The North American Income Trust – Reasons to be cheerful

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 outpacing peers; markets have corrected and are some way off their peaks; investors’ narrow focus on growth stocks has abated somewhat; and, crucially for a trust that has an income mandate, dividends are set for a positive step change (see page 3).

NAIT’s long-term total returns remain well ahead of value-based indices and the trust’s direct competitor. 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 S&P 500 US equities.