JPMorgan Claverhouse Investment Trust plc Annual General Meeting | 25 April 2019 William Meadon , Portfolio Manager Callum Abbot , Portfolio Manager FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
Managers of JPM Claverhouse Investment Trust William Meadon , Managing Director An employee since 1996 Head of Behavioural Finance Core Team Manager of Claverhouse since 1 st March 2012 36 years industry experience – 23 years at J.P. Morgan Asset Management Qualified ACA Callum Abbot , Vice President An employee since 2012 Manager of Claverhouse since January 2018 7 years industry experience – 7 years at J.P. Morgan Asset Management Qualified CFA … focused UK equity specialists As at 31 March 2019. 1 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
JPMorgan Claverhouse Investment Trust plc Founded in 1963, £460million, all cap investment trust – UK only – 60 – 80 stocks – Risk-controlled – Flexible gearing (5% cash to 20% geared) £30m 2020 debenture @ 7.00% pa £50m facility @ 1.87% pa Since new strategy implemented (1 March 2012) – NAV outperformance vs. benchmark of +1.8% p.a. – Share price outperformance versus benchmark of +3.5% p.a. Dividend: 46 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 30 March 2019. 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. *Sector = UK Equity Income Investment Instruments – refer to data provided later in presentation. Image source: Wikimedia, available in the Public Domain Mark 1.0. 2 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
2018: a more volatile year 12 months to 31 December 2018, FTSE All Share Index total return performance 110 105 Global market panic 100 95 -9.5% 90 85 Dec 17 Feb 18 Apr 18 Jun 18 Aug 18 Oct 18 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 2017. Image source Shutterstock. 3 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
2018 performance Benchmark return -9.5% 2018 performance FTSE All Share Index NAV Total Shareholder return NAV -13.4% 0% Total Shareholder Return -5.5% Dividend +5.8% to 27.5p: 46th consecutive annual -4% dividend increase -5.5% -8% -9.5% -12% -13.4% ... a good relative year for Claverhouse shares -16% 2018 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 2017 to 31 December 2018, 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. 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
Performance in 2018 – attribution JPM Claverhouse Investment Trust plc – Calendar year ending 31 December 2018 Stock level attribution British American Tobacco (u) 0.5% Fenner (o) 0.3% Fevertree Drinks (o) 0.3% John Laing (o) 0.3% Softcat (o) 0.3% Tesco (o) -0.2% AstraZeneca (u) -0.3% Smurfit Kappa (o) -0.3% Thomas Cook (o) -0.4% Jupiter Fund Management (o) -0.5% -0.8% -0.4% 0.0% 0.4% 0.8% 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. 5 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
UK takeovers continue Merger and acquisition activity is vibrant Top 15 Western European countries by mergers and acquisition activity from 24 June 2016 – 31 October 2018 GBP billions 948 1000 Shire Sky 800 Fenner 600 400 321 224 191 183 164 200 113 77 48 46 42 33 30 28 24 18 11 10 9 3 0 United Kingdom Germany Spain France Italy Netherlands Switzerland Sweden Denmark Ireland Portugal Norway Luxembourg Belgium Finland Austria Greece Jersey Cyprus Isle of Man Source: J.P. Morgan Asset Management, Bloomberg. Activity from 24 June 2016 to 31 October 2018. The companies above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. 6 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
Thomas Cook Thomas Cook share price (£) 150 Bought Sold 125 Share price (£) 100 75 Investment thesis 50 A holiday company wrong-footed by the weather! 25 Poor management Balance sheet crisis 0 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Source: J.P. Morgan Asset Management, Bloomberg. Share Price 31 March 2016 to 31 March 2019. The companies/securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Image source: Shutterstock. Past performance is not a reliable indicator for current and future results. 7 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
Going global – Fever-Tree Fever-Tree Investment thesis Marketing expertise combined with quality product has driven growth Vast markets at early stages of growth Stocked in 74 countries Source: J.P. Morgan Asset Management. The securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Image source: Fevertree. Past performance is not a reliable indicator for current and future results. 8 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
Consistent compounder – Diageo Diageo - sales split by category, FY18 Other 8% RTD Scotch 5% 27% Beer 15% US Whiskey 2% Investment thesis Tequila Vodka 3% Diversified growth across spirits, brands and regions 11% Gin 4% Productivity gains supporting margin expansion whilst investing in brands and innovation IMFL Whisky Canadian 5% Whisky Strong free cash generation facilitating £6.9bn of cash Liqueurs Rum 7% 6% returns to shareholders since FY17 7% Source: J.P. Morgan Asset Management, Goldman Sachs. Sales split by category FY18. The securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Image source Shutterstock. Past performance is not a reliable indicator for current and future results. 9 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
Strong brand relationships supporting global growth – JD Sports JD Sports 6.5 0.32 Share Price (LHS) 6.0 0.31 Consensus EPS estimate 2019* (RHS) 5.5 0.30 Consensus EPS (£) Share price (£) 5.0 0.29 4.5 0.28 Investment thesis 4.0 0.27 Consumer demand is for the latest releases from the biggest brands – “The King of Trainers” 3.5 0.26 Showcasing the brands in the right environment – good for customers, good for brands 3.0 0.25 Operates in 16 countries in 1474 shops Apr 17 Oct 17 Apr 18 Oct 18 Source: J.P. Morgan Asset Management, Bloomberg. Data from 28 April 2017 – 23 April 2019. * The consensus EPS estimate is an arithmetic average of selected broker estimates for earnings per share of the company for the year shown. The securities above are shown for illustrative purposes only. Their inclusion should not be interpreted as a recommendation to buy or sell. Image source: pxhere under the creative commons licence CC0. The use of the image does not represent an endorsement of JP Morgan Asset Management or any of its affiliates. Past performance is not a reliable indicator for current and future results. 10 | FOR AGM USE ONLY | NOT FOR FURTHER PUBLIC DISTRIBUTION
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