BlackRock Income and Growth Investment Trust Plc - Portfolio Update
18 May 2020 - 8:59PM
PR Newswire (US)
BLACKROCK INCOME AND GROWTH
INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) |
All information is at 30 April
2020 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 |
11.9% |
-17.0% |
-14.0% |
-8.0% |
3.6% |
64.5% |
Net asset value |
5.8% |
-18.0% |
-14.5% |
-8.4% |
5.2% |
53.9% |
FTSE All-Share Total Return |
4.9% |
-18.8% |
-16.7% |
-7.5% |
4.8% |
46.2% |
|
|
|
|
|
|
|
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: |
165.30p |
Net asset value - cum income*: |
168.38p |
Share price: |
164.00p |
Total assets (including
income): |
£42.1m |
Discount to cum-income NAV: |
2.6% |
Gearing: |
3.9% |
Net yield**: |
4.4% |
Ordinary shares in issue***: |
22,605,600 |
Gearing range (as a % of net
assets) |
0-20% |
Ongoing charges****: |
1.1% |
* includes net revenue of 3.08 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 4.4% and includes the 2019 final
dividend of 4.60p per share declared on 24 December 2019 and paid
to shareholders on 16 March 2020, and the 2019 interim dividend of
2.60p per share declared on 25 June 2019 and paid to shareholders
on 2 September 2019. |
*** excludes 10,093,332 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 2019. |
Sector Analysis |
Total assets
(%) |
Pharmaceuticals &
Biotechnology |
9.0 |
Household Goods & Home
Construction |
8.1 |
Food Producers |
7.4 |
Support Services |
6.8 |
Media |
6.5 |
Financial Services |
6.5 |
Mining |
5.9 |
Oil & Gas Producers |
5.4 |
Tobacco |
5.3 |
Banks |
4.7 |
Gas, Water & Multiutilities |
4.7 |
Travel & Leisure |
4.5 |
Food & Drug Retailers |
3.2 |
General Retailers |
3.1 |
Health Care Equipment &
Services |
3.0 |
Mobile Telecommunications |
2.6 |
Life Insurance |
2.1 |
Electronic & Electrical
Equipment |
1.2 |
Personal Goods |
1.2 |
Industrial Engineering |
1.1 |
Construction & Materials |
0.6 |
Nonlife Insurance |
0.4 |
Beverages |
0.4 |
Real Estate Investment Trusts |
0.3 |
Net Current Assets |
6.0 |
|
------ |
Total |
100.0 |
|
====== |
|
|
Ten Largest Equity
Investments |
|
Company |
Total assets
(%) |
AstraZeneca |
7.1 |
British American Tobacco |
5.3 |
RELX |
4.9 |
Unilever |
4.9 |
BHP |
4.3 |
Reckitt Benckiser |
4.2 |
National Grid |
3.8 |
Tesco |
3.2 |
John Laing Group |
3.1 |
Smith & Nephew |
3.0 |
Commenting on the markets, Adam
Avigdori and David Goldman representing the Investment Manager
noted: |
|
Global equity markets
rose in April. Remarkably, it was a month of both unprecedented
global contraction in economic activity and yet strong “risk on”
market sentiment, with the S&P posting its largest calendar
month gain since 1987. The spread of COVID-19 remained the primary
focus globally. The number of confirmed virus cases globally
surpassed 4m, however, data indicated the curve of new cases began
to flatten in most countries. Oil prices jumped sharply on news
that Russia and Saudi Arabia had agreed to cut supply but then
plunged into negative territory on the expiry of the May WTI (West
Texas Crude Oil) future, as the lack of available storage meant
investors holding the May contract would be forced to take physical
delivery on expiry of the contract. Record-low Purchasing Managers
Indices (PMIs) were reported globally, and unemployment rates rose
at alarming levels. Global and national economic forecasters (IMF,
OBR) updated their gloomy growth projections, capturing the
beginning of the downturn in the developed economies. Despite
continued uncertainty and disappointing economic activity data, the
Volatility Index (VIX) remained in the range of 30 to 45 likely
attributable to the announcements of further stimulus packages
which came from the Fed (additional $2.3 trillion) and the euro
zone (additional €500 billion). In the UK, composite PMI of 12.9
(from 36.0) was significantly below the prior low of 38.1, recorded
in November 2008 during the Global Financial Crisis. Lockdown
measures were extended after the hospitalization of prime minister,
Boris Johnson due to severe coronavirus symptoms. Towards the end
of the month, Chancellor Sunak confirmed that very small businesses
will be offered loans of up to £50k with full state guarantees and
no interest payable for the first 12 months. About 160 companies in
the UK FTSE have now announced a cut or suspension to their
dividends, including Shell's first dividend cut since the 1940s.
The FTSE All Share benchmark rose 4.9% in April with Technology,
Consumer Services, and Consumer Goods as top outperformers while
Oil & Gas was the top underperformer.
Over the month, the Company returned 5.8%, outperforming the
benchmark, the FTSE All-Share which returned 4.9%.
The Company’s underweight holding in HSBC was the top contributor
to performance. The company had been defensive vs other banks in
the February and March market sell-off and has since caught up and
underperformed the market. The Company’s underweight holding in
Royal Dutch Shell also contributed to performance. Energy stocks
underperformed generally, but the company also announced a cut to
the dividend for the first time since the Second World War.
National Grid was the top detractor to performance. Utilities and
other defensives underperformed a more constructive market
environment. Standard Chartered also detracted as banks generally
underperformed the market as investors feared large loan loss
provisions and weaker than expected income growth.
During the month, we bought positions in United Utilities, Informa,
Intermediate Capital and Big Yellow Group. We reduced our holdings
in National Grid, ABFoods, Royal Dutch Shell and Hiscox and added
to Next, Vodafone and British American Tobacco.
This Covid-19 led crisis is the closest we have got to a global
natural disaster in financial markets, and its impact has been
immediate and severe. Entire industries are being shut down
overnight with revenues effectively going to zero. It has been felt
much more acutely than anything we have seen in recent memory.
Whilst in ‘normal’ economic downturns, activity slows gradually
over months, with ‘lockdowns’ by governments, activity has slowed
very dramatically with significant variations by industry and
geography.
The hit to nominal GDP from this crisis is likely to be record
breaking with early estimates suggesting falls of up to 30% in
nominal GDP in a number of developed market economies for the
second quarter. Whilst the scale of this crisis has been
unprecedented, we have also seen extraordinary government
intervention. This should provide a cushion to businesses that are
being hurt by the impact of the shutdowns. As we start to ease past
the current peak in this crisis, governments now need to determine
how they modify their economic support as the impact on businesses
and industries becomes clearer. Fiscal policy, for example, has
played an earlier, and more prominent role versus the 2008
financial crisis and we expect to see more pressure on governments
and central banks to deploy their balance sheets. The role and type
of economic support is likely to lead to material dispersion within
the market over the medium-term.
We recognise the enormous uncertainty still facing society,
employers and their employees today. Whether it is the threat of a
resurgence of the virus, the emergence of viable treatments and
potential vaccines or the different speeds and ways in which
governments remove restrictions and support. We are treading
cautiously; balancing the significant long-term opportunity we see
with a wide range of short-term scenarios and factors. Amongst
these are clearly the impact of widespread unemployment, the
changes to both consumer and business behaviour with regards to
which products and services they consume and how they consume them
in addition to the potential for inflation to pick up. Crucially,
whilst we expect that the threat from Covid-19 will be addressed,
either through a vaccine, rolling containment policies or herd
immunity, it is the duration of the pandemic and associated
containment policies that will be crucial in determining the state
of the economy and speed of recovery thereafter.
In conclusion, we came into this crisis more defensively positioned
and with limited gearing which benefited the Company and leaves us
in a strong position to take advantage of the dislocation. In times
like these, the scale and breath of the platform at BlackRock
allows us to leverage significant resources across stock analytics,
market insights and data science. For example, in the month of
March, as the crisis unfolded and as 90% of the global workforce
began working from home, the UK team still spoke with over 210
management teams; seeking to understand companies’ immediate
liquidity needs, balance sheet strain and strategy to navigate the
crisis. We know, from our experience in 2008/2009, how important
these resources and support are and the opportunities it enables
you to find. In the weeks and months ahead, we will continue to
utilise these resources and our previous experiences in uncertain
markets to continue to build on the promising start to the year to
ensure the Company emerges from this period of volatility well
placed to deliver strong capital and dividend growth over the long
term. |
18 May 2020 |
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