JPMorgan Claverhouse Investment Trust plc Annual General Meeting 18 April 2018 William Meadon, Portfolio Manager Callum Abbot, Portfolio Manager FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Co-fund managers Co-manager of Claverhouse Appointed 1 st March 2012 35 years industry experience 22 years at J.P. Morgan Asset Management Co-manager of Claverhouse Appointed 25 th January 2018 6 years industry experience 6 years at J.P. Morgan Asset Management focused UK equity specialists As at 12 April 2018. 1 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
JPMorgan Claverhouse Investment Trust plc 55 years old, 460million, all cap investment trust UK only 60 80 stocks Risk-controlled Since new strategy implemented (1 March 2012) NAV outperformance vs. benchmark of +2.5% p.a. Share price outperformance versus benchmark of +4.5% p.a. Dividend: 45 consecutive years of dividend growth. Well covered. Best reserves in the sector ( > 1year) Past performance is not a reliable indicator of current and future results. Dividends are not guaranteed. Source: J.P. Morgan Asset Management as of 28 February 2018 unless otherwise stated. *Annualised net asset value (NAV) return of the investment trust in excess of the benchmark calculated geometrically. NAV return per share is calculated on a bid value to bid value basis, in GBP, cum-income NAV (assuming that all dividends paid out during the relevant periods were reinvested into the shares of the investment trust at the NAV per share on ex-dividend date), with borrowings at par basis. Benchmark = FTSE All Share Index. Index return does not include fees or operating expenses. 2 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
2017: a lower volatility year 12 months to 31 December 2017, FTSE All Share Index total return performance 115 113 UK general election Brexit divorce bill agreed +13.1% 111 109 107 105 Trump inaugurated as 45 th US President 103 101 First UK rate rise in over a decade 99 97 Article 50 triggered 95 Dec 16 Feb 17 Apr 17 Jun 17 Aug 17 Oct 17 a positive total return Past performance is not a reliable indicator of current and future results. Source: J.P. Morgan Asset Management, Thomson Reuters Datastream. Data from 31 December 2016 to at 31 December 2017, in GBP. Index return does not include fees or operating expenses. Returns rebased to 100 as of 31 December 2016. 3 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
2017 performance NAV +16.2% 2017 performance Total Shareholder Return +21.8% Benchmark return +13.1% 24% 20% FTSE All Share Index NAV Total Shareholder return 21.8% Dividend +13.0% to 26p: 45th consecutive annual dividend increase 16% 13.1% 16.2% 12% 8% 4%... a strong year for Claverhouse shares 0% 2017 Past performance is not a reliable indicator of current and future results. Dividends are not guaranteed. Source: J.P. Morgan Asset Management. Data from 31 December 2016 to 31 December 2017, in GBP. NAV returns are net of fees and applicable charges, income reinvested, borrowings at par (debt valued at maturity face value). Total shareholder return is change in the share price of JPM Claverhouse Investment Trust plc over 2016. Benchmark is FTSE All Share Index (total return). Index return does not include fees or operating expenses. The Benchmark is a point of reference against which the performance, risk characteristics or composition of the Investment Trust may be measured. However, the Investment Trust will be managed without reference to its Benchmark. 4 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Outperformance over all periods JPMorgan Claverhouse Investment Trust plc as of 28 February 2018 Annualised performance (%) Three months YTD One year Three years Five years Since strategy change* NAV returns 0.52-4.49 6.40 6.75 9.59 11.03 Share Price returns 1.86 0.12 14.69 9.49 11.66 13.21 Benchmark returns -0.62-5.15 4.36 5.90 7.27 8.37 NAV excess return 1.15 0.69 1.95 0.81 2.17 2.45 Share price excess return 2.50 5.55 9.90 3.39 4.09 4.47 Past performance is not a reliable indicator of current and future results. Source: J.P. Morgan Asset Management. *Since change of strategy on 1 March 2012. NAV returns are net of fees and applicable charges, in GBP with income reinvested, including actual ongoing charges excluding any entry and exit fees. Total shareholder return is the change in the share price of JPM Claverhouse Investment Trust plc. Benchmark is FTSE All Share Index (total return). Index return does not include fees or operating expenses. The Benchmark is a point of reference against which the performance, risk characteristics or composition of the Investment Trust may be measured. However, the Investment Trust will be managed without reference to its Benchmark. Excess return calculated geometrically. Returns greater than 1 year are annualised. 5 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Five year performance JPMorgan Claverhouse Investment Trust plc as of 28 February 2018 Calendar year performance (%) 2013 2014 2015 2016 2017 NAV returns 34.90 2.03 6.04 10.75 16.19 Share Price returns 42.94 3.96 3.59 7.22 21.79 Benchmark returns 20.81 1.18 0.98 16.74 13.06 NAV excess return 11.67 0.84 5.01-5.12 2.77 Share price excess return 18.32 2.75 2.59-8.15 7.72 Past performance is not a reliable indicator of current and future results. Source: J.P. Morgan Asset Management. NAV returns are net of fees and applicable charges, in GBP with income reinvested, including actual ongoing charges excluding any entry and exit fees. Total shareholder return is the change in the share price of JPM Claverhouse Investment Trust plc. Benchmark is FTSE All Share Index (total return). Index return does not include fees or operating expenses. The Benchmark is a point of reference against which the performance, risk characteristics or composition of the Investment Trust may be measured. However, the Investment Trust will be managed without reference to its Benchmark. Excess return calculated geometrically. 6 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Performance in 2017 attribution JPM Claverhouse Investment Trust plc Calendar year ending 31 December 2017 Stock level attribution Fevertree Drinks (o) 1.3% 3i Group (o) Beazley (o) Synthomer (o) Rentokil Initial (o) 0.3% 0.3% 0.3% 0.3% Unilever (o) Royal Dutch Shell (n) GKN (o) Anglo American (u) ITV (o) -0.2% -0.2% -0.2% -0.3% -0.4% -0.8% -0.4% 0.0% 0.4% 0.8% 1.2% 1.6% Past performance is not a reliable indicator of current and future results. Source: J.P. Morgan Asset Management, FactSet. The Investment Trust is actively managed according to the Investment Policy and the investment manager s internal guidelines. Holdings, sector weights, allocations and leverage, as applicable, are subject to change without notice. (o) represents an overweight position relative to the benchmark (FTSE All Share Net Index), (u) represents an underweight position & (n) represents neutral position. Attributions may not match official returns due to differences in systems rounding. 7 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Fevertree Sparkling growth and fizzing momentum EPS and share price Share price ( ) First top EPS ( ) 30 slice 0.45 Share Price (LHS) 25 EPSe (RHS) 0.4 20 15 10 First bought 0.35 0.3 0.25 0.2 Share price doubled again in 2017 3bn market cap Consistently beating expectations US expansion has huge potential 5 0.15 0 0.1 Apr 15 Oct 15 Apr 16 Oct 16 Apr 17 Oct 17 Apr 18... running a winner Past performance is not a reliable indicator of current and future results. Source: J.P. Morgan Asset Management, Bloomberg. Share Price 09 April 2014 11 April 2018. *The EPSe consensus is an arithmetic average of selected broker estimates for earnings per share of the company for the year shown. The companies above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Opinions, estimates, forecasts, projections and statements of financial market trends are based on market conditions at the date of the publication, constitute our judgment and are subject to change without notice. There can be no guarantee they will be met. 8 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Fenner An absolute belter EPS and share price Provider of industrial conveyor belts and precision polymer products to a range of end markets EPS ( ) 6.5 0.24 Cyclical recovery in its key end markets, mining and oil & gas, driving upgrades Share price ( ) 5.5 0.22 Attractive valuation, with a FCF yield of 7%, drawing a bid from Michelin 4.5 3.5 First bought 0.2 0.18 0.16 2.5 0.14 1.5 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 0.12 Past performance is not a reliable indicator of current and future results. Source: J.P. Morgan Asset Management, Bloomberg, data from 1 st January 2017 29 March 2018. EPSe consensus is an arithmetic average of selected broker estimates for earnings per share of the company for the year shown. The companies above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Opinions, estimates, forecasts, projections and statements of financial market trends are based on market conditions at the date of the publication, constitute our judgment and are subject to change without notice. There can be no guarantee they will be met. 9 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
ITV Worth watching Price/Earnings and EPS The biggest and most popular commercial television channel in the UK PE ratio (x) EPS ( ) 20 0.2 Price/Earnings Ratio (x) Earnings Per Share ( ) 18 0.18 16 0.16 Under pressure from changes in media consumption New CEO with plenty of options to turnaround fortunes Significant de-rating despite earnings being resilient 6% FCF yield and 5.5% dividend yield 14 0.14 12 0.12 10 0.1 8 0.08 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Past performance is not a reliable indicator of current and future results. Source: J.P. Morgan Asset Management, Bloomberg, data from 1 st January 2017 29 March 2018. EPSe consensus is an arithmetic average of selected broker estimates for earnings per share of the company for the year shown. The companies above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Opinions, estimates, forecasts, projections and statements of financial market trends are based on market conditions at the date of the publication, constitute our judgment and are subject to change without notice. There can be no guarantee they will be met. 10 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Stock & Sector positions JPMorgan Claverhouse Investment Trust plc as of 28 February 2018 Largest overweight and underweight positions (%) Largest overweight and underweight positions (%) Fevertree Drinks 2.0% Financial Services 2.5% Ashtead Group 1.7% Life Insurance 2.3% 3i Group 1.7% Mining 2.0% Electrocomponents 1.7% Beverages 1.7% Rio Tinto 1.5% Software & Computer Services 1.7% National Grid -1.1% Mobile Telecommunications -1.1% Shire -1.2% Food & Drug Retailers -1.4% AstraZeneca -1.2% Gas, Water & Multi-Utilities -1.9% Reckitt Benckiser -1.5% Real Estate Investment Trusts -2.0% Barclays -1.6% Pharmaceuticals & Biotechnology -3.3% -3% -2% -1% 0% 1% 2% 3% -6% -4% -2% 0% 2% 4% Source: J.P.Morgan Asset Management, Factset. The Investment Trust is actively managed according to the Investment Policy and the investment manager s internal guidelines. Holdings, sector weights, allocations and leverage, as applicable, are subject to change without notice. 11 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Outlook 12 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
UK equities not looking expensive FTSE 100 Shiller CAPE x, adjusted using trailing 10-year average inflation-adjusted earnings GTM UK 30 25 20 15 Average: 16.9x 10 31 March 2018: 14.5x 5 '83 '87 '91 '95 '99 '03 '07 '11 '15 Source: FTSE, Goldman Sachs, J.P. Morgan Asset Management. Index is FTSE 100 due to availability of P/E data. Guide to the Markets - UK. Data as of 31 March 2018. Past performance is not a reliable indicator of current and future results. 13 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
UK equities very attractive yield versus other countries Dividend yield % yield 5 Dividend yield 4 3 2 1 0 US Japan World EM Eurozone UK Dividends are not guaranteed. Past performance is not a reliable indicator of current and future results. 14 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Dividends the advantage of investment trusts Would you like lumpy or consistent? FTSE All-Share dividend growth by year UK Equity Income Investment Companies vs UK Market 20% 180.0 UK Market Index 15% 170.0 UK Equity Income ICs 10% 5% 0% -5% Value of Dividends (Rebased) 160.0 150.0 140.0 130.0 120.0 110.0-10% 100.0-15% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 90.0 80.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bloomberg, Numis Securities Research. Date as of December 2017. Source: Capita, Company Data, Bloomberg, Numis Securities Research. Please note that UK market data excludes the Vodafone special dividend in 2014. As at March 2018. Dividends are not guaranteed. Past performance is not a reliable indicator of current and future results. 15 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Claverhouse: A fortress balance sheet Well covered and secure dividend UK Equity Income Investment Companies 1.3 Peer group Dividend cover 1.2 1.1 JPM Claverhouse IT 1 0.9 0.2 0.4 0.6 0.8 1 1.2 1.4 Revenue reserves (Years dividend) Source: Numis Securities Research, Datastream, Company Data, Bloomberg, Numis Securities Research. Based on 2017 Annual Report. Covered and secured dividend refers to attempting to minimize the impact of any falls in capital gains and income from the trust. Dividends are not guaranteed. Past performance is not a reliable indicator of current and future results. 16 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
JPMorgan Claverhouse Investment Trust plc 45 consecutive annual dividend increases (1972 dividend = 0.48p) Annual dividend per share 35 Total Dividend (pence per share) 30 +5.5% p.a. +30% 26.0 25 20 15 15.3 16.4 16.9 17.5 18.3 18.9 19.5 20.0 21.5 23.0 10 5 0 2007 2008* 2009 2010 2011 2012 2013 2014 2015 2016 2017 Dividends are not guaranteed. Past performance is not a reliable indicator of current and future results. *Source: J.P. Morgan Asset Management, as at 31 December 2017. Dividend growth is calculated as the compounded annual growth rate of dividends paid by JPMorgan Claverhouse Investment Trust plc (excluding special dividends) over the period shown (2006-2016). Not including special dividend of 3.6 pence per share paid in 2008. Dividend paid by the Fund may exceed the gains of the Fund, 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. 17 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Conclusion 2017: strong returns with low volatility Consistent long term outperformance and dividend growth Outperformance of NAV (+2.5% p.a.) and share price (+4.5% p.a.) since change in strategy* 45 consecutive years of dividend growth Global economic outlook still benign; Brexit and political outlook more uncertain 2018 markets likely to be challenging... focused on delivering performance in a risk controlled way Past performance is not a reliable indicator of current and future results. Dividends are not guaranteed. Source: J.P. Morgan Asset Management as of 28 February 2018. *NAV relative return since 01 March 2012, in GBP. Annualised net asset value (NAV) return of the investment trust in excess of the benchmark calculated geometrically. NAV return per share is calculated on a bid value to bid value basis, in GBP, cum-income NAV (assuming that all dividends paid out during the relevant periods were reinvested into the shares of the investment trust at the NAV per share on ex-dividend date), with borrowings at par (debt valued at maturity face value). Benchmark = FTSE All Share Index. Index return does not include fees or operating expenses. 18 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
John D. Rockefeller Do you know the only thing that gives me pleasure? It s to see my dividends coming in. - John D. Rockefeller Source: Shutterstock. 19 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Appendix 20 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Share price discount 3 years JPMorgan Claverhouse Investment Trust plc Net Asset Value (NAV) vs. Share Price 900 800 Net Asset Value Last Price 700 600 500 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Premium/Discount to NAV 0-2 -4-6 -8-10 -12-14 Jan 15 Jan 16 Jan 17 Jan 18 Past performance is not a reliable indicator of current and future results. Source: J. P. Morgan Asset Management. Bloomberg. Data from 31 January 2015 to 28 February 2018. *As at 28 February 2018. 21 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Investment objective and risk profile JPMorgan Claverhouse Investment Trust plc (the Company) Investment objective The Company aims to provide a combination of capital and income growth from a portfolio consisting mostly of companies listed on the London Stock Exchange. The Company s portfolio consists of between 60 and 80 individual equities in which the Manager has high conviction. The company has the ability to use borrowing to gear the portfolio within the range of 5% net cash to 20% geared in normal market conditions. Risk profile The value of your investment may fall as well as rise and you may get back less than you originally invested. Where permitted, a trust may invest in other investment trusts that utilise gearing (borrowing), which will exaggerate market movements both up and down. Dividend income payments are not guaranteed and may fluctuate. This fund may use derivatives for investment purposes or for efficient portfolio Management. Derivatives are complex and trusts that use them for investment purposes may be more volatile. These trusts are considered to be higher risk than trusts that invest only in shares. External factors may cause an entire asset class to decline in value. Prices and values of all shares or all bonds could decline at the same time, or fluctuate in response to the performance of individual companies and general market conditions. This trust may utilise gearing (borrowing) which will exaggerate market movements both up and down. The trust may invest in smaller company shares, which can be more unpredictable and less liquid than shares of larger companies. The share price may trade at a discount to the Net Asset Value of the company. The single market in which the Trust primarily invests, in this case the UK, may be subject to particular political and economic risks and, as a result, the trust may be more volatile than more broadly diversified trusts. The key risks facing the Company and the mechanisms in place to monitor and measure these risks are set out in the Company s annual report, a copy of which is available from its website, www.jpmclaverhouse.co.uk. 22 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION
Important information This is a marketing communication and as such the views contained herein are not to be taken as an advice or recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. 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. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not reliable indicators of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/jpmpdf/1320694304816.pdf. Investment is subject to documentation. The Investor Disclosure Document, and Key Features / Terms & Conditions can be obtained free of charge from JPMorgan Asset Management (UK) Limited, and the Key Information Document can be obtained from JPMorgan Funds Limited or www.jpmam.co.uk/investmenttrust. This communication is issued by JPMorgan Asset Management (UK) Limited, which is authorised and regulated in the UK by the Financial Conduct Authority. Registered in England No: 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP. Material ID: 0903c02a820f27b3 23 FOR AGM USE ONLY NOT FOR FURTHER PUBLIC DISTRIBUTION