropriate, recognised indices orcombinations thereof and disclosed in “Appendix III - Sub-FundDetails”. The neutral risk position of any Sub-Fund will be thecomposition of the benchmark in both its investment andcurrency component weightings. The Investment Managersmay take currency positions towards this benchmark bypurchasing (or selling) currencies for forward settlement by thesale (or purchase) of other currencies held in the portfolio. TheInvestment Managers may however give to the Sub-Fund acurrency exposure that differs from that applicable benchmarkprovided that, when using forward currency contracts,purchases of currencies that are not a reference currency ofthe relevant Sub-Fund will be permitted to increase theexposure up to a maximum of 15% above the benchmarkweight of a given currency and in total such purchasetransactions providing a currency exposure which is greaterthan the benchmark weightings (except purchases in thereference currency of the Sub-Fund) will not be in excess of thevalue of 20% of the assets of the relevant Sub-Fund.

In addition, the Fund may engage in the following currencyhedging techniques:

(i) hedging by proxy, i.e. a technique whereby a Sub-Fundeffects a hedge of the reference currency of the Sub-Fund(or benchmark or currency exposure of the assets of theSub-Fund) against exposure in one currency by insteadselling (or purchasing) another currency closely related toit, provided however that these currencies are indeed likelyto fluctuate in the same manner.

(ii) cross-hedging, i.e. a technique whereby a Sub-Fund sells acurrency to which it is exposed and purchases more ofanother currency to which the Sub-Fund may also beexposed, the level of the base currency being leftunchanged, provided however that all such currencies arecurrencies of the countries which are at that time withinthe Sub-Fund’s benchmark or investment policy and thetechnique is used as an efficient method to gain thedesired currency and asset exposures.

(iii) anticipatory hedging, i.e. a technique whereby the decisionto take a position on a given currency and the decision tohave some securities held in a Sub-Fund’s portfoliodenominated in that currency are separate, provided

1 Temporary borrowing is not permitted for investment purposes.

34 Appendix II

however that the currency which is bought in anticipationof a later purchase of underlying portfolio securities is acurrency associated with those countries which are withinthe Sub-Fund’s benchmark or investment policy.

A Sub-Fund may not sell forward more currency exposure thanthere is in underlying assets exposure on either an individualcurrency (unless hedging by proxy) or a total currency basis.

In case the publication of the benchmark has been stopped orwhere major changes in that benchmark have occurred or if forsome reason the Directors feel that another benchmark isappropriate, another benchmark may be chosen. Any suchchange of benchmark will be reflected in an updatedProspectus.

The Fund may only enter into forward currency contracts ifthey constitute private agreements with highly rated financialinstitutions specialised in this type of transaction and maywrite call options and purchase put options on currencies ifthey are traded on a regulated market operating regularly,being recognised and open to the public.

c) The Fund may not deal in financial futures, except that:

i) for the purpose of hedging the risk of the fluctuation of thevalue of the portfolio securities of its Sub-Funds, the Fundmay sell stock index futures provided that there existssufficient correlation between the composition of the indexused and the corresponding portfolio of the relevant Sub-Fund;

ii) for the purpose of efficient portfolio management, theFund may, in respect of each Sub-Fund, purchase and sellfutures contracts on any kind of financial instruments;

d) The Fund may not deal in index options except that:

i) for the purpose of hedging the risk of the fluctuation of thevalue of the portfolio securities of its Sub-Funds, the Fundmay sell call options on indices or purchase put options onindices provided there exists a sufficient correlationbetween the composition of the index used and thecorresponding portfolio of the relevant Sub-Fund. Thevalue of the underlying securities included in the relevantindex option shall not exceed, together with outstandingcommitments in financial futures contracts entered into forthe same purpose, the aggregate value of the portion ofthe securities portfolio to be hedged; and

ii) for the purpose of efficient portfolio management the Fundmay, in respect of each Sub-Fund, purchase and selloptions on any kind of financial instruments;

provided however that the aggregate acquisition cost (interms of premiums paid) of options on securities, indexoptions, interest rate options and options on any kind offinancial instruments purchased by the Fund in respect of a

particular Sub-Fund shall not exceed 15% of the total netassets of the relevant Sub-Fund;

provided that the Fund may only enter into thetransactions referred to in paragraphs c) and d) above, ifthese transactions concern contracts which are traded on aregulated market operating regularly, being recognisedand open to the public.

e) i) The Fund may sell interest rate futures contracts for thepurpose of managing interest rate risk. It may also for thesame purpose write call options or purchase put options oninterest rates or enter into interest rate swaps by privateagreement with highly rated financial institutionsspecialised in this type of operation. In principle, theaggregate of the commitments of each Sub-Fund relatingto futures contracts, options and swap transactions oninterest rates may not exceed the aggregate estimatedmarket value of the assets to be hedged and held by theSub-Fund in the currency corresponding to those contracts.

(ii) The Fund may use bond and interest rate options, bond andinterest rate futures, index futures contracts and MBS TBAsfor the purposes of efficient portfolio management andmay enter into currency, interest rate and index swaps.

The Fund may enter into swap contracts in which the Fundand the counterparty agree to exchange payments whereone or both parties pay the returns generated by asecurity, instrument, basket or index thereof. The paymentsmade by the Fund to the counterparty and vice versa arecalculated by reference to a specific security, index, orinstruments and an agreed upon notional amount. Anysuch underlying security or instrument must be atransferable security and any such index must be an indexof a regulated market. The value of the underlyingsecurities shall be taken into account for the calculation ofthe investment restrictions applicable to individual issuers.The relevant indices include, but are not limited to,currencies, interest rates, prices and total return oninterest rates indices, fixed income indices and stockindices.

The Fund may enter into swap contracts relating to anyfinancial instruments or index, including total return swaps.All such permitted transactions must be effected throughhighly rated financial institutions specialised in this type oftransaction.

(iii) The Fund may use credit default swaps. A credit defaultswap is a bilateral financial contract in which onecounterpart (the protection buyer) pays a periodic fee inreturn for a contingent payment by the protection sellerfollowing a credit event of a reference issuer. Theprotection buyer must either sell particular obligationsissued by the reference issuer for its par value (or someother designated reference or strike price) when a creditevent occurs or receive a cash settlement based on thedifference between the market price and such reference

Appendix II 35

price. A credit event is commonly defined as bankruptcy,insolvency, receivership, material adverse restructuring ofdebt, or failure to meet payment obligations when due. TheISDA have produced standardised documentation for thesetransactions under the umbrella of its ISDA MasterAgreement.

The Fund may use credit default swaps in order to hedgethe specific credit risk of some of the issuers in its portfolioby buying protection.

In addition, the Fund may, provided it is in its exclusiveinterest, buy protection under credit default swaps withoutholding the underlying assets provided that the aggregatepremiums paid together with the present value of theaggregate premiums still payable in connection with creditdefault swap purchased together with the amount of theaggregate of premiums paid relating to the purchase ofoptions on transferable securities or on financialinstruments for a purpose other than hedging, may not, atany time, exceed 15% of the net assets of the relevant Sub-Fund.

Provided it is in its exclusive interest, the Fund may alsosell protection under credit default swaps in order toacquire a specific credit exposure. The Fund will only enterinto credit default swap transactions with highly ratedfinancial institutions specialised in this type of transactionand only in accordance with the standard terms laid downby the ISDA. Also, the Fund will only accept obligationsupon a credit event that are within the investment policy ofthe relevant Sub-Fund.

The Fund will ensure it can dispose of the necessary assetsat any time in order to pay redemption proceeds resultingfrom redemption requests and to meet its obligationsresulting from credit default swaps and other techniquesand instruments.

The aggregate commitments of all credit default swaptransactions will not exceed 20% of the net assets of any Sub-Fund provided that all swaps will be fully funded.

f) With respect to options referred to under a), b), d) and e)above, not withstanding any provision to the contrary, the Fundmay enter into OTC option transactions with highly ratedfinancial institutions participating in these types oftransactions.

3. Specific restrictions on dealing in Financial DerivativeInstruments

Unless otherwise approved by the Taiwan Financial SupervisoryCommission, for any Sub-Fund registered for public distribution inTaiwan, the total value of a Sub-Fund’s open long derivativepositions may not exceed 40% of the Sub-Fund’s net asset value,and the total value of a Sub-Fund’s open short derivative positionsmay not exceed the total market value of the correspondingsecurities held by the Sub-Fund

II Financial Techniques and InstrumentsFinancial techniques and instruments (securities lending, sale withright of repurchase transactions as well as repurchase and reverserepurchase agreements) may be used by any Sub-Fund for thepurpose of generating additional capital or income or for reducingcosts or risk, to the maximum extent allowed by and within thelimits set forth in (i) article 11 of the Grand Ducal regulation of 8 February 2008 relating to certain definitions of the LuxembourgLaw, (ii) CSSF Circular 08/356 relating to the rules applicable toundertakings for collective investments when they use certaintechniques and instruments relating to transferable securities andmoney market instruments (“CSSF Circular 08/356”) and (iii) anyother applicable laws, regulations, circulars or CSSF positions. Asignificant proportion of the income generated from the securitieslending program is credited to participating Sub-Funds, with aportion of the income shared between the Management Companyfor oversight of the program and JPMorgan Chase Bank, N.A. for itsrole as securities lending agent for the Fund. The net revenues ofthe Fund arising from securities lending transactions are specifiedin the semi-annual and annual reports published by the Fund.Borrowers of securities lent by participating Sub-Funds areapproved by the Management Company after appropriateassessment of such borrowers’ status and financial standing. Cashcollateral received in the context of the use of such techniques andinstruments may be reinvested, pursuant to the laws, regulationsand pronouncements above, in:

(a) shares or units in money market UCIs calculating a daily netasset value and being assigned a rating of AAA or itsequivalent;

(b) short-term bank deposits;

(c) money market instruments as defined in Directive 2007/16/ECof 19 March 2007;

(d) short-term bonds issued or guaranteed by a EU Member State,Switzerland, Canada, Japan or the United States or by theirlocal authorities or by supranational institutions andundertakings with EU, regional or world-wide scope;

(e) bonds issued or guaranteed by first class issuers offering anadequate liquidity, and

(f) reverse repurchase agreement transactions according to theprovisions described under section I (C) (a) of CSSF Circular08/356.

To the extent required by CSSF Circular 08/356, reinvestments ofsuch cash collateral must be taken into account for the calculationof the Sub-Fund’s global exposure.

Use of the aforesaid techniques and instruments involves certainrisks (See “Appendix IV – Risk Factors”) and there can be noassurance that the objective sought to be obtained from such usewill be achieved.

Appendix III – Sub-Fund DetailsThe information contained in this Appendix should be read inconjunction with the full text of the Prospectus of which thisforms an integral part.

1. Classes of sharesThe Board of Directors may decide to create within each Sub-Funddifferent Share Classes whose assets will be commonly investedpursuant to the specific investment policy of the relevant Sub-Fund, but which may have any combination of the followingfeatures:

• Each Sub-Fund may contain A, B, C, D, I and X Share Classes,which may differ in the minimum subscription and holdingamounts, eligibility requirements and fees and expensesapplicable to them as listed for each Sub-Fund. In addition,each Share Class may be branded either “JPM” or “JF”, as aprefix, for which the characteristics may differ for te sameShare Class.

• Each Share Class, where available, may be offered in theReference Currency of the relevant Sub-Fund, or may bedenominated in any currency, and such currency denominationwill be represented as a suffix to the Share Class name.

• Each Share Class may be either hedged (see definition of“Hedged Share Class” in the section “Principal Features andGlossary”) or unhedged; those Share Classes that are hedgedwill be identified with the suffix “(hedged)”.

• Each Share Class, where available, may also have differentdividend policies as described in the main part of theProspectus under the section “Dividend Policy”: “(acc)”,“(dist)”, “(div)”, “(inc)” and “(mth)” suffixed Share Classes maybe available.

• The attention of Shareholders is drawn to the fact that the NetAsset Value of a Share Class denominated in one currency mayvary unfavourably in respect of another Share Classdenominated in another currency due to hedging transactions.

A complete list of available Share Classes may be obtained fromthe website www.jpmorganassetmanagement.lu, the registeredoffice of the Fund or the Management Company in Luxembourg.

a) Eligibility RequirementsShares of D Share Classes may only be acquired by distributorsappointed by the Management Company purchasing Shares onbehalf of their clients.

Shares of I Share Classes are reserved for Institutional Investorsonly which are defined as follows:

• Institutional Investors, such as banks and other professionalsof the financial sector, insurance and reinsurance companies,social security institutions and pension funds, industrial,commercial and financial group companies, all subscribing ontheir own behalf, and the structures which such InstitutionalInvestors put into place for the management of their ownassets.

• Credit institutions and other professionals of the financialsector investing in their own name but on behalf ofInstitutional Investors as defined above.

• Credit institutions or other professionals of the financial sectorestablished in Luxembourg or abroad which invest in their ownname but on behalf of their clients on the basis of adiscretionary management mandate.

• Collective investment schemes established in Luxembourg orabroad.

• Holding companies or similar entities, whether Luxembourg-based or not, whose shareholders are Institutional Investors asdescribed in the foregoing paragraphs.

• Holding companies or similar entities, whether Luxembourg-based or not, whose shareholder(s) is an (are) individualperson(s) who is (are) currently deemed to be a well-informedinvestor(s).

• A holding company or similar entity, whether Luxembourg-based or not, which as a result of its structure, activity andsubstance constitutes an Institutional Investor in its own right.

Shares of X Share Classes may only be acquired by InstitutionalInvestors who are clients of the Management Company orJPMorgan Chase & Co. and (i) which meet the minimum accountmaintenance or qualification requirements established from timeto time for JPMorgan Chase & Co. client accounts and/or (ii) whoseShare Class X Shares will be held in a JPMorgan Chase & Co. clientaccount subject to separate advisory fees payable to theInvestment Manager or any of its affiliated companies.

Shares of X Share Classes are designed to accommodate analternative charging structure whereby an Annual Managementand Advisory Fee normally charged to the Sub-Fund and thenpassed on in the share price is instead administratively levied andcollected by the Management Company or through the appropriateJPMorgan Chase & Co. entity directly from the Shareholder. The feeis therefore listed as “Nil” in the Fees and Expenses tables in thisappendix, due to it not being levied on the Sub-Fund.

36 Appendix III

b) Minimum Initial and Subsequent Subscription Amounts, andMinimum Holding Amounts

Minimum initial investment amounts, minimum subsequentinvestment amounts and minimum holding amounts per ShareClass are listed below (except for the JPMorgan Investment Funds –Blue and Green Fund for which the minimum subscription amountis EUR 3,000,000) and are in USD or at equivalent amounts inalternative currencies:

Share Minimum Initial Minimum Subsequent Minimum HoldingClass Subscription Amount Subscription Amount Amount

A USD 35,000 USD 5,000 USD 5,000

B USD 1,000,000 USD 1,000 USD 1,000,000

C USD 10,000,000 USD 1,000 USD 10,000,000

D USD 5,000 USD 1,000 USD 5,000

I USD 10,000,000 USD 1,000 USD 10,000,000

X On Application On Application On Application

The Management Company may, at any time, decide tocompulsorily redeem all Shares from any Shareholder whoseholding is less than the minimum holding amount specified aboveor on application, or who fails to satisfy any other applicableeligibility requirements set out in the Prospectus. In such cases,the Shareholder concerned will receive one month’s prior notice soas to be able to increase their holding above such amount orotherwise satisfy the eligibility requirements.

c) Operating and Administrative ExpensesA, B, C and D Share Classes (and the I Share Classes of theJPMorgan Investment Funds – Euro Liquid Market Fund) will bear afixed annual Operating and Administrative Expenses charge as setout in this Appendix. I and X Share Classes will be subject to amaximum annual Operating and Administrative Expenses charge asset out in this Appendix. If the actual Operating and AdministrativeExpenses for the I and X Share Classes are below the statedmaximum percentage, only the actual expenses incurred will becharged.

d) ListingShares of X Share Classes will not be listed on either theLuxembourg or Bermuda Stock Exchanges.

2. Risk Management ProcessThe Fund employs a risk management process which enables it tomonitor and measure at any time the risk of the positions and theircontribution to the overall risk profile of each individual Sub-Fund.Furthermore, the Fund employs a process for accurate andindependent assessment of the value of OTC derivative instrumentswhich is communicated to the CSSF on a regular basis inaccordance with Luxembourg Law.

Upon request of investors, the Management Company will providesupplementary information relating to the risk managementprocess.

Appendix III 37

Reference CurrencyUS Dollar (USD)

BenchmarkMorgan Stanley Capital International (MCSI) All Countries Asia ex-Japan Index (Total Return Net).

Investment ObjectiveTo provide long-term capital growth by investing primarily incompanies in Asia (excluding Japan).

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested in equity and equity linkedsecurities of companies that are incorporated under the laws of,and have their registered office in, an Asian country (excludingJapan), or that derive the predominant part of their economicactivity from Asia (excluding Japan), even if listed elsewhere.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights.Subject to the foregoing, equity exposure may also be achieved, toa limited extent through investment in convertible securities, indexand participation notes and equity linked notes.

Fixed and floating rate debt securities, cash and cash equivalentsmay be held on an ancillary basis.

The Sub-Fund may also invest in UCITS and other UCIs.

The Sub-Fund may invest in assets denominated in any currencyand currency exposure may be hedged.

The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management.Techniques and instruments relating to transferable securities andmoney market instruments (including, but not limited to, securitieslending or repurchase agreements) may be used for the purpose ofefficient portfolio management.

All of the above investments will be made in accordance with thelimits set out in “Appendix II - Investment Restrictions and Powers”.

Investor ProfileThis is a core equity Sub-Fund designed to give broad marketexposure to stock markets across the Asian region excluding Japan.Because the Sub-Fund is diversified across a number of markets, itmay be suitable for investors who are looking for a stand-aloneAsian ex Japan regional equity investment aimed at producinglong-term capital growth. Because the Sub-Fund is invested inequities, and because of the additional individual economic,currency and political risks associated in the Asian ex Japan region,the Sub-Fund is probably suitable for investors with at least a fiveyear investment horizon.

Risk Profile• This equity Sub-Fund invests primarily in a portfolio of Asian

equities excluding Japan.

• As the Sub-Fund invests in equities, investors are exposed tostock market fluctuations and the financial performance of thecompanies held in the Sub-Fund’s portfolio.

• Therefore, investors may see the value of their investment fallas well as rise on a daily basis, and they may get back less thanthey originally invested.

• Also, investors should be aware that the Sub-Fund is investedin Emerging Markets, which may be subject to additionalpolitical and economic risks, while stocks can be negativelyimpacted by low liquidity, poor transparency and greaterfinancial risks.

• However, the volatility of the Sub-Fund is limited by itsdiversification across a large number of companies andindustry groups.

• This Sub-Fund is denominated in USD, but has significant non-USD exposure in the portfolio.

Investment ManagersJPMorgan Asset Management (Singapore) Limited

3. Equity Sub-Funds

JPMorgan Investment Funds –

JF Asia ex-Japan Fund

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJF Asia ex-Japan A 5.0% 1.50% 0.40% 0.50%

JF Asia ex-Japan B Nil 0,90% 0.25% Nil

JF Asia ex-Japan C Nil 0.75% 0.25% Nil

JF Asia ex-Japan D 5.0% 2.25% 0.40% 0.50%

JF Asia ex-Japan I Nil 0.75% 0.21% Max Nil

JF Asia ex-Japan X Nil Nil 0.20% Max Nil

38 Appendix III

Reference CurrencyEuro (EUR)

BenchmarkMorgan Stanley Capital International (MSCI) Europe (Total ReturnNet).

Investment ObjectiveTo provide long-term capital growth by investing primarily inEuropean companies that the Investment Manager believes to be inrecovery situations.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in equity and equity linked securities ofcompanies being in recovery situations that are incorporated underthe laws of, and have their registered office in, a European country, orthat derive the predominant part of their economic activity fromEurope, even if listed elsewhere. Companies deemed to be inrecovery situations are those for which the market sentiment isdeemed to be excessively negative and therefore that are consideredto offer potential for out-performance compared to the marketaverage.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights. Subjectto the foregoing equity exposure may also be achieved, to a limitedextent, through investment in convertible securities, index andparticipation notes and equity linked notes.

Fixed and floating rate debt securities, cash and cash equivalents maybe held on an ancillary basis.


The Sub-Fund may invest in assets denominated in any currency andcurrency exposure may be hedged.

The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management. Techniques

and instruments relating to transferable securities and money marketinstruments (including, but not limited to, securities lending orrepurchase agreements) may be used for the purpose of efficientportfolio management.


Investor ProfileThis is an aggressively managed equity Sub-Fund designed to seekout companies in Europe, the valuation of whose shares have beendepressed by business or other problems but where, in the opinion ofthe fund manager, there is the prospect of a recovery and consequentrevaluation. The Sub-Fund may, therefore, be suitable for investorslooking for a higher risk equity strategy to complement a coreportfolio, or for investors looking to capitalise on the significantinvestment opportunities offered by recovery stocks whilst acceptingthe significant risks. Investors in this Sub-Fund should also have atleast a five year investment horizon.

Risk Profile• This aggressively managed equity Sub-Fund invests primarily in a

portfolio of European equities including the UK, which are in arecovery situation.


• Therefore, investors may see the value of their investment fall aswell as rise on a daily basis, and they may get back less than theyoriginally invested.

• Also the Sub-Fund’s concentration on recovery stocks limits theroom for risk diversification within the Sub-Fund. However, theremay also be greater potential for higher returns.

• This Sub-Fund is denominated in EUR, but will have exposure tonon-EUR currencies.

Investment ManagerJPMorgan Asset Management (UK) Limited.


Europe Recovery Fund

Fees and ExpensesAnnual Management Operating and Redemption

Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Europe Recovery A 5.0% 1.50% 0.40% 0.50%

JPM Europe Recovery B Nil 0.90% 0.25% Nil

JPM Europe Recovery C Nil 0.80% 0.20% Nil

JPM Europe Recovery D 5.0% 2.50% 0.40% 0.50%

JPM Europe Recovery I Nil 0.80% 0.16% Max Nil

JPM Europe Recovery X Nil Nil 0.15% Max Nil

Appendix III 39

40 Appendix III


BenchmarkMorgan Stanley Capital International (MSCI) Europe Index (TotalReturn Net).

Benchmark for Hedged Share ClassesMorgan Stanley Capital International (MSCI) Europe Index (TotalReturn Net) hedged into EUR for the EUR hedged Share Classes

Investment ObjectiveTo achieve a return in excess of the European equity markets byinvesting primarily in European companies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in equity and equity linked securities ofcompanies that are incorporated under the laws of, and have theirregistered office in, a European country, or that derive thepredominant part of their economic activity from Europe, even iflisted elsewhere.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights.Subject tothe foregoing, equity exposure may also be achieved, to a limitedextent through investment in convertible securities, index andparticipation notes and equity linked notes.

Fixed and floating rate debt securities, cash and cash equivalents maybe held on an ancillary basis.


The Sub-Fund may invest in assets denominated in any currency andcurrency exposure in this Sub-Fund may be hedged or may bemanaged by reference to its benchmark.

The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management. Techniques

and instruments relating to transferable securities and money marketinstruments (including, but not limited to, securities lending orrepurchase agreements) may be used for the purpose of efficientportfolio management.


Investor ProfileThis is a core equity Sub-Fund designed to give broad marketexposure to European stock markets. Because the Sub-Fund isdiversified across a number of markets and is managedconservatively relative to its benchmark index, it may be suitablefor investors who are looking for a core equity investment to sit atthe heart of their portfolio, or as a stand alone investment aimedat producing long-term capital growth. Investors in this Sub-Fundshould also have at least a five year investment horizon.

Risk Profile• This equity Sub-Fund invests primarily in a portfolio of

European equities including the UK.

• As the Sub-Fund invests in equities, investors are exposed to stockmarket fluctuations and the financial performance of thecompanies held in the Sub-Fund’s portfolio.



• Also, the Sub-Fund’s careful risk controls and high level of stockdiversification aim to ensure low volatility relative to the benchmarkindex. Therefore, returns are not dependent on taking large risksagainst the Sub-Fund’s benchmark.

• This Sub-Fund is denominated in EUR, but will have exposureto non-EUR currencies.



Europe Select Equity Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Europe Select Equity A 5.0% 1.50% 0.40% 0.50%

JPM Europe Select Equity B Nil 0.90% 0.25% Nil

JPM Europe Select Equity C Nil 0.65% 0.20% Nil

JPM Europe Select Equity D 5.0% 2.25% 0.40% 0.50%

JPM Europe Select Equity I Nil 0.65% 0.16% Max Nil

JPM Europe Select Equity X Nil Nil 0.15% Max Nil

Appendix III 41


BenchmarkMorgan Stanley Capital International (MSCI) Europe Index (TotalReturn Net).

Investment ObjectiveTo provide long-term returns by investing primarily in highdividend-yielding equities of European companies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested in high dividend-yieldingequity and equity linked securities of companies that areincorporated under the laws of, and have their registered officein, a European country, or that derive the predominant part oftheir economic activity from Europe, even if listed elsewhere.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights.Subject to the foregoing, equity exposure may also be achieved,to a limited extent through investment in convertible securities,index and participation notes and equity linked notes.

Fixed and floating rate debt securities, cash and cashequivalents may be held on an ancillary basis.


The Sub-Fund may invest in assets denominated in any currencyand currency exposure in this Sub-Fund may be hedged or maybe managed by reference to its benchmark.

The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management.Techniques and instruments relating to transferable securitiesand money market instruments (including, but not limited to,securities lending or repurchase agreements) may be used forthe purpose of efficient portfolio management.

All of the above investments will be made in accordance withthe limits set out in “Appendix II - Investment Restrictions andPowers”.

Investor ProfileThis is a value style equity Sub-Fund designed to give a broadmarket exposure to European stock markets and to generatelong-term returns. The Sub-Fund is diversified across a numberof markets and may be suitable for investors who are lookingfor an income producing core equity investment, or as a standalone investment aimed at producing long-term capital growth.Investors in this Sub-Fund should also have at least a three-to-five year investment horizon.


higher yielding European equities including the UK.

• As the Sub-Fund invests in equities, investors are exposedto stock market fluctuations and the financial performanceof the companies held in the Sub-Fund’s portfolio.

• Therefore, investors may see the value of their investmentfall as well as rise on a daily basis, and they may get backless than they originally invested.


• Also, the Sub-Fund’s careful risk controls and high level ofstock diversification aim to ensure low volatility relative tothe benchmark index. Therefore, returns are not dependenton taking large risks against the Sub-Fund’s benchmark.

• Also, investors should be aware that the Sub-Fund mayinvest in emerging European markets, which may be subjectto additional political and economic risks, while stocks canbe negatively impacted by low liquidity, poor transparencyand greater financial risks.

• This Sub-Fund is denominated in EUR, but will haveexposure to non-EUR currencies.



Europe Strategic Dividend Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Europe Strategic Dividend A 5.0% 1.50% 0.40% 0.50%

JPM Europe Strategic Dividend B Nil 0.90% 0.25% Nil

JPM Europe Strategic Dividend C Nil 0.65% 0.20% Nil

JPM Europe Strategic Dividend D 0.50% 2.25% 0.40% 0.50%

JPM Europe Strategic Dividend I Nil 0.65% 0.16% Max Nil

JPM Europe Strategic Dividend X Nil Nil 0.15% Max Nil


BenchmarkMorgan Stanley Capital International (MSCI) World Index (TotalReturn Net)

Benchmark for Hedged Share ClassesMorgan Stanley Capital International (MSCI) World Index (TotalReturn Net) hedged into EUR for the EUR hedged Share Classes

Investment ObjectiveTo provide long-term capital growth by investing primarily incompanies, globally, that generate high and rising income.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested in equities and equity linkedsecurities that generate high and rising income. Issuers of thesesecurities may be located in any country, including emergingmarkets. The Sub-Fund’s portfolio is concentrated inapproximately 40 to 70 companies.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights.Subject to the foregoing, equity exposure may also be achieved,to a limited extent, through investment in convertible securities,index and participation notes and equity linked notes.

Fixed and floating rate debt securities, cash and cashequivalents may be held on an ancillary basis.



The Sub-Fund may invest in financial derivative instruments forhedging purposes and efficient portfolio management.Techniques and instruments relating to transferable securitiesand money market instruments (including, but not limited to,securities lending or repurchase agreements) may be used forthe purpose of efficient portfolio management.

All of the above investments will be made in accordance with thelimits set out in “Appendix II - Investment Restrictions andPowers”.

Investor ProfileThis equity Sub-Fund is designed to give exposure primarily toequities and equity linked securities that generate high andrising income in order to provide long-term returns. The Sub-Fund is diversified across a range of sectors and markets andmay be suitable for investors who are looking for an incomeproducing core equity investment or as a stand alone investmentaimed at producing long-term capital gain. Investors in this Sub-Fund should have at least a five year investment horizon.


dividend yielding equities and equity linked securities andthis may therefore limit the room for risk diversificationwithin the Sub-Fund. The Sub-Fund may therefore bear littleresemblance to its benchmark index and so may be morevolatile than more broadly based equity sub-funds.

• As the Sub-Fund invests in equities and equity linkedsecurities, investors are exposed to stock market fluctuationsand the financial performance of the companies held in theSub-Fund’s portfolio.

• In search of income, this Sub-Fund may take significantpositions at the stock selection, sector and countryallocation level. The Sub-Fund’s volatility may therefore behigh.

• Therefore, investors may see the value of their investmentfall as well as rise on a daily basis, and they may get backless than they originally invested.

• Furthermore, investors should be aware that the Sub-Fundmay invest in emerging markets, which may be subject toadditional, political and economic risks. Stocks may benegatively impacted by low liquidity, poor transparency andgreater financial risks.

• The Sub-Fund is denominated in USD, but will havesignificant exposure to other currencies.

Investment ManagerJ.P. Morgan Investment Management Inc.


Global Dividend Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Dividend A 5.0% 1.50% 0.40% 0.50%

JPM Global Dividend B Nil 0.90% 0.25% Nil

JPM Global Dividend C Nil 0.60% 0.20% Nil

JPM Global Dividend D 5.0% 2.25% 0.40% 0.50%

JPM Global Dividend I Nil 0.60% 0.16% Max Nil

JPM Global Dividend X Nil Nil 0.15% Max Nil

42 Appendix III


BenchmarkMorgan Stanley Capital International (MSCI) World Financials IndexUSD (Total Return Net).

Investment ObjectiveTo achieve a high return by investing primarily in companies from thefinancial, banking, insurance and property sectors (“FinancialCompanies”), globally.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in equity and equity linked securities ofFinancial Companies. Issuers of these securities may be located in anycountry, including emerging markets.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights.Subject to the foregoing, equity exposure may also be achieved, toa limited extent, through investment in convertible securities,index and participation notes and equity linked notes.




The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management.Techniques and instruments relating to transferable securities andmoney market instruments (including, but not limited to, securities

lending or repurchase agreements) may be used for the purpose ofefficient portfolio management.


Investor ProfileThis is a specialist sector equity Sub-Fund investing only in thefinancial sector of the global stock market. Although this focusedapproach can result in high relative returns when the financial sectoris in favour with the market, investors can suffer long periods ofunderperformance when the sector falls out of favour. The Sub-Fundmay, therefore, be suitable for investors with at least five yearinvestment horizon looking for a higher risk equity strategy tocomplement an existing core portfolio, or for experienced, diversifiedinvestors looking for exclusive exposure to a single stock marketsector.

Risk Profile• This equity Sub-Fund invests primarily in a portfolio of global

financial stocks.


• Therefore, investors may see the value of their investment fall aswell as rise on a daily basis, and they may get back less than theyoriginally invested.

• Also the Sub-Fund’s concentration on financial stocks limits theroom for risk diversification within the Sub-Fund. However, theremay also be greater potential for higher returns.

• This Sub-Fund is denominated in USD, but will have significantexposure to other currencies.

Investment ManagerJPMorgan Asset Management (UK) Limited.J.P. Morgan Investment Management Inc.


Global Financials Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Financials A 5.0% 1.50% 0.40% 0.50%

JF Global Financials A 5.0% 1.50% 0.40% 0.50%

JPM Global Financials B Nil 0.90% 0.25% Nil

JPM Global Financials C Nil 0.80% 0.25% Nil

JPM Global Financials D 5.0% 2.50% 0.40% 0.50%

JPM Global Financials I Nil 0.80% 0.21% Max Nil

JPM Global Financials X Nil Nil 0.20% Max Nil

Appendix III 43

44 Appendix III

Reference CurrencyUS Dollar (USD).

BenchmarkMorgan Stanley Capital International (MSCI) World Index USD (TotalReturn Net)


Investment ObjectiveTo provide long-term capital growth primarily through exposure tocompanies, globally, by direct investment in securities of suchcompanies and through the use of financial derivative instruments.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested, either directly or through theuse of financial derivative instruments, in equity and equity-linkedsecurities. Issuers of these securities may be located in anycountry, including emerging markets.


Financial derivative instruments utilised by the Sub-Fund mayinclude, but are not limited to, futures, options, contracts fordifference, forward contracts on financial instruments and optionson such contracts, credit linked instruments, mortgage TBAs andswap contracts by private agreement and other fixed income,currency and credit derivatives. Long and short positions may beemployed as described below. Financial derivative instruments mayalso be used for hedging purposes.

To enhance investment returns, the Sub-Fund will, mainly throughthe use of covered cash settled equity swaps, have exposure tolong and short positions in equities. The Sub-Fund will normallyhold directly or through the use of financial derivative instruments,long positions of approximately 130% of its net assets, andapproximately 30% of its net assets in short positions through theuse of financial derivative instruments. However at times the Sub-Fund may hold long positions of up to 150% of its net assets andshort positions of up to 50% of net assets. In certain marketconditions, the Sub-Fund may only hold 100% of its net assets inlong positions with no short positions. When outside of the range115% long/15% short and 145% long/45% short, steps will be taken

to adjust the exposure of the Sub-Fund so as to move back withinsuch range. The Sub-Fund’s long positions will be sufficiently liquidto cover at all times the Sub-Fund’s obligations arising from itsshort positions.


The Sub-Fund may also invest in units of UCITS and other UCIsincluding money market funds.

The Sub-Fund may invest in assets denominated in any currencyand currency exposure in this Sub-Fund may be managed byreference to its benchmark.

Techniques and instruments relating to transferable securities andmoney market instruments (including, but not limited to, securitieslending or repurchase agreements) may be used for the purpose ofefficient portfolio management.

The global exposure of the Sub-Fund will be monitored using VaRmethodology.


Investor ProfileThis is an actively managed Sub-Fund designed to give exposure toglobal stock markets. The Sub-Fund is well diversified across arange of markets. Financial derivative instruments will be used togain exposure to covered long and short positions on suchsecurities. This Sub-Fund uses an investment process which isbased on the bottom-up analysis of companies and their futureearnings and cashflows by a group of specialist sector analysts.The Sub-Fund may be suitable for investors who are looking for anequity investment with scope for additional returns. Investorsshould have at least a five-year investment horizon.

Risk Profile• This equity Sub-Fund invests primarily in equities globally.

• The Sub-Fund frequently uses derivative positions rather thandirect investments, in order to create and maintain exposure toglobal stock markets.

• As the Sub-Fund invests in equities and financial derivativeinstruments on equities, investors are exposed to stock marketfluctuations and the financial performance of the companiesheld in the Sub-Fund’s portfolio or to which the portfolio isexposed.


Global Select 130/30 Fund

Appendix III 45


• This Sub-Fund is denominated in USD, but will have exposureto non-USD currencies.

• The Sub-Fund may use financial derivative instruments toachieve its investment objective.

• The risks associated with the financial derivative instrumentslisted in the Investment Policy above are further detailed in“Appendix IV – Risk Factors”.

Investment ManagerJPMorgan Asset Management (UK) Limited


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Select 130/30 A 5.0% 1.50% 0.40% 0.50%

JPM Global Select 130/30 B Nil 0.90% 0.25% Nil

JPM Global Select 130/30 C Nil 0.80% 0.20% Nil

JPM Global Select 130/30 D 5.0% 2.50% 0.40% 0.50%

JPM Global Select 130/30 I Nil 0.80% 0.16%Max Nil

JPM Global Select 130/30 X Nil Nil 0.15%Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkNon-hedged 10% Claw-Back Morgan Stanley Capital International (MSCI)

World Index (Total Return Net)EUR hedged 10% Claw-Back Morgan Stanley Capital International (MSCI)

World Index (Total Return Net) hedged into EUR

46 Appendix III


BenchmarkMorgan Stanley Capital International (MSCI) World Index USD (TotalReturn Net).


Investment ObjectiveTo achieve a return in excess of the global equity markets byinvesting primarily in companies, globally.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in equity and equity linked securities.Issuers of these securities may be located in any country, includingemerging markets.








Investor ProfileThis is a core equity Sub-Fund designed to give exposure tointernational stock markets. Because the Sub-Fund is diversifiedacross a number of markets and is managed conservatively relativeto its benchmark index, it may be suitable for investors who arelooking for a core international equity investment to sit at the heartof their portfolio, or as a stand alone investment aimed at producinglong-term capital growth. Investors in this Sub-Fund should alsohave a three-to-five year investment horizon.

Risk Profile• This equity Sub-Fund invests primarily in a portfolio of global

equities.


• Therefore, investors may see the value of their investment fall aswell as rise on a daily basis, and they may get back less thanthey originally invested.

• However, the volatility of the Sub-Fund is limited by itsdiversification across a large number of companies and industrygroups.

• Also, the Sub-Fund’s careful risk controls and high level of stockdiversification aim to ensure low volatility relative to thebenchmark index. Therefore, returns are not dependent ontaking large risks against the Sub-Fund’s benchmark.

• This Sub-Fund is denominated in USD, but will have significantexposure to other currencies.



Global Select Equity Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Select Equity A 5.0% 1.50% 0.40% 0.50%

JPM Global Select Equity B Nil 0.90% 0.25% Nil

JPM Global Select Equity C Nil 0.60% 0.20% Nil

JPM Global Select Equity D 5.0% 2.25% 0.40% 0.50%

JPM Global Select Equity I Nil 0.60% 0.16% Max Nil

JPM Global Select Equity X Nil Nil 0.15% Max Nil

Appendix III 47


BenchmarkEuropean Overnight Index Average (EONIA)

Benchmark for Hedged Share ClassesBritish Bankers’ Association (BBA) LIBOR USD Overnight Indexfor the USD hedged Share Classes

British Bankers’ Association (BBA) LIBOR SEK Spot Next Indexfor the SEK hedged Share Classes

British Bankers’ Association (BBA) LIBOR GBP Overnight Indexfor the GBP hedged Share Classes

Investment ObjectiveTo provide a total return in all market environments in excess ofthe return on short-term instruments, through a market neutralstrategy. Derivatives will be used where appropriate, to gainexposure primarily to European and US equity securities.

Investment PolicyThe Sub-Fund will invest its assets primarily in cash, cashequivalents and short-dated instruments including but not limitedto, government securities, securities issued by corporations andtime deposits.

Equity exposure, which will normally be achieved through swaps ona basket of equities, will predominantly be in companies that areincorporated under the laws of, and have their registered office inthe US or a European country or derive the predominant part oftheir economic activity from the US or Europe. Through the use ofsuch swaps the Sub-Fund will seek to achieve its strategy throughlong exposure to undervalued equities and equity-linked securitiesand short exposure to overvalued equities and equity-linkedsecurities with the intention of achieving a net market neutralexposure.

The Sub-Fund may also invest directly in equity securities.


Repurchase agreements and other techniques and instrumentsmay be used for efficient portfolio management.

EUR is the reference currency of the Sub-Fund but assets may bedenominated in other currencies; however a substantial part of theassets of the Sub-Fund will be denominated in or hedged into EUR.

The Sub-Fund’s derivative investments will mainly include swaps ona basket of equities but may also include other swaps, forwards(including futures), options and contracts for difference.

The Sub-Fund will seek to provide returns regardless of whetherthe markets are in an upward or downward cycle.



Investor ProfileThis market neutral Sub-Fund seeks to achieve total returns inexcess of cash (not relative to an index benchmark). It may besuitable for investors who seek exposure to a product that isuncorrelated to the equity markets. Although the Sub-Fund has acash benchmark, it should not be used as a substitute fortraditional liquidity funds. The Sub-Fund may suit investors seekingto boost performance in a low-return market environment. TheSub-Fund is designed for experienced investors with at least a fiveyear investment horizon.

Risk Profile• This market neutral Sub-Fund holds the majority of its assets in

cash, cash equivalents and short-dated instruments, with itsmarket exposure, and most of its excess return potential,overlaid onto the portfolio using derivatives, such as futures,forwards and swaps.

• The Sub-Fund frequently uses derivatives rather than directequity investments, maintaining a broadly market neutralposition.

• EUR is the reference currency of the Sub-Fund but assets maybe denominated in other currencies; however a substantialpart of the assets of the Sub-Fund will be denominated orhedged into EUR.

• Investors should be aware that the Sub-Fund may not benefitfrom the returns arising from its investments in cash, cashequivalents and short-dated instruments due to its paymentobligations under the derivatives into which it enters (which asstated above will principally comprise swaps).

• The risks associated with the derivative instruments listed inthe Investment Policy above are further detailed in “AppendixIV – Risk Factors”.


Highbridge Statistical Market Neutral Fund

48 Appendix III

• The market neutral strategy used by the Sub-Fund may fail toproduce the intended result. There is no guarantee that theuse of corresponding long and short positions will succeed inlimiting the Sub-Fund’s exposure to stock market movements,capitalisation, sector-swings or other risk factors.

Investment ManagerHighbridge Capital Management, LLC


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Highbridge Statistical Market Neutral A 5.0% 1.50% 0.40% 0.50%

JPM Highbridge Statistical Market Neutral B Nil 0.90% 0.25% Nil

JPM Highbridge Statistical Market Neutral C Nil 0.80% 0.20% Nil

JPM Highbridge Statistical Market Neutral D 5.0% 2.25% 0.40% 0.50%

JPM Highbridge Statistical Market Neutral I Nil 0.80% 0.16% Max Nil

JPM Highbridge Statistical Market Neutral X Nil Nil 0.15% Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkNon-hedged 20% High Water Mark European Overnight Index Average (EONIA) USD hedged 20% High Water Mark British Bankers’ Association (BBA) LIBOR USD Overnight

IndexSEK hedged 20% High Water Mark British Bankers’ Association (BBA) LIBOR SEK Spot

Next IndexGBP hedged 20% High Water Mark British Bankers’ Association (BBA) LIBOR GBP Overnight

Index

Appendix III 49

Reference CurrencyJapanese Yen (JPY)

BenchmarkTokyo Stock Price Index (TOPIX) (Total Return Net).

Benchmark for Hedged Share ClassesTokyo Stock Price Index (TOPIX) (Total Return Gross) hedged intoEUR for the EUR hedged Share Classes

Investment ObjectiveTo achieve a return in excess of the Japanese equity marketprimarily from a concentrated portfolio of medium to large sizedJapanese companies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in equity and equity linked securities ofmedium to large sized companies that are incorporated under thelaws of, and have their registered office in, Japan, or that derive thepredominant part of their economic activity from Japan, even iflisted elsewhere. The Sub-Fund’s portfolio is concentrated inapproximately 50 companies.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights.Subject to the foregoing, equity exposure may also be achieved toa limited extent, through investment in convertible securities,index and participation notes and equity linked notes.







Investor ProfileThis is an equity Sub-Fund designed to give concentrated exposureto Japanese equities. Because the Sub-Fund is concentrated in onlyfifty stocks, it may be suitable for investors willing to acceptsignificantly higher risks in order to potentially generate higherlong-term returns. Because the Sub-Fund is invested in equities,and because of the individual economic, currency and politicalrisks associated with single country investing, the Sub-Fund is bestsuited for investors with at least a five year investment horizon.

Risk Profile• This equity Sub-Fund invests in a concentrated portfolio of

Japanese equities.



• Furthermore, investors should be aware that the Sub-Fundinvests in a single market, which can be subject to particularpolitical and economic risks and while providing a focusedinvestment and the potential for higher returns, also furtherlimits the room for risk diversification within the Sub-Fund.

• Because the portfolio is concentrated in approximately fiftystocks, diversification is reduced and volatility is increased, butthere may be greater potential for higher returns.

• Non-JPY denominated investors are exposed to currency risk as the Sub-Fund’s underlying assets are denominated mainly in JPY.

Investment ManagerJPMorgan Asset Management (Japan) Limited.


Japan 50 Equity Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Japan 50 Equity A 5.0% 1.50% 0.40% 0.50%

JPM Japan 50 Equity B Nil 0.90% 0.25% Nil

JPM Japan 50 Equity C Nil 0.75% 0.20% Nil

JPM Japan 50 Equity D 5.0% 2.50% 0.40% 0.50%

JPM Japan 50 Equity I Nil 0.75% 0.16% Max Nil

JPM Japan 50 Equity X Nil Nil 0.15% Max Nil

50 Appendix III


BenchmarkTokyo Stock Price Index (TOPIX) (Total Return Net)

Investment ObjectiveTo provide long-term capital growth by investing primarily inJapanese companies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in equity and equity linked securities ofcompanies that are incorporated under the laws of, and have theirregistered office in Japan or that derive the predominant part oftheir economic activity from Japan, even if listed elsewhere.

Equity exposure may be achieved through investment in shares,depositary receipts, warrants and other participation rights andonly to a limited extent through investment in convertiblesecurities, index and participation notes and equity linked notes.





This Sub-Fund uses an investment process which is based onsystematic investment in stocks with specific style characteristicswhich are associated with long-term outperformance, caused by theimpact of human psychological biases on stock markets.

All the above investments will be made in accordance with thelimits set out in “Appendix II - Investment Restrictions and Powers”.

Investor ProfileThis Sub-Fund is designed for investors looking for broad marketexposure in a single developed stock market. Therefore the Sub-Fund may suit investors who are looking to add a single countryholding to an existing diversified portfolio or for investors lookingfor a stand-alone core equity investment aimed at producing long-term capital growth. Because the Sub-Fund is invested in equities,and because of the individual economic, currency and politicalrisks associated with single country investing, the Sub-Fund may besuitable for investors with at least a five year investment horizon.

Risk Profile• This actively managed equity Sub-Fund invests primarily in a

portfolio of Japanese equities.





• The Sub-Fund is denominated in USD but its underlying assetsare mainly denominated in JPY.

Investment ManagerJPMorgan Asset Management (Japan) Limited JF Asset Management Limited


Japan Behavioural Finance Equity Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Japan Behavioural Finance Equity A 5.0% 1.50% 0.40% 0.50%

JPM Japan Behavioural Finance Equity B Nil 0.90% 0.25% Nil

JPM Japan Behavioural Finance Equity C Nil 0.75% 0.20% Nil

JPM Japan Behavioural Finance Equity D 5.0% 2.25% 0.40% 0.50%

JPM Japan Behavioural Finance Equity I Nil 0.75% 0.16% Max Nil

JPM Japan Behavioural Finance Equity X Nil Nil 0.15% Max Nil

Appendix III 51



Investment ObjectiveTo provide superior long-term capital growth by investing primarilyin an aggressively managed portfolio of Japanese companies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in equity and equity linked securities ofcompanies that are incorporated under the laws of, and have theirregistered office in, Japan, or that derive the predominant part oftheir economic activity from Japan, even if listed elsewhere. TheSub-Fund’s portfolio will be very concentrated.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights. Subjectto the foregoing, equity exposure may also be achieved, to a limitedextent, through investment in convertible securities, index andparticipation notes and equity linked notes.






Investor ProfileThis is an aggressively managed concentrated equity Sub-Fundinvesting in a portfolio of Japanese stocks. Because the Sub-Fund isconcentrated, it may be suitable for investors willing to accept

significantly higher risks in order to potentially generate higherlong-term returns. This Sub-Fund uses an investment processwhich is based on the bottom-up analysis of companies and theirfuture earnings and cashflows by a group of specialist sectoranalysts. The Sub-Fund is invested in equities, and investors shouldbe aware of the individual economic, currency and political risksassociated with single country investing. Therefore, the Sub-Fundmay be suitable for investors looking for a higher risk equitystrategy to complement an existing core portfolio, or who arelooking to enhance potential long-term returns but are alsocomfortable with the extra risk inherent in the Sub-Fund’sinvestment strategy. Investors in this Sub-Fund should also have atleast a five year investment horizon.

Risk Profile• This aggressively managed concentrated equity Sub-Fund

invests primarily in a portfolio of Japanese equities.

• Due to its active stock and sector allocations, high volatilitymay occur and the Sub-Fund may bear little resemblance tothe composition of its benchmark. Therefore, there may begreater potential for higher returns and losses.




• Because the portfolio is concentrated, diversification is reducedand volatility is increased, but there may be greater potentialfor higher returns.

Investment ManagerJPMorgan Asset Management (Japan) Limited


Japan Focus Fund

52 Appendix III


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Japan Focus A 5.0% 1.50% 0.40% 0.50%

JPM Japan Focus B Nil 0.90% 0.25% Nil

JPM Japan Focus C Nil 0.75% 0.20% Nil

JPM Japan Focus D 5.0% 2.50% 0.40% 0.50%

JPM Japan Focus I Nil 0.75% 0.16% Max Nil

JPM Japan Focus X Nil Nil 0.15% Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkAll 10% Claw-Back Tokyo Stock Price Index (TOPIX) (Total Return Net)

Appendix III 53


BenchmarkTokyo Stock Price Index (TOPIX) (Total Return Net).

Benchmark for Hedged Share ClassesTokyo Stock Price Index (TOPIX) (Total Return Gross) hedged intoEUR for the EUR hedged Share Classes

Investment ObjectiveTo achieve a return in excess of the Japanese equity market byinvesting primarily in Japanese companies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in equity and equity linked securities ofcompanies that are incorporated under the laws of, and have theirregistered office in, Japan, or that derive the predominant part oftheir economic activity from Japan, even if listed elsewhere.







Investor ProfileThis is a core equity Sub-Fund designed to give exposure toJapanese equities. Because the Sub-Fund is managedconservatively relative to its benchmark index, it may be suitablefor investors who are looking for a core single country equityinvestment to sit at the heart of their portfolio, or as a stand aloneinvestment aimed at producing long-term capital growth. Also,because the Sub-Fund is invested in equities, and because of theindividual economic, currency and political risks associated withsingle country investing, the Sub-Fund may be suitable forinvestors with at least a five year investment horizon.


Japanese equities.• As the Sub-Fund invests in equities, investors are exposed to

stock market fluctuations and the financial performance of thecompanies held in the Sub-Fund’s portfolio.




• Also, the Sub-Fund’s careful risk controls and high level ofstock diversification aim to ensure low volatility relative to thebenchmark index. Therefore, returns are not dependent ontaking large risks against the Sub-Fund’s benchmark.

• Non-JPY denominated investors are exposed to currency risk asthe Sub-Fund’s underlying assets are denominated mainly in JPY.

Investment ManagerJPMorgan Asset Management (Japan) Limited.


Japan Select Equity Fund

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Japan Select Equity A 5.0% 1.50% 0.40% 0.50%

JPM Japan Select Equity B Nil 0.90% 0.25% Nil

JPM Japan Select Equity C Nil 0.75% 0.20% Nil

JPM Japan Select Equity D 5.0% 2.25% 0.40% 0.50%

JPM Japan Select Equity I Nil 0.75% 0.16% Max Nil

JPM Japan Select Equity X Nil Nil 0.15% Max Nil

54 Appendix III



Investment ObjectiveTo provide long-term capital growth by investing primarily in avalue style biased portfolio of Japanese companies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in a value style biased portfolio ofequity and equity linked securities of companies that areincorporated under the laws of, and have their registered office inJapan or that derive the predominant part of their economic activityfrom Japan, even if listed elsewhere.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights. Subjectto the foregoing, equity exposure may also be achieved, to a limitedextent, through investment in convertible securities, index andparticipation notes and equity linked notes.






Investor ProfileThis is a value investment style equity Sub-Fund designed to giveexposure to value companies in Japan. Because value stocks tendto outperform at different times to growth stocks, investors shouldbe prepared for periods of underperformance relative to theJapanese stock market. However, research shows that over thelong-term both value and growth investment styles haveoutperformed. Therefore, this Sub-Fund can be used both toprovide a value tilt to an existing diversified portfolio or as aninvestment in its own right. Investors in this Sub-Fund should haveat least a five year investment horizon.

Risk Profile• This equity Sub-Fund invests in a value style portfolio of

Japanese companies.



• Furthermore, investors should be aware that the Sub-Fundinvests in a single market, which can be subject to particularpolitical and economic risks and while providing a focusedinvestment and the potential for higher returns, also limits theroom for diversification within the Sub-Fund.

• Also the Sub-Fund’s pure exposure to value stocks furtherlimits the room for risk diversification within the Sub-Fund.Short-term volatility against broader market indices maytherefore be considerable.

• Although research shows that value stocks outperform overthe long-term, investors may experience periods of high short-term volatility.

• Non JPY denominated investors may be exposed to currencyrisk as the Sub-Fund’s underlying assets are denominatedmainly in JPY.

Investment ManagerJPMorgan Asset Management (Japan) Limited JF Asset Management Limited


Japan Strategic Value Fund

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Japan Strategic Value A 5.0% 1.50% 0.40% 0.50%

JPM Japan Strategic Value B Nil 0.90% 0.25% Nil

JPM Japan Strategic Value C Nil 0.75% 0.20% Nil

JPM Japan Strategic Value D 5.0% 2.25% 0.40% 0.50%

JPM Japan Strategic Value I Nil 0.75% 0.16% Max Nil

JPM Japan Strategic Value X Nil Nil 0.15% Max Nil

Appendix III 55


BenchmarkStandard & Poor’s (S&P) 500 Index (Total Return Net)

Investment ObjectiveTo achieve high dividend yield whilst participating in long termcapital growth by investing primarily in US companies

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested in high dividend yielding equityand equity linked securities of companies that are incorporatedunder the laws of, and have their registered office in, the US, orthat derive the predominant part of their economic activity fromthe US, even if listed elsewhere.

The Sub-Fund may also invest in Canadian companies.







Investor ProfileThis equity Sub-Fund is designed to give exposure primarily to highdividend yielding US equities and to generate long term capitalgrowth. The Sub-Fund is diversified across a range of sectors.Because the Sub-Fund is invested in equities, and because of theindividual economic, currency and political risks associated withsingle country investing, the Sub-Fund may be suitable forinvestors with at least a three-to-five year investment horizon.

Risk Profile• This equity Sub-Fund invests primarily in a portfolio of high

dividend yielding US equities.




• Also, the Sub-Fund’s exposure to high dividend yieldingequities limits the room for risk diversification within the Sub-Fund




US Dividend Fund

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM US Dividend A 5.0% 1.50% 0.40% 0.5%

JPM US Dividend B Nil 0.90% 0.25% Nil

JPM US Dividend C Nil 0.65% 0.20% Nil

JPM US Dividend D 5.0% 2.00% 0.40% 0.5%

JPM US Dividend I Nil 0.65% 0.16% Max Nil

JPM US Dividend X Nil Nil 0.15% Max Nil

56 Appendix III


BenchmarkStandard & Poor’s (S&P) Rating Group 500 Index (Total Return Net)

Benchmark for Hedged Share ClassesStandard and Poor’s (S&P) Rating Group 500 Index (Total ReturnNet) hedged into EUR for the EUR hedged Share Classes

Investment ObjectiveTo maximise long-term capital growth by investing primarily in anactively managed portfolio of medium to large capitalisation UScompanies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested in equity and equity linkedsecurities of medium to large capitalisation companies that areincorporated under the laws of, and have their registered office in,the US, or that derive the predominant part of their economicactivity from the US, even if listed elsewhere.








Investor ProfileThis Sub-Fund is designed for investors looking for broad marketexposure to a single developed stock market. Therefore the Sub-Fund may suit investors who are looking to add a single countryholding to an existing diversified portfolio or for investors looking fora stand-alone core equity investment aimed at producing long-termcapital growth. This Sub-Fund uses an investment process which isbased on systematic investment in stocks with specific stylecharacteristics which are associated with long-term outperformance,caused by the impact of human psychological biases on stockmarkets. Because the Sub-Fund is invested in equities, and becauseof the individual economic, currency and political risks associatedwith single country investing, the Sub-Fund may be suitable forinvestors with at least a three-to-five year investment horizon.

Risk Profile• This actively managed equity Sub-Fund invests primarily in a

portfolio of US equities.





• Non-USD denominated investors are exposed to currency riskas the Sub-Fund’s underlying assets are denominated mainly inUSD.

Investment ManagerJ. P. Morgan Investment Management Inc.


US Equity Fund

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM US Equity A 5.0% 1.50% 0.40% 0.50%

JPM US Equity B Nil 0.90% 0.25% Nil

JPM US Equity C Nil 0.65% 0.20% Nil

JPM US Equity D 5.0% 2.00% 0.40% 0.50%

JPM US Equity I Nil 0.65% 0.16% max Nil

JPM US Equity X Nil Nil 0.15% max Nil

Appendix III 57


BenchmarkLIBOR one-month US Dollar deposits

Benchmark for Hedged Share ClassesLIBOR one-month Euro deposit for the EUR hedged Share Classes

Investment ObjectiveTo achieve a total return over a full market cycle in excess of itscash benchmark, through a market neutral strategy. Exposure willprimarily be to US companies mainly through the use of financialderivative instruments.

Investment PolicyThe Sub-Fund will invest its assets primarily in cash, cashequivalent and short dated instruments including but not limitedto, government securities, securities issued by corporations andtime deposits.

The Sub-Fund will gain exposure to equity and equity linkedsecurities of companies that are incorporated under the laws of,and have their registered office in the US or derive thepredominant part of their economic activity from the US even iflisted elsewhere, mainly through the use of financial derivativeinstruments. The minimum exposure to such equity or equitylinked securities will be 67% of the Sub-Fund’s total assets.


To achieve its market neutral strategy the Sub-Fund will, mainlythrough the use of covered cash settled swaps on equity baskets,achieve long exposure to attractive equities and equity-linkedsecurities and short exposure to unattractive equities and equity-linked securities. The relative attractiveness or unattractiveness ofa particular equity will be based upon quantitative factors such asan equity’s valuation or catalysts that could trigger a rise or fall inan equity’s price. The Sub-Fund will normally hold mainly throughthe use of financial derivative instruments long positions of up to200% of its net assets, and up to 200% of its net assets in shortpositions through the use of cash settled financial derivativeinstruments. The Sub-Fund will hold sufficient liquid assets(including, if applicable, sufficiently liquid long positions) to coverat all times the Sub-Fund’s obligations arising from its financialderivative positions (including short positions).

Financial derivative instruments utilised by the Sub-Fund mayinclude, but are not limited to, futures, options, contracts fordifference, forward contracts on financial instruments and optionson such contracts, credit linked instruments, mortgage TBAs and

swap contracts by private agreement and other fixed income,currency and credit derivatives. Long and short positions may beemployed as described above. Financial derivative instruments mayalso be used for hedging purposes.



USD is the reference currency of the Sub-Fund but assets may bedenominated in other currencies and currency exposure may behedged.


The Sub-Fund will seek to provide positive returns regardless ofwhether the markets are in an upward or downward cycle.



Investor ProfileThis market neutral Sub-Fund seeks to achieve total returns inexcess of its cash benchmark through exposure to US markets. Itmay be suitable for investors who seek exposure to a product thatis uncorrelated to the equity markets. Although the Sub-Fund has acash benchmark, it should not be used as a substitute fortraditional liquidity funds. The Sub-Fund may suit investors seekingto boost performance in a low-return market environment. TheSub-Fund is designed for experienced investors with at least a fiveyear investment horizon.

Risk Profile• This Sub-Fund is exposed primarily to US equities.

• The Sub-Fund frequently uses derivatives rather than directequity investments, maintaining a broadly market neutralposition.

• The market neutral strategy used by the Sub-Fund may fail toproduce the intended result. There is no guarantee that theuse of corresponding long and short positions will succeed inlimiting the Sub-Fund’s exposure to stock market movements,capitalisation, sector-swings or other risk factors.


US Market Neutral Fund

58 Appendix III

• As the Sub-Fund invests in equities and financial derivativesinstruments on equities, investors are exposed to stock marketfluctuations and the financial performance of the companiesheld in the Sub-Fund’s portfolio or to which the portfolio isexposed.



• USD is the reference currency of the Sub-Fund but assets maybe denominated in other currencies and currency exposuremay be hedged.


Investment ManagerJ. P. Morgan Investment Management Inc.

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM US Market Neutral A 5.0% 1.50% 0.40% 0.50%

JPM US Market Neutral B Nil 0.90% 0.25% Nil

JPM US Market Neutral C Nil 0.80% 0.20% Nil

JPM US Market Neutral D 5.0% 2.25% 0.40% 0.50%

JPM US Market Neutral I Nil 0.80% 0.16% Max Nil

JPM US Market Neutral X Nil Nil 0.15% Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkNon-hedged 20% High Water Mark LIBOR one-month US Dollar depositsEUR hedged 20% High Water Mark LIBOR one-month Euro deposit

Appendix III 59


BenchmarkStandard & Poor’s (S&P) Rating Group 500 Index (Total ReturnNet).

Benchmark for Hedged Share ClassesStandard & Poor’s (S&P) Rating Group 500 Index (Total Return Net)hedged into EUR for the EUR hedged Share Classes

Investment ObjectiveTo achieve a return in excess of the US equity market by investingprimarily in US companies.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested in equity and equity linkedsecurities of companies that are incorporated under the laws of,and have their registered office in, the US, or that derive thepredominant part of their economic activity from the US, even iflisted elsewhere.


Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights.Subject to the foregoing, equity exposure may also be achieved,toa limited extent, through investment in convertible securities,index and participation notes and equity linked notes.




The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management.Techniques and instruments relating to transferable securities andmoney market instruments (including, but not limited to, securitieslending or repurchase agreements) be used for the purpose ofefficient portfolio management.


Investor ProfileThis is a core equity Sub-Fund designed to give exposure to USequities. Because the Sub-Fund is managed conservatively relativeto its benchmark index, it may be suitable for investors who arelooking for a core single-country equity investment to sit at theheart of their portfolio, or as a stand alone investment aimed atproducing long-term capital growth. Also, because the Sub-Fund isinvested in equities, and because of the individual economic,currency and political risks associated with single countryinvesting, the Sub-Fund may be suitable for investors with at leasta three-to-five year investment horizon.

Risk Profile• This equity Sub-Fund invests primarily in a portfolio of US

equities.• As the Sub-Fund invests in equities, investors are exposed to

stock market fluctuations and the financial performance of thecompanies held in the Sub-Fund’s portfolio.




• Also, the Sub-Fund’s careful risk controls and high level ofstock diversification aim to ensure low volatility relative to thebenchmark index. Therefore, returns are not dependent ontaking large risks against the Sub-Fund’s benchmark.

• Non-USD denominated investors are exposed to currency riskas the Sub-Fund’s underlying assets are denominated mainly inUSD.



US Select Equity Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM US Select Equity A 5.0% 1.50% 0.40% 0.50%

JPM US Select Equity B Nil 0.90% 0.25% Nil

JPM US Select Equity C Nil 0.65% 0.20% Max Nil

JPM US Select Equity D 5.0% 2.00% 0.40% 0.50%

JPM US Select Equity I Nil 0.65% 0.16% Max Nil

JPM US Select Equity X Nil Nil 0.15% Max Nil

60 Appendix III


BenchmarkLIBOR one-month Euro deposits for the EUR denominated ShareClasses

LIBOR one-month Euro deposits expressed in USD terms for theUSD denominated Share Classes

Benchmark for Hedged Share ClassesLIBOR one-month US Dollar deposit for the USD hedged ShareClasses

Investment ObjectiveTo achieve a total return in EUR in excess of its cash benchmarkfrom a concentrated portfolio of securities, globally.

Investment PolicyThe Sub-Fund will primarily invest in a concentrated portfolio ofequity and equity linked securities (including depository receipts,warrants and other participation rights), index and participationnotes, equity linked notes, convertible securities, fixed and floatingrate debt securities, deposits with credit institutions and moneymarket instruments. Issuers of these securities may be located inany country, including emerging markets.



The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management. Morespecifically, the Sub-Fund may invest in options, index swaps andindex futures as well as cash or cash equivalents to hedge againstdirectional. Techniques and instruments relating to transferablesecurities and money market instruments (including, but notlimited to, securities lending or repurchase agreements) may beused for the purpose of efficient portfolio management.

Important additional information on how the Sub-Fund is managedis contained in the introductory paragraph for the Total ReturnSub-Funds.

All of the above investments will be made in accordance with thelimits set out in Appendix II - Investment Restrictions and Powers”.

Investor ProfileThis aggressively managed Sub-Fund invests in a highlyconcentrated portfolio of equities, bonds, convertible bonds andcash anywhere in the world and denominated in any currency.

The Sub-Fund is managed to achieve total returns in excess ofcash, rather than relative to a benchmark index, with equities asthe prime driver of these returns. Therefore, in strong stockmarket conditions, the Sub-Fund can be expected to seeksignificant exposure to equities, but when stock markets are weak,the Sub-Fund may seek to lower equity exposure, focusing insteadon bonds and cash. In extreme situations the Sub-Fund may beinvested 100% in equities or may hold no equities at all.

The Sub-Fund may therefore be suited to experienced investorslooking for a higher risk investment strategy to complement anexisting core portfolio, or for diversified investors looking to boostlong-term returns who are also comfortable with the extra risksinherent in the Sub-Fund. Investors in this Sub-Fund should have atleast a three-to-five year investment horizon.

Risk Profile• The Sub-Fund can invest in equities, leaving investors exposed

to stock market fluctuations and the financial performance ofthe companies held in the Sub-Fund’s portfolio. Therefore,investors may get back less than they originally invested.

• However, this Sub-Fund can take large asset allocationdecisions between equities, bonds and cash, and can also usederivatives. Therefore, investors in the Sub-Fund mayexperience higher relative levels of volatility.

Investment ManagerJPMorgan Asset Management (UK) Limited.J. P. Morgan Investment Management Inc.

4. Total Return Sub-FundsThe Sub-Funds categorised as “Total Return” are managed with a view to achieving total returns in excess of a prevailing cash rate, and not relative toan index. Equity stock selection will be the primary source of this return, reflecting a bottom up stock picking approach. The Sub-Funds will usederivatives, In particular these Sub-Funds may use futures and/or options to lower the direct equity market exposure significantly and may hold highcash positions.


Global Total Return Fund

Appendix III 61


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Total Return A 5.0% 1.25% 0.40% 0.50%

JF Global Total Return A 5.0% 1.25% 0.40% 0.50%

JPM Global Total Return B Nil 0.75% 0.25% Nil

JPM Global Total Return C Nil 0.60% 0.20% Nil

JPM Global Total Return D 5.0% 2.25% 0.40% 0.50%

JPM Global Total Return I Nil 0.60% 0.16% Max Nil

JPM Global Total Return X Nil Nil 0.15 Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkEUR 10% High Water Mark LIBOR one-month Euro depositsUSD non-hedged 10% High Water Mark LIBOR one-month Euro deposit

(expressed in USD terms)USD hedged 10% High Water Mark LIBOR one-month US Dollar deposit

62 Appendix III


Investment MinimumShares in this Sub-Fund may be acquired by investors subscribingfor a minimum amount of Euro 3,000,000.

BenchmarkLIBOR one-month Euro deposits.

Investment ObjectiveTo achieve, over a medium-term horizon (2 to 3 years), a return inexcess of its cash benchmark from a portfolio of securities,globally, using derivative strategies where appropriate.

Investment PolicyThe Sub-Fund will primarily invest in a portfolio of fixed andfloating rate debt securities, equity and equity linked securities(including depository receipts, warrants and other participationrights), index and participation notes, equity linked notes,convertible securities, deposits with credit institutions and moneymarket instruments. Issuers of these securities may be located inany country, including emerging markets.

The Sub-Fund may use financial derivative instruments to achieveits investment objective. Financial derivative instruments may alsobe used for hedging purposes.

Financial derivative instruments utilised by the Sub-Fund mayinclude, but are not limited to, futures, options, contracts fordifference, total return swaps, selected OTC derivatives and otherderivative products.

The Investment Manager will vary asset and country allocationsover time to reflect market conditions and opportunities.

The Sub-Fund’s fixed and floating rate debt securities will generallybe restricted to securities rated at least A as measured byindependent rating agencies such as Moody or equivalent, forlonger-term securities, or at least A1 or equivalent, for shorter-term securities, as measured by independent rating agencies suchas Moody’s and Standard & Poor’s. The convertible securities willusually have an average credit quality of Baa2 or equivalent asmeasured by independent rating agencies such as Moody’s andStandard & Poor’s. Within this constraint, the Sub-Fund may investin below investment grade securities and unrated securities.


Techniques and instruments relating to transferable securities andmoney market instruments (including, but not limited to, securities





Investor ProfileAs a balanced Sub-Fund, this Sub-Fund invests in fixed incomesecurities, short-term securities, deposits with credit institutionsand money market instruments, equity securities, convertiblebonds and bonds. It is most suited for investors who would like anincome and the opportunity for investment growth through modestequity exposure, while enjoying some downside protection. Sincethe Sub-Fund is bond biased it is most suited to investors that arerisk averse. Investors will therefore likely use the Sub-Fund tocomplement an existing core portfolio of bonds, in order to gaingreater diversification. The Sub-Fund can also be used as a stand-alone investment for investors looking to produce steady capitalgrowth. The Sub-Fund is managed against a cash benchmark.Because of the additional volatility associated with equities andconvertible bonds, investors in this Sub-Fund should also have atleast a two-to-three year investment horizon.

Risk Profile• This balanced Sub-Fund invests primarily in investment grade

bonds, both government and non-government, but also hasexposure to unrated bonds, convertible bonds, fixed andfloating rate debt securities, money market instruments,equities and cash.

• Because bonds and convertible bonds pay a regular incomeand have a fixed maturity date, their volatility is expected to berelatively low.

• The risk to initial investment capital is relatively low. However,because of the Sub-Fund’s exposure to equities, risks arehigher than in Sub-Funds that invest only in bonds.


• This Sub-Fund is denominated in EUR and when assets aredenominated in other currencies, these will generally behedged back into EUR.

• The risks associated with the derivative instruments listed inthe Investment Policy above are further detailed in AppendixIV – Risk Factors.

5. Balanced Sub-Funds


Blue and Green Fund

Appendix III 63


Fees and ExpensesThe Shares are charged annual total expenses of 0.85% of theaverage net assets of the Shares.

Subscriptions, Redemptions and SwitchesSubscriptions for Shares can be made once a week on the Mondayof each week (a “Valuation Day”). If any such day is not a bankbusiness day in both Luxembourg and France, the immediatelyfollowing bank business day in both such jurisdictions shall be aValuation Day.

A Shareholder may present his Shares for redemption in whole orin part on any Valuation Day. Switches into the Shares of this Sub-Fund will not be permitted.

ListingThe Shares of the Sub-Fund are not listed on the LuxembourgStock Exchange.

64 Appendix III


BenchmarkJ.P. Morgan 1 Month Cash Euro (10%); MSCI Japan Index (TotalReturn Net) (6%); MSCI Europe Index (Total Return Net) (25%);MSCI US Index (Total Return Net) (15%); MSCI EM Index (TotalReturn Net) (4%); J.P. Morgan Global Bond Index (EUR Hedged)(Total Return Gross) (40%).

Investment ObjectiveTo provide long-term capital growth and income by investingprimarily in companies and sovereign issuers, globally.

Investment PolicyThe Sub-Fund will hold between 30% and 70% of its total assets(excluding cash and cash equivalents) in equity and equity linkedsecurities. In addition, the Sub-Fund will invest between 30% and70% of its total assets (excluding cash and cash equivalents) infixed and floating rate debt securities. Issuers of these securitiesmay be located in any country, including emerging markets.


The Sub-Fund will seek to maintain an average credit quality of atleast AA or equivalent as measured by independent rating agenciessuch as Moody’s or Standard & Poor’s, for longer term securities,or of at least A1 or equivalent for shorter term securities. Withinthis constraint, the Sub-Fund may invest in below investment gradeand unrated securities.

The Sub-Fund may also invest in UCITS and other UCIs. Cash andcash equivalents may be held on an ancillary basis.

EUR is the reference currency of the Sub-Fund but assets may bedenominated in other currencies. The currency exposure in thisSub-Fund may be hedged or may be managed by reference to itsbenchmark.



Investor ProfileThis is a balanced Sub-Fund which invests in both equities andbonds. Therefore the Sub-Fund may be suitable for investorslooking for potentially higher returns than a pure bond Sub-Fundbut are prepared to take a higher level of risk in order to achievethis. Because of the additional volatility associated with equities,investors in this Sub-Fund should also have at least a three-to-fiveyear investment horizon.

Risk Profile• This balanced Sub-Fund invests primarily in equities and

bonds, with the asset allocation mix in the benchmark 50/40between the two (with the remainder in cash).

• The Sub-Fund’s exposure to equities means that investors areexposed to stock market movements and therefore they shouldexpect the value of the Sub-Fund to rise and fall on a dailybasis.

• However, the Sub-Fund’s exposure to bonds is designed todampen volatility and lead to greater stability of returns overthe long term. Also, risk to capital is less than with pure equitySub-Funds and the bond portion of the portfolio can provideprotection during a stock market downturn.

• This Sub-Fund is denominated in EUR, but may at times havesignificant non-EUR exposure in the portfolio.



Global Balanced Fund (EUR)


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Balanced (EUR) A 5.0% 1.45% 0.20% 0.50%

JPM Global Balanced (EUR) B Nil 0.85% 0.20% Nil

JPM Global Balanced (EUR) C Nil 0.75% 0.15% Nil

JPM Global Balanced (EUR) D 5.0% 1.95% 0.20% 0.50%

JPM Global Balanced (EUR) I Nil 0.75% 0.11% Max Nil

JPM Global Balanced (EUR) X Nil Nil 0.10% Max Nil

Appendix III 65


BenchmarkCitigroup UST Bill (1 month) Index (5%); MSCI EAFE Index USD(Total Return Net) (16%); MSCI EM Index USD (Total Return Net)(4%); Russell 2500 (Total Return Net) (4%); S&P 500 Index USD(Total Return Net) (26%); J.P. Morgan US Government Bond IndexUSD (Total Return Gross) (35%); J.P. Morgan Non-US GovernmentBond Index (USD Hedged) (Total Return Gross) (10%).

Investment ObjectiveTo provide long-term capital growth and income by investingprimarily in companies and sovereign issuers, globally.

Investment PolicyThe Sub-Fund will hold between 30% and 70% of its total assets(excluding cash and cash equivalents) in equity and equity linkedsecurities. In addition, the Sub-Fund will invest between 30% and70% of its total assets (excluding cash and cash equivalents) infixed and floating rate debt securities. Issuers of these securitiesmay be located in any country, including emerging markets.


The Sub-Fund will seek to maintain an average credit quality of atleast AA or equivalent as measured by independent rating agenciessuch as Moody’s or Standard &Poor’s, for longer term securities,or of at least A1 or equivalent/ for shorter term securities. Withinthis constraint, the Sub-Fund may invest in below investment gradeand unrated securities.

The Sub-Fund may also invest in UCITS and other UCIs. Cash andcash equivalents may be held on an ancillary basis.

USD is the reference currency of the Sub-Fund but assets may bedenominated in other currencies. The currency exposure in thisSub-Fund may be hedged or may be managed by reference to itsbenchmark.

The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management.Techniques and instruments relating to transferable securities and

money market instruments (including, but not limited to, securitieslending or repurchase agreements) may be used for the purpose ofefficient portfolio management.


Investor ProfileThis is a balanced Sub-Fund which invests in both equities andbonds. Therefore the Sub-Fund may be suitable for investorslooking for potentially higher returns than a pure bond Sub-Fundbut are prepared to take a higher level of risk in order to achievethis. Because of the additional volatility associated with equities,investors in this Sub-Fund should also have at least a three-to-fiveyear investment horizon.

Risk Profile• This balanced Sub-Fund invests primarily in equities and

bonds, with the asset allocation mix in the benchmark 50/45between the two (with the remainder in cash).

• The Sub-Fund’s exposure to equities means that investors areexposed to stock market movements and therefore they shouldexpect the value of the Sub-Fund to rise and fall on a dailybasis.

• However, the Sub-Fund’s exposure to bonds is designed todampen volatility and lead to greater stability of returns overthe long term. Also, risk to capital is less than with pure equitySub-Funds and the bond portion of the portfolio can provideprotection during a stock market downturn.

• This Sub-Fund is denominated in USD, but may at times havesignificant non-USD exposure in the portfolio.


Dividend PolicyThe Board of Directors intend to declare dividends to Shareholdersof the Share Class X (inc) daily, with a distribution to be mademonthly. Dividends will only be paid out of the pro-rata Share ofthe net investment income less expenses attributable to the ShareClass X (inc) Shares.


Global Balanced Fund (USD)


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Balanced (USD) A 5.0% 1.45% 0.20% 0.50%

JF Global Balanced (USD) A 5.0% 1.50% 0.20% 0.50%

JPM Global Balanced (USD) B Nil 0.85% 0.20% Nil

JPM Global Balanced (USD) C Nil 0.75% 0.15% Nil

JPM Global Balanced (USD) D 5.0% 1.95% 0.20% 0.50%

JPM Global Balanced (USD) I Nil 0.75% 0.11% Max Nil

JPM Global Balanced (USD) X Nil Nil 0.10% Max Nil

66 Appendix III



Benchmark for Hedged Share ClassesLIBOR one-month Euro deposits hedged into USD for the USDhedged Share Classes

LIBOR one-month Euro deposits hedged into SEK for the SEKhedged Share Classes

Investment ObjectiveTo achieve capital appreciation in excess of its cash benchmarkby investing primarily in securities, globally, using derivativestrategies where appropriate.

Investment PolicyThe Sub-Fund will primarily invest in a portfolio of equity andequity linked securities (including depository receipts, warrantsand other participation rights), index and participation notes,equity linked notes, commodity index instruments, convertiblesecurities, fixed and floating rate debt securities, deposits withcredit institutions and money market instruments. Issuers ofthese securities may be located in any country, includingemerging markets.

The Sub-Fund may use financial derivative instruments to achieveits investment objective. Financial derivative instruments mayalso be used for hedging purposes.


The Investment Manager will vary asset and country allocationsover time to reflect market conditions and opportunities,although the Sub-Fund will always have an exposure to equityand equity linked securities.

The Sub-Fund will seek to maintain an average credit quality of atleast investment grade as measured by independent ratingagencies such as Moody’s and Standard & Poor’s. Within thisconstraint, the Sub-Fund may invest in below investment gradesecurities and unrated securities.


Techniques and instruments relating to transferable securitiesand money market instruments (including, but not limited to,

securities lending or repurchase agreements) may be used forthe purpose of efficient portfolio management.




Investor ProfileAs a balanced Sub-Fund, this Sub-Fund invests in equities,convertible bonds, fixed and floating rate debt securities, andmoney market instruments. It is most suited to investors that arelooking for investment growth through predominantly equityexposure. Since the Sub-Fund is equity biased, it is most suited toinvestors that are prepared to take higher risk. Investors willlikely use the Sub-Fund to complement an existing core portfolioof bonds, in order to gain greater diversification. The Sub-Fundcan also be used as a stand alone investment for investorslooking to produce capital growth. The Sub-Fund is managedagainst a cash benchmark. Because of the additional volatilityassociated with equities and convertible bonds, investors in thisSub-Fund should also have at least a three-to-five yearinvestment horizon.

Risk Profile• This Sub-Fund invests primarily in equities, cash, convertible

bonds, fixed and floating rate debt securities, and moneymarket instruments with a bias towards equities.

• The Sub-Fund’s exposure to equities means that investors areexposed to stock market movements and therefore theyshould expect the value of the Sub-Fund to rise and fall on adaily basis.

• However, the Sub-Fund’s exposure to convertible bonds, fixedand floating rate securities and money market instruments isdesigned to dampen volatility and lead to greater stability ofreturns over the long term. The risk to capital is less thanwith a pure equity Sub-Fund.


• This Sub-Fund is denominated in EUR, but may at times havesignificant non-EUR exposure in the portfolio.




Global Capital Appreciation Fund

Appendix III 67

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Capital Appreciation A 5.0% 1.25% 0.20% 0.50%

JPM Global Capital Appreciation B Nil 0.75% 0.20% Nil

JPM Global Capital Appreciation C Nil 0.60% 0.15% Nil

JPM Global Capital Appreciation D 5.0% 1.95% 0.20% 0.50%

JPM Global Capital Appreciation I Nil 0.60% 0.11% Max Nil

JPM Global Capital Appreciation X Nil Nil 0.10% Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkAll ex USD and SEK hedged 10% High Water Mark LIBOR one-month Euro depositsSEK hedged 10% High Water Mark LIBOR one-month Euro deposits

hedged into SEKUSD hedged 10% High Water Mark LIBOR one-month Euro deposits

hedged into USD

68 Appendix III



Benchmark for Hedged Share ClassesLIBOR one-month Euro deposits, hedged into SEK for the SEKhedged Share Classes

Investment ObjectiveTo achieve, over a medium-term horizon (2 to 3 years), a return inexcess of its cash benchmark from a portfolio of securities,globally, using derivative strategies where appropriate.

Investment PolicyThe Sub-Fund will primarily invest in a portfolio of fixed andfloating rate debt securities, equity and equity linked securities(including depository receipts, warrants and other participationrights), index and participation notes, equity linked notes,convertible securities, deposits with credit institutions and moneymarket instruments. Issuers of these securities may be located inany country, including emerging markets.

The Sub-Fund may use financial derivative instruments to achieveits investment objective. Financial derivative instruments may alsobe used for hedging purposes.



The Sub-Fund’s fixed and floating rate debt securities will generallybe restricted to securities rated at least A or equivalent, for longer-term securities, or at least A1 or equivalent, for shorter-termsecurities, as measured by independent rating agencies such asMoody’s and Standard & Poor’s. The convertible securities willusually have an average credit quality of Baa2 or equivalent asmeasured by independent rating agencies such as Moody’s andStandard &Poor’s. Within this constraint, the Sub-Fund may investin below investment grade securities and unrated securities.



EUR is the reference currency of the Sub-Fund but assets may bedenominated in other currencies. The currency exposure in thisSub-Fund may be hedged.



Investor ProfileThis Sub-Fund invests in equities, convertible bonds, fixed andfloating rate debt securities, and money market instruments. It ismost suited for investors who would like an income and theopportunity for investment growth through modest equityexposure, while enjoying some downside protection. Since the Sub-Fund is bond biased it is most suited to investors that are riskaverse. Investors will therefore likely use the Sub-Fund tocomplement an existing core portfolio of bonds, in order to gaingreater diversification. The Sub-Fund can also be used as a stand-alone investment for investors looking to produce steady capitalgrowth. The Sub-Fund is managed against a cash benchmark.Because of the additional volatility associated with equities andconvertible bonds, investors in this Sub-Fund should also have atleast a two-to-three year investment horizon.

Risk Profile• This Sub-Fund invests primarily in investment grade bonds,

both government and non-government, but also has exposureto unrated bonds, convertible bonds, fixed and floating ratedebt securities, money market instruments, equities and cash.

• Because bonds and convertible bonds pay a regular incomeand have a fixed maturity date, their volatility is expected to berelatively low.

• The risk to initial investment capital is relatively low, althoughbecause of the Sub-Fund’s exposure to equities, risks arehigher than in Sub-Funds that invest only in bonds.


• The Sub-Fund is denominated in EUR and when assets aredenominated in other currencies, these will generally behedged back into EUR.




Global Capital Preservation Fund (EUR)

Appendix III 69


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Capital Preservation (EUR) A 5.0% 1.25% 0.20% 0.50%

JPM Global Capital Preservation (EUR) B Nil 0.75% 0.20% Nil

JPM Global Capital Preservation (EUR) C Nil 0.60% 0.15% Nil

JPM Global Capital Preservation (EUR) D 5.0% 1.70% 0.20% 0.50%

JPM Global Capital Preservation (EUR) I Nil 0.60% 0.11% Max Nil

JPM Global Capital Preservation (EUR) X Nil Nil 0.10% Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkAll ex SEK hedged 10% High Water Mark LIBOR one-month Euro depositsSEK hedged 10% High Water Mark LIBOR one-month Euro deposits

hedged into SEK

70 Appendix III


BenchmarkLIBOR one-month US Dollar deposits.

Investment ObjectiveTo achieve, over a medium-term horizon (2 to 3 years), a returnin excess of its cash benchmark from a portfolio of securities,globally, using derivative strategies where appropriate.

Investment PolicyThe Sub-Fund will primarily invest in a portfolio of fixed andfloating rate debt securities, equity and equity linked securities(including depository receipts, warrants and other participationrights), index and participation notes, equity linked notes,convertible securities, deposits with credit institutions andmoney market instruments. Issuers of these securities may belocated in any country, including emerging markets.

The Sub-Fund may use financial derivative instruments toachieve its investment objective. Financial derivative instrumentsmay also be used for hedging purposes.

Financial derivative instruments utilised by the Sub-Fund mayinclude, but are not limited to, futures, options, contracts fordifference, total return swaps, selected OTC derivatives andother derivative products.


The Sub-Fund’s fixed and floating rate debt securities willgenerally be restricted to securities rated at least A orequivalent, for longer-term securities, or at least A1 orequivalent, for shorter-term securities, as measured byindependent rating agencies such as Moody’s and Standard &Poor’s. The convertible securities will usually have an averagecredit quality of Baa2 or equivalent as measured by independentrating agencies such as Moody’s and Standard &Poor’s. Withinthis constraint, the Sub-Fund may invest in below investmentgrade securities and unrated securities.


Techniques and instruments relating to transferable securitiesand money market instruments (including, but not limited to,securities lending or repurchase agreements) may be used forthe purpose of efficient portfolio management.

USD is the reference currency of the Sub-Fund but assets may bedenominated in other currencies. The currency exposure in thisSub-Fund may be hedged.

The global exposure of the Sub-Fund will be monitored usingVaR methodology.


Investor ProfileThis Sub-Fund invests in equities, convertible bonds, fixed andfloating rate debt securities, and money market instruments. It ismost suited for investors who would like an income and theopportunity for investment growth through modest equityexposure, while enjoying some downside protection. Since theSub-Fund is bond biased it is most suited to investors that arerisk averse. Investors will therefore likely use the Sub-Fund tocomplement an existing core portfolio of bonds, in order to gaingreater diversification. The Sub-Fund can also be used as astand-alone investment for investors looking to produce steadycapital growth. The Sub-Fund is managed against a cashbenchmark. Because of the additional volatility associated withequities and convertible bonds, investors in this Sub-Fundshould have at least a two-to-three year investment horizon.

Risk Profile• This Sub-Fund invests primarily in investment grade bonds,

both government and non-government, but also hasexposure to unrated bonds, convertible bonds, fixed andfloating rate debt securities, money market instruments,equities and cash.

• Because bonds and convertible bonds pay a regular incomeand have a fixed maturity date, their volatility is expected tobe relatively low.

• The risk to initial investment capital is relatively low.However, because of the Sub-Fund’s exposure to equities,risks are higher than in Sub-Funds that invest only in bonds.


• This Sub-Fund is denominated in US dollars and when assetsare denominated in other currencies, these will generally behedged back into US dollars.




Global Capital Preservation Fund (USD)

Appendix III 71


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Capital Preservation (USD) A 5.0% 1.25% 0.20% 0.50%

JPM Global Capital Preservation (USD) B Nil 0.75% 0.20% Nil

JPM Global Capital Preservation (USD) C Nil 0.60% 0.15% Nil

JPM Global Capital Preservation (USD) D 5.0% 1.70% 0.20% 0.50%

JPM Global Capital Preservation (USD) I Nil 0.60% 0.11% Max Nil

JPM Global Capital Preservation (USD) X Nil Nil 0.10% Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkAll 10% High Water Mark LIBOR one-month US Dollar deposits

72 Appendix III


Benchmark10% J.P. Morgan Government Bond Index - Emerging MarketsGlobal Index (Total Return Gross) in EUR, 45% Merrill Lynch HighYield BB-B Constrained Index (Total Return Gross) hedged into EUR,10% FTSE EPRA/NAREIT Developed Index (Total Return Net)hedged into EUR, 25% Morgan Stanley Capital International WorldIndex (Total Return Net) hedged into EUR, 10% Citigroup EuroBroad Investment-Grade (Total Return Gross) in EUR

Investment Objective To provide regular income by investing primarily in a portfolio ofincome generating securities, globally, and through the use offinancial derivative instruments.

Investment PolicyThe Sub-Fund will primarily invest in fixed and floating rate debtsecurities, equity and equity linked securities and Real EstateInvestment Trusts (“REITs”). The majority of the Sub-Fund’s totalassets (excluding cash and cash equivalents) will be invested infixed and floating rate debt securities. Issuers of these securitiesmay be located in any country, including emerging markets.

The Sub-Fund may also invest in other eligible assets including, butnot limited to, convertible securities and forward currencyexchange contracts.

Equity exposure may be achieved through investment in shares,depository receipts, warrants and other participation rights.Subject to the foregoing, equity exposure may also be achieved, toa limited extent, through investment in index and participationnotes and equity linked notes.

The Sub-Fund may use other financial derivative instruments toachieve its investment objective. These may include, but are notlimited to, futures, options, contracts for difference, forwardcontracts on financial instruments and options on such contracts,credit linked instruments, mortgage TBAs and swap contracts byprivate agreement and other fixed income, currency and creditderivatives. Financial derivative instruments may also be used forhedging purposes.

The Sub-Fund may invest in below investment grade securities andunrated securities.

Cash and cash equivalents may be held on an ancillary basis.


The Sub-Fund may invest in assets denominated in any currency.Non EUR currency exposure may be hedged or may be managedwith reference to the Sub-Fund’s benchmark.




Investor ProfileThis is an actively managed multi-asset class Sub-Fund designed toproduce a quarterly income distribution in excess of the quarterlyaverage of European Overnight Index Average (EONIA); howeverthis level of income distribution is not guaranteed. The Sub-Fundmay be suitable for investors looking to source income from amore diverse range of investments than a pure bond fund, andwho are prepared to take a higher level of risk. Because of theadditional volatility associated with equities, investors in this Sub-Fund should have a three-to-five year investment horizon.

Risk Profile• This Sub-Fund invests primarily in fixed and floating rate debt

securities, equity and equity linked securities and REITs. TheSub-Fund may also invest in other assets including, but notlimited to, convertible securities and forward currencyexchange contracts.

• Returns to investors will vary from year to year, depending oncoupon and dividend income and capital returns generated bythe underlying financial assets. Capital returns may be negativein some years.

• Investors in “(div)” Share Classes should be aware that in orderto make dividend distributions in line with the portfolio’s yieldto maturity, the Sub-Fund’s capital may be paid out from timeto time. This may be tax inefficient for investors in certaincountries.

• The Sub-Fund may invest in below investment grade securitiesand unrated securities which are accompanied by higher risks,due to the greater balance sheet and credit risks associatedwith investing in this asset class, but they can potentiallyenhance income and returns for investors.

• The Sub-Fund’s exposure to equities means that investors areexposed to stock market movements. Therefore, investors maysee the value of their investment rise or fall on a daily basisand they may get back less than they originally invested.

• Emerging market bonds and equities are accompanied byhigher risks, due to the greater political and credit risksassociated with investing in these asset classes. They can alsobe impacted by low liquidity, poor transparency and greaterfinancial risk. However, they can also potentially enhanceincome and returns for investors.


Global Income Fund

Appendix III 73


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Income A 5.0% 1.25% 0.20% 0.50%

JPM Global Income B Nil 0.85% 0.20% Nil

JPM Global Income C Nil 0.60% 0.15% Nil

JPM Global Income D 5.0% 1.60% 0.20% 0.5%

JPM Global Income I Nil 0.60% 0.11% Max Nil

JPM Global Income X Nil Nil 0.10% Max Nil

• Investors should be aware that investments in REITs aresubject to risks associated with the direct ownership of realestate.

• This is an actively managed Sub-Fund and may bear littleresemblance to its benchmark index.


• The Sub-Fund is denominated in EUR, but will have significantexposure to other currencies. Non EUR currency exposure maybe hedged back into EUR or may be managed with reference tothe Sub-Fund’s benchmark.


Investment ManagerJ.P.Morgan Investment Management Inc.JPMorgan Asset Management (UK) Limited

Dividend PolicyThe Board of Directors intends to declare dividends toShareholders of the Share Classes with the suffix “(div)” quarterlyand these will normally be paid in February, May, August andNovember.

It is intended that the “(div)” Share Classes will pay a dividend inexcess of the quarterly average of EONIA; however this level ofincome distribution is not guaranteed. Any income in excess of thatdistributed in the quarterly dividend, will be accumulated to areserve. This reserve may be used to increase future dividendpayments.

74 Appendix III


BenchmarkUBS Global Focus Convertible Bond Index Hedged into USD (TotalReturn Gross).

Investment ObjectiveTo provide a return by investing primarily in a diversifiedportfolio of convertible securities and warrants, globally.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested in convertible securities andwarrants. Issuers of these securities may be located in anycountry, including emerging markets.

Convertible securities exposure may be achieved throughconvertible bonds, convertible notes, convertible preferenceshares and any other suitable convertible or exchangeableinstruments.

Fixed and floating rate debt securities, equity and equity linkedsecurities (including depository receipts and other participationrights), index and participation notes, equity linked notes, cashand cash equivalents may be held on an ancillary basis.


USD is the reference currency of the Sub-Fund but assets may bedenominated in other currencies; however a substantial part ofthe assets of the Sub-Fund will be denominated in or hedgedinto USD.

The Sub-Fund may invest in financial derivative instruments forhedging purposes and for efficient portfolio management.

Techniques and instruments relating to transferable securitiesand money market instruments (including, but not limited to,securities lending or repurchase agreements) may be used forthe purpose of efficient portfolio management.


Investor ProfileThis is a convertible Sub-Fund which offers some of the potentialreturns of an equity portfolio but with some of the lowervolatility characteristics associated with bonds. Therefore theSub-Fund may be suitable for investors looking for long-termcapital growth but at a potentially lower risk level than with pureequity Sub-Funds. Investors in this Sub-Fund should have atleast a three-to-five year investment horizon.

Risk Profile• This is a convertibles Sub-Fund, investing primarily in global

convertible bonds.

• Convertibles are a hybrid between debt and equity,permitting holders to convert into shares in the companyissuing the bond at a specified future date.

• Therefore, investors should be prepared for greater volatilitythan straight bond investments, with an increased risk ofcapital loss, but with the potential of higher returns.

• This Sub-Fund is denominated in USD and where assets aredenominated in other currencies these may be hedged backinto USD.


6. Convertibles Sub-Funds


Global Convertibles Fund (USD)


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Convertibles (USD) A 5.0% 1.25% 0.40% 0.50%

JF Global Convertibles (USD) A 5.0% 1.50% 0.40% 0.50%

JPM Global Convertibles (USD) B Nil 0.75% 0.25% Nil

JPM Global Convertibles (USD) C Nil 0.75% 0.20% Nil

JPM Global Convertibles (USD) D 5.0% 1.75% 0.40% 0.50%

JPM Global Convertibles (USD) I Nil 0.75% 0.16% Max Nil

JPM Global Convertibles (USD) X Nil Nil 0.15% Max Nil

Appendix III 75


Valuation DayThe Net Asset Value per Share is determined twice monthly, onthe 15th day and on the last Business Day of each month (each a“Valuation Day”). If the 15th day of any month is not a BusinessDay, the Valuation Day shall be on the immediate followingBusiness Day.

Subscriptions and RedemptionsApplications for subscriptions and redemptions concerning theSub-Fund must be received by 2.30 p.m., three Business Daysprior to the relevant Valuation Day. Applications forsubscriptions and redemptions received after such time will bedealt with on the next Valuation Day.

Investment PhasesThe Sub-Fund will feature three distinct investment phases asdescribed below:

• a period of up to three months following the launch of theSub-Fund (the “Asset Gathering Period”);

• after the Asset Gathering Period, the Sub-Fund will pursueits principal investment objective for a period of five years(the “Principal Investment Period”);

• following the Principal Investment Period, the Sub-Fund willpursue its final investment policy as described below.

Investment ObjectiveTo achieve a return profile comparable to that achieved byholding, from purchase to maturity, a five-year below investmentgrade emerging market corporate bond, but with increaseddiversification by investing primarily in a portfolio of belowinvestment grade emerging market corporate fixed and floatingrate debt securities, with maturity dates within twelve months ofthe termination of the Principal Investment Period.

Investment PolicyDuring the Asset Gathering PeriodThe Sub-Fund will invest all of its assets, excluding cash anddeposits, in high quality transferable short term USD-denominated fixed and floating rate debt securities.


The Sub-Fund may invest in UCITS and UCIs.

The Sub-Fund will not invest in convertible bonds, equities orother participation rights.

Within the investment restrictions contained in “Appendix II –Investment Restrictions and Powers”, the Sub-Fund may at anytime enter into repurchase agreements with highly ratedfinancial institutions specialised in this type of transaction. Thecollateral underlying the repurchase agreements will alsocomply with the above credit quality restrictions, although nomaturity constraints will apply.

During the Principal Investment PeriodThe Sub-Fund will invest primarily in a portfolio of belowinvestment grade emerging market corporate fixed and floatingrate debt securities issued by companies that are incorporatedunder the laws of, and have their registered office in, anemerging market country, or that derive a predominant part oftheir economic activity from emerging market countries, even iflisted elsewhere, with maturity dates within twelve months ofthe termination of the Principal Investment Period.

Whilst the Investment Manager intends to hold such securitiesuntil maturity, the Investment Manager has the discretion to sellsecurities prior to maturity. During the Principal InvestmentPeriod, the Investment Manager has the discretion to invest theproceeds from such sales in cash and cash equivalents up to amaximum of 49% of the Sub-Fund’s assets.

The Sub-Fund may also invest in fixed and floating rate debtsecurities issued or guaranteed by governments of emergingmarket countries.


The Sub-Fund may invest to an unlimited extent in belowinvestment grade securities, unrated securities and securitiesfrom emerging markets. There are no credit quality or maturityrestrictions with respect to the securities in which the Sub-Fundmay invest.


The Sub-Fund may invest in financial derivative instruments,including equivalent cash settled instruments, for hedgingpurposes and for efficient portfolio management. Techniquesand instruments relating to transferable securities and moneymarket instruments (including, but not limited to, securitieslending or repurchase agreements) may be used for the purposeof efficient portfolio management.

The Sub-Fund may invest in assets denominated in any currency;however a substantial part of the assets of the Sub-Fund will bedenominated in or hedged into USD.

7. Bond Sub-Funds


Emerging Markets Corporate Bond Portfolio Fund I

76 Appendix III

After the Principal Investment Period After the Principal Investment Period, the Sub-Fund will aim toachieve a competitive level of return in the Reference Currencyand a high degree of liquidity by investing the proceeds from thepreviously held below investment grade emerging marketcorporate fixed and floating rate debt securities, in high qualitytransferable USD-denominated short-term fixed and floating ratedebt securities and in cash deposits.

The Sub-Fund may also remain invested in below investmentgrade emerging market corporate fixed and floating rate debtsecurities with maturity dates up to twelve months after thetermination of the Principal Investment Period.




Within the investment restrictions contained in “Appendix II –Investment Restrictions and Powers”, the Sub-Fund may at anytime enter into repurchase agreements with highly ratedfinancial institutions specialised in this type of transaction. Thecollateral underlying the repurchase agreements will alsocomply with the above credit quality restrictions, although nomaturity constraints will apply.

All of the above investments will be made in accordance with thelimits set out in “Appendix II – Investment Restrictions andPowers”.

Investor ProfileThis is a bond Sub-Fund that offers exposure primarily to belowinvestment grade emerging market corporate securitiesmaturing within twelve months of the termination of thePrincipal Investment Period. The Sub-Fund may be suitable forinvestors looking to gain exposure to a diversified portfolio ofsuch securities, held from purchase to maturity. Investors shouldhave an investment horizon of five years to match the PrincipalInvestment Period of the Sub-Fund.

Risk Profile• The Sub-Fund will invest primarily, during the Principal

Investment Period, in below investment grade emergingmarket corporate bonds, each of which may carry a risk ofdefault or downgrade.

• Investment in emerging market bonds is accompanied byhigher risks than developed market bonds, includingsignificant price fluctuation and an increased risk of capitalloss, due to the political (including capital controls), interestrate and credit risks associated with investing in the assetclass.

• The Sub-Fund may invest in securities that are not rated byindependent rating agencies, which may present a higherrisk than rated securities.

• Investors should be prepared for greater volatility than frominvestments in developed market corporate bonds oremerging market government bonds.

• The Sub-Fund’s potential concentration in the number ofissuers and emerging market companies limits room fordiversification and may impact liquidity.

• The Sub-Fund may invest in assets denominated in anycurrency; however a substantial part of the assets of theSub-Fund will be denominated or hedged into USD.

• The Sub-Fund may invest directly in securities listed on theRussian Trading System (RTS) Stock Exchange and the MoscowInterbank Currency Exchange, which are classified as RegulatedMarkets. For further information relating to investment inRussia, please refer to “Appendix IV – Risk Factors”.

• Due to the default risk of any individual holding investorsshould be aware that there is no guarantee that their initialcapital will be returned in full.

Investment ManagerJPMorgan Asset Management (UK) LimitedJ.P. Morgan Investment Management Inc.

Dividend PolicyThe Board of Directors intends to declare, annually, a dividend toShareholders of Share Classes with the suffix (div). Suchdividend will normally be paid in March.


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Emerging Markets Corporate Bond Portfolio I – A 3.0% 1.00% 0.40% 2.00%1

JPM Emerging Markets Corporate Bond Portfolio I – B Nil 0.60% 0.25% 2.00%1

JPM Emerging Markets Corporate Bond Portfolio I – C Nil 0.50% 0.20% 2.00%1

JPM Emerging Markets Corporate Bond Portfolio I – D 3.0% 1.50% 0.40% 2.00%1

JPM Emerging Markets Corporate Bond Portfolio I – I Nil 0.50% 0.16% Max 2.00%1

JPM Emerging Markets Corporate Bond Portfolio I – X Nil Nil 0.15% Max 2.00%1

1 A redemption charge of 2.00% is applicable to Shareholders who exit the Sub-Fund before the end of the Principal Investment Period. A redemption charge of 0.50% appliesafter the end of the Principal Investment Period.

Appendix III 77


BenchmarkJ.P. Morgan EMU Bond Index in EUR (Total Return Gross).

Investment ObjectiveTo achieve a return in excess of European bond markets byinvesting primarily in European fixed and floating rate debtsecurities, using derivative strategies where appropriate.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested, either directly or through theuse of financial derivative instruments, in fixed and floating ratedebt securities issued or guaranteed by European governments ortheir agencies, state and provincial agencies and supranationalorganisations.

The Sub-Fund may use financial derivative instruments to achieveits investment objective, these may include futures, options,contracts for difference, forward contracts on financial instrumentsand options on such contracts, credit linked instruments, mortgageTBAs and swap contracts by private agreement and other fixedincome, currency and credit derivatives. Financial derivativeinstruments may also be used for hedging purposes.

The Sub-Fund may invest in unrated securities. The Sub-Fund mayalso invest in emerging markets on an ancillary basis.

Short-term money market instruments and deposits with creditinstitutions may be held on an ancillary basis.


In any event, the Sub-Fund will neither invest more than 25% of itstotal assets in convertible bonds, nor invest more than 10% of itstotal assets in equities and other participation rights.



The global exposure of the Sub-Fund will be monitored using VaRmethodology


Investor ProfileThis is a bond Sub-Fund which offers access to a broad range ofinvestment grade European securities, potentially bringinginvestors higher returns than pure government bonds with thebenefits of portfolio diversification. Therefore, the Sub-Fund maybe suitable for investors looking for a relatively low riskinvestment, perhaps with the aim of also producing a regularincome. When added to an equity portfolio, the Sub-Fund can alsopotentially enhance risk-adjusted returns, offering diversificationfor equity investors who have little or no bond exposure. Investorsshould have at least a two-to-four year investment horizon.

Risk Profile• This European bond Sub-Fund invests primarily in investment

grade bonds, a significant proportion of which may be non-government, which carry high credit ratings and have arelatively low risk of default.

• Therefore, although bond prices fluctuate depending on theglobal economic and interest rate backdrop, the risk of losingsome or all of your initial investment capital is relatively lowcompared to many equity Sub-Funds.

• Because bonds pay a regular income and have a fixed maturitydate, their volatility is also expected to be relatively low,thereby giving greater certainty of return than with manyother asset classes.

• Meanwhile, the Sub-Fund maintains a low tracking erroragainst its benchmark index, so fewer risks are taken relativeto the benchmark to achieve Sub-Fund returns than in moreaggressive Sub-Funds.


• This Sub-Fund is denominated in EUR, but may at times havenon-EUR exposure.



Dividend PolicyThe Board of Directors intends to declare a final dividend toShareholders of the JPM Europe Bond A (inc) – EUR Shares. TheBoard may also declare interim dividends at such time the Boardso decides. Dividends may be paid out of the capital and/or pro-rata Share of the investment income less expenses attributable tothe JPM Europe Bond A (inc) – EUR Shares, subject to minimumcapital requirements as specified under Luxembourg Law.


Europe Bond Fund

78 Appendix III


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Europe Bond A 3.0% 0.70% 0.20% 0.50%

JPM Europe Bond B Nil 0.40% 0.20% Nil

JPM Europe Bond C Nil 0.35% 0.15% Nil

JPM Europe Bond D 3.0% 1.05% 0.20% 0.50%

JPM Europe Bond I Nil 0.35% 0.11% Max Nil

JPM Europe Bond X Nil Nil 0.10% Max Nil

Appendix III 79


BenchmarkJ.P. Morgan Global Government Bond Index, hedged into EUR (TotalReturn Gross).

Investment ObjectiveTo achieve a return in excess of global government bond marketsby investing primarily in global fixed and floaring rate debtsecurities, using derivative strategies where appropriate.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested, either directly or through theuse of financial derivative instruments, in fixed and floating ratedebt securities issued or guaranteed by issuers of developedcountries, globally. The Sub-Fund generally focuses ongovernments or their agencies, state and provincial entities andsupranational organisations.


The Sub-Fund may invest in below investment grade securities andunrated securities. The Sub-Fund may also invest in emergingmarkets on an ancillary basis.







All of the above investments will be made in accordance with thelimits set out in “Appendix II Investment Restrictions and Powers”.

Investor ProfileThis is a global bond Sub-Fund which offers access to a broadrange of primarily government securities, potentially bringinginvestors higher returns than cash instruments with the benefits ofportfolio diversification. Therefore, the Sub-Fund may be suitablefor investors looking for a relatively low risk investment, perhapswith the aim of also producing a regular income. When added to anequity portfolio, the Sub-Fund can also potentially enhance risk-adjusted returns, offering diversification for equity investors whohave little or no bond exposure. Investors should have at least atwo-to-four year investment horizon.

Risk Profile• This global bond Sub-Fund invests primarily in investment

grade bonds, which carry high credit ratings and have arelatively low risk of default.





• This Sub-Fund is denominated in EUR, but may at times havesignificant non-EUR exposure.




Global Bond Fund (EUR)

80 Appendix III

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Bond (EUR) A 3.0 0.80% 0.20% 0.50%

JPM Global Bond (EUR) B Nil 0.50% 0.20% Nil

JPM Global Bond (EUR) C Nil 0.40% 0.15% Nil

JPM Global Bond (EUR) D 3.0% 1.20% 0.20% 0.50%

JPM Global Bond (EUR) I Nil 0.40% 0.11% Nil

JPM Global Bond (EUR) X Nil Nil 0.10% Max Nil

Appendix III 81


BenchmarkCitigroup World Government Bond Index, hedged into USD (TotalReturn Gross).

Investment ObjectiveTo achieve a return in excess of global government bond marketsby investing primarily in global fixed and floating rate debtsecurities, using derivative strategies where appropriate.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested, either directly or through theuse of financial derivative instruments, in fixed and floating ratedebt securities issued or guaranteed by issuers of developedcountries, globally the Sub-Fund generally focuses on governmentsor their agencies, state and provincial entities and supranationalorganisations.


The Sub-Fund may invest in below investment grade securities andunrated securities. The Sub-Fund may also invest in emergingmarkets on an ancillary basis.





USD is the reference currency of the Sub-Fund but assets may bedenominated in other currencies; however a substantial part of theassets of the Sub-Fund will be denominated in or hedged into USD.



Investor ProfileThis is a global bond Sub-Fund which offers access to a broadrange of primarily government securities, potentially bringinginvestors higher returns than cash instruments with the benefits ofportfolio diversification. Therefore, the Sub-Fund may be suitablefor investors looking for a relatively low risk investment, perhapswith the aim of also producing a regular income. When added to anequity portfolio, the Sub-Fund can also potentially enhance risk-adjusted returns, offering diversification for equity investors whohave little or no bond exposure. Investors should have at least atwo-to-four year investment horizon.

Risk Profile• This global bond Sub-Fund invests primarily in investment

grade bonds, which carry high credit ratings and have arelatively low risk of default.





• This Sub-Fund is denominated in USD, but may at times havesignificant non-USD exposure.




Global Bond Fund (USD)

82 Appendix III

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Bond (USD) A 3.0% 0.80% 0.20% 0.50%

JF Global Bond (USD) A 3.0% 1.00% 0.20% 0.50%

JPM Global Bond (USD) B Nil 0.50% 0.20% Nil

JPM Global Bond (USD) C Nil 0.40% 0.15% Nil

JPM Global Bond (USD) D 3.0% 1.20% 0.20% 0.50%

JPM Global Bond (USD) I Nil 0.40% 0.11% Max Nil

JPM Global Bond (USD) X Nil Nil 0.10% Max Nil

Appendix III 83


BenchmarkBarclays Capital Global Aggregate excluding Treasuries Index,hedged into EUR (Total Return Gross).

Investment ObjectiveTo achieve a return in excess of global non-government bondmarkets by investing primarily in global fixed and floating rate debtsecurities, using derivative strategies where appropriate.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested, either directly or through theuse of financial derivative instruments, in fixed and floating ratedebt securities. Issuers of these securities may be located in anycountry, including emerging markets.










Investor ProfileAs this bond Sub-Fund invests most of its portfolio in nongovernment bonds, it is most suited for investors willing to takeslightly higher risks in search of higher returns or a higher yield.Investors in the Sub-Fund will therefore likely use it to complementan existing core bond portfolio invested purely in lower riskgovernment or agency bonds, in order to gain greaterdiversification through exposure to the higher return potential ofnon-investment grade securities. The Sub-Fund can also be used asa stand alone investment for experienced investors looking toproduce capital growth or a higher income. Because of the slightlyhigher volatility associated with non-government securities,investors in this Sub-Fund should also have at least a two-to-fouryear investment horizon.

Risk Profile• This global bond Sub-Fund invests primarily in non government

bonds, some of which may be non-investment grade orunrated and carry a risk of default.

• Corporate bond prices can fluctuate significantly depending onnot only the global economic and interest rate backdrop, butalso the general credit background.

• However, corporate bonds can pay a high income, potentiallydampening volatility as well as offering higher capital returnsin the event of any upgrading.


• This Sub-Fund is denominated in EUR, but may at times havesignificant non-EUR exposure.



Dividend PolicyThe Board of Directors intends to declare, semi annually, a dividend to Shareholders of the JPM Global Enhanced Bond X(inc) – EUR Shares. Dividends will only be paid out of the pro-rataShare of the net investment income less expenses attributable tothe JPM Global Enhanced Bond X (inc) – EUR Shares.


Global Enhanced Bond Fund

84 Appendix III

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global Enhanced Bond A 3.0% 0.90% 0.20% 0.50%

JPM Global Enhanced Bond B Nil 0.55% 0.20% Nil

JPM Global Enhanced Bond C Nil 0.45% 0.15% Nil

JPM Global Enhanced Bond D 3.0% 1.20% 0.20% 0.50%

JPM Global Enhanced Bond I Nil 0.45% 0.11% Max Nil

JPM Global Enhanced Bond X Nil Nil 0.10% Max Nil

Appendix III 85


BenchmarkMerrill Lynch US High Yield, Master II Constrained Index(Total Return Gross)

Benchmark for Hedged Share ClassesMerrill Lynch US High Yield, Master II Constrained Index (TotalReturn Gross) hedged into EUR for the EUR hedged Share Classes

Investment ObjectiveTo achieve a return in excess of global bond markets by investingprimarily in below investment grade global fixed and floating ratedebt securities, using derivative strategies where appropriate.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested, either directly or through theuse of financial derivative instruments, in fixed and floating ratedebt securities issued or guaranteed by companies. Issuers ofthese securities may be located in any country, including emergingmarkets.


The Sub-Fund may invest in unrated securities.








Investor ProfileAs this bond Sub-Fund invests beyond the investment grade arenain high yield bonds, it is most suited for investors willing to takeextra risks in search of higher future returns. Investors in the Sub-Fund will therefore likely use it to complement an existing corebond portfolio invested in lower risk government or agency bonds,in order to gain greater diversification through exposure to thehigher return potential of non-investment grade securities. TheSub-Fund can also be used as a stand alone investment forinvestors looking to produce capital growth. Because of the highervolatility of high yield securities, investors should have at least athree-to-five year investment horizon.

Risk Profile• This high yield bond Sub-Fund invests primarily in global

corporate debt securities below investment grade.

• Non-investment grade bonds are accompanied by higher risks,due to the greater balance sheet and credit risks associatedwith investing in the asset class, but they can also potentiallyenhance income and return for investors.

• Therefore, investors should be prepared for greater volatilitythan investment grade bond investments, with an increasedrisk of capital loss, but with the potential of higher returns.

• However, the Sub-Fund is well diversified across industries,sectors and credit ratings.


• This Sub-Fund is denominated in USD, but may at times havenon-USD exposure.




Global High Yield Bond Fund

86 Appendix III

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Global High Yield Bond A 3.0% 0.85% 0.40% 0.50%

JPM Global High Yield Bond B Nil 0.50% 0.40% Nil

JPM Global High Yield Bond C Nil 0.45% 0.15% Nil

JPM Global High Yield Bond D 3.0% 1.25% 0.40% 0.50%

JPM Global High Yield Bond I Nil 0.45% 0.11% Max Nil

JPM Global High Yield Bond X Nil Nil 0.10% Max Nil

Appendix III 87


BenchmarkBritish Bankers’ Association (BBA) LIBOR USD Overnight Index

Benchmark for Hedged Share ClassesBritish Bankers' Association (BBA) LIBOR USD Overnight Indexhedged to BRL for the BRL hedged Share Classes

European Overnight Index Average (EONIA) for the EUR hedgedShare Classes

British Bankers’ Association (BBA) LIBOR SEK Spot Next Index for theSEK hedged Share Classes

British Bankers’ Association (BBA) LIBOR GBP Overnight Index forthe GBP hedged Share Classes

Investment ObjectiveTo achieve a return in excess of the benchmark by exploitinginvestment opportunities in, amongst others, the fixed income andcurrency markets, using derivative strategies where appropriate.

Investment PolicyThe Sub-Fund will invest the majority of its total assets in fixed andfloating rate debt securities issued in developed and emergingmarkets, including, but not limited to, debt securities ofgovernments and their agencies, state and provincial governmentalentities, supranational organisations, corporations and banks. TheSub-Fund will overlay direct investment using financial derivativeinstruments.

The Sub-Fund may use financial derivative instruments to achieve itsinvestment objective; these may include futures, options, contractsfor difference, forward contracts on financial instruments andoptions on such contracts, credit linked instruments, mortgage TBAsand swap contracts by private agreement and other fixed income,currency and credit derivatives. Financial derivative instruments mayalso be used for hedging purposes.




The Sub-Fund is opportunistic, however it may invest 100% of itsassets in cash and government securities until suitable investmentopportunities can be identified.


USD is the reference currency of the Sub-Fund but assets may bedenominated in other currencies; however a substantial part of theassets of the Sub-Fund will be denominated in or hedged into USD.

The Sub-Fund will seek to provide positive total returns over amedium term horizon regardless of whether the markets are in anupward or downward cycle.



Investor ProfileThis is a total return bond Sub-Fund aimed at investors looking fora return that exceeds the benchmark while reducing the likelihoodof capital losses on a medium term basis through a flexible,diversified multi-sector approach, focusing on absolute returns andvalue generation from multiple sources. Since the Sub-Fund isfocused on a bond universe rather than on cash volatility, investorsshould have an investment horizon of at least three to five years.

Risk Profile• This Sub-Fund invests its assets primarily in bonds and short-

term securities, with its market exposure and most of itsexcess return potential overlaid onto the portfolio usingderivatives, such as futures, forwards, mortgage TBAs andswaps.


• USD is the reference currency of the Sub-Fund but assets maybe denominated in other currencies; however a substantialpart of the assets of the Sub-Fund will be denominated in orhedged into USD.

• The Sub-Fund’s currency exposure to the investor ispredominantly in the currency of the Share Class but theremay at times be a significant exposure to other currencies inthe portfolio.




Income Opportunity Fund

88 Appendix III

Fees and Expenses

Annual Management Operating and RedemptionShare Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Income Opportunity A 3.0% 1.00% 0.20% 0.50%

JPM Income Opportunity B Nil 0.60% 0.20% Nil

JPM Income Opportunity C Nil 0.55% 0.15% Nil

JPM Income Opportunity D 3.0% 1.25% 0.20% 0.50%

JPM Income Opportunity I Nil 0.55% 0.11% Max Nil

JPM Income Opportunity X Nil Nil 0.10% Max Nil

Performance Fee

Share Classes Performance Fee Mechanism Performance Fee BenchmarkNon-hedged 20% High Water Mark British Bankers’ Association (BBA) LIBOR USD

Overnight Index BRL hedged 20% High Water Mark British Bankers' Association (BBA) LIBOR USD

Overnight Index hedged to BRLEUR hedged 20% High Water Mark European Overnight Index Average (EONIA)SEK hedged 20% High Water Mark British Bankers’ Association (BBA) LIBOR SEK Spot

Next Index GBP hedged 20% High Water Mark British Bankers’ Association (BBA) LIBOR GBP

Overnight Index

Appendix III 89


BenchmarkBarclays Capital US Aggregate Bond Index, in USD (Total ReturnGross).

Investment ObjectiveTo achieve a return in excess of US bond markets by investingprimarily in US fixed and floarting rate debt securities, usingderivative strategies where appropriate.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash andcash equivalents) will be invested, either directly or through theuse of financial derivative instruments, in fixed and floating ratedebt securities issued or guaranteed by the US government orits agencies and by companies that are incorporated under thelaws of, and have their registered office in, the US, or that derivea predominant part of their economic activity from the US, evenif listed elsewhere.

The Sub-Fund may use financial derivative instruments toachieve its investment objective, these may include futures,options, contracts for difference, forward contracts on financialinstruments and options on such contracts, credit linkedinstruments, mortgage TBAs and swap contracts by privateagreement and other fixed income, currency and creditderivatives. Financial derivative instruments may also be usedfor hedging purposes.

The Sub-Fund may actively invest in below investment grade andemerging market securities. The Sub-Fund may also invest inunrated securities.



In any event, the Sub-Fund will neither invest more than 25% ofits total assets in convertible bonds, nor invest more than 10%of its total assets in equities and other participation rights.

Techniques and instruments relating to transferable securitiesand money market instruments (including, but not limited to,

securities lending or repurchase agreements) may be used forthe purpose of efficient portfolio management.


The global exposure of the Sub-Fund will be monitored usingVaR methodology.


Investor ProfileThis bond Sub-Fund offers access to a broad range of USinvestment grade securities, bringing investors enhanced returnopportunities and the benefits of effective portfoliodiversification. When added to an equity portfolio, the Sub-Fundcan also potentially enhance risk-adjusted returns, making it anideal diversification opportunity for equity investors who havelittle or no bond exposure. Investors should have at least a two-to-four year investment horizon.

Risk Profile• This US bond Sub-Fund invests primarily in non-government

bonds, some of which may be sub-investment grade orunrated and therefore carry a risk of default.

• Corporate bond prices can fluctuate significantly dependingon not only the global economic and interest rate backdrop,but also the general credit background.

• However, corporate bonds can pay a high income, potentiallydampening volatility as well as offering higher capitalreturns in the event of any upgrading.


• This Sub-Fund is denominated in USD, but may at times havesignificant non-USD exposure.

• The risks associated with the derivative instruments listed inthe Investment Policy above are further detailed in“Appendix IV – Risk Factors”.

Investment ManagerJPMorgan Investment Management Inc.


US Bond Fund

90 Appendix III


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM US Bond A 3.0% 0.90% 0.20% 0.50%

JF US Bond A 3.0% 1.00% 0.20% 0.50%

JPM US Bond B Nil 0.55% 0.20% Nil

JPM US Bond C Nil 0.45% 0.15% Nil

JPM US Bond D 3.0% 1.15% 0.20% 0.50%

JPM US Bond I Nil 0.45% 0.11% Max Nil

JPM US Bond X Nil Nil 0.10% Max Nil

Appendix III 91


Benchmark7 Day EUR LIBID, in EUR.

Investment ObjectiveTo achieve a competitive level of return in the reference currencyand a high degree of liquidity by investing primarily in EURdenominated short term fixed and floating rate debt securities.

Investment PolicyAt least 67% of the Sub-Fund’s total assets (excluding cash and cashequivalents) will be invested in EUR denominated short term fixedand floating rate debt securities.

The Sub-Fund investments will generally be restricted, for longer-term securities, to securities rated at least A or equivalent asmeasured by independent rating agencies such as by Moody’s orStandard & Poor’s. For shorter-term securities the quality will be atleast A-1 or equivalent as measured by independent rating agenciessuch as Moody’s or Standard & Poor’s. Within these constraints, theSub-Fund may invest in below investment grade securities andunrated securities.

The Sub-Fund will only hold securities which, at the time of theiracquisition, have an initial or remaining maturity which does notexceed 397 days, taking into account their own terms and conditionsand/or the effect of any connected financial instruments, orsecurities for which the reference interest rate, pursuant to theirterms and conditions or as a result of connected financialinstruments, is adjusted at least annually on the basis of marketconditions. Moreover, the average duration of the portfolio shall notexceed one year.



A substantial part of the assets of the Sub-Fund will be denominatedin or hedged into EUR.

The Sub-Fund may invest in financial derivative instruments,including equivalent cash settled instruments, for hedging purposesand for efficient portfolio management. Techniques and instrumentsrelating to transferable securities and money market instruments(including, but not limited to, securities lending or repurchaseagreements) may be used for the purpose of efficient portfoliomanagement.


Investor ProfileThis Sub-Fund is a liquidity Sub-Fund that uses high quality moneymarket instruments to enhance returns. Investors in the Sub-Fundare therefore likely to be looking for an alternative to cash depositsfor their medium-term or temporary cash investments, includingseasonal operating cash for pension funds or the liquiditycomponents of investment portfolios.

Risk Profile• This money market Sub-Fund is designed as a secure home for

investors’ EUR. It operates by pooling investors’ assets across anumber of high-quality money market instruments, aiming forhigh levels of security and liquidity while seeking a competitiveyield.

• Because the Sub-Fund’s underlying investments are primarily inshort-term securities, often issued by the government or bybanks, the risk to investors’ capital is low.

• This Sub-Fund is denominated in EUR, but may at times havenon-EUR exposure

• Non-EUR denominated investors are exposed to currency risk asthe Sub-Fund’s underlying assets are denominated mainly inEUR.


.

8. Money Market Sub-Funds


Euro Liquid Market Fund


Share Class Initial Charge and Advisory Fee Administrative Expenses ChargeJPM Euro Liquid Market A 3.0%1 0.40% 0.25% 0.50%1

JPM Euro Liquid Market B Nil 0.40% 0.15% Nil

JPM Euro Liquid Market C Nil 0.15%2 0.10% Nil

JPM Euro Liquid Market D 3.0%1 0.50% 0.25% 0.50%1

JPM Euro Liquid Market I Nil 0.15%2 0.06% Nil

JPM Euro Liquid Market X Nil Nil 0.05% Max Nil1 With effect from 1 July 2010, the Initial Charge and Redemption Charge will be nil.2 With effect from 1 July 2010, the Annual Management and Advisory Fee will increase from 0.15% to 0.16%.

92 Appendix IV

Appendix IV: Risk FactorsThe information contained in this Appendix should be read inconjunction with the full text of the Prospectus of which this formsan integral part.

GeneralThe following statements are intended to inform investors of theuncertainties and risks associated with investments andtransactions in transferable securities and other financialinstruments. Investors should remember that the price of Sharesand any income from them may fall as well as rise and thatShareholders may not get back the full amount invested. Pastperformance is not necessarily a guide to future performance andShares should be regarded as a medium to long-term investment.Where the currency of the relevant Sub-Fund varies from theinvestor’s home currency, or where the currency of the relevantSub-Fund varies from the currencies of the markets in which theSub-Fund invests, there is the prospect of additional loss (or theprospect of additional gain) to the investor greater than the usualrisks of investment.

RegulatoryThe Fund is governed by EU legislation, specifically EC Directive2001/107 and 108, and is a Luxembourg domiciled UCITS. Investorsshould note that the regulatory protections provided by their localregulatory authorities may differ or may not apply. Investorsshould consult their financial or other professional adviser forfurther information in this area.

Investment ObjectiveInvestors should be fully aware of the investment objectives of theSub-Funds as these may state that the Sub-Funds may invest on alimited basis in areas which are not naturally associated with thename of the Sub-Fund. These other markets and/or assets may actwith more or less volatility than the core investments andperformance will, in part, be dependent on these investments. Allinvestments involve risks and there can be no guarantee againstloss resulting from an investment in any Shares, nor can there beany assurance that a Sub-Fund’s investment objectives will beattained in respect of its overall performance. Investors shouldtherefore ensure (prior to any investment being made) that theyare satisfied with the risk profile of the overall objectives disclosed.

Suspension of Share dealingsInvestors are reminded that in certain circumstances their right toredeem Shares may be suspended (see “General Information –Temporary Suspension of Issues, Redemptions and Switches”).

WarrantsWhen the Fund invests in warrants, the values of these warrantsare likely to fluctuate more than the prices of the underlyingsecurities because of the greater volatility of warrant prices.

Futures and OptionsUnder certain conditions, the Fund may use options and futures onsecurities, indices and interest rates, as described in “Appendix II -Investment Restrictions and Powers”, “Investment Restrictions andPowers” for the purpose of efficient portfolio management. Also,

where appropriate, the Fund may hedge market and currency risksusing futures, options or forward foreign exchange contracts. Inorder to facilitate efficient portfolio management and to betterreplicate the performance of the benchmark, the Fund may finally,for a purpose other than hedging, invest in derivative instruments.The Fund may only invest within the limits set out in “Appendix II -Investment Restrictions and Powers”.

Transactions in futures carry a high degree of risk. The amount ofthe initial margin is small relative to the value of the futurescontract so that transactions are “leveraged” or “geared”. Arelatively small market movement will have a proportionatelylarger impact which may work for or against the investor. Theplacing of certain orders which are intended to limit losses tocertain amounts may not be effective because market conditionsmay make it impossible to execute such orders.

Transactions in options also carry a high degree of risk. Selling(“writing” or “granting”) an option generally entails considerablygreater risk than purchasing options. Although the premiumreceived by the seller is fixed, the seller may sustain a loss well inexcess of that amount. The seller will also be exposed to the risk ofthe purchaser exercising the option and the seller will be obligedeither to settle the option in cash or to acquire or deliver theunderlying investment. If the option is “covered” by the sellerholding a corresponding position in the underlying investment or afuture on another option, the risk may be reduced.

Sub-Funds Investing in Commodity Index Instruments Investments which grant an exposure to commodities involveadditional risks than those resulting from traditional investments.More specifically, political, military and natural events mayinfluence the production and trading of commodities and, as aconsequence, influence financial instruments which grant exposureto commodities; terrorism and other criminal activities may havean influence on the availability of commodities and therefore alsonegatively impact financial instruments which grant exposure tocommodities.

Derivative RisksVolatilityDue to the low margin deposits normally required in tradingderivative instruments, a high degree of leverage is typical fortrading in derivatives instruments. As a result, a relatively smallprice movement in a derivative contract may result in substantiallosses to the investor. Investment in derivative transactions mayresult in losses in excess of the amount invested.

Risk of Trading Credit Default Swaps (“CDS”)The price at which a CDS trades may differ from the price of theCDS’ referenced security. In adverse market conditions, the basis(difference between the spread on bonds and the spread of CDS)can be significantly more volatile than the CDS’ referencedsecurities.

Particular Risks of Exchange Traded Derivative TransactionsSuspensions of Trading Each securities exchange or commodities contract market typicallyhas the right to suspend or limit trading in all securities or

Appendix IV 93

commodities which it lists. Such a suspension would render itimpossible for the Sub-Funds, to liquidate positions and,accordingly, expose the Fund to losses and delays in its ability toredeem Shares.

Particular Risks of OTC Derivative TransactionsAbsence of regulation; counterparty default In general, there is less governmental regulation and supervisionof transactions in the OTC markets (in which currencies, forward,spot and option contracts, credit default swaps, total return swapsand certain options on currencies are generally traded) than oftransactions entered into on organised exchanges. In addition,many of the protections afforded to participants on someorganised exchanges, such as the performance guarantee of anexchange clearinghouse, may not be available in connection withOTC transactions. Therefore, any Sub Fund entering into OTCtransactions will be subject to the risk that its direct counterpartywill not perform its obligations under the transactions and that theSub Fund will sustain losses. A Sub Fund will only enter intotransactions with counterparties which it believes to becreditworthy, and may reduce the exposure incurred in connectionwith such transactions through the receipt of letters of credit orcollateral from certain counterparties. Regardless of the measuresthe Fund may seek to implement to reduce counterparty creditrisk, however, there can be no assurance that a counterparty willnot default or that the Fund will not sustain losses as a result.

Liquidity; requirement to performFrom time to time, the counterparties with which the Fund effectstransactions might cease making markets or quoting prices incertain of the instruments. In such instances, the Fund might beunable to enter into a desired transaction in currencies, creditdefault swaps or total return swaps or to enter into an offsettingtransaction with respect to an open position, which mightadversely affect its performance. Further, in contrast to exchangetraded instruments, forward, spot and option contracts oncurrencies do not provide the Investment Manager with thepossibility to offset the Fund’s obligations through an equal andopposite transaction. For this reason, in entering into forward, spotor options contracts, the Fund may be required, and must be able,to perform its obligations under the contracts.

Necessity for counterparty trading relationships As noted above, participants in the OTC market typically enter intotransactions only with those counterparties which they believe tobe sufficiently creditworthy, unless the counterparty providesmargin, collateral, letters of credit or other credit enhancements.The Fund may, but does not currently intend to, enter intotransactions on the basis of credit facilities established on behalf ofany company within JPMorgan Chase & Co. While the Fund and theInvestment Manager believe that the Fund will be able to establishmultiple counterparty business relationships to permit the Fund toeffect transactions in the OTC market and other counterpartymarkets (including credit default swaps, total return swaps andother swaps market as applicable), there can be no assurance thatit will be able to do so. An inability to establish or maintain suchrelationships would potentially increase the Fund’s counterpartycredit risk, limit its operations and could require the Fund to cease

investment operations or conduct a substantial portion of suchoperations in the futures markets. Moreover, the counterpartieswith which the Fund expects to establish such relationships will notbe obligated to maintain the credit lines extended to the Fund, andsuch counterparties could decide to reduce or terminate suchcredit lines at their discretion.

Reverse Repurchase Agreements and sale with right ofrepurchase transactions in which the Fund acts as purchaser:In the event of the failure of the counterparty with which cash hasbeen placed, there is the risk that the value of the collateralreceived may be less than the cash placed out which may be dueto factors including inaccurate pricing of the collateral, adversemarket movements in the value of the collateral, a deterioration inthe credit rating of the issuer of the collateral, or the illiquidity ofthe market in which the collateral is traded. Locking cash intransactions of significant size or duration, delays in recoveringcash placed out, or difficulty in realising collateral may restrict theability of the Sub-Fund to meet redemption requests or fundsecurity purchases.

Repurchase Agreements and sale with right of repurchasetransactions in which the Fund acts as seller: In the event of the failure of the counterparty with which collateralhas been placed, there is the risk that the value of the collateralplaced with the counterparty is higher than the cash originallyreceived, which may be due to factors including that the value ofthe collateral placed usually exceeds the cash received, marketappreciation of the value of the collateral, or an improvement inthe credit rating of the issuer of the collateral. Locking investmentpositions in transactions of significant size or duration, or delays inrecovering collateral placed out, may restrict the ability of the Sub-Fund to meet delivery obligations under security sales or paymentobligations arising from redemptions requests.

Securities LendingSecurities lending involves counterparty risk, including the risk thatthe loaned securities may not be returned or returned in a timelymanner and/or at a loss of rights in the collateral if the borroweror the lending agent defaults or fails financially. This risk isincreased when a Sub-Fund’s loans are concentrated with a singleor limited number of borrowers. Should the borrower of securitiesfail to return securities lent by a Sub-Fund, there is a risk that thecollateral received may be realised at a value lower than the valueof the securities lent out, whether due to inaccurate pricing of thecollateral, adverse market movements in the value of thecollateral, a deterioration in the credit rating of the issuer of thecollateral, or the illiquidity of the market in which the collateral istraded. A Sub-Fund may reinvest the cash collateral received fromborrowers. There is a risk that the value or return of the reinvestedcash collateral may decline below the amount owed to thoseborrowers, and those losses may exceed the amount earned by theSub-Fund on lending the securities. Delays in the return ofsecurities on loan may restrict the ability of the Sub-Fund to meetdelivery obligations under security sales or payment obligationsarising from redemption requests.

94 Appendix IV

Sub-Funds Investing in Smaller CompaniesSub-Funds which invest in smaller companies may fluctuate invalue more than other Sub-Funds because of the greater potentialvolatility of Share prices of smaller companies.

Sub-Funds Investing in Technology Related Companies Sub-Funds which invest in technology related companies mayfluctuate in value more than other Sub-Funds because of thegreater potential volatility of share prices of technology relatedcompanies.

Sub-Funds Investing in Concentrated PortfoliosSub-Funds which invest in a concentrated portfolio may be subjectto greater volatility than those Sub-Funds with a more diversifiedportfolio.

Asset Backed Securities (ABS) and Mortgage BackedSecurities (MBS) Certain Sub-Funds may have exposure to a wide range of assetbacked securities (including asset pools in credit card loans, autoloans, residential and commercial mortgage loans, collateralisedmortgage obligations and collateralised debt obligations), agencymortgage pass-through securities and covered bonds. Theobligations associated with these securities may be subject togreater credit, liquidity and interest rate risk compared to otherfixed income securities such as government issued bonds.

ABS and MBS are securities that entitle the holders thereof toreceive payments that are primarily dependent upon the cash flowarising from a specified pool of financial assets such as residentialor commercial mortgages, motor vehicle loans or credit cards.

ABS and MBS are often exposed to extension and prepayment risksthat may have a substantial impact on the timing and size of thecashflows paid by the securities and may negatively impact thereturns of the securities. The average life of each individualsecurity may be affected by a large number of factors such as theexistence and frequency of exercise of any optional redemptionand mandatory prepayment, the prevailing level of interest rates,the actual default rate of the underlying assets, the timing ofrecoveries and the level of rotation in the underlying assets.

High Yield BondsInvestment in fixed income securities is subject to interest rate,sector, security and credit risks. Compared to investment gradebonds, high yield bonds are normally lower-rated securities andwill usually offer higher yields to compensate for the reducedcreditworthiness or increased risk of default that these securitiescarry.

Investment Grade Bonds Certain Sub-Funds may invest in investment grade bonds.Investment grade bonds are assigned ratings within the top ratingcategories by rating agencies (Fitch, Moody’s and/or Standard &Poor’s) on the basis of the creditworthiness or risk of default of abond issue. Rating agencies review, from time to time, suchassigned ratings and bonds may therefore be downgraded in ratingif economic circumstances impact the relevant bond issues.

Sub-Funds Investing in Participation Notes Investment in Participation Notes involves an OTC transaction witha third party. Therefore Sub-Funds investing in Participation Notesare exposed not only to movements in the value of the underlyingequity, but also to the risk of counterparty default, which may inthe event of counterparty default result in the loss of the fullmarket value of the equity.

Emerging and Less Developed MarketsIn emerging and less developed markets, in which some of theSub-Funds will invest, the legal, judicial and regulatoryinfrastructure is still developing but there is much legal uncertaintyboth for local market participants and their overseas counterparts.Some markets may carry higher risks for investors who shouldtherefore ensure that, before investing, they understand the risksinvolved and are satisfied that an investment is suitable as part oftheir portfolio. Investments in emerging and less developedmarkets should be made only by sophisticated investors orprofessionals who have independent knowledge of the relevantmarkets, are able to consider and weigh the various riskspresented by such investments, and have the financial resourcesnecessary to bear the substantial risk of loss of investment in suchinvestments.

Countries with emerging and less developed markets include, butare not limited to (1) countries that have an emerging stock marketin a developing economy as defined by the International FinanceCorporation, (2) countries that have low or middle incomeeconomies according to the World Bank, and (3) countries listed inWorld Bank publication as developing. The list of emerging and lessdeveloped markets is subject to continuous change; broadly theyinclude any country or region other than the United States ofAmerica, Canada, Japan, Australia, New Zealand and WesternEurope. The following statements are intended to illustrate therisks which in varying degrees are present when investing inemerging and less developed markets. Investors should note thatthe statements do not offer advice on suitability of investments.

(A) Political and Economic Risks• Economic and/or political instability could lead to legal, fiscal

and regulatory changes or the reversal of legal / fiscal /regulatory / market reforms. Assets could be compulsorily re-acquired without adequate compensation.

• A country’s external debt position could lead to suddenimposition of taxes or exchange controls.

• High interest and inflation rates can mean that businesses havedifficulty in obtaining working capital.

• Local management may be inexperienced in operatingcompanies in free market conditions.

• A country may be heavily dependent on its commodity andnatural resource exports and is therefore vulnerable toweaknesses in world prices for these products.

Appendix IV 95

(B) Legal Environment• The interpretation and application of decrees and legislative

acts can be often contradictory and uncertain particularly inrespect of matters relating to taxation.

• Legislation could be imposed retrospectively or may be issuedin the form of internal regulations not generally available tothe public.

• Judicial independence and political neutrality cannot beguaranteed.

• State bodies and judges may not adhere to the requirements ofthe law and the relevant contract. There is no certainty thatinvestors will be compensated in full or at all for any damageincurred.

• Recourse through the legal system may be lengthy andprotracted.

(C) Accounting Practices• The accounting, auditing and financial reporting system may

not accord with international standards.

• Even when reports have been brought into line withinternational standards, they may not always contain correctinformation.

• Obligations on companies to publish financial information mayalso be limited.

(D) Shareholder Risk• Existing legislation may not yet be adequately developed to

protect the rights of minority Shareholders.

• There is generally no concept of any fiduciary duty toShareholders on the part of management.

• Liability for violation of what Shareholder rights there are, maybe limited.

(E) Market and Settlement Risks• The securities markets in some countries lack the liquidity,

efficiency and regulatory and supervisory controls of moredeveloped markets.

• Lack of liquidity may adversely affect the ease of disposal ofassets. The absence of reliable pricing information in aparticular security held by a Sub-Fund may make it difficult toassess reliably the market value of assets.

• The Share register may not be properly maintained and theownership or interest may not be (or remain) fully protected.

• Registration of securities may be subject to delay and duringthe period of delay it may be difficult to prove beneficialownership of the securities.

• The provision for custody of assets may be less developed thanin other more mature markets and thus provides an additionallevel of risk for the Sub-Funds.

• Settlement procedures may be less developed and still be inphysical as well as in dematerialised form.

(F) Price Movement and Performance• Factors affecting the value of securities in some markets

cannot easily be determined.

• Investment in securities in some markets carries a high degreeof risk and the value of such investments may decline or bereduced to zero.

(G) Currency Risk• Conversion into foreign currency or transfer from some

markets of proceeds received from the sale of securitiescannot be guaranteed.

• Investors might be exposed to currency risk when investing inShare Classes that are not hedged to the investor’s referencecurrency.

• Exchange rate fluctuations may also occur between the tradedate for a transaction and the date on which the currency isacquired to meet settlement obligations.

(H) TaxationInvestors should note in particular that the proceeds from thesale of securities in some markets or the receipt of anydividends and other income may be or may become subject totax, levies, duties or other fees or charges imposed by theauthorities in that market, including taxation levied bywithholding at source. Tax law and practice in certain countriesinto which the Fund invests or may invest in the future (inparticular Russia, China and other emerging markets) is notclearly established. It is therefore possible that the currentinterpretation of the law or understanding of practice mightchange, or that the law might be changed with retrospectiveeffect. As a result, the Fund could become subject to additionaltaxation in such countries that is not anticipated either at thedate of this Prospectus or when investments are made, valuedor disposed of.

(I) Execution and Counterparty RiskIn some markets there may be no secure method of deliveryagainst payment which would minimise the exposure tocounterparty risk. It may be necessary to make payment on apurchase or delivery on a sale before receipt of the securitiesor, as the case may be, sale proceeds.

(J) NomineeshipThe legislative framework in some markets is only beginning todevelop the concept of legal/formal ownership and ofbeneficial ownership or interest in securities. Consequently thecourts in such markets may consider that any nominee orcustodian as registered holder of securities would have fullownership thereof and that a beneficial owner may have norights whatsoever in respect thereof.

96 Appendix IV

Investments in ChinaUnder the prevailing regulations in the People's Republic of China("PRC"), foreign investors can invest in China A Shares throughinstitutions that have obtained Qualified Foreign InstitutionalInvestor ("QFII") status in the PRC. The current QFII regulationsimpose strict restrictions (including rules on investmentrestrictions, minimum investment holding period and repatriationof principle and profits) on China A Share investment.

In extreme circumstances, a Sub-Fund may incur losses due tolimited investment capabilities, or may not be able to fullyimplement or pursue its investment objectives or strategy, due toQFII investment restrictions, illiquidity of the China A Sharesmarket, and/or delay or disruption in execution of trades or insettlement of trades.

Investments by a Sub-Fund in the China A Share and otherpermissible securities denominated in Renminbi will be madethrough the QFII in Renminbi. Such Sub-Fund(s) and ShareClass(es) will be exposed to any fluctuation in the exchange ratebetween the Reference Currency of the relevant Sub-Fund and theRenminbi in respect of such investments.

Investment in RussiaThe relative infancy of the Russian governmental and regulatoryframework may expose investors to various political and economicrisks. The Russian Securities Market from time to time may alsosuffer from a lack of market efficiency and liquidity which maycause higher price volatility and market disruptions.

The Fund may invest in securities listed on the Russian TradingSystem (RTS) Stock Exchange and on the Moscow InterbankCurrency Exchange in Russia. Investments in Russia are currentlysubject to certain heightened risks with regard to the ownershipand custody of securities. In Russia shareholdings are evidenced byentries in the books of a company or its registrar (which is neitheran agent nor responsible to the Custodian). No certificatesrepresenting shareholdings in Russian companies will be held bythe Custodian or any of its local sub-custodians or in an effectivecentral depository system. As a result of this system and the lackof effective state regulation and enforcement, the Fund could loseits registration and ownership of Russian securities through fraud,negligence or even mere oversight. However, in recognition of suchrisks, the Russian sub-custodian of the Custodian is followingincreased “due diligence” procedures. The sub-custodian hasentered into agreements with Russian company registrars and willonly permit investment in those companies that have adequateregistrar procedures in place. In addition, the settlement risk isminimised as the sub-custodian will not release cash until registrarextracts have been received and checked. In addition, Russian debtsecurities have an increased custodial risk associated with them assuch securities are, in accordance with market practice, held incustody with Russian institutions which may not have adequateinsurance coverage to cover loss due to theft, destruction ordefault.

Potential Conflicts of InterestThe Management Company and JPMorgan Chase & Co. may effecttransactions in which the Management Company or JPMorgan

Chase & Co. has, directly or indirectly, an interest which mayinvolve a potential conflict with the Management Company’s dutyto the Fund. Neither the Management Company nor JPMorganChase & Co. shall be liable to account to the Fund for any profit,commission or remuneration made or received from or by reasonof such transactions or any connected transactions nor will theManagement Company’s fees, unless otherwise provided, beabated.

The Management Company will ensure that such transactions areeffected on terms which are not less favourable to the Fund than ifthe potential conflict had not existed.

Such potential conflicting interests or duties may arise because theManagement Company or JPMorgan Chase & Co. may haveinvested directly or indirectly in the Fund.

More specifically, the Management Company, under the rules ofconduct applicable to it, must try to avoid conflicts of interestsand, when they cannot be avoided, ensure that its clients (includingthe Fund) are fairly treated.

Depositary ReceiptsInvestment into a given country may be made via directinvestments into that market or by depository receipts traded onother international exchanges in order to benefit from increasedliquidity in a particular security and other advantages. Adepository receipt admitted to the official listing on a stockexchange in an Eligible State or traded on a Regulated Market maybe deemed an eligible transferable security regardless of theeligibility of the market in which the security to which it relatesnormally trades.

ListingWhere the Shares are listed, the exchanges on which those Sharesare listed take no responsibility for the contents of this document,make no representations as to its accuracy or completeness andexpressly disclaim any liability whatsoever for any kind of lossarising from or in reliance upon any part of the contents of thisdocument.

This Prospectus includes particulars given in compliance with theListing Regulations of the exchanges on which the Shares are listedfor the purpose of giving information with regard to the Fund. TheDirectors collectively and individually accept full responsibility forthe accuracy of the information contained in this Prospectus andconfirm, having made all reasonable inquiries, that to the best oftheir knowledge and belief there are no other facts the omission ofwhich would make any statement herein misleading.

The foregoing risk factors do not purport to be a completeexplanation of the risks involved in investing in the Shares.Prospective investors should read the entire Prospectus andconsult with their legal, tax and financial advisors before makingany decision to invest in the Fund.

Appendix V 97

Appendix V: Calculation of Performance FeesThe information contained in this Appendix should be read inconjunction withthe full text of the Prospectus of which thisforms an integral part.

1. Calculation of Performance Fee by application of a HighWater Mark

Where the Management Company is entitled to receive from thenet assets of each Sub-Fund or Share Class, as set out in the tableunder “Performance Fees” in “Appendix III – Sub-Fund Details”, anannual performance-based incentive fee (the “Performance Fee”),this Performance Fee will be equal to the given percentage (the“Performance Fee Rate”, as set out in the same table) of the ShareClass Return (defined in 1.1 below) in excess of the greater of theBenchmark Return (as set out in 1.3 below) and the High WaterMark Return (defined in 1.2 below), where applicable, (the “ExcessReturn”), calculated as described below. On each Valuation Day, anaccrual for the previous Valuation Day’s, Performance Fee is made,when appropriate, and the Performance Fee is paid whereapplicable for each class of the relevant Sub-Fund on the lastValuation Day of the Fund’s accounting year. In the case ofliquidation or merger of a Sub-Fund to which a performance fee isapplicable, the performance fee will be paid on the last ValuationDay before its liquidation or merger. Pursuant to the provisions ofthe relevant investment management agreement, the InvestmentManager may be entitled to receive the Performance Fee from theManagement Company.

1.1 Share Class ReturnOn each Valuation Day, the net asset value of each Share Class ofeach Sub-Fund for which a Performance Fee applies, whichincludes an accrual for all fees and expenses (including the AnnualManagement and Advisory Fee, and the Operating andAdministrative Expenses to be borne by the relevant Class at therate set out in “Appendix III - Sub-Fund Details” to this Prospectus),is adjusted for any dividend distributions and for subscriptions andredemptions dealt with on that Valuation Day, if any, and anyPerformance Fee accrued through that day in respect of suchShare Class is added back (the “Adjusted Net Asset Value”). Forpurposes of calculating the Performance Fee, the “Share ClassReturn” is computed on each Valuation Day, as the differencebetween the net asset value (adjusted by adding back any accruedPerformance Fee) on such day and the Adjusted Net Asset Value onthe previous Valuation Day, expressed as a return based on theprevious Valuation Day’s, Adjusted Net Asset Value for that ShareClass.

1.2 High Water Mark ReturnA high water mark is the point after which a Performance Feebecomes payable. The high water mark will be the higher of theNAV at launch of the Share Class, or the NAV at which the lastPerformance Fee has been paid.

The “High Water Mark Return” is defined as the return necessary,since the start of the accounting year, to equal the Net Asset Valueper Share of each Share Class of each Sub-Fund on the lastValuation Day of the last accounting year in which a PerformanceFee was charged. If no Performance Fee has been charged sincethe launch of the Share Class, the High Water Mark Return is thereturn necessary to equal the initial Net Asset Value per Share ofthat Share Class.

1.3 Benchmark ReturnThe Benchmark Return is determined on each Valuation Day bymultiplying the benchmark which prevailed on the previousValuation Day, by the actual number of days elapsed since the lastValuation Day divided by 365.

For Shares in the X Share Class, the Benchmark Return isdetermined on each Valuation Day by multiplying (benchmark +0.75%) which prevailed on the previous Valuation Day by the actualnumber of days elapsed since the last Valuation Day divided by365. The benchmark is determined on the basis of quotationsavailable from independent sources, rounded upwards to thenearest four decimal places and computed in accordance withprevailing market practices.

1.4 Performance Fee AccrualsIf the Share Class Return exceeds the Benchmark Return and thecumulative Share Class Return exceeds the High Water MarkReturn, the Performance Fee accrual is increased by thePerformance Fee Rate multiplied by the Excess Return multipliedby the previous Valuation Day’s Adjusted Net Asset Value for thatShare Class. If the Share Class Return does not exceed theBenchmark Return, the Performance Fee accrual is reduced (butnot below zero) by the Performance Fee Rate multiplied by thenegative Excess Return multiplied by the previous Valuation Day’sAdjusted Net Asset Value for that Share Class. Following a periodof negative Excess Return whereby the Performance Fee accrualhas been reduced to zero, no new Performance Fee is accrued untilsuch time as the cumulative Share Class Return exceeds thegreater of the High Water Mark Return and the cumulativeBenchmark Return since the beginning of the Company accountingyear. The Performance Fee accrued on any Valuation Day isreflected in the Net Asset Value per Share on the basis of whichsubscriptions and redemptions may be accepted.

Day Change in NAV - Change in Benchmark = Difference X Performance fee rate = Daily Accrual +/- Cumulative Accrual

1 +1.0% - +0.015% = +0.985% X 10% = +0.098% + +0.098%

2 +0.2% - +0.015% = +0.185% X 10% = +0.018% + +0.116%

3 -0.50% - +0.015% = -0.515% X 10% = -0.051% - +0.065%

Example of calculation

98 Appendix V

1.5 Effect of Performance Fee AccrualsThe Performance Fee is calculated on each Valuation Day but isaccrued within the Net Asset Value per Share one day in arrears(trade date plus one day). During periods of market volatility,unusual fluctuations may occur in the Net Asset Value per Share ofeach Share Class for which a Performance Fee is charged. Thesefluctuations may happen where the impact of a Performance Feecauses the Net Asset Value per Share to be reduced whilst thereturns from underlying assets have increased. Conversely, theimpact of a negative Performance Fee can cause the Net AssetValue per Share to be increased whilst the underlying assets havedecreased.

1.6 Computation of Performance FeesPerformance Fee computations are made by the AdministrativeAgent and audited annually by the auditors of the Company. TheBoard may make such adjustments of accruals as it deemsappropriate to ensure that the accrual represents fairly andaccurately the Performance Fee liability that may eventually bepayable by the Sub-Fund or Class to the Management Company.

1.7 Annual Payment of Performance FeesThe annual Performance Fee payable is equal to the PerformanceFee accrued through to close of business on the last Valuation Dayof the Company’s accounting year. Performance Fees payable tothe Management Company in any accounting year are notrefundable in any subsequent accounting years.

2. Calculation of Performance Fee by application of a Claw-Back Mechanism

Some Sub-Funds may follow a Claw-Back Mechanism for thecalculation of their Performance Fees. The purpose of the Claw-Back Mechanism is to ensure that the Management Company doesnot benefit from periods of underperformance, and will onlybecome entitled to a Performance Fee when it outperforms thecumulative Benchmark Return (as defined in Appendix V) accruedsince the last Valuation Day of the last year in which aPerformance Fee was paid.

2.1 Daily Share Class ReturnOn each Valuation Day, the “Adjusted Net Asset Value” is calculatedin respect of each Share Class of any Sub-Fund for which aPerformance Fee applies. The Adjusted Net Asset Value is the netasset value (which includes an accrual for all fees and expenses,including the Annual Management and Advisory Fee, and theOperating and Administrative Expenses to be borne by the relevantShare Class at the rate set out in “Appendix III - Sub-Fund Details”to this Prospectus), adjusted for any dividend distributions and anysubscriptions and redemptions dealt with on that Valuation Day,and any Performance Fee accrued throughout that Valuation Day.

The “Daily Share Class Return” is calculated on each ValuationDay,as the difference between the net asset value (adjusted byadding back any accrued Performance Fee), on such day and theAdjusted Net Asset Value on the previous Valuation Day, expressedas a percentage of the previous Valuation Day’s, Adjusted Net AssetValue for that Share Class.

2.2 Daily Benchmark ReturnThe “Daily Benchmark Return” is determined on each ValuationDay by taking the percentage difference between the benchmarkon such Valuation Day and the benchmark on the previousValuation Day.

For Shares in the X Share Class, the Daily Benchmark Return isdetermined on each Valuation Day by taking the percentagedifference between the benchmark on such Valuation Day and thebenchmark on the previous Valuation Day, plus (0.75% divided by365) multiplied by the actual number of calendar days since thelast Valuation Day.

2.3 Claw-Back MechanismFollowing an accounting year in which no Performance Fee hasbeen charged, no Performance Fee will accrue until such time asthe cumulative Daily Share Class Return (since the last ValuationDay of the last accounting year in which a Performance Fee wascharged) exceeds the cumulative Daily Benchmark Return (sincethe last Valuation Day of the last accounting year in which aPerformance Fee was charged).

If no Performance Fee has been charged since the launch of theShare Class, no Performance Fee will accrue until such time as thecumulative Daily Share Class Return (since the launch of that ShareClass) exceeds the cumulative Daily Benchmark Return accruedsince the launch of that Share Class.

2.4 Excess ReturnOn any Valuation Day, the “Excess Return” is given by thedifference between the Daily Share Class Return and the DailyBenchmark Return. If, however, on any Valuation Day thedifference between the Daily Share Class Return and the DailyBenchmark Return exceeds the difference between the cumulativeDaily Share Class Return (since the last Valuation Day of the lastaccounting year in which a Performance Fee was charged) and thecumulative Daily Benchmark Return (since the last Valuation Day ofthe last accounting year in which a Performance Fee was charged),then the Excess Return for that Valuation Day is given by thedifference between the cumulative Daily Share Class Return andthe cumulative Daily Benchmark Return.

Additionally, if on any Valuation Day the difference between thecumulative Daily Share Class Return and the cumulative DailyBenchmark Return is zero or negative then the Excess Return forthat Valuation Day will also be zero.

2.5 Performance Fee AccrualsThe “Daily Performance Fee Accrual” is calculated each ValuationDay, and is equal to the Performance Fee Rate multiplied by theExcess Return multiplied by the previous Valuation Day’s AdjustedNet Asset Value for that Share Class.

Subject to the provisions of the Claw-Back Mechanism described in2.3 above, if on any Valuation Day the Daily Share Class Returnexceeds the Daily Benchmark Return, the Performance Fee accrualis increased by the amount of the Daily Performance Fee Accrual”.If however on any Valuation Day the Daily Share Class Return doesnot exceed the Daily Benchmark Return, the Performance Fee

Appendix V 99

accrual is correspondingly reduced by the amount of that ValuationDay’s Daily Performance Fee Accrual. The Performance Fee accrualwill never be reduced below zero.

No Performance Fee will be accrued until such time as thecumulative Daily Share Class Return (since the last Valuation Day ofthe last accounting year in which a Performance Fee was charged)exceeds the cumulative Daily Benchmark Return (since the lastValuation Day of the last accounting year in which a PerformanceFee was charged).

Additionally, if at any time the Performance Fee accrual has beenreduced to zero, no new Performance Fee is accrued until suchtime as the cumulative Daily Share Class Return (since the lastValuation Day of the last accounting year in which a PerformanceFee was charged) exceeds the cumulative Daily Benchmark Return(since the last Valuation Day of the last accounting year in which aPerformance Fee was charged).

The Performance Fee accrued on any Valuation Day is reflected inthe Net Asset Value per Share on the basis of which subscriptionsand redemptions may be accepted.

2.6 Effect of Performance Fee AccrualsThe Performance Fee is calculated on each Valuation Day but isaccrued within the Net Asset Value per Share one day in arrears(that is, on the Business Day after the relevant Valuation Day).Consequently, during periods of market volatility, unusual

fluctuations may occur in the Net Asset Value per Share of eachShare Class for which a Performance Fee is charged. Thesefluctuations may happen where the impact of a Performance Feecauses the Net Asset Value per Share to be reduced whilst thereturns from underlying assets have increased. Conversely, theimpact of a negative Performance Fee can cause the Net AssetValue per Share to be increased whilst the underlying assets havedecreased.

2.7 Computation of Performance FeesPerformance Fees are calculated by the Administrative Agent andaudited annually by the independent auditors of the Fund. TheBoard may make such adjustments of accruals as it deemsappropriate to ensure that the accrual represents fairly andaccurately the Performance Fee liability that may eventually bepayable by the Sub-Fund or Share Class to the ManagementCompany.

2.8 Annual Payment of Performance FeesThe annual Performance Fee payable is equal to the PerformanceFee accrued through to close of business on the last Valuation Dayof the Fund’s accounting year. Performance Fees payable to theManagement Company in any accounting year are not refundablein any subsequent accounting years.

In the case of liquidation or merger of a Sub-Fund to which aperformance fee is applicable, the performance fee will be paid onthe last Valuation Day before its liquidation or merger.

Example of calculation

Day Change in NAV - Change in Benchmark = Difference X Performance fee rate = Daily Accrual +/- Cumulative Accrual

1 +1.0% - +0.5% = +0.5% X 10% = +0.050% + +0.050%

2 +0.5% - +0.75% = -0.25% X 10% = -0.025% - +0.025%

3 -1.25% - -1.5% = +0.25% X 10% = +0.025% + +0.050%

Distribution of this Prospectus is not authorised unless accompanied by a copy of the latest annual financial report and of the latest semi-annual financial report, if published thereafter. Such reports form an integral part of this Prospectus.

NOT FOR USE BY OR DISTRIBUTION TO US PERSONSGB H29 04/10

JPMorgan Asset Management (Europe) S.à r.l.European Bank and Business Centre6 route de TrèvesL-2633 SenningerbergGrand Duchy of LuxembourgInternet Site: www.jpmorganassetmanagement.comE-mail Address: [email protected]