BLACKROCK GREATER EUROPE
INVESTMENT TRUST plc (LEI - 5493003R8FJ6I76ZUW55)
All information is at 30 November
2017 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) |
-2.0% |
-0.7% |
24.8% |
46.7% |
336.8% |
Net asset value*
(diluted) |
-2.2% |
-0.9% |
24.6% |
46.6% |
336.7% |
Share price |
0.1% |
4.1% |
31.1% |
53.7% |
336.4% |
FTSE World Europe ex
UK |
-1.6% |
-1.2% |
25.0% |
40.5% |
242.6% |
* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream
At month end
Net asset value
(capital only): |
340.19p |
Net asset value
(including income): |
341.01p |
Net asset value
(capital only)1: |
339.86p |
Net asset value
(including income)1: |
340.57p |
Share price: |
337.75p |
Discount to NAV
(including income): |
1.0% |
Discount to NAV
(including income)1: |
0.8% |
Net gearing: |
1.9% |
Net
yield2: |
1.6% |
Total assets
(including income): |
£325.0m |
Ordinary shares in
issue3: |
95,295,953 |
Ongoing
charges4: |
1.10% |
1 Diluted for treasury shares.
2 Based on a final dividend of 3.70p per share and an
interim dividend of 1.75p per share for the year ended 31 August 2017.
3 Excluding 15,032,985 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 |
31.1 |
|
France |
17.3 |
Health Care |
18.7 |
|
Switzerland |
16.1 |
Consumer Goods |
15.8 |
|
Netherlands |
13.7 |
Consumer Services |
13.3 |
|
Germany |
12.7 |
Technology |
8.3 |
|
Denmark |
12.7 |
Financials |
8.0 |
|
Sweden |
7.9 |
Oil & Gas |
4.2 |
|
Belgium |
5.8 |
Basic Materials |
2.3 |
|
Russia |
4.2 |
Net current
liabilities |
(1.7) |
|
Spain |
3.6 |
|
----- |
|
Finland |
3.5 |
|
100.0 |
|
Israel |
2.1 |
|
===== |
|
Greece |
1.6 |
|
|
|
Ukraine |
0.5 |
|
|
|
Net current
liabilities |
(1.7) |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
|
|
|
|
|
Ten Largest Equity
Investments |
|
|
Company |
Country |
%
of
Total Assets |
|
|
|
Unilever |
Netherlands |
4.9 |
SAP |
Germany |
4.8 |
Fresenius Medical
Care |
Germany |
4.2 |
RELX |
Netherlands |
4.1 |
Lonza Group |
Switzerland |
4.1 |
Novo Nordisk |
Denmark |
3.8 |
Danske Bank |
Denmark |
3.7 |
Compagnie Financière
Richemont |
Switzerland |
3.7 |
Industria De Diseno
Textil Inditex |
Spain |
3.6 |
Wartsila |
Finland |
3.5 |
Commenting on the markets, Stefan
Gries, representing the Investment Manager noted:
During the month, the Company’s NAV fell by 2.0% and the share
price rose by 0.1%. For reference, the FTSE World Europe ex UK
Index returned -1.6% during the period.
It was another strong month for the Eurozone economy, with
September’s unemployment figure reaching the lowest level since
2009 (8.9%) and manufacturing in October enjoying its strongest
month since early 2011. Unsurprisingly, with this, confidence has
risen; the Consumer Confidence Index increased to its highest level
in 16 years in November.
Looking at the political landscape, Angela Merkel’s Christian
Democratic Union came no closer to forming a government, two months
after securing victory in Germany’s national elections. However,
more positively for markets, indications of Italy conforming to the European trend of
populist defeat seen over the last year come their elections in Q1
2018, increased as the Five Star Movement suffered another setback
losing the presidency of Sicily.
The market was led by more defensive sectors (those less influenced
by the economy) over the month, with utilities and consumer staples
outperforming. Consumer discretionary and industrial names pulled
back. Towards the end of the month a clear rotation in sector
leadership occurred, with many of the top performing cyclical names
(those more positively exposed to the economy) in Europe experiencing short draw-downs.
The Company underperformed the market over the month. Stock
selection detracted from performance whilst sector allocation
marginally aided returns.
On a sector basis the strongest performance came from a lower
allocation to telecoms. The greater weighting towards the health
care sector, where the Company’s preference remains for med tech
stocks over large cap pharmaceuticals, was also positive for
relative returns. The greatest detraction on a sector basis came
from the higher allocation to industrials, which gave back some of
its strong returns year-to-date.
Stocks within the consumer space were the main detractors over the
month, including a holding in Richemont. The company posted
slightly disappointing results for the first half of 2017, with
underlying Earnings Before Interest and Tax up 11%. Investors were
particularly disappointed not to receive guidance on margins or
operating expenses during the company conference call. Our
conviction in the investment case has not changed.
The Company also suffered relative losses from a holding in
Inditex. Nothing notable has changed to the fundamentals of the
stock over the month; however, the industry was impacted by
unusually warm October weather putting a dent in sales. We believe
this should normalise into the end of the year. Not holding large
benchmark healthcare stocks Roche and Novartis detracted from
returns, as they saw some share price relief in what has been a
challenging year for the sector.
Positively, a holding in dental implant manufacturer Straumann
aided returns. Their Q3 results were strong, with 16% organic
growth. This led to raised full year guidance from ‘low teens’ to
13-15%. The stock has had a strong run year-to-date, but continues
to execute well and we believe the company’s growth remains well
underpinned in the near term. The Company also saw the holding in
Israeli multinational pharmaceutical company, Teva Pharmaceuticals,
contribute positively to returns after suffering losses during the
preceding month.
A position in Eiffage also outperformed the index, reporting Q3
results in line with expectations. Positively, the order book
remains strong, running at +9% year-over-year with contracting
sales +7%, supporting a healthy book-to-bill ratio.
Outlook
The synchronicity and breadth of growth globally continues, with
most countries reporting manufacturing Purchasing Manager’s Indices
in expansionary territory. This has aided consumer confidence, an
important pillar of demand, with household consumption and
investment contributing 80% to GDP growth in the Euro area since
2013. This environment, alongside an inflection in earnings, has
been supportive for European equities. We believe the region can
experience further growth without fuelling excessive inflation, and
thus a higher interest rate environment in the near-term, as slack
continues to exist in the European economy. 2018’s political
calendar also appears to offer less potential pitfalls for
Europe; however, we will closely
watch the Italian election outcome and remain cautious of any
fallout from ongoing Brexit negotiations. Whilst valuations in
areas of the market remain at elevated levels, the constructive
environment and potential for further earnings growth has created
numerous opportunities for fundamental investors across the region.
We believe the case for European equities remains underpinned and
investor positioning does not yet appear extended.
13 December 2017
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.