JPMorgan Claverhouse outperformed its benchmark index, both in terms of NAV and share price over 2015. The return on net assets of the UK stock market, as measured by the Company’s benchmark, the FTSE All-Share Index, was +1.0%. The Company’s total return on net assets was significantly better at +6.0% (the fourth year in a row that the fund has beaten its benchmark). The share price at the year end was identical as at the previous year end, at 602.5p. This is because, despite the rise in the NAV over the year, the discount of the share price to NAV (calculated using the capital-only NAV, with debt at par) widened, from 3.4% to 5.9%, and the total return to shareholders for the year was +3.6%. The Board decided that the total dividend for the year should be increased from 20.0p to 21.5p, a rise of 7.5%, significantly above inflation and thus growing the total dividend for the 43rd successive year.
Imperial Tobacco (now Imperial Brands) was again a significant contributor to performance over the year. The managers say that, in an increasingly uncertain economic environment, the company’s visibility of both earnings and dividend growth is reassuring and, with a premium yield, still looks very good value. Another long term holding, the broadcaster ITV, announced a fifth consecutive year of double digit profit growth and increased its annual dividend by 36%, whilst also returning part of its strong cash generation to shareholders through a third consecutive special dividend. They believe this stock remains attractive both in terms of its valuation and its ability to beat market expectations. Jupiter Fund Management also performed well, increasing its regular dividend strongly whilst also paying a special dividend.
Other successful stocks included a number of their housebuilding and property related stocks including Taylor Wimpey, Berkeley Group and Bellway, all of which announced good results, but also benefited from the positive sentiment towards the domestic cyclical stocks following the general election result.
By contrast, the biggest detractor from performance was the underweight position in BG Group which received a takeover approach from Royal Dutch Shell in early April. The holding in the leading iron ore producer, Rio Tinto performed poorly over the year, as it suffered from collapsing commodity prices. The portfolio did, however, benefit from avoiding the very worst performers in the mining sector such as Glencore, which fell over 65% during the year.
JCH : Claverhouse outperforms again and hikes dividend for 43rd year