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Fund Profile

BlackRock Sustainable American Income 31 December 2019

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by BlackRock Sustainable American Income. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
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Overview

BlackRock North American Income Trust (BRNA) offers investors a portfolio of high-quality US companies at attractive valuations, with a track record of strong dividend growth. The trust is overseen by Tony DeSpirito (lead manager), Franco Tapia (co-manager) and David Zhao (co-manager).

Last year, in an attempt to attract new investors, the board announced a shift in strategy, increasing the dividend by 62% and allowing a proportion to be funded from capital. At the current share price the trust offers investors a yield of 4.3%. The move has paid off and the trust now trades at a premium of 1.2%.

BRNA believes that companies which pay dividends have stronger management teams, and that those that can grow their dividends offer attractive long-term returns at lower levels of volatility. To find these companies, the team uses a bottom-up, stock-specific approach, starting with a universe of the 500 largest US companies by market cap and breaking it down by fundamental analysis.

Since the current managers took over in 2014, there has been a marked improvement in the trust’s performance: it has now outperformed the benchmark Russell 1000 Value index in four of the past five calendar years, and this has been achieved at low levels of beta.

Analyst's View

Currently yielding 4.5%, BRNA is an attractive option for investors looking for a source of equity income that isn’t the ‘usual suspect’ UK. Since changing its management team in 2014, the trust has been a true turnaround story. The impact that Tony has had on the portfolio has been stark, as we illustrate in the Performance section. Over three years he has generated the highest alpha of any manager focusing on North America excluding Canada (1.51), at relatively low levels of standard deviation (19.42%).

The manager has shown a clear capacity to capture upside and limit downside, all the while delivering a strong level of income. Given the uncertain environment for world equities, we are not surprised that the trust now trades at a premium, and believe that BRNA is well suited to a more uncertain environment of elevated economic and political risks.

bull bear
Strong track record of delivering total returns
Trading at a premium
Now yielding 4.5%, with the Board having increased the dividend by over 60% last year
Current uncertainty surrounding US market conditions
Low levels of relative volatility are attractive in the current uncertain environment

Continue to Portfolio

Fund History

04 Apr 2024 Fund Analysis
BRSA's portfolio trades at a significant P/E discount to the US market and is defensively positioned...
08 Feb 2024 Results analysis: BlackRock Sustainable American Income
BRSA's reference index, the Russell 1000 Value Index, is at an historical low in valuation terms...
10 Nov 2023 LATAM rate cuts and central bank gold buying
We take a look at some of the highlights of our BlackRock event…
03 Nov 2023 The inflation reduction act: one year on
The US’s vast climate change legislation programme is a year old. The team managing the BlackRock Sustainable American Income Trust says the Act is driving innovation in new transition technologies...
31 Oct 2023 BlackRock Sustainable American Income
Steve Farkas
Rewatch this webinar which was part of our October and November online event 'The Best of BlackRock'...
Watch Recording
06 Sep 2023 You should be dancing…
North America should be a core part of any portfolio…
07 Jun 2023 Under pressure
We identify the equity trusts which have delivered the best downside protection in recent years...
19 May 2023 The year ahead in US stock markets
Markets may have seen a short-lived rally in the latter part of 2022, but with tough economic conditions ahead, it is important to focus on those companies that can sustain their earnings, says Lisa Yang, manager of the BlackRock Sustainable American Income trust plc...
20 Apr 2023 Fund Analysis
BRSA: with a repeat of the last ten years of stock market behaviour seemingly unlikely, could value and sustainability come to the fore..?
31 Jan 2023 Results analysis: BlackRock Sustainable American Income
BRSA’s value-based investment style shows defensive qualities in difficult market conditions…
22 Sep 2022 Fund Analysis
BRSA’s ESG-conscious approach to US value investing has generated positive near-term returns despite the market rout…
07 Sep 2022 American muscle
Beating US indices is a monumental task. We examine the closed- and open-ended North American sectors to see how they have fared…
27 Jul 2022 Has the comeback begun?
Our analysts debate whether the market has fully priced in the current inflation and looming recession…
13 Jul 2022 Ready player one
We wonder where, if anywhere, should investors look for returns after a tumultuous first half of the year…
13 May 2022 Time to reappraise the ‘value’ approach?
After a tough decade, the environment for the value approach is improving, says Lisa Yang, Co-Manager of the BlackRock Sustainable American Income Trust plc. Is it time for investors to take note?
27 Apr 2022 Finding value in a haystack
Non-income value strategies are becoming increasingly scarce, but the holdouts represent attractive near-term opportunities…
25 Mar 2022 Slides and Audio: BlackRock Sustainable American Income
Download the presentation and listen to the audio from our 'Ideas for your ISA' virtual Spring event on 15 March...
23 Mar 2022 Fifteen ideas for your ISA
Slides and audio from our event last week, featuring fund managers running money in every major market in the world...
23 Feb 2022 Regime change
Ahead of our spring conference, we ask whether investors need to junk their portfolios and start again…
17 Feb 2022 Results analysis: BlackRock Sustainable American Income
Reporting results for the year ending 31 October 2021, BRSA has succeeded in combining sustainable investing with an outperforming value-stock bias…
15 Dec 2021 Fund Analysis
BRSA’s new sustainable approach to US value investing represents a highly distinct strategy…
08 Dec 2021 We are the (ESG) champions
Investment trusts tend to be amongst the best-performing ESG strategies in the combined open- and closed-ended universe…
24 Nov 2021 Holding back the tears
While the final text of COP26 fell short of what many had hoped for, the writing is on the wall for fossil fuels and, from an investment perspective, the age of sustainability has only just begun…
17 Nov 2021 How Do You Like Them Apples
Judging whether the US market is expensive is not as easy as many make it out to be…
03 Nov 2021 Don't fear the reaper
With market direction hard to call, we consider the case for taking a long-term view in the investment trust sector…
20 Oct 2021 Board games
Investment trust boards talk a good game about championing shareholders interests - but do they really deliver?
28 Jul 2021 How are the mighty fallen
Dividend culture as we knew it is dead, according to Kepler's David Johnson, but investment trusts offer a solution...
20 Jul 2021 Fund Analysis
Proposed shifts in BRNA’s strategy towards sustainable investing may improve its return profile and be the catalyst for a narrowing discount….
22 Apr 2021 FAANGs for the memories
The massive outperformance of mega-cap tech last year could become a thing of the past if anti-trust legislation and negative sentiment starts to bite...
12 Feb 2021 Results analysis: BlackRock North American Income
With a strong start to the year, BRNA has a number of catalysts to drive performance in 2021 and an attractive yield of 4.7%...
07 Jan 2021 Fund Analysis
BRNA offers a disciplined US value opportunity with superior income attributes…
19 Nov 2020 Hope springs eternal
The US election has given long-suffering value investors new hope of a 'great rotation' in their favour, but that light at the end of the tunnel could in fact be a train…
01 Oct 2020 Alternatives for Income Investors
Slides and audio from our event focused on alternative routes to a reliable income…
30 Sep 2020 Slides and Audio: BlackRock North American Income
View the presentation and listen to the audio from our 'Alternatives for Income Investors' event on 29 September...
20 Aug 2020 Alternatives for income investors
In a world where dividend are under unprecedented pressure, our income focused online event in September should provide serious food for thought…
09 Jul 2020 Fund Analysis
BRNA offers a 5% yield from a portfolio of high quality US companies…
18 Jun 2020 Gimme shelter
As income investors brace for impact we ask which regions and trusts are less likely to cut their dividends in 2020…
27 Apr 2020 What does defensive investing mean today?
As investors reflect on the damage inflicted by the coronavirus outbreak on their portfolios in recent weeks, they may be looking for a way to build in greater resilience. However, traditional defensive investment strategies may not be the answer...
13 Feb 2020 Choose your own adventure
Predicting the future is impossible, but identifying which trends have coincided in the past can give us clues about what may be to come...
31 Dec 2019 Fund Analysis
Since a management change in 2014, BRNA has been one of the great turnaround stories...
12 Dec 2019 Regime change: how manager changes impact performance
Does a change in manager result in improved trust performance?
25 Sep 2019 Where next for the US stock market?
12 Jun 2019 Fund Analysis
In the current volatile environment, this trust appears a stand out candidate for more cautious investors...
31 Oct 2018 Fund Analysis
A diversified portfolio comprised mainly of US equities, BRNA produced almost double the return in NAV terms of the Russell 1000 Value index in 2017, and has comfortably outperformed the benchmark so far in 2018...
31 Oct 2018 The Trump effect
Two years after the shock election of Donald Trump, we take a look at what the Trump administration has really meant for US markets and the trusts that invest in them...
26 Apr 2018 The $23.9 trillion dollar question*
Are US equities, which have hit record highs on 71 occasions in the last 12 months, overpriced or are they actually trading at a price worth paying?
26 Apr 2018 Fund Analysis
A large cap portfolio, focused on high quality companies, positioned for an inflationary environment with significant exposure to banks
16 Jan 2018 Fund Analysis
A large cap US equity portfolio offering a stronger yield than most of its peers, positioned for an inflationary environment...
28 Jun 2017 What does the future hold for US markets?
As the 45th president of the United States settles into the role, BlackRock North American Income Trust co-manager Tony DeSpirito talks about the future for the North American markets in the wake of a new political and economic environment.
27 Jun 2017 What's driving frontier markets?
Can political and economic reforms make a difference when it comes to looking for growth?
15 Jun 2017 Signs of continental shift
BlackRock's Stefan Gries explains what's driving opportunities in Greater Europe...
13 Jun 2017 Fund Analysis
An income-orientated US equity trust with a decent track record of outperformance since its change in strategy...
12 Jun 2017 Right place, right time
BlackRock's David Zhao and Franco Tapia explain how 2016 was a year of two halves for the US stock markets as the prospect of a return to growth improved the fortunes for certain market sectors.
08 Jun 2017 The long game
Highlights from BlackRock Income & Growth's annual general meeting...
05 Jun 2017 Emerging Opportunities
BlackRock's Chris Colunga discusses the advantages of emerging European countries...
View all

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The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
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