53 years of consecutive growth: JPMorgan Claverhouse

JCH extends its dividend growth record to 53 consecutive years…by Josef Licsauer

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

Overview

JPMorgan Claverhouse’s (JCH) disciplined, bottom-up investment process remains focussed on identifying high-quality businesses capable of delivering sustainable income and long-term capital growth. Whilst the portfolio invests predominantly in large-cap companies, the managers retain full flexibility to invest right across the market-cap spectrum, accessing opportunities where valuations, income and capital growth potential align.

Recent Portfolio activity reflects this too, with additions to existing holdings in Prudential exemplifying where the managers see a combination of strong income characteristics and supportive structural drivers. A new position has also been initiated in mid-cap stock Softcat, which boasts a strong market position and attractive dividend-growth potential. Taken together, these changes underpin the managers’ pursuit of blending higher-yielding holdings and quality compounders, diversifying the sources of both income- and capital-growth drivers.

With a Dividend yield of 3.9%, JCH currently sits at a premium to both the UK market and peer group, supported by one of the longest records of dividend growth in the sector. The latest annual dividend rose by 2.3%, marking a 53rd consecutive year of increases, and was supported by an increase in revenue returns, which climbed 11.8% over the year. Whilst not fully covering the dividend, JCH continues to benefit from healthy revenue and distributable reserves to support the payout in leaner times. Over the longer term, dividend growth has also comfortably outpaced inflation, supporting real income progression.

Over the past year to 09/04/2026, JCH has delivered NAV and share price total returns of 41.5% and 40.1%, respectively, marginally ahead of the FTSE All-Share Index. Performance was supported by a few key positions within financials like NatWest and selected smaller companies, although not holding Standard Chartered hurt relative returns.

At the time of writing, JCH trades on a 6.2% Discount, wider than its five-year average of 3.7%.

Analyst’s View

We think the case for UK equities is becoming harder to ignore. Valuations remain depressed relative to global peers, and corporate fundamentals are, in many cases, stronger than sentiment implies, supported by resilient balance sheets and a high proportion of overseas earnings. However, the backdrop is not without its challenges. Domestic growth remains subdued and, whilst peak inflation and interest rates have eased, the risk of a renewed pickup persists. Ongoing geopolitical tensions in the Middle East are pushing up energy prices, which may feed back into inflation and interest rate expectations. Even at current levels, rates continue to offer meaningful competition to equity income trusts, and any upward pressure could weigh on sentiment.

In this environment, we think active management is key. Broad market exposure through an ETF risks leaving investors tied to a narrow group of index-heavyweights, where growth can be limited. But this is where JCH stands out. The managers are active, anchoring the portfolio in a range of high-quality large-cap companies, but also blending that with undervalued opportunities across the market-cap spectrum, where income and growth potential are appealing. Overall, we think this results in a more diversified income profile than many peers and when combined with one of the longest dividend track records in the sector, alongside a premium yield to the market, provides a strong foundation for long-term income investors.

Whilst not immune to a more challenging rate environment or periods of smaller company underperformance, we think these risks are well understood. At a discount wider than its five-year average, therefore, we think JCH offers an opportunity to access a differentiated portfolio at a time when the market backdrop, whilst uncomfortable, may prove rewarding for patient investors.

Bull

• Refreshed management team, keen to make their contribution to JCH’s 53 years of dividend growth
• Actively managed portfolio, with team expertise across large, mid and small caps
• Attractive dividend yield relative to the benchmark, and prospects for it to continue to grow

Bear

• Greater exposure to small and mid caps increases sensitivity to the UK economy
• Most recent dividend remains uncovered by earnings
• Structural gearing can magnify losses in a falling market, as well as gains in rising ones

See the full research on JPMorgan Claverhouse here >

_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.}

The post 53 years of consecutive growth: JPMorgan Claverhouse appeared first on USNewsRank.