BlackRock (NYSE:BLK) Sustainable American Income Trust (BRSA), managed by Tony DeSpirito, David Zhao, and Lisa Yang, is leveraging its ESG-centric investment strategy to attract investors looking for value in a challenging economic environment. With a history of value stocks outperforming during and after recessions and Federal Reserve rate hikes, BRSA positions itself as a promising option for those seeking US equity exposure combined with a high dividend yield.
Since July 2021, BRSA has focused on companies that not only offer dividends but also score well on environmental, social, and governance (ESG) metrics. This shift to an ESG-focused approach aims at tapping into the growing trend of sustainable investing while targeting income generation and potential capital gains for investors.
In light of the current economic landscape marked by a potential recession and increased caution among investors, BRSA's strategy could pay off. Historical data from BlackRock indicates that value stocks have traditionally performed well in post-recession periods and following Fed rate hikes, dating back to 1978 and 1984 respectively.
Despite trading at a discount in today's market—an aspect that enhances its appeal—BRSA offers a robust annual dividend yield of 4.3%. This is supported by the trust's policy of distributing an annual dividend of 8.0c per share from its substantial reserve funds, which are allocated specifically for regular shareholder payouts.
For investors interested in US equities with the added benefit of dividends and a focus on sustainability, BRSA provides an avenue to potentially capitalize on market conditions where undervalued dividend-yielding stocks with strong ESG attributes may experience enhanced valuations as the market adjusts.
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