Portfolio Update

BLACKROCK NORTH AMERICAN INCOME TRUST plc (LEI: 549300WWOCXSC241W468)
All information is at 30 September 2018 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	-0.5%	6.8%	16.1%	12.8%	73.7%	102.0%
Share price	-0.6%	4.6%	23.3%	20.6%	91.7%	95.9%
Russell 1000 Value Index	-0.1%	7.0%	15.0%	12.6%	70.1%	106.6%

Source: BlackRock

At month end
Net asset value – capital only:	180.52p
Net asset value – cum income:	181.46p
Share price:	179.00p
Discount to cum income NAV:	1.4%
Net yield¹:	4.5%
Total assets including current year revenue:	£125.0m
Gearing:	Nil
Options overwrite:	14.0%
Ordinary shares in issue²:	68,874,044
Ongoing charges³:	1.1%

¹ In line with the dividend policy announced in the Annual Report on 13 December 2017 of dividends amounting to 8.00p per share for the year ending 31 October 2018 and based on the share price as at close of business on 30 September 2018.

² Excluding 31,487,261 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 2017.

Benchmark Sector Analysis	Total Assets (%)
Financials	25.5
Health Care	17.6
Energy	11.8
Information Technology	11.2
Industrials	8.3
Consumer Staples	6.7
Utilities	4.9
Consumer Discretionary	3.9
Telecommunication Services	3.6
Materials	2.0
Net current assets	4.5
	-----
	100.0
	=====

Country Analysis	Total Assets (%)
United States	79.4
United Kingdom	5.2
Canada	2.9
Ireland	2.7
Netherlands	2.3
France	0.9
Denmark	0.7
Germany	0.7
China	0.4
Switzerland	0.3
Net current assets	4.5
	-----
	100.0
	=====

Ten Largest Investments
Company	Country of Risk	Total Assets (%)
Pfizer	USA	4.0
JPMorgan Chase	USA	4.0
Citigroup	USA	3.4
Verizon Communications	USA	3.3
Bank of America	USA	3.2
Wells Fargo	USA	3.0
Oracle	USA	2.6
Anthem	USA	2.6
Microsoft	USA	2.4
Suncor Energy	Canada	2.3

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

For the one-month period ended 30 September 2018, the Company’s NAV decreased by 0.5% while the share price fell by 0.6% (all in sterling). The Company’s benchmark, the Russell 1000 Value Index, returned -0.1% for the period.

The largest contributor to relative performance was stock selection in the information technology sector, most notably in the semiconductors & semiconductor equipment industry. Overweight exposure to the software industry also proved beneficial. In real estate, underweight exposure to the sector boosted relative performance, and in utilities, stock selection among multi-utilities and electric utilities enhanced relative returns. Other notable contributors included overweight exposure to the health care providers & services industry and underweight exposure to the materials sector.

The largest detractor from relative performance was stock selection in the energy sector. Notably, selection decisions in the oil, gas, & consumable fuels industry proved costly. In the financials sector, a combination of stock selection and allocation decisions proved detrimental. Our overweight to banks was especially costly, as the industry fell out of favour with investors amid a flattening U.S. yield curve. Stock selection in the newly established communication services sector was also a source of underperformance for the month, as our preference for Verizon Communications relative to AT&T. weighed on relative returns. Stock selection in the consumer discretionary was also a notable detractor.

The portfolio’s option overwriting strategy detracted modestly from absolute returns in September. This should be understood within the context of rising U.S. equity market prices.

Transactions/Options

Transactions: In September we initiated a new position in State Street Corp, an American financial services and bank holding company. Position sizes in Microsoft, Verizon Communications, PepsiCo, and Aetna were also increased. Conversely, we exited our positions in General Mills, KeyCorp, and The Kroger. Other notable trades included trimming our existing positions in Oracle, American International Group, and Union Pacific.

Options:  As of 30 September 2018, the Company’s options exposure was 14.0% and the delta of the options was 88.9. 

Positioning

As of the period end, the Company’s largest overweight positions relative to the benchmark were in the health care, financials, and information technology sectors. The Company’s largest underweight positions relative to the benchmark were in the real estate, consumer discretionary, and materials sectors.

Source: BlackRock.

15 October 2018

Latest information is available by typing blackrock.co.uk/brna on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.