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
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Overview

From 31 May, JPM American’s (JAM) large-cap portfolio will reflect the best growth and value ideas from the “Equity Focus” team in New York. As such, JAM’s new portfolio will be significantly more concentrated. To some extent, this change reflects an extension of the portfolio changes which were made in 2017, encouraging the previous manager to increase concentration in the portfolio, but also to run winners longer.

JAM is one of few trusts focused on North America to have outperformed the benchmark over the short, medium and longer term. However, given the board has been consistently buying shares back, it has taken a proactive move to make the trust more interesting and/or relevant to today’s investment trust buyer by modifying the strategy.

The key changes to the portfolio will be that each stock will reflect the best ideas from two co-managers who have worked together for over 20 years, and together run JP Morgan’s Equity Focus Strategy, who each have very different growth and value stock selection styles respectively. The split between growth and value is expected to remain fairly evenly balanced over time, but never more than a 60:40 tilt either way.

Each manager has ultimate decision-making authority over their stocks in the portfolio, but at all times must have between 10 (minimum) and 20 (maximum) holdings at any one time. Position sizes are related entirely down to conviction levels, rather than any other considerations (benchmark constituent etc). Importantly, both managers in the past worked alongside and contributed to the management of JAM as a closed-end vehicle, and so the ins-and-outs of trusts, boards and the subtleties of managing a trust versus an open-ended fund.

In other respects, JAM remains the same in terms of it’s objective, and positioning. The trust aims to achieve capital growth, and is expected to provide a 'core' exposure to North American equities.

Since 2011 (when the JPMorgan Equity Focus SICAV launched), JAM’s previous manager outperformed peers, but marginally lagged the S&P 500. It is noteworthy that the new strategy has outperformed both, and without any gearing. The historic performance shows that the new strategy represents an evolution rather than a revolution to the returns that shareholders have come to expect from the trust.

Kepler View

The change in manager is the latest move made by a historically very proactive board to make JAM more attractive to investment trust buyers. The new strategy is an interesting approach, with a credible performance track record, and echoes many of the trends we are picking up elsewhere in fund world (best ideas, concentrated portfolios etc).

There are good reasons why shareholders can expect an improvement in performance, with a more active approach and the considerable resources of the new team being harnessed for shareholders. Having said that, the impressive dividend growth seen over the past few years, should not be relied on to continue, with the mandate change likely to result in less portfolio income.

The board’s negotiation of further lower fees makes the ongoing charges likely to be very competitive relative to both active and passively managed strategies. As time goes on, and as the investment trust world gets to know the managers better, there is certainly the potential for the discount to narrow sustainably. Over the short term, the discount to the (admittedly income dominated) peer group average looks rather unfair.

BULL
BEAR
Interesting new strategy, which has strong track record
Managers relatively unknown in the investment trust sphere, track record will take time to develop
Large, liquid trust representing the only “core” US strategy in the investment trust sphere
Lower portfolio income, means investors can expect lower dividends going forward, all things being equal
Very low OCF
Discount relatively narrow, as such limited potential for re-rating
Continue to Portfolio
2025 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

15 Jan 2025 Any given Sunday
We ask if the stars are aligning for US small-caps…
08 Jan 2025 Kings of the castle
We reveal the winners of our 2025 investment trust ratings…
27 Nov 2024 What would Kenny Rogers do?
As the world waits for the Trump show to start in earnest, should you hold ‘em, fold ‘em, walk away or run?
20 Nov 2024 Big wheels keep on turnin’
The US election throws up several investment ideas from the mainstream to the more idiosyncratic...
17 Jul 2024 Balancing act
We ask why trusts with a more flexible approach have outperformed…
17 Jul 2024 Fund Analysis
JAM has carefully and successfully navigated the US market over several years…
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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The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
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