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
JCH’s steady and consistent dividend is complemented by the consistency of its relative performance…
Overview

JPMorgan Claverhouse (JCH) offers an actively managed pure exposure to companies listed on the London Stock Exchange. This makes it relatively unusual in the UK Equity Income sector in offering undiluted access to UK companies, but it also stands apart because of its near unrivalled track record of increasing its dividend over 49 consecutive years. JCH offers a prospective dividend yield of 4.6% (see Dividend section).

JCH’s managers avoid making large, binary bets on sectors or styles, and instead pick stocks from different market segments to build a balanced portfolio, trusting their stock-picking abilities to add value over time. Within this, the team have a large degree of latitude afforded by the investment trust structure. JCH has significant revenue reserves, meaning that the managers are not constrained in terms of buying companies that pay low (or even no) dividend yields.

As we show in the Performance section, the balanced portfolio and stock picking approach enable JCH to perform well on a relative basis in a range of different market conditions. The consistency of outperformance delivered historically by the managers is impressive. William has now managed JCH in 40 quarters, which has seen JCH outperform the benchmark in 28 of them, representing a very creditable 70% hit rate.

JCH’s managers and board expect that the trust will generally offer a geared exposure to equity markets over time. The average has been in line with the managers’ stated neutral level of 10%, but net cash currently stands at 0.9%. Historically, gearing has meant that, notwithstanding the consistency we refer to above, JCH has suffered on a relative basis in market shocks, and Q1 2022 has been in line with this pattern.

Analyst's View

Given JCH’s ‘pure’ exposure to companies listed on the London Stock Exchange, it can claim to have the longest track record of dividend increases for a trust solely invested in UK equities. Yet the rate of increase has also been attractive, with a rate of increase that has seen an acceleration over the past five years. The board’s policy remains to seek to increase the total dividend each year and, taking a run of years together, to pay dividends that at least match the rate of inflation.

This may make JCH attractive to income seekers but also to those who believe that the UK stock market is cheap by international standards and want an active manager to provide exposure. As we discuss in Performance, JCH’s track record is noteworthy, not least because of the consistency of outperformance the managers have delivered historically. William has managed JCH for a total of 40 quarters, with JCH outperforming the benchmark in 28 of them, representing an impressive 70% hit rate. In our view, this also represents a key attraction for shareholders who wish to have the benefits of an active manager without any of the ‘heroics’.

The advantages of having a balanced barbell approach to portfolio construction, having exposure to both growth and value stocks, are probably not lost on investors in the current uncertain environment. JCH offers a solid example of a dividend hero with the consistency of relative returns too.

Bull

  • High dividend yield, with a strong track record of dividend growth, backed by a deep revenue reserve
  • Consistency of positive relative returns over long term
  • Portfolio balanced between growth and value, with UK market looking attractive by international standards

Bear

  • Typically higher gearing than peers, which can exacerbate downside (as much as amplify the upside)
  • Shares trade on a small discount; there is no guarantee the company will buy back shares when discount is wider than 5%
  • UK stock market may remain on a discount to other markets indefinitely
Continue to Portfolio
2022 Kepler Income & Growth Rated Fund

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

Fund History

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...
13 May 2020 Braving the new world
Join 15 of the UK's best known fund managers at the Kepler Trust Intelligence Virtual Summit to find out how they see the world after the pandemic...
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%....
02 Apr 2020 Kepler Rated: JPMorgan Claverhouse
JCH has generated real dividend growth each year for two decades…
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…
02 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...
15 Aug 2018 The income edge
Last year saw investment trusts soar in popularity among both retail investors and wealth managers. We examine why this has happened, as well as the structural advantages of investment trusts for income-hungry investors...
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...
20 Nov 2017 Thin ice...
Our analysis shows the extent to which funds in the UK equity income sector are concentrated on just a few dividend paying stocks…
08 Nov 2017 Straight talking...
Bronwyn Curtis OBE, chairman of JPMorgan Asian, tells us why making the tough decisions and addressing the elephant in the room are her forte...
13 Sep 2017 Big Issue(rs)
We highlight the UK equity trusts that have issued and bought back the most shares over the course of 2017 so far and how these actions have affected shareholders...
12 Jun 2017 MAYDAY!
As the Conservative party founders, we examine the impact of last week’s disastrous election on trusts...
11 May 2017 Storm proofing...
Our research shows dividend cover among UK equity income trusts is at its highest level in decade...
31 Mar 2017 JPMorgan Emerging Markets Investment Trust
A large, well resourced trust offering very broadly diversified exposure to the world's emerging markets...
26 Apr 2016 Analysts welcome Mercantile results
Analysts at Winterflood Securities think The Mercantile Investment Trust is an attractive alternative for investors seeking smaller companies exposure on its current discount.
18 Mar 2016 Results roundup: Murray International and JP Morgan Claverhouse
Analysts at JPMorgan Cazenove say Murray International is through the worst after a strong start to the year, and JP Morgan Claverhouse remains a core holding for Winterflood Securities.
05 Feb 2016 Fund Analysis
A large cap focused trust with a high conviction stock picking approach, which aims to generate capital growth and income via a portfolio of UK equities.
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