The information contained in this release was correct as at
31 August 2020. 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 INVESTMENTS TRUST PLC (LEI -
5493003R8FJ6I76ZUW55)
All information is at 31 August
2020 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) |
4.5% |
12.9% |
17.2% |
39.2% |
512.4% |
Net asset value*
(diluted) |
4.7% |
12.9% |
17.1% |
39.1% |
512.7% |
Share price |
2.3% |
13.2% |
18.0% |
43.1% |
500.1% |
FTSE World Europe ex
UK |
2.2% |
5.7% |
0.7% |
7.1% |
271.2% |
* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream
At month end
Net asset value
(capital only): |
456.23p |
Net asset value
(including income): |
460.95p |
Net asset value
(capital only)1: |
456.23p |
Net asset value
(including income)1: |
460.95p |
Share price: |
447.00p |
Discount to NAV
(including income): |
3.0% |
Discount to NAV
(including income)1: |
3.0% |
Net gearing: |
5.7% |
Net
yield2: |
1.3% |
Total assets
(including income): |
388.7m |
Ordinary shares in
issue3: |
84,323,101 |
Ongoing
charges4: |
1.1% |
1 Diluted for treasury shares.
2 Based on a final dividend of 4.10p per share for the year
ended 31 August 2019 and an interim
dividend of 1.75p per share for the year ending 31 August 2020.
3 Excluding 26,005,837 shares held in treasury.
4 Calculated as a percentage of average net assets and using
expenses, excluding interest costs, after relief for taxation, for
the year ended 31 August 2019.
Sector
Analysis |
Total
Assets (%) |
|
Country
Analysis |
Total
Assets (%) |
Technology |
26.0 |
|
Denmark |
18.8 |
Industrials |
18.3 |
|
Switzerland |
14.5 |
Health Care |
17.3 |
|
Netherlands |
12.2 |
Consumer Goods |
11.1 |
|
France |
12.2 |
Consumer Services |
9.2 |
|
Germany |
10.0 |
Financials |
8.5 |
|
Italy |
5.9 |
Oil & Gas |
3.8 |
|
Sweden |
5.6 |
Basic Materials |
3.5 |
|
United Kingdom |
4.0 |
Telecommunications |
1.9 |
|
Russia |
3.4 |
Net Current
Assets |
0.4 |
|
Israel |
2.7 |
|
----- |
|
Spain |
2.5 |
|
100.0 |
|
Belgium |
2.3 |
|
===== |
|
Finland |
2.3 |
|
|
|
Ireland |
2.2 |
|
|
|
Poland |
0.8 |
|
|
|
Greece |
0.2 |
|
|
|
Net Current
Assets |
0.4 |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
Top 10
Holdings |
Country |
Fund
% |
ASML |
Netherlands |
6.1 |
Sika |
Switzerland |
6.0 |
SAP |
Germany |
5.9 |
Lonza Group |
Switzerland |
5.2 |
Kering |
France |
5.2 |
Novo Nordisk |
Denmark |
5.1 |
Royal Unibrew |
Denmark |
5.1 |
DSV |
Denmark |
4.5 |
RELX |
United Kingdom |
4.1 |
Safran |
France |
3.6 |
Commenting on the markets,
Stefan Gries, representing the
Investment Manager, noted:
During the month, the Company’s NAV rose 4.5% and the share
price rose 2.3%. For reference, the FTSE World Europe Ex UK Index
returned 2.2% during the period.
Europe ex UK markets were up
during August with cyclical assets leading the strong market.
Defensive sectors including healthcare, utilities and
telecommunications lagged the market rally.
The rising market was driven by better economic figures as well
as hopes for successful Covid-19 vaccine trials. Fundamental news
were fairly limited during the month.
The Company outperformed the reference index over the month,
driven by strong stock selection while sector allocation was also
positive.
In sector terms, the Company benefitted from a higher allocation
to industrials, technology and consumer services as well as a lower
allocation to utilities. Our lower weighting to defensive areas of
the market including utilities was also positive for relative
returns while an overweight exposure to the healthcare sector
detracted.
A number of more cyclically exposed assets such as DSV, Kingspan
and Sika were amongst the top contributors to returns. DSV
continued to perform following strong Q2 results and enjoyed
further tailwinds from the continued recovery in trade volumes in
August. Building materials company Kingspan reported strong numbers
during the month, which is testament to very strong management
execution. The company over-delivered on costs and reported
revenues ahead of consensus. Kingspan benefitted from its diverse
end market exposure seeing good trading in North America, Germany and the Scandinavian countries while
the UK was slightly weaker. Strong medium term growth drivers for
Kingspan include the continued shift towards more energy efficient
buildings as well as its involvement in building new facilities for
electric vehicles.
Sika also continued to contribute strongly to Company
performance after announcing H1 results ahead of expectations back
in July. There was little stock specific news in August, aside from
qualitative comments that the business has seen an acceleration in
growth in key markets like North
America and Europe in July
and August.
The technology sector contributed equally strongly. Hexagon, an
industrial and software conglomerate, drove returns as the company
pre-announced Q2 earnings with sales c. 6% and EBIT 34% ahead of
expectations. The business specializes in the provision of
geo-mapping and monitoring software and sensors, as well as plant
management and automation systems. Its products have applications
in diverse end markets including smart phones, mining automation,
construction surveying, and agriculture optimization.
Also within technology, Danish IT service provider Netcompany
was positive for performance as management continued to execute
strongly, delivering a strong Q2 update and reiterating guidance of
18-20% organic sales growth for 2020 overall. Customer demand
during the crisis was virtually unchanged as many customers
prioritized digitalization projects and the company was quickly
able to move to working remotely. They further benefitted from a
diverse client base serving various customers for the financial,
telecommunication and media, retail and trade, energy and supply,
service and industrial sector, as well as governments and
municipalities. We believe Netcompany’s end markets offer
attractive growth opportunities for many years to come.
Another positive contributor was Neste Oil. Shares continued to
perform well following solid results in July. Furthermore, the
renewable diesel manufacturer signed three new contracts with US
airlines to supply them with sustainable aviation fuel at
San Francisco airport.
The Company’s holding in luxury group Kering contributed on
hopes of travel retail coming back after having been slightly
weaker in previous months. With the help from our data scientist,
we continue to closely monitor consumer spending trends across all
regions.
Not owning large, defensive benchmark constituents including
Nestle, Sanofi and Roche aided returns as these names generally
lagged the market.
Detractors included some of the Company’s holdings in the
healthcare sector. Lonza, DiaSorin, Grifols and Novo Nordisk were
all amongst the bottom performers despite a lack of stock specific
news flow. A number of these positions saw a degree of profit
taking after having performed very strongly over the last few
months.
Elsewhere, not owning Deutsche Post, Siemens and Daimler was
also negative for performance. Shares in the latter rose as the
German car company confirmed strong trading in China during May and June.
At the end of the period the Company had a higher allocation
than the reference index towards technology, consumer services,
industrials and health care. The Company had a neutral
weighting towards oil & gas and underweight allocation to
consumer goods, financials, utilities, basic materials and
telecoms.
Outlook
Over recent years, many investors have avoided exposure to
European equities owing to concerns around political risk, rising
populism, a challenged financial system and the regions larger than
average exposure to China. We have
long been of the view that one needs to take an active approach to
investing in European equities. With this in mind, we didn’t need
to be positive on Europe as a
region to offer our shareholders exposure to some highly attractive
companies that happened to be listed in the region. The response to
the fallout from COVID 19 has the potential to change the more
negative perception on the asset class as a whole.
The proposed €750bn EU Recovery Fund is a great step of
solidarity for the bloc and one that can potentially bring greater
fiscal coordination.
This fund, made up of €390bn of grants and €360bn of loans,
could create net transfers ranging from 3% to 20% of GDP for
countries such as Greece,
Portugal, Spain and Italy. To be funded from issuance of common EU
bonds, this fund marks the first instance of debt mutualisation for
the region – a step which will act to bring in yield spreads for
those southern economies and potentially reduce the ever looming
risk associated with a break-up of the bloc. We believe this can
bring down the overall risk premium for European equities.
In this context, both the economy and local stock markets appear
well positioned to make up lost ground, potentially transforming
European equities into a standout opportunity in the developed
world while notably providing further subsidies for growth in
Emerging Europe.
17 September 2020
ENDS
Latest information is available by typing www.brgeplc.co.uk 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.