2025 performance: resilient, but behind the S&P 500
JPMorgan American Investment Trust’s 2025 was a study in resilience and style headwinds. The NAV total return was +4.6% (debt at fair value) in sterling terms, behind the S&P 500’s +9.6% in sterling. The share price total return was +0.5%, as the shares moved from a small premium early on to finish the year at a 2.7% discount to NAV. A stronger pound didn’t help – the US dollar fell 6.9% against sterling over the year, trimming translated returns.
In US dollars, the S&P 500 returned +17.7% and the portfolio returned +12.9%, a relative shortfall of -4.8%. The team points squarely at 2025’s narrow market and its bias towards high-beta, lower-quality and highly valued shares – the opposite of the trust’s focus on higher-quality growth and value names.
| Key numbers for FY25 | |
|---|---|
| NAV total return (GBP, debt at fair value) | +4.6% |
| Benchmark (S&P 500, GBP) | +9.6% |
| Share price total return | +0.5% |
| Net assets | £1,949.9 million |
| NAV per share (debt at fair value) | 1,153.3p |
| Total dividend for FY25 | 11.5p per share (up 4.5%) |
| Ongoing Charges Ratio | 0.34% (assets over £1 billion charged at 0.25%) |
| Gearing at year end | 4.7% (target 5% within -5% to +20% range) |
| Shares issued | 1,414,046 at 0.8% premium, £16.5 million raised |
| Shares bought back | 10,924,147 into Treasury at 3.4% discount, £116.4 million |
| Discount at 31 Dec 2025 | 2.7% |
| Discount at 30 Mar 2026 | 4.5% |
Long-term scorecard: still ahead since the 2019 strategy shift
Zoom out and the picture brightens. Three-year cumulative NAV total return stands at +70.3% versus +65.4% for the benchmark, and five-year at +99.2% versus +97.2%. Since the investment approach changed on 1 June 2019, the trust has outperformed the benchmark by 17.2% through to the end of February 2026 – a NAV total return of +173.4% versus +156.2% – an annualised edge of 1.0 percentage point. The trust also picked up the Citywire Investment Trust Award for ‘Best North American Equities’ for the second year running.
What drove 2025 underperformance
The main drag was stock selection in the large-cap sleeve (over 90% of assets), especially in technology, energy and industrials. Being underweight some of the year’s AI darlings hurt: an underweight to NVIDIA cost as the shares rose 38.9%. Oracle and HubSpot also detracted – HubSpot fell 42.4% on doubts around monetising its front-office AI tools.
Energy positioning worked against the trust too. EOG Resources underperformed amid cautious guidance and an anticipated oversupplied market. In healthcare, UnitedHealth was exited after rising costs and execution concerns dented conviction.
There were bright spots. Financials were a strong contributor: Morgan Stanley and Capital One Financial both delivered, with the latter buoyed by the Discover acquisition. Broadcom rallied 50.7% on AI-related demand. An underweight to Tesla helped early on, and the team reintroduced the stock later at more attractive levels, with a thesis centred on autonomous driving improving margins over time.
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.
