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North American Income Trust PLC on Wednesday reported an increased interim dividend, as it expressed confidence in its portfolio’s resilience amid challenges from tariffs and fiscal policy. The Edinburgh-based investor in US equities reported a net asset value per share of 367.9 pence at July 31, down 3.0% from 379.2p at January 31. NAV per share total return, including dividends reinvested, was negative 1.2% for the half year. Reference indices the Russell 1000 Value Index and the S&P High Yield Dividend Aristocrats Index lost 4.3% and 3.0%, respectively. ‘The first half of our financial year has been challenging, with an initial steep fall in the US markets from February to mid-April caused by the US government’s introduction of tariffs on imports. In late April, as pauses to the implementation of tariffs were announced, markets staged a rapid recovery,’ noted Chair Charles Park. In terms of equities, power management company Eaton Corp provided the largest contribution to performance, as it reported strong sales and margin performance, said North American Income. Semiconductor supplier Broadcom Inc also positively impacted performance, with it continuing to see ‘strong demand for its Application-Specific Integrated Circuits.’ The trust said pharmaceutical company Bristol-Myers Squibb Co underperformed, as it faced pressure from legacy drugs and a setback in a phase three schizophrenia trial. Information technology and management consulting company Accenture PLC also detracted from fund performance, as the stock derated amid AI-related threats to the consulting industry. North American Income declared a second interim dividend of 2.8p per share bringing the total half-year dividend to 5.6p, up 3.7% from 5.4p a year prior. Its shares were 0.2% lower at 351.43 pence on Wednesday morning in London. ‘We believe that the high-quality nature of the company’s portfolio holdings should provide resilience against current external challenges, whether related to tariff implementations or new fiscal policies. From a valuation standpoint, we are comfortable with the average forward price to earnings multiple of approximately 16x for the companies in the portfolio. However, we have reduced positions in certain overextended market areas. ‘Revenue-wise, dividend growth remains consistent with previous periods, thanks to the predictable cash flow and strong balance sheets of the companies in the portfolio. We continue to focus on resilient companies that do not rely on macroeconomic tailwinds for growth and possess the resources to invest in their future,’ commented co-fund managers Fran Radano and Jeremiah Buckley. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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