The
information contained in this release was correct as at
30 June
2024. 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
30 June
2024 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%
|
-2.4%
|
15.6%
|
9.6%
|
812.8%
|
Share
price
|
-1.4%
|
-3.5%
|
15.3%
|
0.4%
|
765.7%
|
FTSE
World Europe ex UK
|
-1.6%
|
0.3%
|
13.4%
|
22.0%
|
452.3%
|
Sources:
BlackRock and Datastream
At month
end
Net
asset value (capital only):
|
649.95p
|
Net
asset value (including income):
|
655.53p
|
Share
price:
|
614.00p
|
Discount to NAV
(including income):
|
6.3%
|
Net
gearing:
|
8.3%
|
Net
yield1:
|
1.1%
|
Total
assets (including income):
|
£654.2m
|
Ordinary shares
in issue2:
|
99,795,601
|
Ongoing
charges3:
|
0.98%
|
1
Based
on a final dividend of 5.00p per share for the year ended
31 August 2023 and
an
interim dividend of 1.75p per share for the year ending
31 August 2024.
2
Excluding
18,133,337 shares held in treasury.
3
The
Company’s ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other
operating expenses excluding finance costs, direct transaction
costs, custody transaction charges, VAT recovered, taxation, write
back of prior year expenses and certain non-recurring items for the
year ended 31 August 2023.
Sector
Analysis
|
Total
Assets (%)
|
Industrials
|
24.4
|
Technology
|
23.5
|
Consumer
Discretionary
|
22.4
|
Health
Care
|
14.7
|
Financials
|
8.1
|
Basic
Materials
|
6.2
|
Consumer
Staples
|
0.8
|
Net
Current Liabilities
|
-0.1
|
|
-----
|
|
100.0
|
|
=====
|
|
|
|
|
|
|
|
|
|
|
|
|
Country
Analysis
|
Total
Assets (%)
|
Netherlands
|
22.4
|
France
|
20.6
|
Switzerland
|
17.5
|
Denmark
|
10.6
|
United
Kingdom
|
6.5
|
Sweden
|
6.2
|
Ireland
|
5.6
|
Italy
|
3.7
|
United
States
|
3.5
|
Germany
|
1.8
|
Belgium
|
1.7
|
Net
Current Liabilities
|
-0.1
|
|
-----
|
|
100.0
|
|
=====
|
|
|
|
|
Top 10 holdings
|
Country
|
Fund %
|
Novo
Nordisk
|
Denmark
|
9.4
|
ASML
|
Netherlands
|
8.4
|
RELX
|
United
Kingdom
|
6.5
|
LVMH
|
France
|
5.5
|
BE
Semiconductor
|
Netherlands
|
4.6
|
ASM
International
|
Netherlands
|
4.4
|
Hermès
|
France
|
3.9
|
Safran
|
France
|
3.8
|
Schneider
Electric
|
France
|
3.7
|
Ferrari
|
Italy
|
3.7
|
|
Commenting
on the markets, Stefan Gries and
Alexandra Dangoor, representing the
Investment Manager noted:
During the month,
the Company’s NAV rose by 0.7% and the share price declined by
-1.4%. For reference, the FTSE World Europe ex UK Index returned
-1.6% during the period.
French political
uncertainty led to market volatility. President Macron called an
unexpected election which led to concerns that a future government
might come in with a less fiscally responsible agenda. While
creating negative market sentiment in the near term, we think that
a lack of clear mandate for either the French right-wing populist
party RN or the left-wing means that there is a low chance that
policies could have a significant direct negative impact on our
portfolio holdings.
During the month
we saw high quality, internationally exposed businesses outperform
the market whilst particularly French-listed cyclicals and
financials performed poorly. The technology sector delivered
absolute positive returns given very limited impact from French
election risk and continued positive messaging around the ‘AI
investment wave’ coming.
The
Company outperformed the reference index thanks to its positioning
in technology and limited exposure to French domestic stocks, as
well as an underweight to financials. Both sector allocation and
stock selection contributed positively.
Semiconductors
were amongst the top performers during June with shares in BE
Semiconducter (Besi), ASMi and ASML all moving higher. The tone
from management teams during roadshows was positive and all signs
point to increased orders ahead. Besi hosted a Capital Markets Day
in the month where their CEO reiterated a target model of over
EUR 1bn sales over time (growing from
EUR 580m in 2023).
A
position in RELX was also additive in June. RELX has been
consistent in confirming strong underlying trends, particularly on
the back of AI trends in their legal division.
Owning Novo
Nordisk contributed positively to active returns in June with the
investment case continuing to progress well. To name a few of the
headlines in the month, Wegovy prescription data in the US was
strong, the company announced plans for an additional fill and
finish site which continues to build significant capacity growth
from 2026 and Wegovy was approved as an obesity treatment in
China.
A
position in Linde began to recover from recent weakness following
Q1 2024 results which were solid yet seemed to disappoint the
market with guidance which was only raised at the low end of the
company’s range. We think management’s conservatism at Q1 is
understandable and expect Linde to continue showing strong
execution and proving their ability to grow earnings.
Elsewhere,
avoiding European banks such as BNP and Banco Santander was
helpful. The sector was dragged down by political volatility: BNP
was particularly impacted by the French elections, whilst Santander
was impacted by concerns around Brazil as well as an unexpected slowdown of
rate cuts.
Shares in
Chemometec fell in the month despite limited company specific
updates, as the recovery in life sciences is yet to be seen. Having
recently met with management we remain encouraged by the pivot in
their strategy to one we believe is quite promising from a
commercial perspective.
The
portfolio’s holding in Kingspan detracted with shares selling off
on the back of French political noise. The company generates close
to 15% of revenues in France, but
from our read of RN party policies there is nothing that would
really impact the group negatively and thus the share price move
(c. 10% down in the month) may be overdone. General construction
weakness and softer commentary on recovery, with projects being
delayed across the industry, also weighed on sentiment.
Not
holding a few of the reference index large defensive assets, such
as SAP, Roche and Novartis, detracted from relative returns as
their shares outperformed the falling market.
Outlook
As
economic momentum gathers pace and company guidance strikes a more
optimistic tone, Europe has come
into the spotlight. The European Central Bank’s decision to cut
rates was taken positively, although the jury remains out on the
speed rates fall from here. Whilst this rate change is positive for
asset class sentiment, operationally we see limited impact on
companies.
Rising political
discontent, however, has been a thorn in the region’s side.
Geopolitical tensions around tariffs and surprise elections in key
economies such as the UK and France have added a degree of uncertainty. We
take confidence in the changed regulatory landscape for banks in
helping manage perceived contagion risk that could arise from
potentially weaker fiscal positions and believe the negative impact
of tariffs would only be meaningful for a small group of companies.
Whilst uncertainty on policy outcomes remains, we believe the
growth impact is likely limited in the near-term and economics
should continue their positive inflection.
Long-term
structural trends and large amounts of fiscal spending via the
Recovery fund, Green Deal and the REPowerEU plan in Europe can also drive demand for years to
come, for example in areas such as infrastructure, automation,
innovation in medicines, the shift to electric vehicles,
digitization, or decarbonisation. Valuations are attractive versus
history and especially versus US equities. Overall, evidence of a
resilient consumer, healthy corporate sector and decent outlooks
underpinned by green stimulus should be supportive for the
companies held in the portfolio.
17 July 2024
ENDS
Latest
information is available by typing www.blackrock.com/uk/brge
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.