Last checked at 21 Aug 2019 12:27
BlackRock Income and Growth Investment Trust Plc - Portfolio UpdateBlackRock Income and Growth Investment Trust Plc - Portfolio Update
PR Newswire
London, August 21
| BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) |
| All information is at 31 July 2019 and unaudited. |
| Performance at month end with net income reinvested |
| One Month | Three Months | One Year | Three Years | Five Years | Since 1 April 2012 | |
| Sterling | ||||||
| Share price | 2.6% | 2.1% | 0.6% | 21.6% | 41.5% | 95.3% |
| Net asset value | 1.8% | 2.3% | -0.5% | 22.7% | 43.3% | 84.1% |
| FTSE All-Share Total Return | 2.0% | 2.6% | 1.3% | 27.0% | 38.9% | 80.0% |
| Source: BlackRock |
| BlackRock took over the investment management of the Company with effect from 1 April 2012. |
| At month end | |
| Sterling: | |
| Net asset value - capital only: | 203.24p |
| Net asset value - cum income*: | 205.85p |
| Share price: | 199.00p |
| Total assets (including income): | £51.4m |
| Discount to cum-income NAV: | 3.3% |
| Gearing: | 2.2% |
| Net yield**: | 3.5% |
| Ordinary shares in issue***: | 23,017,476 |
| Gearing range (as a % of net assets) | 0-20% |
| Ongoing charges****: | 1.1% |
| * includes net revenue of 2.61 pence per share |
| ** The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.5% and includes the 2018 final dividend of 4.40p per share declared on 20 December 2018 and paid to shareholders on 19 March 2019 and the 2019 interim dividend of 2.60p per share declared on 25 June 2019 and due to be paid to shareholders on 2 September 2019. |
| *** excludes 9,916,456 shares held in treasury |
| **** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 October 2018. |
| Sector Analysis | Total assets (%) |
| Oil & Gas Producers | 10.6 |
| Pharmaceuticals & Biotechnology | 9.0 |
| Media | 7.8 |
| Life Insurance | 7.4 |
| Financial Services | 6.9 |
| Support Services | 6.6 |
| Banks | 6.2 |
| Food Producers | 5.2 |
| Household Goods & Home Construction | 5.2 |
| Tobacco | 4.4 |
| Mining | 3.6 |
| Food & Drug Retailers | 3.4 |
| Travel & Leisure | 3.3 |
| Gas, Water & Multiutilities | 2.8 |
| Industrial Engineering | 2.4 |
| Health Care Equipment & Services | 2.0 |
| Mobile Telecommunications | 2.0 |
| Nonlife Insurance | 2.0 |
| Electronic & Electrical Equipment | 1.2 |
| Construction & Materials | 0.9 |
| Chemicals | 0.6 |
| General Retailers | 0.5 |
| Beverages | 0.3 |
| Net Current Assets | 5.7 |
| ------ | |
| Total | 100.0 |
| ====== | |
| Ten Largest Equity Investments | |
| Company | Total assets (%) |
| Royal Dutch Shell 'B' | 7.0 |
| AstraZeneca | 4.8 |
| RELX | 4.2 |
| GlaxoSmithKline | 4.2 |
| Prudential | 4.1 |
| BP Group | 3.7 |
| British American Tobacco | 3.6 |
| BHP | 3.6 |
| Tesco | 3.4 |
| John Laing Group | 3.0 |
| Commenting on the markets, Adam Avigdori and David Goldman representing the Investment Manager noted: |
| The UK market rose for a second consecutive month in July, returning 2.0% and bringing the calendar year to date returns for the UK Equity market to 15.0%. As expected the Federal Reserve cut US interest rates by 25bps, the first cut since 2008 in its July meeting. The immediate response was a strengthening of the US dollar and the US yield curve flattening, however markets had already been pricing in the shift in policy. Domestic momentum in the US remains relatively robust, however ongoing trade disputes continue to pose a risk to the US and the global growth outlook. Eurozone growth decelerated during Q2, in line with market expectations, which had been gradually reduced in response to softness in the economic data, and the European Central Bank kept interest rates on hold, however it signalled its intention to introduce a comprehensive easing package in upcoming meetings. Unsurprisingly, Boris Johnson was elected as the new UK Prime Minister by a clear majority, however the result does not reflect strong support for his Brexit agenda among the Conservative Party. He has now assembled his “pro-Brexit” Cabinet and pledged to leave the European Union on October 31 — with or without a deal. Sterling fell sharply as markets became increasingly worried over the prospect of a no-deal Brexit. With the slim majority in Parliament, there are a wide range of potential outcomes and uncertainty over Brexit remains high. Larger companies in the UK benefitted from the falling pound during the month and defensive sectors including Pharmaceuticals and Telecoms continued to outperform. |
| Over the quarter the BlackRock Income and Growth Investment Trust plc delivered a return of 1.8%, underperforming the FTSE All-Share which delivered a return of 2.0%. |
| British wealth manager St. James’s Place detracted after reporting that weaker client sentiment had weighed on inflows of new money in the first half of the year while costs rose, leading it to miss forecasts for operating profit. Premier Asset Management was another wealth manager featuring as a detractor after reporting outflows in its latest trading update, citing challenging conditions for the investment industry. The third biggest detractor was Bodycote, which as a global cyclical is sensitive to market concerns around the outlook for global growth. Bodycote also delivered results which we thought were very reassuring in light of the news flow from sector peers, and where its highest margin areas delivered. This remains a differentiated and well capitalised industrial, with a Management team we rate highly. |
| During the month we initiated positions in National Grid and Fuller Smith and Turner. We also added to positions in Vodafone and Weir. We have sold United Utilities and reduced exposure to RELX, AB Foods, Reckitt, Unilever, Bodycote and Hiscox. |
| We continue to see a period of sustained growth. Importantly, we expect nominal growth to remain modest as we see structural pressures from demographics, corporate underinvestment and new technology continuing to act as a drag on inflation. The dovish tilt from central banks is clearly supportive for markets, however from time to time we expect markets to worry about a shift to a more hawkish stance. With heightened political uncertainty and investor nervousness, we expect volatility to return to markets. This provides us, as active managers of a concentrated portfolio, with a great opportunity to identify high-quality cash generative businesses, with robust balance sheets, that can weather various market cycles and help to deliver long term capital and income growth for our clients. |
| We continue to like cash generative consumer staple companies, especially those exposed to the emerging market consumer given the prevalent demographic trends in certain markets. These companies often generate substantial cash flow which allows them to invest in innovation, marketing and distribution to ensure the longevity of their brands while also paying attractive and growing dividends to shareholders. We have also sought exposure to infrastructure spend whilst at the same time we are watching for signs of overheating in the US and monitoring economic growth in China. We also note that inflationary pressures are starting to build and therefore we seek those companies with sufficient pricing power and efficiency potential to withstand rising costs. As the recent past has demonstrated, it is crucial to be selective and to focus on those companies that are strong operators, that provide a differentiated service or product and that boast a strong balance sheet. |
| 21 August 2019 |