JPMorgan fund managers' nine top stocks

William Meadon, joint manager of the £329.4 million JPMorgan Claverhouse investment trust says finding investment opportunities in the UK retail sector is 20% about the product and 80% about "good execution" of managerial strategies.

Meadon explains you can have the best product in the world but if you execute poorly then the company will not last long. It's a philosophy that shapes his selection of stock holdings for the investment trust.

He says: "The high street clothes retailer Next, under Lord Wolfson, has demonstrated just how substantial the rewards shareholders can reap are if management's execution is consistently flawless.

"The company recently announced a 50 pence special dividend for shareholders as the business is generating more cash than it needs. Shareholders were delighted with this and the share price rose more than 10% on the news."

Another example is Sports Direct founded by Mike Ashley. The sporting goods retailer is worth over £4 billion.

Meadon says Ashley's ruthlessly efficient execution at Sports Direct has made the company a "category killer" in the leisure sportswear market in the UK. Ashley is now looking to apply the same disciplined skills to achieve the same results in Europe.

Meadon pinpoints a potential turnaround situation at Halfords: "Poor execution over a number of years led to Halfords being a woefully run retailer in the cycle and automotive parts market. As a consequence the share price performed equally poorly.

"However, the recent arrival of new management under the dynamic leadership of Matt Davies - who did such a good job at Pets at Home - leads us to have high hopes that Davies' proven execution skills will be applied to make Halfords a much more focused, cash generative and profitable company."

JPMorgan Claverhouse, which Meadon co-manages with Sarah Emly, has returned 36.9% over one year compared with an average of 26.7% in the IT UK Growth & Income sector as at 8 January. It holds positions in all the companies mentioned above.

Top stocks for the brave investor

Jonathan Ingram, who co-manages the £154.4 million JPM UK Dynamic fund with John Baker, shares his top UK stock ideas for the brave investor.

Over one year the JPM UK Dynamic fund has returned 27.7% compared with an average of 22.8% for the UK All Companies sector as at 8 January.

The fund holds overweight positions in housebuilders and UK general retailers. Ingram says: "While not without risk, the UK housebuilders sector continues to be an area where we see opportunity. There was significant volatility in the share prices of housebuilders following the withdrawal of the Funding for Lending Scheme."

Despite this volatility the manager says he did not reduce exposure to the sector or other stocks sensitive to the property market such as estate agents and Lloyds Banking Group.

He explains: "This is because we believe this move does not materially affect demand for housing and mortgages. The development could almost be seen as a positive because it suggests the Bank of England views the lending recovery as self-sustaining and that is a positive indicator.

"Additionally, the number of housing transactions forecast for 2014 are well below peak years. On balance, we're still happy with the house builders and are maintaining our overweight position, including names such as Barratt Developments and Crest Nicholson. We also continue to own Foxtons and Countrywide (CWD) that are beneficiaries of the housing upturn as well as Lloyds."

Ingram says the fund holds an overweight position in UK general retailers as well, which is also a sector that may reward brave investors that believe in the strength of the ongoing UK economic recovery.

Another example of a high-volatility but high-return stock is Blinkx, which ingram says has contributed positively to the fund's performance.

Ingram says: "This company is an internet media platform that connects online video viewers with content publishers and distributors, utilising advertising to monetise those interactions. It has experienced growth in viewers and media partnerships and exhibits good momentum characteristics."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.