The
information contained in this release was correct as at
30 April 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 INCOME & GROWTH INVESTMENT TRUST PLC
(LEI:5493003YBY59H9EJLJ16)
All
information is at
30 April
2024 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
|
1.9%
|
2.7%
|
1.7%
|
13.8%
|
14.4%
|
118.9%
|
Net
asset value
|
1.9%
|
5.9%
|
4.9%
|
20.6%
|
27.9%
|
130.0%
|
FTSE
All-Share Total Return
|
2.5%
|
7.5%
|
7.5%
|
23.9%
|
30.1%
|
128.2%
|
|
|
|
|
|
|
|
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:
|
213.77p
|
Net
asset value - cum income*:
|
217.79p
|
Share
price:
|
186.50p
|
Total
assets (including income):
|
£47.8m
|
Discount to
cum-income NAV:
|
14.4%
|
Gearing:
|
5.5%
|
Net
yield**:
|
4.0%
|
Ordinary shares
in issue***:
|
20,115,258
|
Gearing range (as
a % of net assets):
|
0-20%
|
Ongoing
charges****:
|
1.28%
|
* Includes net
revenue of 4.02 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 4.0%
and includes the 2023 Interim Dividend of 2.60p per share declared
on 21 June 2023 with pay date 1 September 2023, and the 2023 final
dividend of 4.80p per share declared on 21 December 2023 with pay
date 15 March 2024.
|
***
excludes 10,081,532 shares held in
treasury.
|
****
The Company's ongoing charges are calculated as a percentage of
average daily net assets and using management fee and all other
operating expenses excluding finance costs, direct transaction
costs, custody transaction charges, VAT recovered, taxation and
certain non-recurring items for the year ended 31 October
2023.
|
Sector Analysis
|
Total assets (%)
|
Banks
|
10.3
|
Support
Services
|
10.2
|
Pharmaceuticals
& Biotechnology
|
9.2
|
Oil
& Gas Producers
|
9.0
|
Financial
Services
|
8.4
|
Media
|
6.7
|
Mining
|
6.1
|
|
|
Household Goods
& Home Construction
|
5.9
|
General
Retailers
|
4.2
|
Real
Estate Investment Trusts
|
3.8
|
Nonlife
Insurance
|
3.3
|
Travel &
Leisure
|
3.2
|
Personal
Goods
|
3.1
|
Food
Producers
|
2.9
|
Industrial
Engineering
|
2.6
|
Life
Insurance
|
2.3
|
Tobacco
|
1.6
|
Electronic &
Electrical Equipment
|
1.5
|
Health Care
Equipment & Services
|
1.3
|
Leisure
Goods
|
1.0
|
General
Industrials
|
0.1
|
Net
Current Assets
|
3.3
|
|
-----
|
Total
|
100.0
|
|
=====
|
Country Analysis
|
Percentage
|
United
Kingdom
|
92.7
|
United
States
|
2.6
|
Switzerland
|
1.4
|
Net
Current Assets
|
3.3
|
|
-----
|
|
100.0
|
|
=====
|
Top 10 holdings
|
Fund %
|
AstraZeneca
|
7.7
|
Shell
|
7.5
|
RELX
|
5.2
|
Rio
Tinto
|
4.8
|
3i
Group
|
4.6
|
HSBC
Holdings
|
4.2
|
Unilever
|
3.1
|
Tate
& Lyle
|
2.9
|
Segro
|
2.7
|
Reckitt
|
2.7
|
|
|
Commenting
on the markets, representing the Investment Manager
noted:
Performance
Overview:
The
Company returned 1.9% during the month net of fees, underperforming
the FTSE All-Share which returned 2.5%.
Market
Summary:
Global equity
markets fell in April, however, UK markets showed resilience as
signs of easing inflation, expectations of interest rate cuts, and
M&A activity helped improve investor
sentiment.
The
FTSE 100 rose steadily over the month, before reaching a record
high of 8,147 points1,
benefitting from the strength in oil, copper, and precious metals
prices.
The
healthcare and consumer staples sectors, which are significant
dollar earners, also contributed to the UK market's strong relative
performance, aided by sterling's weakness against the US
currency2.The
strong performance also trickled down to UK small and mid-cap
stocks, although not to the same extent, with the FTSE 250 ending
0.6% higher3.
US
equities fell over the month of April as sticky inflation dampened
hopes of near-term interest rate cuts from the Federal Reserve.
Strong jobs market combined with elevated inflation has led Fed
rate cuts to be pushed further out, with a June cut now appearing
unlikely.
The
European Central Bank, however, was more dovish as Eurozone
inflation remained steady at 2.4% in April and economic data points
to rate cuts in June4.
The
FTSE All Share had rose by 2.5% during April with Basic Materials,
Oil & Gas and Health Care as the top performing
sectors.
Stock
comments:
WH
Smith was the top detractor during the period as progress in their
US division disappointed though we believe that this is temporary
and that there is still significant growth on offer in the region.
Phoenix was another top detractor,
having performed well post results in March, the shares reacted
negatively to a sell-side broker downgrade.Segro fell during the
month despite a reassuring trading update that demonstrated
continued rental growth.
Rio
Tinto rose reflecting the rebound in iron ore prices. NatWest rose
following a robust trading update that highlighted the resilience
of its Net Interest Income as headwinds from higher deposit costs
fade. Tate & Lyle performed strongly during the month, although
there was limited company specific newsflow during the
month.
Changes:
During the month,
we started a new position in Anglo
American. We view BHP's bid for Anglo American as the beginning of a process
which will result in a materially higher price when the deal is
ultimately done. The approach from BHP highlights the importance
and value of copper assets, a theme we also have exposure to
through Weir, whose products and services support the mining
industry.
Outlook:
Equity markets
entered 2024 in a buoyant mood following a strong and broad rally
in the latter part of 2023. The outlook, and optimism, is a far cry
from 12 months ago, when supply chains were hugely disrupted, and
inflation was double digit and well ahead of central banks' targets
prompting rapid and substantial interest rates hikes despite an
uncertain demand environment. Despite this, equities had one of
their best years on record outperforming bonds with double digit
increases, in dollar terms, across most of the developed world and
some emerging markets. In the US, the Nasdaq was the standout
rising by 54% driven by the largest seven companies that rebounded
strongly (+c.70%) after a poor 2022, when they had fallen by 39% as
a group. The FTSE All Share had returned by 7.9% in 2023.
China was the surprise negative in
2023, with no noticeable COVID re-opening recovery and lacklustre
growth despite government attempts to stimulate.
As we
pass the first quarter of 2024, markets have shifted to
`goldilocks' territory whereby slowing inflation has signalled the
peak for interest rates while broad macroeconomic indicators that
have been weak are not expected to deteriorate further. This is
also helpful for the cost and availability of credit which has
recently improved having been deteriorating through most of 2023.
During December, bond markets had begun to price in 130bps of
easing in the US and a not dissimilar amount in the UK and
Europe.
We
believed that this quantum of cuts will prove to be overly
aggressive without a significant deterioration in the economy which
we don't expect. That said despite these expectations moderating
significantly during Q1, stock markets have continued to make
progress in the developed world. Labour markets remain resilient
for now with low levels of unemployment while real wage growth is
supportive of consumer demand albeit presenting a challenge to
corporate profit margins.
Notably in 2024,
geopolitics will play a more significant role in asset markets.
This year will see the biggest election year in history with more
than 60 countries representing over half of the world's population,
c.4 billion people going to the polls. While most, such as the UK's
are unlikely to have globally significant economic or geopolitical
ramifications, others, such as the US elections in November, could
have a material impact. We believe political certainty may be
helpful for the UK and address the UK's elevated risk premium that
has persisted since the damaging Autumn budget of 2022. Whilst we
do not position the portfolios for any particular election outcome,
we are mindful of the potential volatility and the opportunities
that may result.
As we
have commented several times before, the UK stock market continues
to remain depressed in valuation terms relative to other developed
markets offering double-digit discounts across a range of valuation
metrics. This valuation `anomaly' saw further reactions from UK
corporates with the buyback yield of the UK, at the end of 2023,
standing at a respectable c.2.5%. Combining this with a dividend
yield of c.4%, the cash return of the UK market is attractive in
absolute terms and comfortably higher than other developed markets.
Although we anticipate further volatility ahead as earnings
estimates moderate, we know that in the course of time risk
appetite will return and opportunities are emerging. As we have
stated in previous commentaries, we have identified a number of
opportunities with new positions initiated throughout the year in
both UK domestic and midcap companies.
We
continue to focus the portfolio on cash generative businesses with
durable, competitive advantages as we believe these companies are
best placed to drive returns over the long-term. Whilst we
anticipate economic and market volatility will persist throughout
the year, we are excited by the opportunities this will likely
create; by identifying the companies that strengthen their
long-term prospects as well as attractive turnarounds
situations.
1 https://www.proactiveinvestors.com/companies/news/1046293/ftse-100-live-blue-chips-close-near-record-high-us-stocks-mixed-1046293.html
2 https://www.fxstreet.com/news/pound-sterling-falls-due-to-us-dollars-recovery-uncertainty-ahead-of-boes-policy-decision-202405080812
3 https://www.reuters.com/markets/europe/anglo-american-boosts-londons-ftse-100-near-record-high-2024-05-03/
4 https://www.reuters.com/markets/rates-bonds/ecb-rate-cut-case-getting-stronger-says-chief-economist-lane-2024-05-06/#:~:text=The%20ECB%20has%20all%20but,jobs%20data%20late%20last%20week.
24 May 2024