JP Morgan Chase 2014 Annual Report Download - page 103

JPMorgan Chase & Co./2014 Annual Report 101
AM’s lines of business comprise the following:
Global Investment Management provides comprehensive global
investment services, including asset management, pension analytics,
asset-liability management and active risk-budgeting strategies.
Global Wealth Management offers investment advice and wealth
management, including investment management, capital markets and
risk management, tax and estate planning, banking, lending and
specialty-wealth advisory services.
AM’s client segments comprise the following:
Private Banking clients include high- and ultra-high-net-worth
individuals, families, money managers, business owners and small
corporations worldwide.
Institutional clients include both corporate and public institutions,
endowments, foundations, nonprofit organizations and governments
worldwide.
Retail clients include financial intermediaries and individual investors.
J.P. Morgan Asset Management has two high-level
measures of its overall fund performance.
• Percentage of mutual fund assets under management in funds
rated 4- or 5-star: Mutual fund rating services rank funds based on
their risk-adjusted performance over various periods. A 5-star rating
is the best rating and represents the top 10% of industry-wide ranked
funds. A 4-star rating represents the next 22.5% of industry-wide
ranked funds. A 3-star rating represents the next 35% of industry-
wide ranked funds. A 2-star rating represents the next 22.5% of
industry-wide ranked funds. A 1-star rating is the worst rating and
represents the bottom 10% of industry-wide ranked funds. The
“overall Morningstar rating” is derived from a weighted average of the
performance figures associated with a fund’s three-, five- and ten-year
(if applicable) Morningstar Rating metrics. For U.S. domiciled funds,
separate star ratings are given at the individual share class level. The
Nomura “star rating” is based on three-year risk-adjusted
performance only. Funds with fewer than three years of history are
not rated and hence excluded from this analysis. All ratings, the
assigned peer categories and the asset values used to derive this
analysis are sourced from these fund rating providers as mentioned in
footnote (a). The data providers re-denominate the asset values into
USD. This % of AUM is based on star ratings at the share class level
for U.S. domiciled funds, and at a “primary share class” level to
represent the star rating of all other funds except for Japan where
Nomura provides ratings at the fund level. The “primary share class”,
as defined by Morningstar, denotes the share class recommended as
being the best proxy for the portfolio and in most cases will be the
most retail version (based upon annual management charge,
minimum investment, currency and other factors). Past performance
is not indicative of future results.
• Percentage of mutual fund assets under management in funds
ranked in the 1st or 2nd quartile (one, three and five years): All
quartile rankings, the assigned peer categories and the asset values
used to derive this analysis are sourced from the fund ranking
providers mentioned in footnote (b). Quartile rankings are done on
the net-of-fee absolute return of each fund. The data providers re-
denominate the asset values into USD. This % of AUM is based on
fund performance and associated peer rankings at the share class
level for U.S. domiciled funds, at a “primary share class” level to
represent the quartile ranking of Luxembourg, U.K. and Hong Kong
funds and at the fund level for all other funds. The “primary share
class”, as defined by Morningstar, denotes the share class
recommended as being the best proxy for the portfolio and in most
cases will be the most retail version (based upon annual management
charge, minimum investment, currency and other factors). Where
peer group rankings given for a fund are in more than one “primary
share class” territory both rankings are included to reflect local
market competitiveness (applies to “Offshore Territories” and “HK SFC
Authorized” funds only). Past performance is not indicative of future
results.
Selected metrics
As of or for the year ended
December 31,
(in millions, except ranking data
and ratios) 2014 2013 2012
% of JPM mutual fund assets
rated as 4- or 5-star(a) 52% 49% 47%
% of JPM mutual fund assets
ranked in 1st or 2nd quartile:(b)
1 year 72 68 67
3 years 72 68 74
5 years 76 69 76
Selected balance sheet data
(period-end)
Total assets $ 128,701 $ 122,414 $ 108,999
Loans(c) 104,279 95,445 80,216
Deposits 155,247 146,183 144,579
Equity 9,000 9,000 7,000
Selected balance sheet data
(average)
Total assets $ 126,440 $ 113,198 $ 97,447
Loans 99,805 86,066 68,719
Deposits 150,121 139,707 129,208
Equity 9,000 9,000 7,000
Credit data and quality
statistics
Net charge-offs $ 6 $ 40 $ 64
Nonaccrual loans 218 167 250
Allowance for credit losses:
Allowance for loan losses 271 278 248
Allowance for lending-related
commitments 55 5
Total allowance for credit
losses 276 283 253
Net charge-off rate 0.01% 0.05% 0.09%
Allowance for loan losses to
period-end loans 0.26 0.29 0.31
Allowance for loan losses to
nonaccrual loans 124 166 99
Nonaccrual loans to period-end
loans 0.21 0.17 0.31
(a) Represents the “overall star rating” derived from Morningstar for the U.S., the
U.K., Luxembourg, Hong Kong and Taiwan domiciled funds; and Nomura ’star
rating’ for Japan domiciled funds. Includes only retail open ended mutual funds
that have a rating. Excludes money market funds, Undiscovered Managers Fund,
and Brazil and India domiciled funds.
(b) Quartile ranking sourced from: Lipper for the U.S. and Taiwan domiciled funds;
Morningstar for the U.K., Luxembourg and Hong Kong domiciled funds; Nomura
for Japan domiciled funds and FundDoctor for South Korea domiciled funds.
Includes only retail open ended mutual funds that are ranked by the
aforementioned sources. Excludes money market funds, Undiscovered Managers
Fund, and Brazil and India domiciled funds.
(c) Included $22.1 billion, $18.9 billion and $10.9 billion of prime mortgage loans
reported in the Consumer, excluding credit card, loan portfolio at December 31,
2014, 2013 and 2012, respectively. For the same periods, excluded $2.7 billion,
$3.7 billion and $6.7 billion, respectively, of prime mortgage loans reported in
the CIO portfolio within the Corporate segment.