Q1. How are you positioning your portfolio, and in what sectors or asset classes are you overweight or underweight?

We are positioned for continued growth in the US economy supported by a broadening out of earnings from a few mega cap companies to a wider selection of market participants. While there is a host of conflicting updates for traders to consider, the big picture can be summarised as follows:

• the labour market is cooling1 and yet consumer demand2 remains quite solid, such that near term potential growth remains above the US Federal Reserve’s (the Fed) longer-term expectations
• there are signs that inflation is moderating3 although concerns about adjustments in the labour market keeps additional interest rate cuts as the most likely outcome
• earnings growth4 is showing signs of broadening as well, as more companies across various sectors of the economy are starting to report stronger profits.

Currently, the JAM portfolio is ’style-biased’, in other words we are favouring (“overweight”) growth stocks and holding less (“underweight”) value stocks.

Q2. What’s your outlook for interest rates and the Fed policy, and how is that shaping your quarter 4 strategy?

We expect interest rate reductions to continue in the fourth quarter. In the longer term, prospects for rates are likely to depend on the evolution of the labour markets, and the behaviour of the yield curve – in other words, how interest rates differ for short- and long- term government bonds – which is influenced more by investor expectations than policy makers.

Q3. How are you adjusting risk exposure heading into year-end, and how are you preparing for potential volatility?

We try and take a multi-year view of the businesses we invest in. We are mindful of where we think the world is going over time and try to position more towards longer term drivers of durable demand where we think our perspectives can be more valuable. At the same time, we recognise we need to earn the right to take that perspective and so adjust at the margin to shorter term considerations.

Q4. What role do you see earnings playing this quarter, and are there specific names or sectors you're watching closely?

We believe there is a good chance that some companies will report earnings that will be slightly higher than current forecasts. Market and analyst reactions on the day and the days that follow are almost certainly going to be in reaction to what was already expected. The driver of traders’ reactions will be to what companies offer, guidance for the remainder of the year and the few willing to offer their perspectives for 2026. Communications companies are at the forefront of our attention, as they consider the threats and opportunities that artificial intelligence (AI) poses for businesses. Companies may increase spending, not only from current earnings but also by borrowing, to finance their ambition and remain relevant in transition. Only time will tell.

Q5. Are you concerned about an AI bubble developing, and if so, have you adjusted the JAM portfolio based on what you expect to happen in the tech sector?

Earlier this year, we cut back our position in Nvidia, the Silicon Valley chip manufacturer, but as we moved through the year we saw signs that this caution was perhaps not justified. The most obvious being the massive revisions to capital spending intentions from companies like Microsoft, Amazon and Meta5, increasing their spending from $10bn to $20bn in a quarter.

As we observed that greater confidence − in effect investors being less worried about seeing a return on that capital spending in the shorter term − we added to some of our AI allocations at the stock level.

The securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell.

• Learn more about JPMorgan American Investment Trust (JAM)

¹ EY Parthenon Employment Report August 2025

² Trading Economics United States Personal Spending August 2025

³ CNBC Here’s the inflation breakdown for August 2025 – in one chart

⁴ Factset Insight S&P Earnings season update: July 25, 2025

⁵ Techspot.com Amazon, Google, Microsoft, and Meta push AI spending to new heights, set to surpass $320 billion this year

JPMorgan American Investment Trust | JAM

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The risk indicator assumes you keep the product for 5 year(s). The risk of the product may be significantly higher if held for less than the recommended holding period.

Investment objective: The Company aims to achieve capital growth from North American investments by outperformance of the Company's benchmark, the S&P500 Index, with net dividends reinvested, expressed in sterling terms. The Company emphasises capital growth rather than income and when appropriate may have exposure to smaller capitalisation companies. The Company's gearing policy is to operate within a range of 5% net cash to 20% geared in normal market conditions. Gearing may magnify gains or losses experienced by the Company.

Key risks: Exchange rate changes may cause the value of underlying overseas investments to go down as well as up. External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds and income could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions. This Company may utilise gearing (borrowing) which will exaggerate market movements both up and down. This Company may also invest in smaller companies which may increase its risk profile. The share price may trade at a discount to the Net Asset Value of the  Company. The single market in which the Company primarily invests, in this case the US, may be subject to particular political and economic risks and, as a result, the Company may be more volatile than more broadly diversified companies.