The board of the BlackRock Income Strategies Trust has confirmed that its assets have now been aligned with the trust’s new investment objective following the appointment of BlackRock as investment manager.
In a portfolio update the investment trust, which was the British Assets investment trust under previous manager F&C Investments, announced its adoption of a multi-asset approach to deliver long-term income to shareholders.
At a general meeting in February this year shareholders had to approve the change to a multi-asset strategy.
The investment trust’s new objective is “over the medium term (five to seven years), to aim to preserve capital in real terms and to grow the dividend at least in line with inflation”.
It will target a total portfolio return of UK Consumer Price Index (CPI) plus 4 per cent per annum (before ongoing charges) over a five to seven year cycle.
Its new multi-asset approach is intended to deliver “consistent, long-term income” to shareholders, with the portfolio divided into equities, global fixed income and alternatives.
BlackRock took over as manager of the investment trust after a period of long-term underperformance.
The board revealed approximately 40 per cent of the overall portfolio has been allocated to UK equities, with another 12.5 per cent in international equities, while fixed income accounts for 12 per cent of the portfolio and alternatives makes up 6.4 per cent.
James Long, chairman of the BlackRock Income Strategies Trust, said: “We have been very pleased with the response from investors since we made these announcements. Demand for shares has been consistent and we expect that to accelerate into the new tax year for savers attracted by the trust’s focus on income and aim to preserve capital over the medium term.”
In its outlook, the investment manager added: “2015 is likely to continue to see greater episodes of volatility than previous years.
“Interest rate rises, elections, the strong dollar and oil market price falls will have an impact on the corporate sector and they are monitoring these developments carefully. Whilst all of these dynamics require more tactical positioning and careful monitoring, rising volatility and increased divergence across central bank policy will present cross-asset opportunities.”
