Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2015)
29 slides from Jp Morgan Chase &'s investor day presentation, Feb 24, 2015
Slide 1: Asset Management
A S S E T M A N A G E M E N T Mary Erdoes, Chief Executive Officer Asset Management February 24, 2015
Slide 2: AM: Consistent growth across world-class global client franchise
AM GIM GWM AM: Consistent growth across world-class global client franchise Client-focused, fiduciary culture Strong investment 84% of 10-year long-term mutual fund AUM in top 2 quartiles1 culture 23 consecutive quarters of positive long-term AUM flows Consistency – predictable, low-capital,
Slide 3: Diversified, predictable, capital-efficient growth business
AM GIM GWM Diversified, predictable, capital-efficient growth business Client Assets($T) Brokerage/Custody/Deposits Equity Liquidity Multi-asset & Alternatives Fixed income Target +7-10% $2.1 $2.3 $2.4 $1.7 $1.8 $1.9 Client assets 2014 +8%1 3-yr avg. +8% 23 consecutive quarters of positive flows ($4
Slide 4: 2014 highlights – another record year
AM GIM GWM 2014 highlights – another record year Record 2009 2014 5-yr CAGR Top ■ Assets under management ($T) $1.2 $1.7 7% investment performance ■ Mutual funds with a 4/5 star rating (#)1 127 228 12% ■ Client assets ($T) $1.7 $2.4 7% ■ Long-term AUM flows ($B) $51 $80 1.6x ■ Deposits ($B) $80 $155
Slide 5: Franchise built on leading investment performance across asset classes
AM GIM GWM Franchise built on leading investment performance across asset classes % of 2014 AUM over peer median1 / benchmark2 (net of fees) 3-year 5-year 10-year Equity1 77% 87% 83% 98% for US (5 yr) Fixed Income1 50% 66% 85% 97% for High-Yield (5 yr) Multi-Asset Solutions1 92% 85% 86% 100% f
Slide 6: Strength across diverse products, channels, and regions
AM GIM GWM Strength across diverse products, channels, and regions… ███ < $(100mm) ███ Flat ███ > $100mm LT flows by channel, region, and product ($B) Other Client Channel Region LT AUM Flows Asset Flows Fixed Income Equity Multi-Asset Alternatives Other U.S. EMEA GWM Asia 2012 LatAm $101B U.S. EMEA
Slide 7: …leading to consistently top ranked flows (%)
AM GIM GWM …leading to consistently top ranked flows (%) Ranking of LT client asset flows (as % of beginning of period LT client assets) for key peers 2010-2014 2010-2014 2010 2011 2012 2013 2014 annualized growth annualized growth 1 Peer 1 Peer 4 Peer 1 Peer 4 Peer 12 JPM 8% 2 Peer 2 JPM 8% JPM 7%
Slide 8: …leading to consistently top ranked flows ($)
AM GIM GWM …leading to consistently top ranked flows ($) Ranking of LT client asset flows ($B) for key peers 2010-2014 2010-2014 2010 2011 2012 2013 2014 avg. flows ($B) avg. flows ($B) 1 Peer 1 JPM $103 Peer 1 Peer 8 Peer 8 JPM $100 2 JPM $114 Peer 4 JPM $101 Peer 4 JPM $100 Peer 8 $69 Peer 2 Peer
Slide 9: Combined Asset Management and Chase Wealth Management produce strong results
AM GIM GWM Combined Asset Management and Chase Wealth Management produce strong results 2014 Client assets ($T) 2014 Revenue ($B) 2014 Pretax income ($B) Pretax margin 1 4.7 18.4 4.7 26% 2 AM CWM 18.3 3 2.9 JPM 3.5 1.1 4.6 29% AM CWM 3,4 JPM 2.4 2.6 17.6 4.4 40% AM CWM 3 2 JPM 2.4 JPM 12.0 2.6 14.7
Slide 10: Invaluable benefit of being part of JPMC
AM GIM GWM Invaluable benefit of being part of JPMC Illustrative example Existing J.P. Morgan CB client Lending Individual wealth Company transition Banking Private Bank Investing Banking Lending Wealth advisory CCB CIB CIB GIM Branch banking Access to ECM / DCM M&A 401(k) Cred
Slide 11: GIM: Built on a foundation of exceptional investment capabilities
AM GIM GWM GIM: Built on a foundation of exceptional investment capabilities Strong investment performance: 84% of 10-year LT mutual fund AUM in top 2 quartiles1 Superior client outcomes Serve 60% of world’s largest pension funds, sovereign wealth funds, and central banks Local presence in ove
Slide 12: Continued strength in traditional asset classes
AM GIM GWM 7. TROW $0.5 Continued strength in traditional asset classes Equity example – US equity 40-Act funds Fixed Income example – Core fixed income 40-Act funds % of mutual funds outperforming benchmark1 Industry JPM # of periods of rolling 5Y outperformance vs. benchmark (observed monthly) 2 i
Slide 13: Breadth of platform provides building blocks for leading multi-asset Solutions
AM GIM GWM Breadth of platform provides building blocks for leading multi-asset Solutions GIM Solutions AUM¹ JPM: 31% CAGR Industry: 13% CAGR Institutional custom multi-asset Liability-driven investment Target Date Pooled solutions ex target date 2009 2013 2014 Diversified (60% MSCI World/40% Agg.)2
Slide 14: Institutional: Gaining market share in each client segment
AM GIM GWM Institutional: Gaining market share in each client segment 2009 – 2013 Institutional AUM CAGR1 Industry JPM 26% 24% 20% Market share ~2% 14% 12% 11% 10% 8% 7% 7% 7% 5% Insurance Defined Endowments Sovereign Defined Overall Contribution & Foundations Wealth Funds Benefit ASSET MANAGEMENT E
Slide 15: Retail: World’s fastest growing active mutual fund manager
AM GIM GWM Retail: World’s fastest growing active mutual fund manager Productivity Gross sales per senior salesperson ($mm) # of senior salespeople +43% $789 $696 $487 $550 $526 $543 188 223 261 250 277 284 Active LT AUM ($B) Active LT AUM net flows ($B) and flows rank +120% Assets $392 $443 $247 $2
Slide 16: Leading Alternatives / Absolute Return capabilities across GIM and GWM
AM GIM GWM Leading Alternatives / Absolute Return capabilities across GIM and GWM Alternatives / Absolute Return client assets1 (2014, $B) GWM 3rd-party alternatives Currency / Commodities $290 Real Assets Hedge Fund Solutions Hedge Funds (incl. credit) $214 $195 Private Equity/Private Equity Soluti
Slide 17: GWM: Superior franchise serving sophisticated clients globally
AM GIM GWM GWM: Superior franchise serving sophisticated clients globally Since 2009… Best Global Private Bank Client assets +60% Leading Revenue +50% financial results Pretax income +40% Since 2009… Client advisors +25% (+75% internationally) Successful expansion More than doubled size of
Slide 18: Team-based model delivers JPMC firm-wide solutions to our clients
AM GIM GWM Team-based model delivers JPMC firm-wide solutions to our clients $5mm Clients Mass / Affluent High Net Worth / Ultra High Net Worth Chase Wealth Management Global Wealth Management (GWM) Private Bank Chase Investment Chase Private Banker + Services (CIS) Client (CPC) Investor + Banker +
Slide 19: Trusted advisor to the world’s most sophisticated clients
AM GIM GWM Trusted advisor to the world’s most sophisticated clients % client assets from clients with $10mm+ (2013) 2006-2013 client asset CAGR1 JPM PB 9% market share 86% US 4% 4% >50% of JPM PB client Industry JPM PB assets from clients with $100mm+ 15% JPM PB market share 6% LatAm 1% 47% Industr
Slide 20: Exclusive, customized, thematic solutions capitalize on market cycles
AM GIM GWM Exclusive, customized, thematic solutions capitalize on market cycles Alternatives flows: Gross hedge fund inflows and private equity commitments ($B) 19 14 14 Private 12 13 equity 10 7 Hedge funds 2008 2009 2010 2011 2012 2013 2014 Thematic Alternative solutions = >$500mm raised Crisis I
Slide 21: Advising clients on both sides of their balance sheet
AM GIM GWM Advising clients on both sides of their balance sheet Strong growth in credit book… Expanding deposits business… Year-end spot balance ($B) Year-end spot balance ($B) Mortgages 1 CAGR +14% CAGR Loans +19% CAGR 107 155 (ex-mortgages) 99 145 146 87 25 25% 127 23 70 18 92 55 15 80 46 11 8 77
Slide 22: Continue to invest in tech and talent while control spend levels off
AM GIM GWM Continue to invest in tech and talent while control spend levels off Expense ($) +6% CAGR Tech 2011 2012 2013 2014 2015 2016 2017 Headcount +4% CAGR Front office 2011 2012 2013 2014 2015 2016 2017 Expense ($) +23% CAGR ASSET MANAGEMENT Control 2011 2012 2013 2014 2015 2016 2017 21
Slide 23: Reiterating long-term targets while continuously investing for growth
AM GIM GWM Reiterating long-term targets while continuously investing for growth Key takeaways Strong investment performance across broad range of products Unique franchise, difficult to replicate, increasing barriers to entry Continuously investing in people, products, and processes Predict
Slide 24: Notes appendix
Notes appendix Page 1 1. The “% of 10-year LT mutual fund AUM in top 2 quartiles” analysis represents the proportion of assets in mutual funds that are ranked in the top 2 quartiles of their respective peer category on a 10-year basis as of December 31, 2014. The sources of these percentile rankings
Slide 25: Notes appendix
Notes appendix Page 4 1. The “% of AUM over peer median” analysis represents the proportion of assets in mutual funds that are ranked above their respective peer category median on 3, 5, and 10 year basis as of December 31, 2014. The sources of these percentile rankings, peer category definitions fo
Slide 26: Notes appendix
Notes appendix Page 6 Source: Company filings, J.P. Morgan estimates Note: Peer group includes peers with publicly reported financials and 2014 client assets of at least $500B: Allianz, BAC, BEN, BK, BLK, CS, DB, GS, IVZ, MS, TROW, UBS. Allianz, CS, DB, and UBS figures converted at average exchange
Slide 27: Notes appendix
Notes appendix Page 8 Source: Company filings, J.P. Morgan estimates Note: Allianz, CS, DB, and UBS figures converted at average exchange rate. Balances presented at end of period exchange rate 1. Total AUM; for Allianz reflects total AUM from third-parties 2. Total AUM, brokerage, custody, and depo
Slide 28: Notes appendix
Notes appendix Page 11 Source: Strategic Insight, Morningstar 1. 40-Act funds only. Performance for mutual funds was calculated using Morningstar Direct. Select Share Classes were used for all analysis (except JPMorgan Realty Income which does not have a Select share class, so Institutional share cl
Slide 29: Notes appendix
Notes appendix Page 15 Source: Company filings, FT Towers Watson Global Alternatives Survey 2014, J.P. Morgan estimates 1. Client assets may include non fee-earning client assets (e.g., firm capital invested in its own funds, uncalled capital commitments for funds charging fees on invested capital,