The fund’s Net Asset Value (NAV) total return (NAV) rose by 25.7%, this compares with The North American Income Trust plc benchmark, the Russell 1000 Value Index which returned +26.3%.

The company’s board has announced a final dividend of 4.0p making a total dividend for the year of 10.3p, revealing a rise of 3%.

According to the company, the revenue account remained in a healthy position, building upon the record established in prior years. While many holdings raised their dividend payments in 2021, they did it on a delayed basis instead of annually. The result was flat dividend payments for several holdings for five, six or seven quarters.

Fortunately, most holdings that deferred raising their dividend payments did so by the end of 2021 such that dividend income growth should improve in 2022.

Commenting on the outlook, Dame Susan Rice, chair of The North American Income Trust plc, said: “Russia’s invasion of Ukraine has dominated the headlines in recent months and caused widespread concern on personal, economic and environmental levels. The Company has no material exposure to Russia or Ukraine, although the conflict indirectly has the potential to fuel global inflation through commodity-flow disruptions.

“Ramifications from the conflict have only exacerbated existing concerns of rising inflation, a key issue for the Board and the Manager. Inflation has been at the heart of many investors’ concerns due to its anticipated impact on the US Federal Reserve’s (the “Fed”) policy and corporate outlooks, which has further increased market angst.

“At the same time, coming out of the pandemic lockdowns, demand for most goods and services surged thanks to the general reopening of economies globally, supplemented by healthy consumer spending following multiple rounds of stimulus. However, supplies of key raw materials remain limited because of COVID-19-induced supply-chain disruptions and/or capacity retirements implemented during the pandemic.”

She continued: “This combination of strong consumer demand, restricted supply, and congested supply chains has pushed inflation to its highest level in over 40 years. As a result, the Fed will have to tighten monetary policy through interest-rate hikes and balance-sheet reduction more quickly than originally expected. Investors historically have experienced anxiety during the early stages of a rate-hike cycle because of the potential for a policy mistake.

“The US equity market got off to a rocky start in 2022 as investors became more concerned about inflation, looming interest-rate hikes by the Fed, corporate profitability headwinds, and geopolitical tensions. At the same time, there was a significant rotation out of growth stocks into more value-orientated companies.

“The investment approach of the Company focuses on delivering an above-average income. It is reassuring to note that the majority of its investee companies continue to announce significant increases in the rates of dividend they will pay as this permits the Board to have a high degree of confidence in its ability to target dividend increases to the Company’s shareholders.”

She concluded: “We have experienced a prolonged period where investors have focused on capital growth and income investing has taken a back seat. Our focus on value-orientated companies that are likely to be better able to cope against such a macro-economic backdrop is coming back into favour and the Board is pleased to note the improvement in relative performance that has developed and expects that market conditions are liable to remain favourable for the Company for the immediate future.”