Fund Profile


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.

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JPMorgan Claverhouse (JCH) seeks to provide both capital and income growth from UK equities, and is one of the AIC’s dividend heroes, having grown its dividend every year for 47 years. The trust is run by William Meadon and Callum Abbot with a bottom-up stock-picking approach within a strong risk-control framework. The team believe it is this which has enabled them to outperform the benchmark in c. 70% of the quarters since 2012, when William took over management.

The team rely on a blend of quantitative and ‘human’ input into the investment process. However, William gives Q1 2020 as a prime example of when to disregard the inevitably rearward looking quantitative part of the process and trust the human element more. Anticipating a K-shaped recovery (with some companies performing strongly, and others poorly), the team dramatically re-positioned the trust during March, reducing cyclicality and buying companies that they expected to be more resilient.

Mindful that their ample revenue reserves (see Dividend section) could support the dividend, William and Callum pivoted towards those companies which they anticipated benefitting from the lockdown, irrespective of yield. This action has enabled JCH to recover more strongly than the benchmark, delivering NAV outperformance over the FTSE All-Share from 01/04/20 to 16/11/20 of 8%.

In the interims (as at 30 June 2020) the board reaffirmed their intention to declare an increased dividend for 2020 compared with that for 2019. Last year’s dividend of 29p per share is equivalent to a yield of 4.9% at the current price. Despite the high yield, JCH currently trades on a discount to NAV of 3.2% (as at 16/11/20).

Analyst's View

William and Callum’s stock-picking operates within a strict risk management framework, which has historically helped deliver slow but steady outperformance of the benchmark. That said, 2020 has marked a deviation from this pattern, with high gearing contributing to marked underperformance in Q1 but stock picking driving strong outperformance in the subsequent two quarters.

The team’s fundamental analysis, and willingness change their view based on facts, has seemingly been the key driver of this recovery. JCH’s very significant revenue reserves have also indirectly been a contributor, enabling the team to invest for strong total returns rather than being tied to a process which requires them to invest for short-term income. The resulting pivot in the portfolio resulted in high portfolio turnover but has subsequently proven to be good news for shareholders.

JCH offers an attractive level of dividend with a strong track record of dividend growth. The substantial revenue reserves mean it is likely (although by no means guaranteed) that the trust will continue to grow distributions for the foreseeable future.

Since June 2020 JCH’s shares have de-rated to a discount of 3.2%. This perhaps reflects the appeal of high-growth investment strategies relative to equity income, but does represent a substantial narrowing of the discount since 2016. In normal market conditions, the board looks to repurchase shares at discounts in excess of c. 5%, which makes this an attractive entry point for core UK exposure with a strong track record of index-beating returns.

High dividend yield, with a strong track record of dividend growth, backed by a deep revenue reserve Gearing higher than average for the sector, which can exacerbate downside (as much as amplify the upside)
Consistency of positive relative returns in recent years
Higher OCF than peer group, although future growth in net assets could mitigate this somewhat
Portfolio positioned for COVID-19 resilience
UK market could be negatively impacted by a no-deal Brexit
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Fund History

05 Jun 2024 Fund Analysis
JCH’s pure exposure puts it in a good position to benefit from renewed interest in UK stocks…
05 Jun 2024 Fast and FTSErious
With the FTSE 100 reaching record highs, is there still value on offer?
17 Apr 2024 Pretty, pretty, pretty good
Do investment trusts really protect capital and income against inflation? Let's take a look…
13 Dec 2023 In-come all ye faithful
Equity income could be a beneficiary of the higher interest environment, with trusts a good way to capture it…
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...
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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