BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC | BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC | ||||||
| (LEI:5493003YBY59H9EJLJ16) | ||||||
| All information is at 31 October 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 | -1.0% | -0.5% | 12.2% | 18.4% | 40.2% | 94.3% |
| Net asset value | -2.3% | -2.2% | 7.4% | 16.6% | 39.2% | 80.0% |
| FTSE All-Share Total Return | -1.4% | -2.1% | 6.8% | 19.3% | 37.9% | 76.2% |
| 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: | 196.37p |
| Net asset value - cum income*: | 201.30p |
| Share price: | 198.00p |
| Total assets (including income): | £50.2m |
| Discount to cum-income NAV: | 1.6% |
| Gearing: | 6.7% |
| Net yield**: | 3.5% |
| Ordinary shares in issue***: | 22,958,100 |
| Gearing range (as a % of net assets) | 0-20% |
| Ongoing charges****: | 1.1% |
| * includes net revenue of 4.93 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 paid to shareholders on 27 August 2019. |
| *** excludes 9,975,832 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 (%) |
| Pharmaceuticals & Biotechnology | 9.7 |
| Oil & Gas Producers | 9.4 |
| Life Insurance | 8.7 |
| Media | 8.6 |
| Banks | 7.4 |
| Support Services | 7.4 |
| Food Producers | 6.5 |
| Financial Services | 6.4 |
| Household Goods & Home Construction | 4.5 |
| Travel & Leisure | 4.5 |
| Tobacco | 3.6 |
| Food & Drug Retailers | 3.5 |
| Gas, Water & Multiutilities | 3.4 |
| Mining | 3.0 |
| Health Care Equipment & Services | 2.5 |
| Industrial Engineering | 2.2 |
| Mobile Telecommunications | 2.2 |
| Nonlife Insurance | 1.8 |
| Electronic & Electrical Equipment | 1.2 |
| Construction & Materials | 0.9 |
| General Retailers | 0.5 |
| Beverages | 0.3 |
| Net Current Assets | 1.8 |
| ------ | |
| Total | 100.0 |
| ====== | |
| Ten Largest Equity Investments | |
| Company | Total assets (%) |
| Royal Dutch Shell 'B' | 6.1 |
| AstraZeneca | 5.2 |
| GlaxoSmithKline | 4.5 |
| RELX | 4.2 |
| Unilever | 3.8 |
| British American Tobacco | 3.6 |
| Tesco | 3.5 |
| National Grid | 3.4 |
| BP Group | 3.4 |
| BHP | 3.0 |
| Commenting on the markets, Adam Avigdori and David Goldman representing the Investment Manager noted: |
| Whilst the FTSE All-Share fell by 1.4% in October, other global equity markets saw modest growth. Broad trends of slowing economic activity and uncertainty regarding US-China trade dominated headlines, while hopes of further easing offset this negative rhetoric. The most notable change in the month was around UK domestic assets, as Boris Johnson returned from Europe with a new deal and the risk of ‘no-deal’ Brexit diminished. This led to a rally in sterling and domestic shares outperforming, despite a challenging trading environment for UK businesses as the uncertainty around politics has impacted economic activity and decision making. The Company is broadly neutrally positioned in domestic names, albeit that the initial market reaction was in the domestic sectors that had previously been the most hard-hit (such as retail, property, banks). The Company’s exposure continues to be focused on franchises where we see substantial and sustainable long-term growth performance, and it did consequently see some underperformance in the month. Within the UK more broadly, companies with international exposure saw weakness, in some cases in spite of returning solid Q3 results to the market. Over the month, the Company detracted -2.2%, underperforming the benchmark, the FTSE All-Share by -0.8%. Smith & Nephew was the largest detractor to performance, when, despite strong trading results, the well-regarded CEO announced his departure. Hiscox also detracted on fears of claims from typhoons Faxai and Hagibis. The largest contributor to the fund was Ferguson, benefiting from strong trading and continued activist involvement. St James’ Place contributed to performance, reporting strong net inflows for the quarter. During the month we received shares as a result of the Prudential split into M&G, but we also added to the position. We sold our position in Elementis. We reduced our position in Taylor Wimpey given the recent strength in both shares. We added to our position in AB Foods given an increasingly attractive valuation. We also added to Unilever following recent share price weakness. 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. |
| 18 November 2019 |
