JPM’s Hart: Why I avoid buybacks


JP Morgan Asset Management portfolio manager Clare Hart is avoiding firms carrying out buybacks within her  US equity income fund, calling them “flawed.”

Hart, who co-manages the £1.4bn JPM US Equity Income fund with Jonathan Simon, prefers American compnanies that opt to increase their dividends rather than buy equity back from shareholders.

Hart says: “I personally see dividends as returning money to shareholders – buybacks are not and I think it is flawed.

“It is in lieu of am acquisition. Sometimes it can suggest to me they just want to get their money out of the stockmarket.”

Hart has favoured financials within the fund, which has seen assets grow by 46.53 per cent since the start of 2013. With the biggest financial holding in Wells Fargo at 3.9 per cent, Hart is avoiding the larger financial names and favouring smaller firms.

Hart says: “I have 24 per cent in financials. We don’t have the biggest ones like Goldman Sachs.

“These regional banks are making quite reasonable money and I think they will make more over time. They are not trying to be masters of the universe.”