As investors seek reliable income in an uncertain world, investment trusts need to adapt. JPMorgan Claverhouse Investment Trust plc (JCH) offers a case study in quiet evolution, retaining its income and investor focus while refreshing its investment approach and enhancing its leadership team.
If you rely on a flow of investment income from your investment portfolio to supplement your pension (or indeed as part of it), you’re likely to be very interested in the reliability of that flow.
In other words, while a generous dividend payout is important, you’re equally keen to know that you can count on it even when markets are wobbling – and, even more importantly, that it is set to grow each year to help your finances keep pace with price inflation.
JPMorgan’s Claverhouse, which invests across the whole spectrum of UK listed companies, is designed with those core stable income-related considerations at the very heart of its mandate.
Thus, although yield is not guaranteed and may change over time, Claverhouse currently provides shareholders with an attractive yield of around 4.5%¹, paid quarterly, and it also sits proudly among the leaders of the Association of Investment Companies’ Dividend Heroes table, which recognises those trusts that lead the field in maintaining or increasing their annual payouts year after year.
Indeed, its 52-year record of consecutive annual dividend increases is the longest of any investment trust investing solely in UK equities².
One important aspect of this dividend reliability is rooted in the special structure of investment trusts, which allows them to hold back up to 15% of the dividends received from investee companies each year.
Those reserves can then be used to bolster the trust’s payouts to shareholders in leaner years, effectively minimising the impact of inevitable dividend fluctuations over time. They can also help underpin the capacity of Claverhouse and other Dividend Heroes to pay a rising dividend year on year.
A fresh approach
The past year has been a significant one for Claverhouse, with the appointment of a dynamic managerial team. Claverhouse co-manager Callum Abbot has been joined by two colleagues from the UK equities desk – small and mid-cap specialists Anthony Lynch and Katen Patel.
The revamped managerial line-up has brought with it much continuity of thought, as the trio worked together in UK equities for more than a decade. They are supported by the rest of the sector specialist team, as well as the 80-strong broader desk of global and sector analysts.
The result is “a well-rounded management team with broad sector and market cap coverage, crucial for building a portfolio that can deliver a long-term growing yet resilient income alongside long-term capital growth,” according to a recent report from investment trust research firm Kepler Partners³.
What does the enhanced leadership team mean in practical terms? As Abbot is keen to emphasise, there has been no change to the Trust’s investment philosophy and objectives; and although changes have been introduced to the way the trust is run over the past year, it’s a matter of “evolution rather than revolution”.
Nonetheless, these adjustments are significant, not least as they are likely to strengthen Claverhouse’s credentials as an income trust.
A broader base for income and growth
In particular, the team has trimmed back the percentage of very high-yielding companies that pay generously but offer few growth prospects, in favour of a more diverse and robust balance of stocks capable of delivering ongoing income growth.
The adjusted portfolio contains “some high yielders with stable delivery underpinned by ‘quality compounders’ (businesses paying decent incomes and capable of steady growth), plus high growth companies (with low yields but strong prospects),” explains Abbot.
In addition, with Patel and Lynch bringing their small and mid cap expertise to the party, Claverhouse no longer relies on a holding in JPMorgan UK Smaller Companies investment trust for small cap exposure. Instead, adds Abbot, every stock is individually selected “to align with our mandate”.
The upshot of these adjustments, as the Kepler report puts it, is that Claverhouse is now “targeting companies with resilient earnings, strong balance sheets and consistent dividends across the entire market cap spectrum.”
This refreshed approach appears to be paying off in terms of outperformance versus the benchmark FTSE All-Share index.
Over the year to the end of June 2025, Claverhouse delivered share price total return growth of 16% and its net asset total returns grew in value by 14% (net of fees), against the benchmark return of 11%⁴.
On a longer-term perspective, too, the trust has outperformed, with its shares returning 76% over five years against the benchmark’s 67%⁴.
Cash can’t compete long-term
For anyone considering whether to move out of cash in order to enhance their long-term financial prospects, the record of UK equity income trusts such as Claverhouse could usefully serve as something of a wake-up call.
As recent research by JPMorgan Asset Management highlights, although UK households have been saving much more since the Covid pandemic, they remain largely wedded to cash, fearful of stock markets and the potential for loss.
Yet while it makes eminent sense to keep some cash available for emergencies, savings accounts cannot even hold their own against the erosive power of inflation over the decades – let alone produce a reliable long-term rising income or real growth in the way that well-structured and managed stock market investments can.
Of course, there are no guarantees that the Trust’s past performance will be repeated in the future; however, as a first step into equity markets for a long-term retirement pot or nest egg, JPMorgan Claverhouse not only provides the commitment to a competitive and progressive dividend, but also genuine potential for capital growth over the years.
