JPMorgan Claverhouse (JCH) invests solely in the UK equity market. The trust has an enviable track record of dividend growth which now stands at 47 consecutive years, and it is the only UK equity income ‘dividend hero’ (a trust which has raised its dividend every year for 20 or more years) to have achieved dividend growth ahead of inflation in every year of the past two decades.
Managed by the highly experienced William Meadon and (since January 2018) Callum Abbot, the investment process emphasises a bottom-up stock-picking approach. When William took over the trust in 2012, he enacted a slight evolution in the strategy to make it more concentrated than it had been historically. The portfolio will typically hold between 60 and 80 stocks, and is currently at the lower end of that range. The managers remain bullish on the prospects for the UK market and this is reflected in the current gearing level.
JCH is described by its managers as a ‘get rich slow’ strategy, aiming for consistency of outperformance with as few surprises as possible for investors. Certainly, the stock-picking approach has paid off for investors over the long term – JCH has outperformed in 70% of quarterly periods since William took the reins. The cumulative effect of this is that returns have been strong relative to the FTSE All-Share.
The shares currently yield c. 3.8% and, with ample revenue reserves, the team are confident the fund can continue its track record of providing inflation-beating dividend increases in the coming years. The board has taken a more active approach to discount control in recent years, and JCH currently trades on a discount to NAV of 1.9%.