BlackRock North American Income Trust plc (LON:BRNA) has provided the following portfolio update:
All information is at 31 August 2020 and unaudited.
Discover more about the BlackRock North American Income Trust plc 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 value | 1.7% | -1.7% | -1.4% | -7.8% | 9.7% | 68.4% |
| Share price | -1.0% | -3.0% | -4.4% | -17.3% | 11.3% | 71.2% |
| Russell 1000 Value Index | 2.1% | -0.7% | -2.1% | -8.3% | 9.8% | 65.2% |
Source: BlackRock
| At month end | |
| Net asset value – capital only: | 162.04p |
| Net asset value – cum income: | 162.18p |
| Share price: | 152.50p |
| Discount to cum income NAV: | 6.0% |
| Net yield¹: | 5.2% |
| Total assets including current year revenue: | £130.8m |
| Gearing: | Nil |
| Options overwrite: | 18.4% |
| Ordinary shares in issue²: | 80,629,044 |
| Ongoing charges³: | 1.1% |
1 Based on four quarterly interim dividends of 2.00p per share declared on 7 November 2019 for the year ended 31 October 2019, and on 20 March 2020, 5 May 2020 and 6 August 2020 for the year ending 31 October 2020, and based on the share price as at close of business on 31 August 2020.
² Excluding 19,732,261 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 | 24.9 |
| Health Care | 17.4 |
| Information Technology | 11.3 |
| Consumer Staples | 8.9 |
| Energy | 7.6 |
| Communication Services | 7.5 |
| Industrials | 7.3 |
| Consumer Discretionary | 4.7 |
| Utilities | 3.3 |
| Materials | 1.4 |
| Net current assets | 5.7 |
| —– | |
| 100.0 | |
| ===== |
| Country Analysis | Total Assets (%) |
| United States | 71.9 |
| United Kingdom | 5.1 |
| Netherlands | 4.9 |
| Germany | 4.3 |
| Ireland | 2.5 |
| France | 2.5 |
| Switzerland | 1.6 |
| Norway | 1.0 |
| Canada | 0.5 |
| Net current assets | 5.7 |
| —– | |
| 100.0 | |
| ===== |
| Ten Largest Investments | ||
| Company | Country of Risk | Total Assets (%) |
| Verizon Communications | USA | 4.1 |
| Bank of America | USA | 3.1 |
| Citigroup | USA | 3.1 |
| Medtronic | Ireland | 2.5 |
| Cognizant Technology Solutions | USA | 2.4 |
| Comcast Corporation | USA | 2.4 |
| Wells Fargo | USA | 2.3 |
| BAE Systems | United Kingdom | 2.3 |
| Sanofi | France | 2.2 |
| Anthem | USA | 2.2 |
Tony DeSpirito, Franco Tapia and David Zhao, representing the Investment Manager, noted:
For the one-month period ended 31 August 2020, the Company’s NAV increased by 1.7% and the share price decreased by 1.0% (all in sterling). The Company’s benchmark, the Russell 1000 Value Index, returned -2.1% for the period.
The largest contributor to relative performance was our decision to not invest in the real estate sector. Our lack of exposure to real estate reflects our view that company fundamentals and valuations are unattractive at current prices. In energy, stock selection in the oil, gas and consumable fuels industry boosted relative results during the month. Other modest contributors included an underweight exposure to utilities and stock selection in information technology.
The largest detractor from relative performance was stock selection in the health care sector. Notably, stock selection in the pharmaceuticals and health care equipment and supplies industries proved costly during the month. In financials, stock selection and an overweight exposure to the insurance industry weighed on relative performance, as did investment decisions in the banks and diversified financial services industries. Other notable detractors during the period included stock selection and an underweight exposure to the consumer discretionary and communication services sectors.
The portfolio’s option overwriting strategy modestly detracted from relative performance in August.
Transactions/Options
Transactions: In August, the portfolio initiated new positions in Humana and Danone SA as well as added to our existing positions in Motorola Solutions, Comcast and Coca-Cola. Conversely, we exited our position in Willis Towers Watson and reduced our exposure to Pfizer, Nestle SA and Public Service Enterprise Group during the month.
Options: As of 31 August 2020, the Company’s options exposure was 18.4% and the delta of the options was 85.5.
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 materials sectors.
Source: BlackRock. Data as of 31 August 2020.
21 September 2020
Discover more about the BlackRock North American Income Trust plc at blackrock.com/uk/brna
