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ASSET CLASS RETURN COMPARISON (INCLUDING U.S.)
As of October 2008

By William Pometto
J.P. Morgan Investment Analytics and Consulting
william.m.pometto@jpmorgan.com

Index	Monthly Return	Trailing 3 Months	Year To Date	1 Year	2 Year	3 Year	5 year	10 Year
L.B. Aggregate Bond Index	(2.36)	(2.76)	(1.74)	0.30	2.81	3.60	3.48	5.00
M.L. High Yield Index	(16.25)	(22.99)	(25.25)	(26.54)	(11.42)	(4.74)	0.42	1.66
MSCI Emerging Markets Free	(27.35)	(44.83)	(53.05)	(56.22)	(14.15)	(0.07)	9.87	10.06
MSCI-EAFE (Net)	(20.18)	(34.49)	(43.54)	(46.62)	(46.62)	(5.26)	3.60	1.67
Russell 1000 Growth (Gross)	(17.61)	(26.36)	(34.31)	(36.95)	(13.30)	(5.90)	(1.29)	(2.10)
Russell 2000 Value (Gross)	(19.98)	(20.10)	(24.27)	(30.54)	(15.81)	(4.49)	3.05	7.40
Russell 3000 (Gross)	(17.74)	(24.31)	(33.21)	(36.60)	(14.79)	(5.46)	0.46	1.04
S&P 500-Cap.Weighted	(16.79)	(23.11)	(23.84)	(36.10)	(14.44)	()5.20	0.27	(1.11)

U.S. EQUITY

U.S. Stock Markets plunged in October, experiencing one of the worst months in history.
Volatility was extremely high throughout the month.
There were only a handful of days during October that the Dow Jones Industrial Average didn't end the session with a triple digit gain or loss.
The NASDAQ Composite dropped 17.69 percent for the month due to mixed earnings from technology companies.
The S&P 500 fell 16.79 percent in October, leaving it down over 32 percent year to date.

INTERNATIONAL EQUITY

International Equity Markets suffered bigger losses than domestic stocks.
Concerns of a global recession are being felt across International Markets.
The Emerging Markets Free Index lost a shocking 27.35 percent in October.

FIXED INCOME

Fixed Income Markets were no different than equities, although treasuries seemed to take the smallest hit in October.
Both long and short yields decreased in October.
The L.B. Treasury Index slipped 0.11 percent for the month but is up 4.47 percent for the year.

GLOBAL EQUITIES (EXCLUDING U.S.)
As of October 2008

by Simreet Gill
J.P. Morgan Investment Analytics and Consulting
simreet.k.gill@jpmorgan.com

Europe

Source: J.P. Morgan Investment Analytics & Consulting, Bloomberg, Rimes

Equity markets have been driven by 3 major forces between August and October: economic surprises, volatility and HF redemptions. In terms of economic news, the tide of downward revisions continues to run strong in both the consensus and our own economic forecasts. Over the past month, fear and uncertainty induced a lot of volatility in financial markets, the size of their positions. In turn, investor deleveraging generates even more volatility, feeding into a vicious cycle. Equity long-short hedge funds, which represent the vast majority of equity hedge funds, had their worst month ever in October (-9% according to daily indices). (Morgan Markets)

Asia-Pacific

Australia: A number of developments have given market participants pause to think about the RBA’s next move. Commentary in the media that the recently announced fiscal stimulus is a substitute for rate cuts, further reductions in variable mortgage rates and an even handed speech by the RBA Governor have all been contributing factors. (Morgan Markets)		Australia, Hong Kong & Singapore

Japan (Nikkei 225)		Korean (KOSPI)

Japan: Towards the end of October, Nikkei225 stock price touched a bottom of below 7,000 at one point for the first time since 1982. In reaction to this price action, policymakers started showing their intention to support the economy. Prime Minister Aso postponed the planned dissolution of the Diet, and instead announced the economic stimulus package on 30 Oct. On the following day, the BoJ also finally joined the global circle of coordinated interest rate cuts by cutting 20bp to 0.3%, notwithstanding a risk of damaging their credibility and accountability. The decision might have been done on the judgment of the situation rather than the monetary policy logic. The stock market rose before the meeting in anticipation of a rate cut, and there was a risk of these gains being wiped out unless the BoJ treated it properly. (Morgan Markets)