JPMorgan Claverhouse Investment Trust (JCH) has maintained its 52-year track record of dividend growth while generating strong returns for UK equity investors.
Stocks related to technology and artificial intelligence (AI) have been boosting returns across many equity markets, but the main drivers behind the recent strong performance of JPMorgan Claverhouse Investment Trust (JCH) are refreshingly broad based.
JCH invests in around 60 high conviction ideas across a wide range of sectors, with a mix of high and low dividend payers to support the trust’s 4.5% target dividend*. Roughly half of the portfolio is invested in high-yielding stocks like NatWest that pay over a 4% dividend. The other half is positioned in a combination of higher-growth companies with dividend yields of less than 2%, such as premium food producer Cranswick, and quality compounders with dividend yields of 2%-4%, such as XPS Pensions, a pensions consultant and administrator.
The portfolio also invests in small and mid-cap UK companies and currently has around 20% of the portfolio in this area of the market. Telecom Plus is a smaller company but one of the top 10 active positions in the portfolio. This multiservice provider of energy, broadband, mobile and insurance has strong customer growth, a capital light business model and a 6% dividend yield.
Financials and turnaround stories drove returns
An equally diverse group of stocks were among the top contributors to JCH’s returns over the past 12 months through 30 September 2025. The portfolio’s position in Rolls-Royce doubled in value over the period, reflecting investor confidence in the company’s turnaround. Shares of Serco, another turnaround story, also rose sharply during the period. This industrial services company has repositioned itself towards the defence industry, which the portfolio managers believe is still not fully reflected in the share price. Both companies started growing their dividends again and the portfolio managers added to the positions.
While the JCH portfolio managers had confidence that these companies could improve their businesses, they did not believe this was the case for food producer Diageo, which had volume challenges and a stretched balance sheet. The portfolio was significantly underweight this stock vs. the benchmark, which significantly helped relative performance.
The trust’s large exposure to banks, including Barclays and NatWest, has boosted returns. UK banks are benefiting from structural hedge—they invested heavily in five-year government bonds at low rates years ago and are now reinvesting at much higher rates. In addition, lending activity has been increasing and even the current modest UK economic growth is enough to support banks’ earnings. Banks may also be among the earlier firms to realise tangible benefits from AI, such as cost savings.
Beyond banks, a wide range of other financial companies—insurer Aviva, fintech company Alpha Group and mortgage lender OSB—rounded out the top contributors over the past year. JCH’s largest sector overweight is the investment banking and brokerage sector, with positions XPS Pensions and alternative asset managers ICG and 3i.
Managing exposure to interest rates, tariffs and valuations
The portfolio’s position in 4Imprint also detracted from performance as shares declined over concerns about the company’s exposure to tariff. The company buys goods manufactured in China and exports them to the US for corporate logos, which has been an attractive business model. While revenue growth has stalled, the company has continued to expand margins and recently gave a more positive trading update.
Housebuilders have faced challenges as interest rates remained higher than expected and more secondhand stock has been coming to the market. The portfolio managers see better opportunities in the real estate investment trust sector, which offers similar exposure with better visibility. JCH exited the holdings in Barratt Redow and Taylor Wimpey and initiated positions in London Metric and SEGRO, which is developing data centres and offers some exposure to the enthusiasm around AI.
JCH trimmed its position in RELX, which develops information-based analytics and decision tools for professional and business customers. Despite debate around whether the company is an AI winner or loser, the portfolio managers made the decision based on the high valuation. The trust also reduced its holding in 3i Group, which had been biggest active position, due to valuation but it retains an overweight position.
The portfolio remains underweight industrial metals and mining stocks vs. the benchmark as these companies are highly cyclical and do not tend to consistently grow dividends. JCH is also less exposed to pharmaceutical and biotechnology companies, due to a combination of high valuations and some uncertainty around the potential impact of US policies on pricing.
Looking ahead
While the UK market may have lagged some markets that have more exposure to technology or AI, recent returns have still been robust. Importantly, valuations are still relatively low, especially compared to other markets. The JCH portfolio managers continue to find a wide range of opportunities and remain focused on maintaining the trust’s 52-year track record over continuous dividend growth—the longest of any investment trust investing only in UK equities.