BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC

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BlackRock Greater Europe Investment Trust Plc - Portfolio Update

01/21/2022 | 07:07am EDT

The information contained in this release was correct as at 31 December 2021. 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 31 December 2021 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) 1.0% 7.3% 30.5% 120.7% 826.3%
Net asset value* (diluted) 1.0% 7.3% 30.5% 120.6% 826.7%
Share price -0.3% 5.8% 32.2% 135.3% 849.7%
FTSE World Europe ex UK 3.8% 5.1% 17.4% 53.6% 379.1%

* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream
 

At month end

Net asset value (capital only): 682.49p
Net asset value (including income): 684.00p
Share price: 694.00p
Premium to NAV (including income): 1.5%
Net gearing: 9.1%
Net yield¹: 0.9%
Total assets (including income): £690.5m
Ordinary shares in issue²: 100,945,411
Ongoing charges³: 1.02%

1  Based on an interim dividend of 1.75p per share and a final dividend of 4.55p per share for the year ended 31 August 2021.
2  Excluding 16,983,527 shares held in treasury.
3  Calculated as a percentage of average net assets and using expenses, excluding interest costs, after relief for taxation, for the year ended 31 August 2021.

Sector Analysis Total Assets (%)
Industrials 24.4
Technology 21.2
Health Care 17.1
Consumer Discretionary 16.6
Financials 9.8
Consumer Staples 4.9
Energy 3.3
Basic Materials 2.9
Net Current Liabilities -0.2
-----
100.0
=====
Country Analysis Total Assets (%)
Switzerland 22.8
Netherlands 16.8
Denmark 15.5
France 13.3
Sweden 8.1
United Kingdom 5.9
Russia 4.7
Italy 4.2
Ireland 2.0
Spain 1.9
Poland 1.5
Finland 1.4
Germany 1.1
Greece 1.0
Net Current Liabilities -0.2
-----
100.0
=====

   

Top 10 holdings Country Fund%
ASML Netherlands 6.9
LVMH Moët Hennessy France 6.6
Sika Switzerland 5.4
Lonza Group Switzerland 5.2
Novo Nordisk Denmark 4.8
DSV Panalpina Denmark 4.3
RELX United Kingdom 4.2
Royal Unibrew Denmark 3.2
IMCD Netherlands 3.0
Hermès International France 2.8

Commenting on the markets, Stefan Gries, representing the Investment Manager noted:

During the month, the Company’s NAV rose by 1.0% and the share price fell by 0.3%. For reference, the FTSE World Europe ex UK Index returned 3.8% during the period.

Europe ex UK markets were up during December, finishing a year of exceptional returns. During the month, markets were volatile and experienced their final rotation of the year. Following a set-back in risk assets at the end of November on the back of the emergence of the ‘Omicron’ Covid variant, markets came back into favour towards the end of December as studies suggested milder symptoms in most cases. Industrials, basic materials and health care led the market, while consumer services and telecommunications delivered weaker performance.

During December, the Company lagged its reference index, mainly driven by its exposure to the semiconductor industry, as well as to higher quality stocks particularly within the health care sector, which pulled back on reduced Omicron fears. However, overall, 2021 was another strong performance for the Company.

In sector terms, the Company’s higher allocation to technology detracted as we witnessed a reversal within the semiconductor industry on worries over a potential end to the semiconductor cycle. We do not share those fears and have so far failed to identify any data points that would materially change our view on the sector. Demand, in our view, comes from a diverse range of end markets and the companies we own are typically the market leaders in their respective parts of the semiconductor value chain.

A higher allocation to consumer services also detracted from returns, as did a lower allocation to basic materials. The Company’s overweight to industrials and a lower weighting towards telecommunications and financials was positive.

The health care sector was the largest detractor from relative performance during the month. A number of health care names had performed strongly during November, largely driven by the new Omicron variant, and shares pulled back in December on reduced concerns over the virus. In more stock specific news, DiaSorin experienced volatility following a weak Capital Markets Day where management presented a weaker than expected financial outlook. However, we continue to believe that DiaSorin remains one of the best positioned life sciences firms in Europe.

As flagged, our exposure to the semiconductor industry was also negative during December. BE Semiconductor, ASML and ASMi were all amongst the largest detractors. Besides the above-mentioned market jitters impacting shares during the month, we also saw a few short-term stock specific issues as BE Semiconductor had to lower its Q4 revenue guidance due to flooding in its main production factory in Malaysia.

The Company’s holding in Russian e-commerce name Ozon fell on geopolitical fears, as well as general weakness in the technology sector during the month. Other quality names that sold off during the December rotation on limited stock specific news included Hermès, Adyen and IMCD.

The top performer over the period was our position in wealth tech platform Allfunds, rebounding strongly following a short period of weaker performance. Shares rose once it became clear that a previously anticipated placing was not going to come through. Owning National Bank of Greece was also positive. Elsewhere, shares in combi oven producer Rational and travel exposed Safran also rebounded on reduced Omicron fears and a more positive outlook for the travel and leisure industry generally.

At the end of the period the Company had a higher allocation than the reference index towards technology, industrials, consumer discretionary, health care and energy. The Company had an underweight allocation to financials, consumer staples, utilities, telecoms, real estate and basic materials.

Outlook

Markets delivered strong performance during 2021 on the back of improving activity, vaccine rollouts and easy fiscal and monetary policy. We believe that economic growth and aggregate market earnings still remain underpinned as we head into 2022. We particularly see strong spending coming through the EU Recovery Fund as supportive for a number of global leading businesses operating in areas like digitalization and energy transition which we own in this Company.

Moreover, whilst we still see potential for greater normalisation in certain segments of the market and positive economic growth overall, some of the strong cyclical tailwinds, and indeed policy support seen in 2021, should fade over the course of 2022. Whilst rate markets and inflation expectations are likely to stay volatile, we do not expect policy in Europe to change meaningfully.

We expect greater dispersion between sector and stock outcomes and with that a need for greater selectivity. As we find ourselves in a situation where we see strong industrial and consumer demand, combined with issues in supply chains, we more than ever focus on companies with strong pricing power that have the ability to pass on higher prices.

21 January 2022

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.


© PRNewswire 2022
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