JPMorgan Claverhouse Investment Trust (JCH) has reported annual results for the year ended 31 December 2024, delivering a solid net asset value (NAV) total return of 9.2% (with debt at fair value). While marginally behind that of its All-Share Index benchmark, which JCH says returned 9.4%, the portfolio performed in line with broader UK equity markets, which experienced a strong first half before faltering in the latter stages of the year. The trust’s share price total return was +8.3%, reflecting a modest widening of the discount to NAV. The NAV per share stood at 746.0p at year-end, while the share price closed at 704.0p, a 5.6% discount to NAV (debt at fair). Since the year-end, both have risen, to 791.0p and 752.0p, respectively, as at 19 March 2025.
With a repositioned portfolio, a fresh management team, and a renewed focus on sustainable dividend growth, the JCH team is laying the groundwork to maintain the trust’s Dividend Hero status while targeting long-term outperformance.
Management transition and evolution of strategy
The year marked a key transition in portfolio management. Long-time manager William Meadon stepped down in August 2024, with Anthony Lynch and Katen Patel joining Callum Abbot on the management team. The new managers bring over 35 years of combined investment trust experience and currently co-manage JPMorgan’s open-ended UK Equity Income Fund.
While the investment objective remains unchanged, the new team has begun to evolve the investment approach. The managers are maintaining exposure to high-yielding stocks but have broadened the portfolio’s reach across the JCH’s All-Share investment universe, increasing the focus on dividend growth potential rather than yield alone. As a result, exposure to traditional high-yield sectors such as utilities and miners has been reduced in favour of companies offering more resilient and sustainable dividend growth. At year-end, the portfolio yield stood at 4.3%, which JCH says compared to a yield on the All-Share of 4.02%.
52nd year of dividend increases
Despite a small dip in underlying earnings, JCH extended its impressive track record of dividend growth in 2024, increasing its total dividend per share to 35.4p (2023: 34.5p), a rise of 2.6% – modestly ahead of inflation. This marks the trust’s 52nd consecutive year of dividend increases, placing it at the top end of AIC’s Dividend Heroes. However, the dividend was not fully covered by earnings for the year, with revenue per share falling slightly to 30.15p (2023: 30.69p). The board drew on reserves to fund the shortfall but remains focused on returning to full dividend cover, supported by recent portfolio changes. At the reporting date, revenue reserves stood at 21.45p per share. For 2025, the board has already committed to raising the first three interim dividends to 8.40p each, up from 8.25p in the prior year.
Performance drivers and detractors
Positive contributions came from 3i Group, which benefited from strong performance at its key holding, Action, as well as Rolls-Royce, which raised its dividend and cash flow guidance. Imperial Brands, Diageo, and Qinetiq also added value. However, positions in Bytes Technology, following a CEO trading scandal, and JD Sports Fashion, amid a weaker retail environment, detracted from returns. The managers have since exited JD Sports, citing concerns about strategy under new leadership.
Portfolio attribution showed a modest drag from stock selection (-1.0%), partially offset by positive gearing and cash positioning (+0.8%). The portfolio finished the year 7.6% geared, within the trust’s typical range of up to 20%.
Share buybacks and discount control
The trust was active in managing its discount, repurchasing 1.65m shares during 2024 at a cost of £11.6m. This continued into 2025, with a further 834,678 shares repurchased by mid-March. The discount stood at 4.9% as of 19 March.
The board will seek renewed buyback and issuance authorities at the upcoming AGM in May 2025 and is also reviewing gearing options as the current £40m loan facility matures in May.
Patience required
The managers see potential for UK equities to rebound, supported by depressed valuations, improving fundamentals, and an attractive dividend yield relative to global markets. They comment that the All-Share yield remains more than double that of the MSCI ACWI, and say that JCH’s portfolio is positioned to benefit from a potential earnings and valuation recovery.
JCH’s managers have reclassified portfolio holdings into three categories: high yielders, stable compounders, and high dividend growth names – reducing reliance on a handful of income contributors. Today, around half the portfolio is in high yielders, with the remainder offering strong dividend growth potential in the managers’ view.
Top holdings and positioning
As at year-end, 3i Group, Shell, HSBC, Intermediate Capital Group, and Dunelm were among the largest overweight positions. New investments included Barclays, NatWest, XPS Pensions, and Cranswick, while holdings in SSE, Centrica, and JD Sports were exited.
