JPMorgan Brazil Investment Trust plc Annual General Meeting September 2015 Sophie Bosch de Hood , Executive Director Portfolio Manager sophie.bosch@jpmorgan.com FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Performance JPMorgan Brazil Investment Trust plc to 30 th April 2015 – 12 month rolling returns 30/4/14 – 30/4/13 – 30/4/12 – 30/4/11 – 30/4/10 – (%) 30/4/15 30/4/14 30/4/13 30/4/12 30/4/11 Portfolio return -14.6% -24.4% 4.4 -10.0 14.7 Index -9.5% -17.1% 0.2 -13.0 5.3 Ordinary share price return -11.9% -26.0% -2.7 -15.3 9.3 Source: J.P. Morgan Asset Management. Inception Date: 26 April 2010 Benchmark History - 26 April 2010 To Current - MSCI Brazil 10/40 Total Return Net GBP. Portfolio return: NAV to NAV, net of fees with income reinvested in GBP. Past Performance is not an indication of future performance. 1 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Performance JPMorgan Brazil Investment Trust plc 12 Months to 30 th April 2015 The 12 months to end April were a challenging % period for Brazilian equities, with sentiment driven Portfolio return -14.6% more by political developments than by corporate fundamental Index -9.5% The dominant event of the period was October’s Ordinary share price return -11.9% presidential election. To the market’s dismay, the outcome of the closely fought contest was a 12 Months to 31 st July 2015 % preservation of the status quo Portfolio return -32.7% The steep decline in natural resource prices in the second half of 2014 was a further headwind for Index -31.8% Brazil’s commodity-heavy market over the review Annualised Performance since inception – period % 31 st July 2015 Against this turbulent backdrop, the trust’s net Portfolio return -10.9% asset value and share price underperformed the benchmark Index -10.8% Source: J.P. Morgan Asset Management. Inception Date: 26 April 2010 Benchmark History - 26 April 2010 To Current - MSCI Brazil 10/40 Total Return Net GBP. Portfolio return: NAV to NAV, net of fees with income reinvested in GBP. Past Performance is not an indication of future performance. 2 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Emerging markets remain under pressure Sources of total returns for YTD 2015 Dividend Valuation Chg EPS Growth (Lcl) Currency effect Total Return 45% 25% 21% 5% 3% 2% -2% -3% -4% -4% -7% -8% -8% -10% -15% -16% -20% -20% -25% -35% -55% -75% EM Brazil Mexico Chile Colombia China Korea Taiwan India Malaysia Indonesia Poland Russia South Turkey Africa Source: JPMorgan Asset Management, Factset, as of 31 st July 2015 Past performance is not necessarily a reliable indicator for future performance. EPS = earnings per share 3 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Performance of MSCI Brazil MSCI Brazil 10/40 (Rebased Dec 2000 = 100) 900 800 700 600 500 400 300 200 100 0 Source: Factset, MSCI Brazil 10/40, July 31, 2015. Past performance is not an indication of future performance. Indices do not include fees or operating expenses and are not available for actual investment. Past performance is not an indication of future performance . 4 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Valuations: Brazil & emerging markets Monthly price to earnings Price to earnings and price to book 32 60 MSCI EM MX MSCI Brazil EG 50 24 EM Average HU Brazil Average IN PH Price to earnings CO 40 CL ZA MY BR 16 TH 30 CZ PE ID PL TW SK TR CN 20 8 RU 10 0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 0 Price to book Aug 94 Aug 97 Aug 00 Aug 03 Aug 06 Aug 09 Aug 12 Jul 15 Source: Factset as of 31 st July 2015 BR = Brazil, CL = Chile, CN = China, CO = Colombia, CZ = Czech Republic, EG = Egypt, HU = Hungary, IN = India, ID = Indonesia, SK = South Korea, MX = Mexico, PE = Peru, PL = Poland, RU = Russia, ZA = South Africa, TR = Turkey. 5 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Continued economic slowdown GDP estimates in negative territory GTM – Brazil | Page 6 GDP estimates, calendar year (%) Trend in the same direction Source: Consensus Economics, J.P. Morgan Asset Management. Domestic demand is defined as public and private consumption plus investment. External demand is defined as exports. Guide to the Markets – Brazil. Data as of 31 st July 2015 6 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Brazil has historically seen big GDP growth swings Source: GDP growth per annum 18% 14% 10% 6% 2% 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 -2% -6% Source: MacData, JPMorgan Database, data from 1968 to end 2014. Past performance is not necessarily a reliable indicator for future performance.. 7 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
What do the headlines say? “The vanishing surplus” Brazil: 10 good reasons to think the two-month-old government will go “Two Braz azilian n execut utives arrested d as Petrob robra ras prob robe h hit its utilit lity” “A A Cha hallenging A Augu ugust for or Dilm ilma” Brazil downgrade threat is a real danger sign These 5 Facts Explain Brazil’s Crippling Scandals “Brazil is suffering from recession and scandal” The dodgiest duo in the suspect six Source: Publications listed. The companies above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. The use of the above company logos is in no way an endorsement for JPMAM investment management services. Past performance is not necessarily a reliable indicator for future performance 8 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
The currency is in our favour after many years Currency valuation and support REER vs CARRY 16 HIGH CARRY BR 14 12 RU Policy Rate less US 10 EG ID IN 8 TR ZA 6 CO LOW CARRY CN PH 4 MY CL AU 2 MX TW PL US HU TH KR 0 JP SG -30 -20 -10 0 10 20 30 CHEAP EXPENSIVE REER Relative to Fair Value Source: J.P. Morgan Asset Management estimates. Data as of 24 th August 2015 REER (real effective exchange rate) relative to fair value (export-adjusted 10 year average REER) on the x axis and policy rate on the y axis. CARRY (a currency with a high Information Ratio) Countries over the line of best fit provide good carry for their currency valuation 9 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Currency depreciation is making life more affordable Milk (1 litre) Brazil 2014: £0.73 Nappies UK 2014: £0.60 Brazil 2014: £8.26 UK 2014: £6.00 2015: 2015: Brazil: £0.54 Brazil: £4.41 Coca-Cola (1 litre)) Brazil 2014: £1.30 UK 2014: £1.50 2015: Brazil: £0.54 Shampoo Brazil 2014: £4.30 UK 2014: £4.00 2015: Brazil: £3.83 Apple Ipad Brazil 2014: £485 Aspirin (10 tablets) UK 2014: £260 Brazil 2014: £1.21 2015: UK 2014: £0.30 Brazil: £339 2015: Brazil: £1.28 Source: Company websites. Brazilian prices shown as GBP as at 28 th August 2014. UK prices taken from Tesco.com and Amazon.co.uk. Apple Ipad is previous version of mini Ipad 32gb, wi-fi with retina display. Companies and products shown for illustrative purposes only not to be taken as advice or a recommendation. The use of the above company logos is in no way an endorsement for JPMAM investment management services 10 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
Investment example: Valid A leading provider of identification systems, payment Adapting technology to meet client demands methods, SIM cards and digital certification. Economics – Strong cash flow generation and balance sheet – Average Return on Equity of 20% over the last five years Duration – Historically good at identifying and adapting technology to meet client needs – Business and geographic diversification Governance – Listed on the Novo Mercado – Knowledgeable and experienced management team – Minimum payout of 50% since 2012 Source: Company presentation. BTG Pactual XVI Brasil CEO Conference. As of 13 th February 2015. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. J.P. Morgan Asset Management may or may not hold positions on behalf of its clients in any or all of the aforementioned securities. 11 | FOR PROFESSIONAL CLIENTS/QUALIFIED INVESTORS ONLY - NOT FOR RETAIL USE OR DISTRIBUTION
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