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Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan Claverhouse. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
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Overview

JPMorgan Claverhouse (JCH) invests in predominantly large cap UK companies, with a focus on those that provide consistent and growing dividends.

The managers, William Meadon and Callum Abbot, often refer to the trust as a "get rich slow" fund, aiming to consistently outperform its benchmark index, the FTSE All-share. The duo utilise a bottom up stock picking approach, and place an emphasis on understanding the value, quality and momentum characteristics of a company before making an investment decision. The portfolio holds between 60-80 stocks, reflecting a change in strategy made in 2012, with the managers having been encouraged to adopt a more ‘high conviction’ approach. As such, the managers are not afraid to run their winners, and subject to risk controls, have conviction positions in the portfolio. This is illustrated through the top ten holdings making up over 45% of the portfolio.

The trust has a strong track record of outperformance, and since the change of strategy seven years ago JCH has generated NAV returns of 101.2%. This is considerably more than the FTSE All Share (69.8%) and the AIC (90.8%) and IA peer groups (73.8%). In more recent times, the performance has been subject to the volatility of the market, especially in Q4 2018. Since then however, the trust has rallied and has returned close to 14% year to date.

Perhaps even more impressive than its total returns, is the trust’s dividend history. Currently yielding 3.9%, the trust’s 2018 dividend represented the 46th successive year of growth and was a 5.8% increase over the previous year. Furthermore, the trust has exceptionally strong revenue reserves, and the most recent dividend was covered close to 1.3x by revenue reserves.

Over the past year the trust has traded on an average discount of 0.9%, considerably narrower than the AIC sector one-year average discount of 5.4%. With this said, and in common with many other UK-focused trusts, the discount has widened somewhat over the past couple months and currently sits at 4.5%.



Kepler View

There are numerous reasons to like JPMorgan Claverhouse in the current market environment. The leading reason is due to the strong and, most importantly, reliable income that the trust offers, with the dividend currently yielding 3.9%. As can be seen below, no trust in the AIC UK Equity Income sector can compare in terms of revenue reserves, and in uncertain market conditions this will calm the nerves of many income reliant investors.

Revenue reserves vs. Peers

Source: JPMorgan

Along with reliable income, the trust has a strong track record for outperformance of the benchmark and peers. The change in strategy in 2012 was a turning point for the trust and managers, William Meadon and Callum Abbot, sit in the top half of the AIC UK Equity Income sector for alpha generation (0.44%, Morningstar).

Currently the trust is trading on a discount of around 4.8%. However, we consider any discount to NAV as a good potential entry point for investors who are looking for income and capital appreciation.

Bull Bear
Strong total returns over the long term
The trust’s charges sit towards the upper end of the sector
Extremely reliable dividend, back up by deep reserves
Has one of the highest standard deviations and betas in the sector


Trading at a discount to NAV

Continue to Portfolio

Fund History

17 Apr 2024 Pretty, pretty, pretty good
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04 Oct 2023 To gear, or not to gear...
We examine the impact that rising rates have had on fund managers' appetite for gearing as a means to spice up returns...
18 Sep 2023 Fund Analysis
JCH’s consistency and pure UK equity exposure mark it out from its peers…
16 Mar 2023 Diversity matters
We examine the effect of blending multiple funds within your regional allocation and find that – while the culture wars may rumble on elsewhere – the benefits of diversity for investors are unarguable…
09 Feb 2023 Fund Analysis
JCH is on track for half a century of consecutive dividend growth…
26 Oct 2022 Money for nothing
Debt measured at fair value has had a positive impact on NAV returns for a number of investment trusts this year...
27 May 2022 Fund Analysis
JCH’s steady and consistent dividend is complemented by the consistency of its relative performance…
11 May 2022 Catch a tiger by the tail
As inflation bites harder than it has for decades, we consider the best ways for investors to hang on to their capital...
15 Dec 2021 Dividends in the time of corona
Investment trusts have proven their worth during the pandemic, delivering dividend growth despite the turmoil…
24 Nov 2021 Fund Analysis
Steady outperformance and full exposure to the UK means JCH could be well-positioned for a second ‘Boris bounce’…
28 Apr 2021 The next value opportunity?
Two of our analysts debate whether Europe's improving vaccination programme will be the next opportunity for investors in their pursuit of returns...
24 Feb 2021 Fund Analysis
JCH’s FY 2020 dividend will increase by 1.7%, the 48th consecutive year of growth...
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
23 Nov 2020 Fund Analysis
JCH has bounced back from COVID-19 losses, and yields 4.9%…
05 Jun 2020 Deep impact
Audio and presentations from our conference this week, where fifteen of the world's best fund managers described a profoundly altered investment landscape...
15 Apr 2020 Hold fast
Investment trusts' revenue reserves could make them a vital stronghold for investors facing UK dividend cuts of as much as 47%....
12 Mar 2020 The importance of buying earners*
Our analysis shows that the impact of dividend contributions on long term returns is anything but trivial...
20 Feb 2020 Fund Analysis
JCH has generated real dividend growth each year for two decades…
05 Dec 2019 Holding something in reserve
A sterling bounce poses a threat to UK dividends - we look at how UK equity income investment trust managers stand prepared…
01 Jul 2019 Fund Analysis
JPMorgan Claverhouse is a high conviction UK equity trust, which has handsomely outperformed its peers and index...
03 Oct 2018 We can be heroes
Our analysis has uncovered the trusts which have generated a solid income through thick and thin - without compromising other aspects of performance...
13 Jun 2018 Still waters run deep
UK equity income trusts trade at a discount to their global-equity-income-focused counterparts, yet our research suggests this could be unjustified...
13 Jun 2018 Fund Analysis
JPMorgan Claverhouse invests in income-generating UK companies with a focus on those that provide consistent and growing dividends...
26 Jan 2016 Fund Analysis
26 Jan 2016 Sector report: What lies beneath
Amid growing unease over yield, we highlight five equity income trusts to cope in a harsh environment...
View all

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