Fund of the week: Grab a slice of America’s cash hoards
Dec 23, 2011
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The consumer sector is a favourite for Clare Hart, manager of the £420m JPM US Equity Income Fund – despite US consumer spending rising just 0.1% in October.
“Within the US equity income portfolio, we have been adding to the consumer space, which seems counter-intuitive given the stresses on the consumer, but there are companies that have been oversold,” Hart told Investment Week. Nearly three-quarters of the fund’s assets are in large-caps, with financials, consumer discretionary and healthcare making up the main bulk.
Alongside Jonathan Simon, Hart has been in charge of JPM US Equity Income since December 2008. She believes more investors will turn to the US as the search for income becomes more difficult. “American publicly- traded companies, bolstered by record profits and significant cash hoards, are increasing their dividends at the fastest pace in seven years,” she says. T
his year, 226 firms have increased their dividends, with cuts only seen in four instances. In the past three quarters, $39.8bn was added to US dividend payments, a 50% rise on the $26.5bn increase in 2010.
The 2.75% yield offered by the fund is one of the highest in its sector. But Hart aims for long-term capital growth too. “Over the third quarter, strong stock selection in financials, the fund’s largest sector exposure accounting for nearly a fifth of assets, was the largest positive contributor to performance,” says Investors Chronicle. That helped it return 8.3% over the past year with a total expense ratio of 1.68%.
Contact 020-7742 5853.
JPM US Equity Income Fund top ten holdings
| Name of holding | % of assets |
|---|
| Chevron |
3.6% |
| Wells Fargo |
3% |
| Pfizer |
2.9% |
| Merck |
2.7% |
| ConocoPhillips |
2.4% |
| Johnson & Johnson |
2.3% |
| PPG Industries |
2.2% |
| Verizon Communications |
1.9% |
| Price T Rowe |
1.9% |
| Exxon Mobil |
1.8% |
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