Investors in the US may be preoccupied by a possible trade war with China and rising interest rates but the manager of North American Income Trust (NAIT) is relatively upbeat. He points out that the US economy is doing better than most other developed economies; stock markets have corrected and are some way off their peaks; investors’ narrow focus on growth stocks has abated somewhat, which should help the sorts of stocks that NAIT favours; and, crucially for a trust that has an income mandate, dividends are set for a positive step change.
NAIT’s long-term total returns remain well ahead of value-based indices and the trust’s direct competitor (see page 10). However, NAIT’s focus on quality, dividend paying stocks has seen it lag the wider US market, where performance over the last couple of years has been driven mainly by low/zero yielding technology stocks. With the market looking more volatile, NAIT’s manager will be seeking opportunities to add to stocks that meet his quality criteria, at attractive valuations.
Above average income and long-term growth
NAIT’s objective is to invest for above-average dividend income and long-term capital growth, mainly from a concentrated portfolio of US equities in the S&P 500 index.
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