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    1. Shaping up: Building an effective ISA savings plan

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    Shaping up: Building an effective ISA savings plan

    There is a strong correlation between wealth and health. Those who are better off typically enjoy better physical health, according to research from Durham University1.

    J.P. Morgan Investment Trust Team

    18 Feb 2019

    For those looking to improve their health, a disciplined approach to exercise and a balanced diet can certainly help to shift the pounds. But the same approach can also have a positive effect when it comes to shaping up savings and boosting portfolio value.

    The key to adding pounds to your savings – rather than shedding them from your waistline – is also discipline and balance.

    Step One: Start saving – and stick at it

    A regular savings plan, where you commit a fixed amount into an investment plan each month, helps build a disciplined approach and gets you into good investment habits. Even small amounts can build over the longer term. Investing monthly can also help smooth out the ups and downs of the stock market. The commitment to start and stick with an investment plan is likely to make the biggest difference to your future wealth.

    Step Two: Build a balanced ISA portfolio

    Investing in a spread of assets can help reduce volatility. Markets are by their nature cyclical, but when one sector isn’t doing so well, you can still get returns from other holdings in your portfolio.

    Crash diets, where you eat only watercress or pineapple chunks, are unlikely to deliver long-term results. The same principle applies for those looking for healthy investment returns; it can pay to diversify and build a balanced portfolio. At its most basic this means investing in a range of assets – such as equities, bonds and cash – and where possible diversifying across different geographical regions and sectors.

    Katy Thorneycroft, portfolio manager of the JPMorgan Elect plc - Managed Growth trust says: “Investing in a spread of assets can help reduce volatility. Markets are by their nature cyclical, but when one sector isn’t doing so well, you can still get returns from other holdings in your portfolio.”

    Step Three: Investment trust options for a healthy ISA

    Those looking to build a balanced portfolio may want to consider the following three areas:

    Income trusts: UK equity income trusts could make good core holdings. They typically invest in large UK companies with a track record of paying consistent and reliable dividends. Over time many of these dividends could rise in value, helping to protect your savings against inflation.

    JPMorgan Claverhouse Investment Trust plc invests in a portfolio of such companies. As a result, the dividend paid to its investment trust shareholders has risen every year for the past 45. These trusts aren’t just for those looking to generate an income from their investments though. Dividend payments can be reinvested, helping to boost overall returns.

    Growth trusts: In contrast, trusts that have more of a growth remit tend to focus on companies, sectors or regions with the potential for share-price growth over the longer term.

    One option for those seeking longer-term growth is an emerging market investment trust. These invest in rapidly developing economies such as India, China, Brazil, Latin American and the Middle East. Though diverse countries and regions, they share key characteristics such as a growing middle class and a wealth of natural resources. This should help fuel prosperity over the longer term, benefitting companies selling goods or services in these regions.

    JPMorgan Emerging Markets Investment Trust plc looks to capitalise on these longer-term prospects. Inevitably there are risks in investment in these regions – share prices can be more volatile, particularly over shorter time frames – but political and economic reforms in many of them have helped to create more transparent and stable markets.

    Multi-asset trusts: Those looking for diversification can invest in a ready-made portfolio via a multi-asset trust. These invest in a spread of equities, bonds, cash and sometimes other assets, such as commercial property and infrastructure. They can make good core holdings, particularly for those relatively new to investment. Because they hold a range of assets, returns tend to be lower risk and less volatile than those of straight equity trusts.

    JPMorgan Elect plc - Managed Growth aims to protect growth with diversity by seeking out best in class stocks and products across a variety of regions.

    1 Source: Durham University as at 13 July 2013

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    This is a marketing communication. The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. The value of investments and the income from them may fluctuate in accordance with market conditions and investors may not get back the full amount invested. Past performance and yield are not a reliable indicator of current and future results. There is no guarantee that any forecast made will come to pass. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy. This communication is issued in Europe (excluding UK) by JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, R.C.S. Luxembourg B27900, corporate capital EUR 10.000.000. This communication is issued in the UK by JPMorgan Asset Management (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5J

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