Last checked at 22 Feb 2021 11:56
BlackRock Greater Europe Investment Trust Plc - Portfolio UpdateBlackRock Greater Europe Investment Trust Plc - Portfolio Update
PR Newswire
London, February 19
The information contained in this release was correct as at 31 January 2021. Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at:
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC (LEI - 5493003R8FJ6I76ZUW55)
All information is at 31 January 2021 and unaudited.Performance at month end with net income reinvested
| One Month | Three Months | One Year | Three Years | Launch (20 Sep 04) | |
| Net asset value (undiluted) | -3.2% | 12.8% | 25.9% | 51.6% | 586.8% |
| Net asset value* (diluted) | -3.2% | 12.8% | 26.1% | 51.5% | 587.1% |
| Share price | -0.4% | 21.7% | 31.0% | 64.4% | 615.9% |
| FTSE World Europe ex UK | -2.2% | 13.7% | 7.9% | 14.5% | 299.2% |
* Diluted for treasury shares and subscription shares.Sources: BlackRock and Datastream.
At month end
| Net asset value (capital only): | 511.33p |
| Net asset value (including income): | 511.97p |
| Net asset value (capital only)1: | 511.33p |
| Net asset value (including income)1: | 511.97p |
| Share price: | 528.00p |
| Premium to NAV (including income): | 3.1% |
| Premium to NAV (including income)1: | 3.1% |
| Net gearing: | 8.0% |
| Net yield2: | 1.2% |
| Total assets (including income): | £433.5m |
| Ordinary shares in issue3: | 84,668,101 |
| Ongoing charges4: | 1.0% |
1 Diluted for treasury shares.2 Based on an interim dividend of 1.75p per share and a final dividend of 4.40p per share for the year ended 31 August 2020.3 Excluding 25,660,837 shares held in treasury.4 Calculated as a percentage of average net assets and using expenses, excluding interest costs, after relief for taxation, for the year ended 31 August 2020.
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| Top 10 holdings | Country | Fund % |
| ASML | Netherlands | 7.3 |
| Sika | Switzerland | 5.6 |
| Lonza Group | Switzerland | 5.1 |
| Kering | France | 4.7 |
| Novo Nordisk | Denmark | 4.6 |
| DSV | Denmark | 4.2 |
| Royal Unibrew | Denmark | 4.1 |
| RELX | United Kingdom | 3.6 |
| Hexagon | Sweden | 3.4 |
| Safran | France | 3.1 |
Commenting on the markets, Stefan Gries, representing the Investment Manager noted:
During the month, the Company’s NAV fell by 3.2% and the share price by 0.4%. For reference, the FTSE World Europe ex UK Index returned -2.2% during the period.
Europe ex UK markets fell in January as tightening lockdown measures across Europe and a slower than expected start to the vaccine rollout was a drag on sentiment. Some drivers of the economic recovery such as travel therefore appear to be delayed versus prior expectations. However, while the vaccination progress takes time, we have seen encouraging news of both Novavax and J&J announcing positive vaccine readouts.
Our base case has not changed. The reopening of economies may take longer than the market had hoped when the excellent vaccine data first came through in November. However, so far, we have seen nothing that would change the view that by the end of the year the world will look a lot more ‘normal’.
We believe that the recovery, as and when it arrives, will be stronger than initially thought. Evidence for this can be seen already through the underlying strength of real-world materials, healthy consumer demand for luxury goods and supportive semiconductor market dynamics. Meanwhile, many businesses remain protected by state support mechanisms, while stimulus measures mean that consumers have money to spend.
During January, ‘recovery’ stocks, such as travel-related companies or banks, fell while technology performed strongly. The Company slightly underperformed the reference index during the month, driven by stock selection while sector allocation was positive. In sector terms, the Company benefited from its higher allocation to technology and a lower allocation to financials and consumer goods. A higher allocation to consumer services detracted.
Negative contribution came from a few travel-exposed stocks. Safran and Amadeus were amongst the largest detractors due to the worsened sentiment towards reopening in Europe. This theme also negatively affected DSV Panalpina for similar reasons. However, we believe that DSV will likely do very well in a world of longer lockdowns, being a clear beneficiary of increased global trade that should see positive mix affects. Shares in consumer names Royal Unibrew and Kering declined due to lockdown sensitivities rather than fundamental reasons.
Positive contribution during the month came from our exposure to the semiconductor industry. ASML, BE Semiconductor, Infineon and VAT Group all performed strongly as we continue to see demand momentum strengthen, driven primarily by the fast recovery in autos and demand from smart phone manufacturers. Investors were impressed with several pre-releases from companies confirming that Q4 was extremely strong, while guiding positively for Q1, and in some cases 2021.
Our holding in Russian e-commerce company Ozon also contributed. Ozon is the most recognised ecommerce brand in what is still an underdeveloped ecommerce market. We believe that as the infrastructure is rolled out, the Russian ecommerce market has potential to follow a similar growth path that we have seen in other markets.
RELX was also amongst the best performers during January. Shares had struggled in recent months as the company saw a large COVID impact on their exhibitions business and investors were concerned around lower journals and subscription numbers from universities. While we expect the exhibitions businesses to recover with easing restrictions, shares performed well in January due to positive read-across from publishing competitors who reported little change in subscription numbers.
At the end of the period, the Company had a higher allocation than the reference index towards technology, consumer services, industrials and health care. The Company had a neutral weighting towards oil & gas and underweight allocation to consumer goods, financials, utilities, basic materials and telecoms.
Outlook
In a tumultuous year, European equity markets ended 2020 with relative strength. We see this strength persisting into 2021 aided by better virus testing capabilities, a successful vaccine rollout and a resilient global consumer, alongside continued accommodative policy. Recovery will not be equal across all sectors: some still lack pricing power and are unable to reinstate dividends; others, however, such as travel exposed stocks, could see a meaningfully brighter 2021. Inflation may be on the horizon, but rates will likely remain low. A period of prolonged negative real rates and higher nominal growth is needed to allow governments globally to work their way out of the post pandemic debt overhang. We see this as being a supportive backdrop for equities.
22 February 2021
ENDS
Latest information is available by typing www.brgeplc.co.uk on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal). Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.