BlackRock American Income (BRAI)

BlackRock American Income’s (BRAI) shift to a systematic active equity investment process has made a promising start, with the trust outperforming both its benchmark, the Russell 1000 Value Index, and the S&P 500 since the strategy’s implementation in April 2025. Under this approach, managers Travis Cooke and Muzo Kayacan from BlackRock’s Systematic Active Equity (SAE) team aim to deliver annual outperformance of 1–2% relative to BRAI’s benchmark, leveraging big data, artificial intelligence (AI), and human expertise.

Travis and Muzo avoid large sector or stock-specific bets, aiming to generate alpha through many small active positions. As such, the Portfolio currently offers sector allocation close to that of its benchmark, with similar valuation and quality metrics. At this juncture, the team is seeing opportunities in quality names, as these have been largely ignored over most of 2025, as the market focussed on AI-related companies. However, Travis and Muzo highlight that businesses with strong fundamentals tend to outperform over the long term, and note that the performance of quality names improved in the later months of 2025. That said, they still see opportunities in AI-related stocks and maintain exposure to the theme through names such as Alphabet, Amazon, and Meta.

BRAI adopted an enhanced Dividend policy in its last financial year, under which it pays a quarterly dividend equivalent to 1.5% of the trust’s NAV. As a result, the total dividend increased by c. 46% year-on-year in FY 2025 and the trust currently offers a historic yield of c. 5.5%. Finally, BRAI’s Discount has narrowed significantly since the announcement of the proposal to change its investment objective and policy at the end of February 2025, moving from 7.5% to currently 0.4%.