BLACKROCK NORTH AMERICAN INCOME TRUST PLC - Portfolio Update

BLACKROCK NORTH AMERICAN INCOME TRUST plc All information is at 31 December 2016 and unaudited. Performance at month end with net income reinvested

   

	One Month	Three Months	Six Months	One Year	Three Years	Since Launch (24 Oct 2012)
Net asset value	3.3%	13.8%	19.6%	38.2%	65.9%	98.1%
Share price	7.4%	17.4%	31.5%	53.3%	68.4%	95.8%
Russell 1000 Value Index	3.6%	12.1%	19.4%	40.0%	71.6%	123.5%
Source: BlackRock

   

At month end
Net asset value – capital only:	168.15p
Net asset value – cum income:	169.32p
Share price:	169.50p
Premium to cum income NAV:	0.1%
Net yield*:	2.8%
Total assets including current year revenue:	£116.7m
Gearing:	Nil
Options overwrite:	17.58%
Ordinary shares in issue**:	68,949,044
Ongoing charges***:	1.04%

   

* Based on dividends of 1.20p per share declared on 3 November, 3 August and 4 May 2016 and 1.10p per share declared on 18 February 2016. ** Excluding 31,412,261 ordinary shares held in treasury.

*** 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 2016.

   

Benchmark
Sector Analysis	Total Assets (%)
Financials	27.8
Health Care	14.2
Energy	11.5
Industrials	10.2
Information Technology	9.4
Consumer Staples	6.9
Consumer Discretionary	5.4
Utilities	5.3
Materials	3.4
Telecommunication Services	2.2
Net current assets	3.7
	-----
	100.0
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Country Analysis	Total Assets (%)
USA	88.6
United Kingdom	2.3
France	2.0
Canada	1.7
Netherlands	0.8
Ireland	0.5
China	0.4
Net current assets	3.7
	-----
	100.0
	=====

   

Ten Largest Investments
Company	Country of Risk	Total Assets (%)
Bank of America	USA	4.3
JPMorgan Chase	USA	3.9
Pfizer	USA	3.4
Wells Fargo	USA	2.9
Citigroup	USA	2.8
General Electric	USA	2.6
Microsoft	USA	2.2
Oracle	USA	2.0
Merck	USA	2.0
Occidental Petroleum	USA	1.8

   

Bob Shearer and Tony DeSpirito, representing the Investment Manager, noted:

Performance

For the one month period ended 31 December 2016, the Company’s NAV increased by 3.3% whilst the share price rose by 7.4% (all in sterling). The Company’s benchmark, the Russell 1000 Value Index, gained 3.6% for the period.  The largest contributor to relative performance during the month was stock selection in the energy sector.  Notably, our position in non-benchmark holding Total (+9.6% in GBP) and our overweight to Hess Corporation (+11.0% in GBP) proved to be beneficial.  Stock selection in consumer staples also added to relative returns as our decision to own non-benchmark holding Kroger and to not own benchmark holding Wal-Mart Stores, contributed positively.  Lastly, stock selection in the financials and materials sectors also added modestly to relative performance. The largest detractor from relative performance was stock selection in the aerospace & defence industry. Notably, our positions in non-benchmark holdings Northrop Grumman (-5.5% in GBP) and Lockheed Martin (-4.7% in GBP) proved to be costly.  Stock selection in telecommunication services also dampened relative returns, as did our underweight to the real estate sector.  Lastly, an overweight to the health care providers & services industry hurt relative performance during the month. Transactions/Options Transactions: Notable portfolio changes included increasing our allocation to the technology sector through adding to positions in Intel and Oracle. In materials, we reduced our allocation to E.I. du Pont de Nemours and Company and used the proceeds to increase our position in Dow Chemical Company.  Lastly, we trimmed our exposure to existing positions in Bank of America, General Electric and Raytheon. Options:  As at 31 December 2016, the Company’s options exposure was 17.58% and the delta of the options was 87.92%.  Positioning The Company is currently overweight to the health care, consumer discretionary, financials and materials sectors.  We are approximately equal-weight in the industrials and information technology sectors, and underweight to real estate, telecommunications, energy, utilities, and consumer staples.

19 January 2017

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