North American funds and the “tectonic shift toward sustainability”

As global markets continue to be gripped by the Coronavirus pandemic, the recent US election also had its part to play in the recent volatility.

The strung-out election week saw US big tech stocks surge, which helped to see Nasdaq bounce over 6%, while the Dow Jones hiked up by around 3.5% amid the results.

Despite the ongoing volatility, US markets have continued to rise since summer – particularly in comparison to other major regions across the world.

The US is among the world’s most dynamic economies and has created some of the world’s most powerful and innovative companies.

We take a look at two North American investment funds and how they are shifting focus amid the pandemic.

BlackRock North American Income Trust

BlackRock aims to provide “an attractive and growing level of income return with capital appreciation over the long term”, which is predominantly through investment in a diversified portfolio of primarily large-cap US equities.

The company has over 27 years of experience running trusts and has holdings in Apple, Microsoft, Amazon, and Facebook.

As approaches to investing are rapidly changing, BlackRock believes that how the world is changing amid the Coronavirus is “accelerating transformations in our economies and societies across four dimensions – sustainability, inequality, geopolitics and the policy revolution.

“A tectonic shift toward sustainability was already underway, and the pandemic shone a spotlight on some underappreciated environmental, social and governance (ESG) factors such as employee safety and supply chain integrity.”

BlackRock is priced at 162.50 and has a premium of -7.3% and a NAV of 175.38.

Baillie Gifford US Growth Trust

Baillie Gifford is a North American company that believes that “exceptional growth companies are the major drivers of market wealth creation”. With this in mind, it invests in US companies that have the potential to grow and to hold onto them for long periods of time, for long-term capital growth.

Top holdings include Tesla, Shopify, Amazon, Wayfair, and Zoom Video Communications.

Companies that have gone from strength to strength amid the pandemic, Amazon’s latest trading statement revealed profits to triple and posted a quarterly sales of almost $100bn (£77.4bn).

Writing for Baillie Gifford, James Anderson focuses on how the pandemic has changed our investment habits.

“It’s been startling but wonderful to see the progress of so many of our companies in the crisis. But it comes with challenges. It’s still hard to discern how far pandemic-induced changes will persist.

“There’s a great deal of work to be done. But we do believe that the pandemic period is accelerating the process of change that we continually focus on in our portfolio. We see little road to recovery for supposed value stocks. If we can remain patient and disciplined the opportunities have only proliferated.”

The bulk of the group’s assets are currently in consumer discretionary (33.1%) and information technology (28.4%).

Baillie Gifford is priced at 260.00, with a premium of +3.8%, and a NAV of 250.38.

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Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.