A quality-first approach for volatile markets: JPM US Equity Income FundContributor Clare Hart
With the S&P experiencing a renewed bout of volatility, we asked Clare Hart, Portfolio Manager for the JPM US Equity Income Fund, to tell us why her quality-first approach to investing in value stocks provides compelling opportunities for investors looking for US equity exposure, but who are wary of what’s been a bumpy ride.
Why should investors consider a high-quality approach to US value investing?
Historically, a focus on high quality dividend paying companies with strong management teams has helped investors share in the US stock market’s growth while reducing some of the volatility. In today’s challenging market environment, we believe that a robust dividend policy can be a good indicator of quality, which is why we seek out companies that can pay – and that have the ability to continue to pay – attractive and growing dividends.
These types of stocks, with attractive dividend yields and modest payout ratios, have historically outperformed the S&P 500 Index. Identifying stocks with a modest payout ratio is key, as these companies retain enough capital after paying dividends to invest for future growth, providing us with both a growing stream of dividends and capital appreciation potential.
We focus on quality stocks with the ability to make regular and growing dividend payouts. This combination suggests that a company will likely maintain the ability to pay compelling dividends, with the potential for future growth and appreciation.
Please be aware that this material is for information purposes only. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. JPMorgan Asset Management Marketing Limited accepts no legal responsibility or liability for any matter or opinion expressed in this material.
The value of investments and the income from them can fall as well as rise and investors may not get back the full amount invested. Past performance is not a guide to the future.