The ability of JPMorgan Claverhouse Investment Trust to invest across a wide range of UK stocks has generated 53 years of consecutive dividend growth.

One of the distinguishing features of JPMorgan Claverhouse Investment Trust (JCH) is its record 53 years of consecutive dividend growth, which provided income that outpaced inflation over the full time period ¹. The trust’s strategy of investing in UK companies with attractive dividends today or that may growth over time, has contributed to this robust track record.

Big on banks and brokerage

Roughly half of the portfolio is invested in stocks with dividend yields over 4%, which contribute to Claverhouse’s ability to consistently grow its own dividend over time. Many banks and other financial services companies offer relatively high dividend yields; they tend to generate strong free cash flow that can be used to pay attractive dividends, but they do not tend to trade at the higher valuations of faster-growing companies. As a result, the portfolio has large overweights to these sectors, led by big positions in several major banks. NatWest, the single largest active position, has a has a domestically oriented business model focused around retail deposits. HSBC, the second-largest active position, is a more international bank with drivers related to global financial system.

The portfolio managers also believe that Barclays, a large position that is still trading below book value, can execute on its strategy of redeploying capital toward UK retail banking to increase returns. Claverhouse also has positions in several asset managers and platforms, including Quilters, Integrafin, Capital Group and Jupiter.

In addition to these long-time positions, the portfolio managers made a few changes to Claverhouse’s financial holdings in the past 12 months. 3i Group, a private equity company that had been the largest active position, had a string of disappointments and a deteriorating outlook so the portfolio managers significantly reduced the position. Claverhouse added positions in insurers Prudential and Admiral Group.

Tuning into technology

Claverhouse also invests about a third of the portfolio in stocks offering 2%–4% dividend yields, which the portfolio managers refer to as “quality compounders”. These companies may not pay high dividends but they offer more growth that the highest-yielding companies and the potential to pay greater dividends in the future.

Many software companies, which have historically traded at very high valuations due to their high growth and attractive business models, are now trading in some cases at roughly half price on fears of AI disruption and offering more attractive dividend yields. The Claverhouse portfolio managers have seized this opportunity to take new positions in Softcat and Sage, while adding to an existing holding in Experian.

While these three companies have seen their share prices decline due to being tagged as “AI losers”, they have recently beaten consensus expectations on revenues and margins and each has a unique story.

Softcat is an IT solutions provider, with a capital-light business model that has paid a special dividend every year. Sage has posted double-digit revenue growth and is launching AI-related tools that may helping clients increase efficiency over time, potentially turning it into an “AI winner”. Experion is coming out of a long period of building a product that constrained margins; the product is now released and revenues are accelerating.

Positioning in property vs. housebuilders

Some of the biggest buys and sells in the portfolio over the past year reflect the changing macro environment. Claverhouse added LondonMetric Property, a real estate investment trust with exposure to logistics assets, that has grown income consistently. The stock is now one of the top five active positions in the portfolio.

At the same time, Claverhouse exited positions in housebuilders Barratt Redrow, Taylor Wimpey and Bellway, as the cost of borrowing remains stubbornly high in the UK and is leading to continued high mortgage rates. In addition, reforms around buy-to-let properties are weighing on the housing market.

Macro exposure: energy, mining and defence.

Claverhouse remains underweight the industrial metals and mining sector, which tends to require a heavy capital expenditure (capex) and does not leave a lot of leftover cash. While the portfolio retains its position in Rio Tinto, which offers an attractive yield, it exited the position in Glencore. In the energy sector, Claverhouse has positions in Shell and BP, which also offer high dividend yields and are likely to benefit from the sharp rise in oil prices due to the war in the Middle East.

Another company benefiting from increased geopolitical uncertainty is Serco, an outsourcing business that has pivoted away from general government work towards defence and has been winning some large contracts. The company’s growth has been accelerating and it still trades at a big discount to other defence-related stocks.

Looking ahead

The Claverhouse portfolio managers are prepared to navigate the volatile macro environment. A proprietary risk dashboard considers a range of macro factors—from inflation and rising oil prices to changes in the yield curve—to estimate how the portfolio might perform relative to the benchmark.

In the meantime, the UK equity market looks relatively attractive as it continues to trade below its long-term average valuation compared to other equity markets that appear expensive vs. history. The Claverhouse portfolio managers see plenty of opportunities to invest in UK stocks that will provide a combination of growth and income to keep the trust’s dividend growth track record going.

¹ J.P. Morgan Asset Management, Companies House, UK Office of National Statistics. Cumulative CPI rebased to the Claverhouse dividend in 1988 when the time series began. Dividend paid by the product may exceed the gains of the product, resulting in erosion of the capital invested. It may not be possible to maintain dividend payments indefinitely and the value of your investment could ultimately be reduced to zero. AIC dividend heroes are the investment companies that have consistently increased their dividends for 20 or more years in a row. The JP Morgan Claverhouse Investment Trust has been a recipient of the award since the awards creation and was most recently confirmed on 17th March 2025.

The risk indicator assumes you keep the product for 5 year(s). The risk of the product may be significantly higher if held for less than the recommended holding period.