Editing BlackRock Sustainable American Income Trust
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There are three main elements to BRSA’s investment process: | There are three main elements to BRSA’s investment process: | ||
Idea generation – the managers aim to identify the best ESG and alpha opportunities from an investment universe primarily made up of North American large- and medium-cap equities, although up to 25% of the portfolio can be invested in liquid non-North American companies. ESG exclusion screens are used to narrow the investment universe. The managers are able to leverage the best fundamental and thematic ideas from BlackRock’s US income & value platform to generate a pipeline and prioritise the research agenda. | |||
Fundamental research – this involves assessing the materiality of a firm’s ESG and sustainability factors and evaluating its important earnings drivers, along with engaging with company managements on business and ESG issues. A research document is prepared to illustrate the investment thesis and is discussed within the investment team. The managers evaluate how and over what time frame they expect their research insights to be reflected in a company’s share price. | |||
Portfolio construction – the fund typically has 30–60 high-conviction positions. Gearing of up to 20% of net asset value (NAV) is permitted, but is likely to be in a 0–10% range, with 5% seen as a neutral level. There are clear buy and sell disciplines for both fundamental and ESG considerations. Portfolio risks and exposures are carefully monitored, with an emphasis on stock-specific risk. The fund is diversified by sector, industry and style factors. | |||
== The fund managers: Tony DeSpirito, David Zhao and Lisa Yang == | == The fund managers: Tony DeSpirito, David Zhao and Lisa Yang == |