BlackRock American Income (BRAI)

It has now been a little more than a year since BlackRock American Income (BRAI) adopted a systematic active equity (SAE) investment process, which leverages big data, artificial intelligence (AI), and human expertise. The managers, Travis Cooke and Muzo Kayacan, invest in a large number of stocks and avoid significant overweight or underweight positions in specific sectors or holdings, aiming to generate alpha through many small active bets.

BRAI has delivered strong returns since the implementation of this new strategy in April 2025, with the trust having comfortably outperformed both its benchmark and the S&P 500. Performance has also been strong over the past 12 months, notably thanks to overweight positions in capital markets-exposed banks, alongside storage and semiconductor-related companies that had been left behind in previous years of the AI rally but have benefitted from the buildout of AI infrastructure since the start of 2026.

As a result, exposure to these companies has been reduced. Conversely, several software businesses have been added to the Portfolio, particularly those with strong fundamentals and competitive advantages. Software companies experienced a sell-off in early 2026, which caused many to move into the value universe; however, the team’s model has identified improving market sentiment. Exposure to energy and chemicals companies has also been increased, as these offer attractive valuations, strong quality characteristics, and could benefit from several tailwinds.

So far in FY 2026, BRAI has paid its first two interim Dividends, amounting to 3.55p and 3.75p respectively, resulting in a historic yield of c. 5%. The trust is also currently trading at a small premium, representing strong demand for the shares, with the board having issued new shares to manage it.