Fund Research

BlackRock North American Income Trust

Last update 12 June 2019

BlackRock North American Income Trust is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

The Company aims to provide an attractive and growing level of income return with capital appreciation over the long term, predominantly through investment in a diversified portfolio of primarily large-cap US equities.

As at:

11/06/2019

Group/Investment

BlackRock North American Income Trust

Ticker

BRNA

Management Company

BlackRock

Manager Name

Tony DeSpirito, Franco Tapia

Association of Investment Companies (AIC) Sector

North American

12 Mo Yield

4.69

Dividend Distribution Frequency

Quarterly

Latest Market Capitalisation

£133,542,815

Latest Net Gearing (Cum Fair)

-

Latest Ongoing Charge Ex Perf Fee

1.08%

Turnover Ratio

71.43

Shares Outstanding

73,074,044

(Discount)/ Premium (Cum Fair)

2.8%

BlackRock North American Income Trust aims to provide an attractive and growing level of income, with capital appreciation over the long term.

The managers, Tony DeSpirito (lead manager), Franco Tapia (co-manager) and David Zhao (co-manager), utilise a bottom up stock specific approach to managing the portfolio. The team starts with a universe of the 500 largest US companies by market cap, searching for attractively valued, high quality companies with histories of dividend growth. Currently the portfolio is made up of just 81 holdings. Illustrating the valuation led approach, the average company in the portfolio has a P/E of 13.8x, relative to the average in the benchmark Russell 1000 Value Index of 14.5x.

Since Tony DeSpirito took the helm of the portfolio towards the end of 2014, the trust has seen a marked improvement in performance. Over three years (to the end of May 2019) the trust has generated 47.2% in NAV returns, outperforming the Russell 1000 Value Index (42.2%) and only narrowly trailing the average trust in the AIC North American sector (53.4%). The trust has now outperformed the benchmark in three of the past five calendar years. This has been achieved with lower levels of volatility and over the past year the trust has the second lowest beta of the two AIC North American sectors, sitting at just 0.82.

Alongside the potential for capital appreciation, one of the key draws for investors is the robust income, with the shares currently yielding 4.5%. The dividend saw a dramatic increase last year, when the board increased its dividend by 61.6% to 8p per share. Part of this is paid from capital reserves, but is also supplemented through option writing, headed by the BlackRock Equity Derivatives option team in Boston.

The strong performance, defensive characteristics and now very significant dividend yield have had a clear impact on demand for the shares. The discount has narrowed and the trust currently trades at a premium of 2.8%.

William Sobczak

Important information

BlackRock North American Income Trust is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Kepler Trust Intelligence is a website owned and managed by Kepler Partners LLP. Material produced by Kepler Trust Intelligence should be considered a marketing communication, and is not independent research.

This report has been issued by Kepler Partners LLP for communication only to eligible counterparties and professional clients as defined by the Financial Conduct Authority.  Its contents are not directed at, are not to be communicated to, may not be suitable for and must not be relied on by retail clients

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country.  Persons who access this information are required to inform themselves and to comply with any such restrictions. 

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This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules. 

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Fund History: BlackRock North American Income Trust

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