The North American Income Trust plc
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Investor Warning

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NMPI Status

The Company currently conducts its affairs so that securities issued by The North American Income Trust plc can be recommended by financial advisers to ordinary retail investors in accordance with the FCA’s rules in relation to non-mainstream pooled investment products (NMPIs) and intends to continue to do so for the foreseeable future.

The Company’s securities are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are securities in an investment trust.

 

Pre-investment Disclosure Document (PIDD)

The Alternative Investment Fund Manager Directive (“AIFMD”) requires Aberdeen Fund Managers Limited, as the alternative investment fund manager of The North American Income Trust plc, to make available to investors certain information prior to such investors’ investment in the Company.

The AIFMD is intended to offer increased protection to investors in investment products that do not fall under the existing European Union regime for regulation of investment products known as “UCITS”.

Read the PIDD for The North American Income Trust

 
 

Morningstar Ratings

Fund Rating

 
 

Risk Warning

The value of investments and the income from them may go down as well as up and investors may get back less than the amount invested. The tax benefits relating to ISA investments may not be maintained. Please refer to the Key Facts documents contained in the ISA/Share Plan Brochure & Application form for general and specific investment risks attaching to the individual trusts.

Read the detailed Risk Warning
 

Past Performance

Past performance is not a guide to future results.
See latest monthly factsheet below for performance history.

 
 

Daily Data

At close 22-Jan-2015

Ord
Price898.00p
NAV959.70p
Prem/-Disc-6.43%
Net Dividend Yield3.12%


Source: Morningstar, NAV = Net Asset Value, excluding income.

 
 
 

Portfolio Holdings Disclaimer

Holdings are subject to change at any time. Holdings should not be relied upon in making investment decisions and should not be construed as research or investment advice regarding specific securities. By accessing the portfolio holdings, you agree not to reproduce, distribute or disseminate the portfolio holdings, in whole or in part.

 
 

The North American Income Trust plc

Objective

To provide investors with above average dividend income and long term capital growth through active management of a portfolio consisting predominantly of S&P 500 US equities. Dividends - paid semi-annually in first year; quarterly thereafter.

 
 

The North American Income Trust plc Half Year Report for the six months to 31 July 14
Paul Atkinson, Head of North American Equities

In this webcast Paul Atkinson gives an update on a wide range of subjects including performance, a sector breakdown, top twenty largest investments and an outlook for the Trust.

Click here to listen to the presentation.

 

 

Manager's Monthly Report

December 2014

Major North American equity indices saw mixed performance in December as continued strength in U.S. economic data was partially offset by ongoing concerns about weakness in Europe and declining oil prices. Third-quarter US GDP grew at a better-than-expected annualised rate of 5.0%, up 1.1 percentage points from the previous estimate due primarily to notable increases in consumer spending and private inventory investment. The NYMEX crude oil price ended the 2014 calendar year at its lowest level in more than nine years. The utilities and financials sectors recorded the highest returns within the broader-market S&P 500 Index for the month as investors sought higher-quality dividend stocks on expectations of a longer period of low interest rates. Conversely, telecommunication services and information technology were the weakest-performing sectors. The US investment-grade fixed income market posted a modest gain in December, but experienced volatility as stronger-than-expected economic data caused a dramatic sell-off in shorter-dated US Treasuries. Yields on two- and three-year maturities rose by 20 and 22 basis points, respectively, and closed the 2014 calendar year at their highest levels of the year. The yield on the 10-year note rose modestly in early December before reversing direction and ending the month virtually unchanged.

In portfolio-related news, diversified global industrials company Emerson Electric (EMR) sold its Power Solutions unit to Regal Beloit Corp., a manufacturer of motors and other electrical parts, for US$1.4 billion. EMR estimates that the sale will generate US$30 million in annual savings within four years. Packaged foods producer Kraft Foods Group announced the retirement of CEO Tony Vernon effective in late December. Vernon will remain with the company as a senior adviser through 31 March, and will stay on as a board member until Kraft’s 2015 annual meeting. Chairman John Cahill was named his successor as CEO. Several Trust holdings announced dividend actions in December. Notably, Pharmaceutical firm Pfizer and healthcare REIT Ventas increased their regular quarterly dividends by 8% and 9%, respectively. In addition, derivatives exchange operator CME Group declared an annual variable dividend of US$2.00 per share. In accordance with its dividend policy, CME Group issues a payout to shareholders of 50% of its prior-year earnings in four quarterly dividends each year. Any excess earnings are paid out as a variable dividend.

During the month, we added to existing equity investments in Starwood Hotels & Resorts and Dow Chemical Co. We trimmed our investment in integrated oil and gas company ConocoPhiliips. We continued to closely monitor our fixed income holdings, especially in context of the weakness in high yield markets and the energy sector. Against this backdrop, we opted to tactically lower the Trust’s allocation to fixed income to roughly 5% of total assets at month-end—its lowest allocation to bonds since the Trust conversion in 2012. To that end, we exited investments in Cincinnati Bell 8.375% due 2020, Genon Energy 9.875% due 2020, Tenneco 6.875% due 2020, and Windstream Corp. 7.75% due 2021, and reduced the position in HSBC Finance Corp 6.676% due 2021.

After a year in which the S&P 500 Index continued its remarkable six-year run, stocks are clearly more fully valued than they had been. We believe valuations have expanded to match improved corporate fundamentals over the same period. And despite share prices of large-cap equities hovering near all-time highs, current valuations on a forward P/E ratio of 16.5 are roughly at median levels over the last 10 years. Looking ahead, we believe that, paired with improved underlying fundamentals, valuation levels remain justifiable, especially in context of the low-interest-rate environment. With mixed data on the labour and inflation, we expect the Federal Reserve to err on extending the period of near-zero rates. We also see lower inflation as a boost to economic growth as lower energy prices flow through both corporations and the consumer in the form of lower input and fuel costs. However, even with these tailwinds, we expect returns to be more tempered in the next 12 months given where current valuations stand. Finally, the recent spike in volatility has led to more dispersion among sector and stock returns, which is a good backdrop for active managers. We anticipate using this to our advantage by adding to our investments that we feel may be indiscriminately punished by the market.

 
 

Trust Details

The North American Income Trust plc

Registered Office:
7th Floor
40 Princes Street,
Edinburgh,
EH2 2BY

Registered in Scotland as an Investment Company Number 005218