BlackRock Income and Growth Investment Trust Plc - Portfolio Update
July 17 2019 - 5:25AM
PR Newswire (US)
BLACKROCK INCOME AND GROWTH
INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) |
All information is at 30 June
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 |
4.5% |
6.2% |
-2.1% |
27.2% |
38.9% |
90.3% |
Net asset value |
3.1% |
3.6% |
-1.3% |
26.0% |
41.0% |
80.9% |
FTSE All-Share Total Return |
3.7% |
3.3% |
0.6% |
29.5% |
35.8% |
76.4% |
|
|
|
|
|
|
|
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: |
199.50p |
Net asset value - cum income*: |
204.79p |
Share price: |
196.50p |
Total assets (including
income): |
£51.2m |
Discount to cum-income NAV: |
4.0% |
Gearing: |
0.6% |
Net yield**: |
3.6% |
Ordinary shares in issue***: |
23,067,476 |
Gearing range (as a % of net
assets) |
0-20% |
Ongoing charges****: |
1.1% |
* includes net revenue of 5.29 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 3.6% 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 9,866,456 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 |
8.3 |
Media |
8.1 |
Life Insurance |
7.4 |
Financial Services |
6.7 |
Banks |
6.4 |
Support Services |
6.4 |
Food Producers |
5.9 |
Household Goods & Home
Construction |
5.6 |
Tobacco |
4.2 |
Mining |
3.7 |
Food & Drug Retailers |
3.4 |
Travel & Leisure |
3.2 |
Industrial Engineering |
2.7 |
Nonlife Insurance |
2.3 |
Health Care Equipment &
Services |
1.9 |
Mobile Telecommunications |
1.4 |
Gas, Water & Multiutilities |
1.3 |
Electronic & Electrical
Equipment |
1.2 |
Construction & Materials |
1.0 |
Chemicals |
0.7 |
General Retailers |
0.3 |
|
|
|
|
Net Current Assets |
7.3 |
|
------ |
Total |
100.0 |
|
====== |
|
|
Ten Largest Equity
Investments |
|
Company |
Total assets
(%) |
Royal Dutch Shell 'B' |
6.9 |
RELX |
4.9 |
AstraZeneca |
4.4 |
Prudential |
4.2 |
GlaxoSmithKline |
3.9 |
BP Group |
3.7 |
BHP |
3.7 |
British American Tobacco |
3.6 |
Tesco |
3.4 |
Unilever |
3.2 |
Commenting on the markets, Adam
Avigdori and David Goldman representing the Investment Manager
noted:
|
The UK equity market
continued to rally over the second quarter as weaker economic data
led to increasing expectations of monetary easing, particularly in
the US. The UK’s political environment remained turbulent as
Theresa May failed to secure a Brexit deal in Parliament and
stepped down as Prime Minister; uncertainty is likely to persist
for the remainder of the year with the EU27 leaders having agreed
an extension until 31st October 2019. The trade
dispute between the US and China continued to roil markets and
mounting tensions in the Middle East involving Iran added further
uncertainty.
Large-cap companies modestly outperformed mid-caps and small-caps;
in terms of style factors, the underperformance of Value continued
at the expense of ‘Quality’ companies, particularly those with
strong balance sheets which were delivering sustainable sales and
earnings growth. Sector trends were more mixed: after a first
quarter rally, Tobacco weakened again on volume concerns and
General Retail suffered on tough year-on-year trading comparisons;
the Telecoms sector underperformed as revenues came under further
pressure. Notable positive contributors included Media and
Oil & Gas.
Over the quarter the BlackRock Income and Growth Investment Trust
delivered a return of 3.6%, outperforming the FTSE All-Share which
delivered a return of 3.3%.
The largest contributor came from core holding RELX. Uncertainties
around the academic publishing market in the first quarter were
dispelled as RELX continued to report consistent sales, profits and
earnings growth from its broad portfolio of well-invested
professional information businesses. London Stock Exchange
Group continues to benefit from the regulatory tailwinds to its
clearing businesses, notably LCH, and from higher market levels
which boost FTSE Russell, its index information division. Shares in
Oxford Instruments continued to perform well and also contributed
to performance.
Turning to the portfolio’s detractors, Whitbread saw its share
price decrease after painting a rather negative outlook in their
latest trading update. UK total accommodation sales declined 1.5%
in the quarter due to weak trading conditions and maintained their
previous guidance regarding the caution on the UK business
environment given macro uncertainty. British American Tobacco has
previously reported strong results in the second
quarter and maintained guidance, but the market remains
concerned about weaker volumes in US cigarettes, even though
reported industry data remains fallible. This has caused shares to
be weak in the quarter. Finally, demand for air travel across
Europe has been weaker than expected, exacerbated by Brexit
concerns in the UK, with an adverse impact on all carriers,
including easyJet which we hold.
During the quarter we initiated a position in Trainline, added to
positions in Euromoney, easyJet and Elementis. We have reduced
exposure to Phoenix, Hiscox and Homeserve.
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. |
|
17 July 2019 |
|
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