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Market Overview

JPMorgan Asset Management

The past several months have brought sweeping changes to the financial services industry that continue to reverberate throughout the global financial system. Investors are now faced with the task of assessing what the future holds. Since early September, we have seen drastic steps taken by governments and central banks around the world to provide support to the markets. The world is clearly in recession. Economic conditions are likely to deteriorate - unemployment can be expected to rise, consumer and business spending to slow, and corporate profits to decline, with the downturn likely to last into at least the first half of 2009.

Much of the dim outlook may already be reflected in share prices. Serious challenges undoubtedly lie ahead, so market volatility should be expected to remain high. Though a sustainable recovery may still be some way off, with expectations already so depressed, central banks aggressively cutting rates and fiscal stimulus on the way, the conditions under which equity markets can finally make a bottom look to be forming.

JPMorgan Asset Management
JPMorgan Asset Management takes very seriously its role as a trusted, valued partner. We hold ourselves to a higher standard of judgment when it comes to making investment decisions. In other words, we act in the best interest of the plan participants and make investment recommendations which would be consistent with a prudent person. We take pride in our continuous on-going monitoring of the underlying strategies and in our decision-making process to remove underperforming strategies and introduce alternatives.

Our investment philosophy is for a portfolio to be broadly diversified among asset classes and products and that the structure of a portfolio should be appropriate for its investment objectives. Our investment approach is driven by two factors: our ability to identify sustainable sources of return and our ability to construct risk efficient portfolios from these building blocks. The investment management subsidiaries and affiliates of JPMorgan Chase & Co. have created a leading worldwide money manager offering a range of investment strategies through one of the broadest product lines in the investment management industry. We have access to a breadth of product offerings throughout JPMorgan Asset Management with over 160 products across numerous investment engines.

This information is intended solely to report on various investment views held by JPMorgan Asset Management. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable but should not be assumed to be accurate or complete. These views and strategies described may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Past performance is no guarantee of future results. Please note that investments in foreign markets are subject to special currency, political, and economic risks.

JPMorgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., JPMorgan Investment Advisors Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management Inc.

2008 JPMorgan Chase & Co.

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