Last checked at 17 Jul 2018 17:07
BlackRock Greater Europe Investment Trust Plc - Portfolio UpdateBlackRock Greater Europe Investment Trust Plc - Portfolio Update
PR Newswire
London, July 17
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc (LEI - 5493003R8FJ6I76ZUW55)All information is at 30 June 2018 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) | 0.7% | 8.5% | 12.6% | 51.1% | 364.9% |
| Net asset value* (diluted) | 0.7% | 8.5% | 12.6% | 51.5% | 365.3% |
| Share price | 3.6% | 10.0% | 13.4% | 50.6% | 352.0% |
| FTSE World Europe ex UK | 0.3% | 3.4% | 2.5% | 40.3% | 239.5% |
* Diluted for treasury shares and subscription shares.Sources: BlackRock and Datastream
At month end
| Net asset value (capital only): | 357.19p |
| Net asset value (including income): | 361.10p |
| Net asset value (capital only)1: | 357.19p |
| Net asset value (including income)1: | 361.10p |
| Share price: | 348.00p |
| Discount to NAV (including income): | 3.6% |
| Discount to NAV (including income)1: | 3.6% |
| Net gearing: | 2.2% |
| Net yield2: | 1.6% |
| Total assets (including income): | £312.2m |
| Ordinary shares in issue3: | 86,459,691 |
| Ongoing charges4: | 1.10% |
1 Diluted for treasury shares.2 Based on a final dividend of 3.70p per share for the year ended 31 August 2017 and an interim dividend of 1.75p per share for the year ending 31 August 2018.3 Excluding 23,869,247 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 2017.
| Sector Analysis | Total Assets (%) | Country Analysis | Total Assets (%) | |
| Industrials | 34.2 | Switzerland | 17.8 | |
| Health Care | 19.6 | France | 16.0 | |
| Financials | 12.8 | Germany | 11.6 | |
| Consumer Goods | 10.1 | Denmark | 11.4 | |
| Consumer Services | 8.2 | Netherlands | 11.3 | |
| Technology | 8.0 | Sweden | 7.1 | |
| Basic Materials | 3.4 | Spain | 5.7 | |
| Oil & Gas | 1.8 | Russia | 3.7 | |
| Telecommunications | 1.7 | Israel | 3.6 | |
| Net current assets | 0.2 | Finland | 2.8 | |
| ----- | Belgium | 2.5 | ||
| 100.0 | Ireland | 2.2 | ||
| ===== | Greece | 1.5 | ||
| Italy | 1.4 | |||
| Poland | 1.2 | |||
| Net current assets | 0.2 | |||
| ----- | ||||
| 100.0 | ||||
| ===== |
| Ten Largest Equity Investments | ||
| Company | Country | % of Total Assets |
| Novo Nordisk | Denmark | 4.6 |
| Lonza Group | Switzerland | 4.5 |
| Safran | France | 4.5 |
| Sika | Switzerland | 4.3 |
| Fresenius Medical Care | Germany | 3.7 |
| Unilever | Netherlands | 3.7 |
| Industria de Diseño Textil Inditex | Spain | 3.2 |
| Hexagon | Sweden | 3.1 |
| Compagnie Financière Richemont | Switzerland | 3.0 |
| Danske Bank | Denmark | 2.9 |
Commenting on the markets, Stefan Gries, representing the Investment Manager noted:
During the month, the Company’s NAV rose by 0.7% and the share price increased by 3.6%. For reference, the FTSE World Europe ex UK Index returned 0.3% during the period.
Continental European markets realised modest returns in June. The market was led by defensive sectors, those less sensitive to economic growth, such as utilities, given the heighted geopolitical risk resulting from President Trump’s trade rhetoric. With this, export exposed sectors, in particular autos, suffered underperformance. Energy continued to perform. Bottlenecks in the US, combined with the collapse of production in Venezuela, have allowed OPEC to gain greater influence on the oil price in the near term, which is likely to provide more stability. Italian political risk somewhat subsided as an agreement was reached between Five Star and League for governing. The European Central Bank announced its intention to end Quantitative Easing in December 2018, although it noted it expects interest rates to remain at current levels at least through the summer of 2019. European Purchasing Manager’s Indices remain in expansionary territory but continue to descend from the highs reached in 2017.
The Company outperformed the market over the month. Stock selection drove the Company’s outperformance whilst sector allocation proved neutral. The lower allocation to consumer goods and higher allocation to health care both benefited returns. However, the higher allocation to industrials and lower allocation to utilities both detracted.
The top performer over the month was a holding in payments processor Adyen, which came to market in an Initial Public Offering in June. We allocated to this stock as we felt that Adyen’s approach to customer penetration and ability to win market share in a structurally growing market was positive for potential earnings. Management are guiding for 40%+ growth in 2018. The stock performed exceptionally strongly given the high level of subscription for the shares, with 40x coverage and over 600 orders in the book.
A holding in Straumann contributed positively over the month. Whilst there was no news from the company themselves, the share price was elevated by an upgrade from the broker community after a confident delivery from Straumann management at a conference.
Kingspan performed well as the CEO delivered a reassuring message to the investment community at a conference. The UK has continued to stabilize and trading outside the UK remains robust.
A holding in Remy Cointreau detracted from returns given concerns over trade tariffs and the company’s export driven business. The group’s results, posted early in the month, were robust with full year profits coming in ahead of guidance. Remy continues to show pricing power, taking prices up 4-5% in the US in the second quarter, ahead of the run rate established in the last few years.
At the end of the period, the Company had a higher allocation than the reference index towards industrials, technology, consumer services and health care. A lower allocation was held in financials, consumer goods, utilities, telecommunications, basic materials and oil & gas.
Outlook
Uncertainty in markets has risen in response to politics at home and aboard. On writing, greater trade tensions are at the top of the agenda and have had implications for share price performance in an array of export oriented stocks. Whilst a deal may be made and outcomes more benign, market volatility is likely to remain elevated. Valuation has become incrementally more attractive in the region, in both an absolute and relative sense, but is extended in certain areas. At this stage in the cycle, where companies may consider re-leveraging and repositioning, we seek to understand the vision, execution ability and approach to capital discipline for the companies we invest in. We believe careful stock picking in what may continue to be a more volatile environment can benefit our clients.
17 July 2018
ENDS
Latest information is available by typing www.blackrock.co.uk/brge on the internet. 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.