JPMorgan American Trust Reports 2025 Underperformance but Sustained Long-Term Outperformance

Portfolio shape and valuation going into 2026

At year end, 94.3% of assets were in US large caps across roughly 40 holdings, with a 55% growth and 45% value split. Small caps were about 5.7% – a detractor in 2025 – but still seen as attractive versus large caps.

• Sector tilts: Information technology remains the largest absolute weighting, but still an underweight versus the index. Financials are the largest overweight, with the sector trading at a near 30% discount to the S&P 500. Consumer discretionary is the second largest overweight.
• Valuation and quality: the large-cap portfolio trades at 23.3x price/free cash flow versus 27.8x for the S&P 500, with forward EPS growth of 17.7% broadly in line with the market. Predicted beta is 0.95 and active share 55.1%.
• Recent moves: Exits included UnitedHealth, Regeneron, Eli Lilly and Martin Marietta Materials. New positions included Johnson & Johnson, Gilead Sciences, Ecolab and 3M. Within retail, Lowe’s replaced Home Depot.

Dividends, buybacks and fees – the mechanics that matter

The board continues to marry a capital growth mandate with progressive income. For FY25, shareholders get 11.5p per share in total – an interim 2.75p already paid on 6 October 2025 and, subject to AGM approval, a final 8.75p on 29 May 2026. That’s a 4.5% increase year-on-year. Revenue reserves will stand at £20.2 million after the final dividend, equivalent to 11.9p per share, covering the 2025 payout by 1.0x.

Discount control is active. Early in the year the trust issued 1.41 million shares at a premium, then bought back 10.92 million into Treasury at a 3.4% average discount, adding modest NAV accretion for remaining holders. Since year end, a further 2.78 million shares have been bought into Treasury, with the discount at 4.5% on 30 March 2026. Expect the trust to seek authority to repurchase up to 14.99% of capital and to issue up to 10% from Treasury when demand warrants it.

Costs remain a competitive advantage. The Ongoing Charges Ratio was 0.34% for the year, with net assets over £1 billion charged at just 0.25% – among the lowest for active US equity exposure available to UK investors.

Gearing finished at 4.7%. Facilities include an £85 million revolving credit facility (with a £15 million accordion) to August 2028, plus US$100 million of unsecured notes at fixed coupons of 2.55% (due 2031) and 2.32% (due 2032). The board intends to run with a 5% gearing guide, within a -5% to +20% band.

Outlook and why it matters

The managers remain constructive. They expect solid S&P 500 earnings growth, supported by a resilient US economy and 2025’s restart of Fed cuts. Risks are not hard to find – tariff impacts, shifting US policy, and heightened geopolitical tensions – but the team’s playbook is steady: own high-quality companies with durable advantages, and balance growth with value. Most recently they trimmed growth and added to value.

My read: if market leadership broadens beyond a handful of high-beta winners, this portfolio’s quality bias should be well placed to regain ground. The holdings list looks cheaper than the index on free cash flow and is running close to market growth rates – that’s a sound starting point. On the flip side, if another year of low-quality leadership repeats, relative returns could stay choppy. The small-cap sleeve could be a sleeper upside if the size cycle finally turns.

What to watch next

• Discount dynamics – the 4.5% discount and ongoing buybacks could be supportive if sentiment wobbles.
• Financials overweight – execution at Morgan Stanley and Capital One post-Discover remains key.
• AI exposure with discipline – underweights to the most expensive names helped and hurt in turns. Expect continued selectivity.
• Dividend cover – revenue reserves at 11.9p per share offer some cushioning for the progressive policy.
• Team evolution – value sleeve now run by Jack Caffrey and Graham Spence; Felise Agranoff continues to lead growth after an internal move within the firm.
• AGM and authorities – the May AGM will refresh buyback and issuance powers that have clearly been used to good effect.

Bottom line

2025 was not JAM’s year on relative terms, but the longer record since 2019 remains ahead, costs are low, and the board is active on discount control. With a portfolio priced more cheaply than the market on cash flow and a balanced tilt between growth and value, the trust is positioned for a scenario where market leadership broadens out. If you believe 2026 will reward quality and fundamentals over froth, this is one to keep on the watchlist.