Alan Ray
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Updated 08 Feb 2024
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This is a non-independent marketing communication commissioned by BlackRock. 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.

  • For the 2023 financial year, ending 31/10/2023, BRSA’s NAV and share price total return were -5.6% and -8.1% respectively, compared to a total return of -5.0% for the reference index, the Russell 1000 Value Index. Over the same period, the S&P 500 Index total return was 4.5% (all returns in sterling terms).
  • The S&P 500's performance was driven by a small number of mega-cap technology stocks, many of which do not have high dividend yields, benefiting from investor enthusiasm for new artificial intelligence technologies, which resulting in extremely strong share price performances.
  • One of these stocks, Meta, briefly entered BRSA's reference index but the managers chose not to own it first because it has no historical record of paying a dividend and second because its ESG scores are poor. Not owning this stock was one of the main factors behind the underperformance of the reference index. Increased scrutiny of ESG funds in certain US states also made for a challenging environment. It was also a generally challenging environment for value stocks, and the team estimates that the reference index is at one of its largest price to earnings discounts to the wider market in the last ten years.
  • BRSA’s revenue earnings per share was 3.67p (2022: 3.84p), a decrease of 4.4%. Four quarterly interim dividends totalling 8.0p were paid (2022: 8.0p), equivalent to a 4.6% yield. The same policy and dividend amount will be in place for 2024, with dividends funded from current revenues and distributable reserves.
  • The trust achieved a superior ESG score versus its reference index, as measured by MSCI, with an overall rating of AA, as well as a lower carbon emissions intensity than the same index. The FCA introduced its Sustainable Disclosure Requirements (SDR) in 2023, which differ from the EU equivalents that the trust currently complies with, and the board and manager are considering the implications of these and any changes that may be needed in order to comply, with a deadline for compliance of 2 December 2024.
  • Over the financial year BRSA traded at an average discount of 6.0%, and the board repurchased 240,000 shares at an average discount of 9.1%. A further c. 780,000 shares were purchased post year end up to the beginning of February, with all shares held in treasury. Renewed authority to repurchase shares will be put to shareholders at the forthcoming AGM.
  • Alice Ryder, Chair, said “Against a background of macroeconomic uncertainty and market volatility, our portfolio managers are of the view that an active approach to investing is likely to carry greater rewards. Additionally, our portfolio managers believe quality stocks with higher profitability, stronger balance sheets and stable earnings growth should outperform in an environment of persistent investor concerns over a mild recession in the US and other major developed economies. These are the fundamentals that our portfolio managers continue to favour within your company’s portfolio."

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