November 14, 2024

It’s hard to find an active manager outperforming the S&P 500 – buy it when you do

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This is different from most funds, which either plump for value or growth or attempt the difficult task of balancing both styles together.

The dual strategy shows in the trust’s 10 biggest holdings, which are neatly divided with the top five of magnificent seven growth stocks – Microsoft, Amazon, Nvidia, Meta and Apple – accounting for a quarter of the assets.

Below these are five value stocks: Berkshire Hathaway, the conglomerate of Warren Buffett, the world-famous investor, insurance group Loews, bank Capital One, and energy companies Kinder Morgan and EOG Resources. These make up 13.5pc of the trust.

However, while Mr Agranoff and Mr Ghernati have pared back some of the big technology holdings after their strong run, Mr Caffrey and Mr Simon are overweight in their top value positions. They invest more than an S&P tracker would because they are confident in their recovery prospects.

At the end of September, the trust was split slightly in favour of growth, which held 55pc of the assets, compared with value’s 45pc. The ability to tilt between investment styles has been a big advantage. It let JP Morgan American ride the internet wave after the pandemic but switch more to value when inflation rose two years ago and growth stocks crashed.

Between March 2019 – when the trust introduced its hybrid approach – and September 2024, the trust has generated an annual 17.2pc return, 2pc more per year than the 15.1pc from the S&P 500.

In the few short months since we added the trust to our wealth preserver portfolio, we have already enjoyed more than a 10pc share price return. We are not bailing out of one of the few funds reliably outperforming a buoyant US stock market.

Questor says: buy
Ticker: JAM
Share price: £11.12

Gavin Lumsden is editor of Citywire’s Investment Trust Insider website.

Read the latest Questor column on telegraph.co.uk every weekday at 5am. Read Questor’s rules of investment before you follow our tips.

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