JPMorgan Claverhouse Investment Trust – a positive start to the year

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

Heather Ferguson, Investment Analyst, reports on our view of the JPMorgan Claverhouse Investment Trust following its recently released half-yearly results to end June 2017.

  • Economic and political uncertainty set to continue, with potential for stock market volatility
  • NAV total return of 6.8% compared with 5.5% for the FTSE All Share Index
  • Share price return of 9.6% with a discount to NAV of 9.1%
  • Exposure to pharmaceutical and oil sectors reduced

The UK’s economic and political outlook remains uncertain, in the managers’ view. A minority government and continued Brexit discussions could cause volatility in the UK stock market and companies to delay business and investment decisions. However, the managers feel this uncertain environment will cause interest rates to remain lower for longer and they expect a minority government to increase the likelihood of a softer, more business-friendly Brexit, both of which could be positive for share prices.

JPMorgan Claverhouse remains positioned as a core UK equity income investment trust, with a focus on UK larger companies, although it also has the flexibility to invest in higher-risk smaller companies. While the trust is unlikely to be immune from ongoing economic and political uncertainties, we feel a focus on reasonably-valued, well-managed and well-financed companies could see it in good stead over the longer term. The fund borrows to invest (gearing), which adds risk. Gearing currently stands at 11.7%. Potential investors should refer to the latest annual reports and accounts for details of the risks including the charging structure.

Performance & portfolio review

It has been a positive start to the year for the trust, which outperformed its benchmark index by 1.3% in NAV terms over the first six months of 2017. Please remember past performance is not a guide to the future. Positive stock selection boosted performance with premium drinks maker Fevertree the portfolio’s stand out performer. The trust’s investments in Fevertree and JD Sports, which also performed well, were trimmed over the period as the managers took some profits. Meanwhile, holdings in Melrose Industries, Synthomer, and 3i were added to on the back of encouraging outlook statements issued by the businesses.

Investments in the pharmaceutical and oil sectors generally performed poorly and the managers reduced exposure to these sectors over the period. Elsewhere, the trust benefitted from an investment in Unilever which, following an aborted takeover bid, implemented a number of shareholder-friendly changes to its strategy, pushing the share price to an all-time high.

Annual Percentage Growth
July 12 -

July 13
July 13 -

July 14
July 14 -

July 15
July 15 -

July 16
July 16 -

July 17
JPMorgan Claverhouse Investment Trust PLC 42.24 9.69 7.43 -3.21 22.37
FTSE All-Share TR 24.28 5.61 5.38 3.82 14.9

Past performance is not a guide to the future. Source: Lipper IM to 31/07/2017.


It remains the board’s intention to increase the total dividend each year, as it has for the past 44 years; although please remember all dividends are variable and not guaranteed. A first quarterly dividend of 5.5p was paid on 1 June 2017 and, in line with the board’s intention that the first three quarterly dividends are of an equal amount, they declared a 5.5p dividend to be paid on 1 September.

It is likely UK companies are heading for the highest level of dividends ever paid this year as weaker sterling should provide a boost to earnings made overseas and brought back to the UK. However, as UK economic growth slows, there are concerns over the sustainability of UK dividends in future. The trust has a high level of reserves with which to support its dividend should UK companies struggle to maintain the high level of income they have paid over recent years. The trust currently yields 3.3% although this is not an indicator of future income.

View the JPMorgan Claverhouse factsheet

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