BlackRock North American Income Trust Plc - Portfolio Update

BLACKROCK NORTH AMERICAN INCOME TRUST plc (LEI: 549300WWOCXSC241W468)
All information is at 31 August 2018 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	2.3%	8.5%	11.7%	12.2%	72.3%	98.1%
Share price	5.2%	9.1%	15.1%	19.4%	83.7%	90.9%
Russell 1000 Value Index	2.4%	8.3%	11.2%	11.5%	67.7%	102.6%

Source: BlackRock

At month end
Net asset value – capital only:	181.75p
Net asset value – cum income:	182.29p
Share price:	180.00p
Discount to cum income NAV:	1.3%
Net yield¹:	4.4%
Total assets including current year revenue:	£125.6m
Gearing:	Nil
Options overwrite:	15.0%
Ordinary shares in issue²:	68,874,044
Ongoing charges³:	1.1%

¹ In line with the dividend policy announced in the Annual Report on 13 December 2017 of dividends amounting to 8.00p per share for the year ending 31 October 2018 and based on the share price as at close of business on 31 August 2018.

² Excluding 31,487,261 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 2017.

Benchmark Sector Analysis	Total Assets (%)
Financials	26.6
Health Care	17.3
Energy	11.7
Information Technology	11.2
Industrials	8.0
Consumer Staples	6.6
Utilities	4.9
Consumer Discretionary	3.8
Telecommunication Services	3.6
Materials	2.2
Net current assets	4.1
	-----
	100.0
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Country Analysis	Total Assets (%)
United States	79.9
United Kingdom	5.0
Canada	3.1
Ireland	2.6
Netherlands	2.4
France	0.9
Denmark	0.8
Germany	0.6
China	0.4
Switzerland	0.2
Net Current assets	4.1
	-----
	100.0
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Ten Largest Investments
Company	Country of Risk	Total Assets (%)
JPMorgan Chase	USA	4.1
Pfizer	USA	3.8
Bank of America	USA	3.5
Citigroup	USA	3.4
Verizon Communications	USA	3.4
Wells Fargo	USA	3.3
Oracle	USA	2.9
Anthem	USA	2.5
Suncor Energy	Canada	2.4
Microsoft	USA	2.4

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

For the one-month period ended 31 August 2018, the Company’s NAV increased by 2.3% while the share price increased by 5.2% (all in sterling). The Company’s benchmark, the Russell 1000 Value Index, returned 2.4% for the period.

The largest contributor to relative performance was stock selection in the consumer discretionary sector, most notably in the specialty retail industry. In utilities, stock selection in electric utilities also boosted relative performance. Other notable contributors included our overweight to the health care providers & services industry and a combination of stock selection and an overweight to the information technology sector.

The largest detractor from relative performance was a combination of allocation decisions and stock selection in the financials sector. Notably, an underweight to the diversified financial services industry proved costly, as did stock selection in the banks industry. The portfolio’s cash position, which averaged 5.6% during the period, weighed on relative returns amid rising U.S. equity prices. Other notable detractors included our underweight to real estate and stock selection in the industrials sector.

The portfolio’s option overwriting strategy detracted from absolute returns in August. This should be understood within the context of rising U.S. equity market prices.

Transactions/Options

Transactions: In August we initiated new positions in Mondelez International, Inc., Nestlé S.A. and Newell Brands Inc. Position sizes in Verizon Communications Inc., Marathon Petroleum Corporation, Arthur J. Gallagher & Co. and The Williams Companies, Inc. were also increased. Conversely, we exited our positions in Chevron Corporation, Royal Dutch Shell plc and Lincoln National Corporation. Other notable trades included trimming our existing positions in The Kroger Co, Bank of America Corporation and KeyCorp.

Options:  As of 31 August 2018, the Company’s options exposure was 15.0% and the delta of the options was 87.6. 

Positioning

As of the period end, the Company’s largest overweight positions relative to the benchmark were in the health care, financials and information technology sectors. The Company’s largest underweight positions relative to the benchmark were in the real estate, consumer discretionary and materials sectors.

Source: BlackRock.

19 September 2018

Latest information is available by typing blackrock.co.uk/brna on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.

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