Portfolio Update

BLACKROCK NORTH AMERICAN INCOME TRUST plc (LEI: 549300WWOCXSC241W468)
All information is at 31 May 2019 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	-2.1%	4.2%	-0.1%	5.7%	46.7%	82.8%
Share price	-1.9%	4.2%	1.3%	10.4%	57.6%	97.3%
Russell 1000 Value Index	-3.2%	2.9%	-0.8%	7.1%	45.4%	82.6%

Source: BlackRock

At month end
Net asset value – capital only:	170.57p
Net asset value – cum income:	171.66p
Share price:	176.00p
Premium to cum income NAV:	2.5%
Net yield¹:	4.5%
Total assets including current year revenue:	£125.0m
Gearing:	Nil
Options overwrite:	15.1%
Ordinary shares in issue²:	72,849,044
Ongoing charges³:	1.1%

¹ In line with the dividend policy announced in the Annual Report on 17 December 2018 of dividends amounting to 8.00p per share for the year ending 31 October 2019 and based on the share price as at close of business on 31 May 2019.

² Excluding 27,512,261 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 2018.

Benchmark Sector Analysis	Total Assets (%)
Financials	25.8
Health Care	16.2
Information Technology	11.5
Energy	10.5
Consumer Staples	7.9
Communication Services	6.2
Industrials	5.7
Consumer Discretionary	3.6
Utilities	2.7
Materials	2.7
Net current assets	7.2
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	100.0
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Country Analysis	Total Assets (%)
United States	74.4
United Kingdom	6.2
Netherlands	3.0
Ireland	2.8
Switzerland	2.6
Canada	1.5
Germany	1.4
Denmark	0.5
France	0.4
Net current assets	7.2
	-----
	100.0
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Ten Largest Investments
Company	Country of Risk	Total Assets (%)
Verizon Communications	USA	4.2
JPMorgan Chase	USA	3.6
Wells Fargo	USA	3.5
Citigroup	USA	3.2
Bank of America	USA	2.8
BP Group	United Kingdom	2.4
Microsoft	USA	2.4
Pfizer	USA	2.4
Oracle	USA	2.3
Medtronic	Ireland	2.2

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

For the one-month period ended 31 May 2019, the Company’s NAV decreased by 2.1% while the share price decreased by 1.9% (all in sterling). The Company’s benchmark, the Russell 1000 Value Index, returned -3.2% for the period.

At the sector level, the largest contributor to relative performance was stock selection and allocation decisions in the health care sector. Notably, a combination of stock selection and an overweight to the health care providers & services industry proved beneficial, as did selection decisions in pharmaceuticals. In industrials, stock selection in aerospace & defence and an overweight to the building products industry boosted relative returns. Other contributors in the sector included our underweight allocations to airlines and machinery. Lastly, the portfolio’s cash position, which averaged 8.6% during the month, contributed positively amid declining stock prices.

The largest detractor from relative performance was our underweight allocation to real estate. We view real estate valuations as expensive and continue to maintain 0% exposure to the sector. In utilities, an underweight to the multi-utilities and electric utilities industries weighed on relative returns. Lastly, stock selection in communication services and materials hindered relative performance.

The portfolio’s option overwriting strategy contributed to performance in May amid falling U.S. stock prices.

Transactions/Options

Transactions: In May, the portfolio initiated a new position in Imperial Brands and added a new position in Corteva through the spin-off from DowDuPont. We also added to existing positions in Anthem and Marathon Petroleum. Conversely, we exited our positions in 3M Company and Apple and trimmed our existing positions in Anadarko Petroleum and Oracle Corporation.

Options:  As of 31 May 2019, the Company’s options exposure was 15.1% and the delta of the options 87.6. 

Positioning

As of the period end, the Company’s largest overweight positions relative to the benchmark were in the financials, information technology and energy sectors. The Company’s largest underweight positions relative to the benchmark were in the real estate, utilities and industrials sectors.

Source: BlackRock.

12 June 2019