23rd Apr 2020 17:08
(Alliance News) - North American Income Trust PLC on Thursday underperformed against its main reference index, which the US-focused investment trust attributed to its stock selection.
For the year to the end of January, North American Income's net asset value total return was 6.2%, lower compared to the Russell 1000 Value Index, which gained 14.6%. The Russell 1000 index measures the performance of the 1,000 largest listed companies in the US.
The trust also underperformed against the S&P 500 Index, which returned 21.4%.
Net asset value per share as at January 31 stood at 288.91 pence, up 3.0% from 280.44p the same date the year before.
North American Income's share price at the end of January was 290.00p, reflecting a 0.4% premium to net asset value.
Shares in North American Income closed 0.5% lower at 239.00 pence on Thursday in London.
The trust said that its underperformance was due to weaker holdings in the materials, communication services and consumer discretionary sectors.
In particular, the main detractors to performance were media company Meredith Corp, following a 2020 earnings guidance that was below expectations, weaker earnings from carbon products maker Orion Engineered Carbons and a subdued 2020 outlook from luxury goods retailer Tapestry Inc.
North American Income declared a total dividend of 9.50 pence per share, up 12% from 8.50p the year before.
"It would seem that the impact on the global economy and markets is going to be severe. The magnitude of the effect will depend largely upon the spread, scale, the duration of the outbreak and governmental actions taken. The total number of coronavirus infections has already exceeded the number of severe acute respiratory syndrome cases reported in 2003, suggesting that the total impact on the global economy will be greater," said Chair James Ferguson.
"We are keeping in close communication with all of the companies under coverage given these unprecedented times. We have not had any dividend cuts or suspensions up to this point, but that is likely a matter of time since certain end markets are effectively closed for business with no certain time for re-opening. Furthermore, there has been some rhetoric from government officials about the suspension of dividends of those companies furloughing employees which may impact dividend payments in subsequent months," Ferguson added.
By Dayo Laniyan; [email protected]
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