Hi, I’m Fran Radano, one of the managers of the North American Income Trust. I’m here with my colleague Jeremiah Buckley to talk about the results for the fiscal year ending January 2025.

For the North American Income Trust, we had a strong year returning 23.8% on a total return basis, which compared favourably to the 22.5%
return of the Russell 1000 value index and the 14.9% return of the S&P high yield dividend Aristocrats index.

Revenues for the trust grew 3.5%, which is a bit less than the dividend growth of the underlying companies of 6 to 7%, and this was primarily due to currency headwinds and to a lesser extent the lack of option writing during
the transition of the trust to Janus Henderson.

We declared a final dividend of 4.1p, which ended the year with total dividend payments of 12.2p. This was a 4.3% increase year over year, and we continue to build revenue reserves which are also over one year as they have been for the past three years. And now Jeremiah Buckley is here to talk about stock performance and the changes in the portfolio during this past fiscal year.

Great, thanks, Fran. So drilling down onto the performance during the period, uh, our focus will be mostly on the second half, which is when Janus Henderson was responsible for the performance and and managing the portfolio. From an attribution standpoint relative to our index, uh, we saw the strongest performance in the information technology sector where we had an overweight to the sector and we had strong security selection. Our second best performing sector was healthcare where while the healthcare sector was weaker than the overall market, we did have strong security selection during the period and the two sectors that were detrimental to our performance relative to the index were the industrial sector, where our security selection underperformed relative to the benchmark as well as the real estate sector where we were overweight but the sector suffered relative to the benchmark because of sticky high interest rates from a specific stock standpoint, one of our biggest contributors on the positive side was Broadcom, a semiconductor company which is benefiting from demand for their ASICs products or application specific integrated circuits where they’re seeing significant demand from hyper scalers who are responsible for building out the infrastructure for AI. They’ve also done a really great job integrating the VMware software business and are starting to see an uptick in their analogue semiconductor piece of the business. They grew the dividend 12% year over year.

A second positive contributor was Morgan Stanley, which towards the end of the period saw substantial growth in their investment banking business as well as their trading businesses. As capital market trends were strong and optimism around 2025 started to build throughout the year, they also saw strong growth in their wealth management business because of higher asset prices, but also net interest income started to grow again as deposit outflows tapered down. They also grew the dividend 9% year over year.

One last contributor was IBM, one of the stronger yielding positions for us, but they’re also starting to see benefits in their revenue growth from a transition to more AI software oriented business and a stabilisation in their consulting business.

On the other side of the ledger, we did have some stocks that detracted from performance during the period.
One of our largest detractors was Amgen as part of the pharma and biotech sector which I mentioned was weaker relative to the index during the period. Amgen also had a specific issue where their anti-obesity therapy didn’t quite meet expectations in phase two, but we still have confidence in the long term
potential of that therapy and believe that it will accelerate growth.

In the coming years, a second detractor to the performance was UPS, United Parcel Services, where they’re still trying to come back from the issues that they had with the labour negotiations that impacted their volumes during the period, and we’ve also seen a weaker freight market due to excess inventories in the retail as well as the industrial supply chains.

We continue to evaluate that position or it’s worth in the portfolio. During the period we made significant changes to the overall portfolio. The strategy was to increase the yield that we were getting from old economy sectors like financials and health care and industrials so that we could create the flexibility to own lower yielding but faster growing companies in the new economy sectors like information technology and communication services, we did this with the intention of continuing to maintain the yield that we’ve historically had in the portfolio by using this barbell approach. As a result of that we’ve had significant increases in our positioning and waiting and information technology focusing on companies that were contributing to the AI infrastructure build out as well as software companies that were benefiting from the applications that will be using AI going forward and providing efficiency gains for their customers.

We also materially increased our positioning within the healthcare sector, as I mentioned, not only did health care underperform during the previous period, but for the last couple of years and so we’re finding attractive dividend yields as well as valuations in the sector, and we believe that we’re on the cusp of an innovation wave that will increase the revenue growth outlook going forward as well. On the other side of the ledger we reduced positions and our weightings in sectors like financials, materials, as well as consumer staples as we believe this barbell approach. Has a better overall yield and growth profile than some of the ideas that we had in those sectors. With that I’ll turn it back to Fran to cover our outlook going forward.

Thanks, Jeremiah. It’s been a very interesting period of time here as we’ve seen the macroeconomic volatility reached sort of an unprecedented seemingly unprecedented period that we’re trying to manage this portfolio. We’re not chasing headlines, but we are willing to reposition the trust when we believe there’s dislocations in the market and in stocks specifically. When we look at the underlying portfolio companies within the North American Income Trust, we continue to largely see strong fundamentals, and we also see the ability to not only grow cash flows but to grow earnings. That said, we’re also cognizant of evaluations in this backdrop as well, given the higher interest rates and higher inflation. There’s a wide range of outcomes going forward, and we continue to manage the trust with prudence, and we really look to build an all weather portfolio that can resist these tough times and position us better hopefully we have better times ahead. We’re gonna continue to lean into opportunities as they progress themselves and show themselves, and we will continue to seek progressive dividend payers and be able to continue that revenue stream that we’ve historically done since the inception of the trust.

We’d like to thank you for your support and we look forward to speaking to you all in the future.