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(Sharecast News) - BlackRock American Income Trust reported an improvement in performance and investor sentiment in the year ended 31 October on Wednesday, alongside the launch of a new systematic investment strategy and an enhanced income policy.
The London-listed trust generated a net asset value total return of 11.5% over the year, while the share price total return reached 20.9%, outperforming its benchmark, the Russell 1000 Value Index, which returned 8.4% on a net total return basis.
Net assets stood at 129.5m at the year end, with net asset value per share rising to 229.56p from 216.24p a year earlier.
The share price closed the period at 218p, narrowing the discount to net asset value to 5.0%, compared with 12.1% at the prior year-end, and the discount had further tightened to 1.2% by 30 January.
During the year, the company implemented a revised investment mandate managed by BlackRock's Systematic Active Equity team, combining quantitative techniques, big data and artificial intelligence while retaining a focus on US value stocks and dividends.
The change, which took effect on 17 April#, was accompanied by a reduction in management fees and a six-month fee holiday to the end of October, contributing to a fall in ongoing charges to 0.73% from 1.06%.
An enhanced dividend policy was also introduced, providing for quarterly payments equivalent to 1.5% of net asset value, or 6% on an annualised basis.
Total dividends for the year amounted to 11.7p per share, up from 8p in 2024, despite revenue earnings per share declining to 2.83p from 3.39p, reflecting the trust's shift away from targeting income generation at the portfolio level.
David Barron, chairman of the company, said the changes had created a differentiated proposition for investors.
"The company's systematic investment approach, which we believe is truly innovative and the first of its kind in the UK investment company sector, its diversified exposure to US value stocks beyond the US mega cap names, and its enhanced income mean it is a truly differentiated proposition," he said.
"We are pleased that since the change in strategy, the company has outperformed its benchmark and seen a significant narrowing of its discount."
Net profit after tax for the year was 10.95m, down from 22.57m in the prior year, reflecting lower capital gains, while revenue profit fell to 1.78m from 2.6m.
The board said it remained confident that the new systematic approach would support long-term returns and income, supported by an enhanced discount control mechanism and continued share buyback authority.
At 1342 GMT, shares in BlackRock American Income Trust were down 0.16% at 236.62p.
Reporting by Josh White for Sharecast.com.