BlackRock North American Income Trust plc (LON:BRNA) have provided the following portfolio update for the month ended 31 May 2020.
All information is at 31 May 2020 and unaudited.
Performance at month end with net income reinvested
| One Month | Three Months | Six Months | One Year | Three Years | Five Years | |
| Net asset value | 5.6% | 0.3% | -7.8% | 2.0% | 14.3% | 60.7% |
| Share price | 0.5% | -1.4% | -14.4% | -5.0% | 17.9% | 69.4% |
| Russell 1000 Value Index | 5.5% | -1.4% | -9.4% | 0.3% | 12.8% | 52.8% |
Source: BlackRock
| At month end | |
| Net asset value – capital only: | 165.74p |
| Net asset value – cum income: | 166.99p |
| Share price: | 159.25p |
| Discount to cum income NAV: | 4.6% |
| Net yield¹: | 5.0% |
| Total assets including current year revenue: | £135.6m |
| Gearing: | Nil |
| Options overwrite: | 16.7% |
| Ordinary shares in issue²: | 81,204,044 |
| Ongoing charges³: | 1.1% |
1 Based on four quarterly interim dividends of 2.00p per share declared on 6 August 2019 and 7 November 2019 for the year ended 31 October 2019 and on 20 March 2020 and 5 May 2020 for the year ending 31 October 2020, and based on the share price as at close of business on 31 May 2020.
² Excluding 19,157,261 ordinary shares held in treasury.
³ Ongoing charges represent the management fee and all other operating expenses excluding interest as a % of average shareholders’ funds for the year ended 31 October 2019.
| Benchmark Sector Analysis | Total Assets (%) |
| Financials | 24.1 |
| Health Care | 18.6 |
| Consumer Staples | 8.9 |
| Information Technology | 8.5 |
| Energy | 8.3 |
| Communication Services | 7.2 |
| Industrials | 6.9 |
| Consumer Discretionary | 4.6 |
| Utilities | 4.6 |
| Materials | 1.8 |
| Net current assets | 6.5 |
| —– | |
| 100.0 | |
| ===== |
| Country Analysis | Total Assets (%) | |||
| United States | 71.4 | |||
| United Kingdom | 5.0 | |||
| Netherlands | 4.8 | |||
| Germany | 4.0 | |||
| France | 2.4 | |||
| Ireland | 2.4 | |||
| Switzerland | 2.1 | |||
| Norway | 1.3 | |||
| Canada | 0.1 | |||
| Net current assets | 6.5 | |||
| —– | ||||
| 100.0 | ||||
| ===== | ||||
| Ten Largest Investments Company | Country of Risk | Total Assets (%) | ||
| Verizon Communications | USA | 4.2 | ||
| Bank of America | USA | 3.3 | ||
| Citigroup | USA | 3.0 | ||
| Anthem | USA | 2.5 | ||
| Sanofi | France | 2.4 | ||
| Medtronic | Ireland | 2.4 | ||
| Koninklijke Philips | Netherlands | 2.2 | ||
| Unilever | Netherlands | 2.1 | ||
| FirstEnergy | USA | 2.1 | ||
| Williams Companies | USA | 2.0 | ||
Tony DeSpirito, Franco Tapia and David Zhao, representing the Investment Manager, noted:
For the one-month period ended 31 May 2020, the Company’s NAV increased by 5.6% and the share price by 0.5% (all in sterling). The Company’s benchmark, the Russell 1000 Value Index, returned 5.5% for the period.
The largest contributor to relative performance was stock selection in the health care sector. Notably, selection decisions in health care equipment and supplies contributed positively, as did stock selection and an overweight exposure to the health care providers and services industry. In financials, stock selection in the insurance industry and an underweight exposure to diversified financial services boosted relative returns. Other notable contributors included an underweight exposure to real estate and stock selection in the energy sector.
The largest detractor from relative performance was stock selection and allocation decisions in the information technology sector. Notably, stock selection and an underweight exposure to the semiconductors and semiconductors equipment industry weighed on relative results, as did stock selection and an overweight to information technology services. The portfolio’s cash position, which averaged 8.6% for the month, also hurt relative performance amid sharp appreciation in U.S. stock prices. Other notable detractors during the period included stock selection and allocation decisions in industrials and stock selection in communication services.
The portfolio’s option overwriting strategy modestly detracted from relative performance in May.
Transactions/Options
Transactions: In May, the portfolio initiated new positions in Ross Stores and PPL as well as added to existing positions in Equinor and Pioneer Natural Resources. Conversely, we exited our positions in Marathon Oil, Total SA and The Travelers Companies. We also reduced our exposure to BP during the month.
Options: As of 31 May 2020, the Company’s options exposure was 16.7% and the delta of the options was 84.7.
Positioning
As of the period end, the Company’s largest overweight positions relative to the benchmark were in the financials, health care and energy sectors. The Company’s largest underweight positions relative to the benchmark were in the real estate, materials and utilities sectors.
Source: BlackRock. Data as of 31 May 2020.
15 June 2020
Discover more about the BlackRock North American Income Trust plc at blackrock.com/uk/brna
