Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by JPMorgan American. 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
JAM’s outperformance puts it in the spotlight as a low-cost, core option for US equities…
Overview

JPMorgan American (LON:JAM) offers investors a core US equity exposure with a distinctive investment strategy with two fund managers selecting stocks, one with a growth style and one with a value style, to form a single large cap portfolio which overall is style neutral, together with a small allocation to small cap growth stocks. JAM has a relatively concentrated portfolio and there is a bias towards quality companies across the different pools, meaning that there are many shared characteristics. The small-cap allocation is up to 10% of the overall portfolio, while the allocation to growth or value stocks can be between 40% to 60%.

Tim Parton and Felise Agranoff are responsible for the selection of growth companies, while Jonathan Simon selects the value stocks. The small cap sub-portfolio is managed by Eytan Shapiro, who has a growth orientated investment approach.

The managers of JAM employ long-term gearing, with the guidelines allowing the managers to gear between 0% and 10%. JAM is currently net geared c. 4%, which is in line with its long-term average.

JAM trades at a c. 4% discount and, as we discuss in the Discount section, the board has committed to using share buybacks when the discount widens. As a result, discount volatility has been low, in keeping with JAM’s proposition as a core US equity trust. JAM is primarily a vehicle for capital growth and currently yields c. 1%.

Again, in keeping with its core proposition, JAM has a very competitive tiered management fee structure and it has a lower OCF than its peer group.

Kepler View

If the investment trust sector’s relatively small North America peer group that JAM sits in is anything to go by, investment trust investors are perennially underweight US equities on a long-term basis. And yet the S&P 500 Index continues to be the largest, and one of the best-performing, equity markets in the world, as it has been for decades. We think JAM’s core, but high-conviction, investment strategy, combined with its extremely competitive management fee structure as discussed in the Charges section, make it a stand-out option for any investor looking to build long-term equity exposure without relying too heavily on a particular investment style. The last two years have been a sharp reminder that one cannot rely on past performance to be a guide to future returns, with growth strategies that have outperformed for many years finding it harder going, while there has been a resurgence for value styles. Higher interest rates make it far less clear cut that one style will dominate for long periods of time and JAM’s blended strategy could be well suited to such an environment. Let’s not forget also that while US small-caps have been somewhat eclipsed in the last decade, that may now be changing. JAM maintains a small allocation to this part of the market as well, in keeping with its core proposition.

Bull

  • Revised investment strategy has delivered outperformance over four years of difficult markets
  • Highly competitive fee structure and ongoing charges
  • Strong track record of limiting discount volatility using share buybacks

Bear

  • Gearing can enhance losses on the downside
  • A return to markets led by a very narrow group of stocks may not suit JAM’s managers’ style
  • JAM has a low dividend yield
Continue to Portfolio

Fund History

03 Jul 2024 A really great stockmarket, the best, some tell me the best they’ve ever seen
US equities should be the bedrock of any diversified portfolio…
27 Mar 2024 Results analysis: JPMorgan American
JAM continues to cement its position as a core US equity trust with another year of outperformance…
01 Feb 2024 Bring some yin-yang into your portfolio in 2024
Inherent contradictions within portfolios can give them stability in a polarised world...
06 Sep 2023 You should be dancing…
North America should be a core part of any portfolio…
06 Jul 2023 Fund Analysis
JAM’s outperformance puts it in the spotlight as a low-cost, core option for US equities…
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…
21 Nov 2022 Fund Analysis
JAM’s continued outperformance puts it in the spotlight as a low-cost, core option for US equities...
05 Oct 2022 European equities: Oui ou non?
Our analysts go head to head on the prospects for investors looking to the continent for prospective investments...
07 Sep 2022 American muscle
Beating US indices is a monumental task. We examine the closed- and open-ended North American sectors to see how they have fared…
15 Jun 2022 Staying active
We highlight several alternatives to passive investments for investors looking for core exposure in uncertain markets...
05 Apr 2022 Fund Analysis
JAM’s blended approach to US equities has allowed it to outperform in a very difficult market…
30 Mar 2022 You say tomato…
Do it yourself or put it into a global fund and leave it to the experts - our analyst debate the merits of each approach...
17 Nov 2021 How Do You Like Them Apples
Judging whether the US market is expensive is not as easy as many make it out to be…
06 Oct 2021 Fund Analysis
JAM offers investors a ‘one stop shop’ to US equities, with a core approach that has outperformed the S&P 500…
22 Apr 2021 FAANGs for the memories
The massive outperformance of mega-cap tech last year could become a thing of the past if anti-trust legislation and negative sentiment starts to bite...
31 Mar 2021 East End boys and West End girls
Our analysts debate whether the US or Asian stock markets will deliver the best returns over the next decade…
31 Mar 2021 Fund Analysis
JAM offers investors a core portfolio of US equities, blending both growth and value styles, while aiming to outperform the S&P 500…
19 Nov 2020 Hope springs eternal
The US election has given long-suffering value investors new hope of a 'great rotation' in their favour, but that light at the end of the tunnel could in fact be a train…
01 Sep 2020 Fund Analysis
In what has been a challenging year for investors, the benefits of JAM’s new approach are coming to the fore…
13 May 2020 Sea change
While global giants like Amazon still hold the weather gauge, we examine the long term prospects for a shift in the prevailing wind...
29 Apr 2020 On solid ground
Our analysis of discounts highlights trusts which are likely to offer significantly less discount downside from the current level…
13 Feb 2020 Choose your own adventure
Predicting the future is impossible, but identifying which trends have coincided in the past can give us clues about what may be to come...
05 Feb 2020 The best form of defence
We look at the continued rise of passive funds, and find out how investment trust managers are countering it...
18 Dec 2019 The squeeze continues: how trust costs keep falling
As pressure on costs remains, we reveal which trusts have achieved the most significant reductions in 2019….
12 Dec 2019 Regime change: how manager changes impact performance
Does a change in manager result in improved trust performance?
10 Dec 2019 Fund Analysis
JAM offers a reinvigorated core US equity exposure, which should help to provide protection against any future rotation between value and growth…
24 Jul 2019 Fool's gold?
We examine the relationship between how much a fund costs and how it performs, with surprising results...
26 Jun 2019 Measure for measure
In the first of a two-part series, we examine the tools investors can use to assess how active a manager actually is…
14 May 2019 Fund Analysis
JAM has been re-invigorated by a new manager set-up, due to take effect at the end of May 2019...
24 Dec 2018 Why did the chicken cross the road?
Because he was so bored of reading newspapers devoted entirely to Brexit he was hoping he’d be hit by a truck.
13 Dec 2018 Efficiency is everything
With fee structures under increasing scrutiny, we analyse which trusts limit their costs without sacrificing standards...
31 Oct 2018 The Trump effect
Two years after the shock election of Donald Trump, we take a look at what the Trump administration has really meant for US markets and the trusts that invest in them...
31 Oct 2018 Fund Analysis
One of few trusts in this sector to have outperformed the benchmark over five, ten and fifteen years...
26 Apr 2018 Fund Analysis
A North American equity fund which has outperformed the benchmark, which is notoriously hard to beat, over five, ten and 15 years...
26 Apr 2018 The $23.9 trillion dollar question*
Are US equities, which have hit record highs on 71 occasions in the last 12 months, overpriced or are they actually trading at a price worth paying?
01 Jan 2017 Fund Analysis
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