With the contentious US presidential election seemingly settled and Covid-19 vaccines on the way, multinational companies that do best during periods of global growth could see a more favourable backdrop.

That scenario would be welcomed by the BlackRock North American Income Trust (BRNA), a value-oriented fund invested in higher-quality large businesses.

BlackRock North American Income has scope for performance improvement if value names continue to rally. As such, a 6.5% discount to net asset value (NAV) and 4.9% dividend yield should appeal to income seekers in the ongoing era of persistent low interest rates.

Its 12-month average discount to NAV is 4%, according to Winterflood, meaning investors can currently pick up the trust at a real bargain price. A slight downside is that its 1.1% ongoing charge is higher than the AIC North American sector average of 0.96%.

Launched in late 2012, BlackRock North American’s objective is to provide an attractive and growing level of income along with long-term capital growth. It has the capacity to invest up to 20% overseas at the time of investment.

Managers Tony DeSpirito, Franco Tapia and David Zhao seek to uncover dynamic companies with dividend growth potential and the power to compound growth over many years, and they use options to generate additional income for shareholders.

‘The managers have a long-term history of working together, including at Pzena Investment Management before they joined BlackRock North American,’ says Kepler analyst William Sobczak. ‘They believe this familiarity helps their investment decisions – in particular, enabling honest and open debate during the stock selection process.’

When it comes to stocks, DeSpirito, Tapia and Zhao look for high-quality franchises and companies with strong dividend payout potential while keeping an eye out for dividend initiations too.

The trust’s emphasis on quality, cash-generative businesses that can grow their dividends over time – principally financials such as insurers and banks, energy infrastructure stocks and software companies that aren’t egregiously valued yet boast predictable growth trajectories – means the portfolio also has a defensive bent that should serve shareholders well if the pandemic-induced recession lingers for long.

As at the end of October, top 10 positions included mobile phone network Verizon and banking behemoths Bank of America and Citigroup, as well as media giant Comcast and health insurer Anthem.

According to the latest factsheet, the managers initiated new positions in Zimmer Biomet, Exelon, Philip Morris, British American Tobacco (BATS) and First American Financial in October, while exiting BP (BP.) and reducing exposure to Wells Fargo, Altria, BAE Systems (BA.), Medtronic and Verizon.

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