BlackRock North American Income Trust NAV increased by 1% in December

BlackRock North American Income Trust plc (LON:BRNA) has announced its latest portfolio update.

All information is at 31 December 2020  and unaudited.

Discover more about the trust at blackrock.com/uk/brna

Performance at month end with net income reinvested 


 
One
Month
Three
Months
Six
Months
One
Year
Three
Years
Five
Years
Net asset value1.0%9.8%7.8%-0.8%16.8%69.9%
Share price2.0%11.9%12.5%-8.6%17.7%78.3%
Russell 1000 Value Index1.4%9.9%11.0%-0.4%18.1%71.6%

At month end

Net asset value – capital only:175.03p
Net asset value – cum income:175.71p
Share price:165.75p
Discount to cum income NAV:5.7%
Net yield1:4.8%
Total assets including current year revenue:140.2m
Gearing:Nil
Options overwrite18.7%
Ordinary shares in issue2:79,784,044
Ongoing charges3:1.1%

1 Based on four quarterly interim dividends of 2.00p per share declared on 20 March 2020, 5 May 2020, 6 August 2020 and 4 November 2020 for the year ended 31 October 2020, and based on the share price as at close of business on 31 December 2020.

² Excluding 20,577,261 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.

Sector AnalysisTotal Assets (%)
Financials26.3
Health Care16.8
Information Technology12.4
Consumer Staples8.1
Energy7.1
Industrials6.7
Communication Services6.4
Consumer Discretionary4.8
Utilities4.2
Materials2.2
Net Current Assets5.0
—–
100.0
=====
Country AnalysisTotal Assets (%)
United States74.9
Netherlands4.6
United Kingdom4.3
Germany3.9
France2.2
Ireland2.1
Switzerland1.7
Norway0.9
Canada0.4
Net Current Assets5.0
—–
100.0
=====
Top 10 HoldingsCountry% Total Assets
CitigroupUnited States3.4
Verizon CommunicationsUnited States3.1
Bank of AmericaUnited States2.8
Wells FargoUnited States2.6
American International GroupUnited States2.4
AnthemUnited States2.3
Comcast CorporationUnited States2.3
Samsung ElectronicsUnited States2.2
Cisco SystemsUnited States2.2
MedtronicIreland2.1

Tony DeSpirito, Franco Tapia and David Zhao, representing the Investment Manager, noted:

For the one-month period ended 31 December 2020, the Company’s NAV increased by 1.0% and the share price by 2.0% (all in sterling). The Company’s benchmark, the Russell 1000 Value Index, returned 1.4% for the period.

The largest contributor to relative performance was stock selection and an underweight exposure to the industrials sector. Notably, selection decisions among industrial conglomerates and an underweight exposure to machinery proved beneficial. In information technology, stock selection and an overweight exposure to the technology hardware, storage and peripherals and IT services industries boosted relative performance. In consumer staples, stock selection in food and staples retailing helped relative results. Other contributors during the month included an overweight exposure to financials and an underweight exposure to consumer discretionary and utilities.

The largest detractor from relative performance was the portfolio’s cash balance, which remains a preferred defensive allocation of the portfolio management team. At the sector level, selection decisions in the communication services sector was the largest detractor from relative results. Within the sector, a lack of exposure to the entertainment industry proved costly during the month. In health care, stock selection in pharmaceuticals weighed on relative results, as did an overweight exposure to health care providers and services.

The portfolio’s option overwriting strategy detracted from relative performance during the month.

Transactions/Options

Transactions: In December, the portfolio initiated a new position in Ameren. Allocations to Cisco Systems and Morgan Stanley were increased during the month. Conversely, we reduced our exposure to Cognizant Technology Solutions, Constellation Brands and Samsung Electronics.

Options:  As of 31 December 2020, the Company’s options exposure was 18.7% and the delta of the options was 86.8.

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 industrials, real estate and communication services sectors.

Source: BlackRock. Data as of 31 December 2020.

19 January 2021

Discover more about the BlackRock North American Income Trust plc at blackrock.com/uk/brna

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