BlackRock Grtr Eur Portfolio Update
11 November 2015 - 11:03PM
UK Regulatory
TIDMBRGE TIDMBRGS
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc
All information is at 31 OCTOBER 2015 and unaudited.
Performance at month end with net income reinvested
One Three One Three Launch
Month Months Year Years (20 Sep 04)
Net asset value* (undiluted) 3.5% -3.6% 10.0% 41.0% 210.9%
Net asset value* (diluted) 3.1% -3.0% 9.6% 41.2% 209.9%
Share price 4.3% -2.1% 12.0% 41.0% 202.7%
FTSE World Europe ex UK 5.0% -4.1% 5.2% 38.3% 142.4%
Sources: BlackRock and Datastream
At month end
Net asset value (capital only): 251.48p
Net asset value (including income): 254.67p
Net asset value (capital only)*: 250.90p
Net asset value (including income)*: 253.58p
Share price: 246.25p
Discount to NAV (including income): 3.3%
Discount to NAV (including income)*: 2.9%
Subscription share price: 10.00p
Net gearing: 0.5%
Net yield**: 2.0%
Total assets (including income): GBP266.8m
Ordinary shares in issue***: 104,309,663
Subscription shares: 20,545,178
Ongoing charges****: 0.89%
* Diluted for subscription shares and treasury shares.
** Based on a final dividend of 3.35p for the year ended 31 August 2015 and an
interim dividend of 1.65p per share for the year ended 31 August 2015.
*** Excluding 5,488,898 shares held in treasury.
**** Calculated as a percentage of average net assets and using expenses,
excluding performance fees and interest costs, after relief for taxation for
the year ended 31 August 2015.
Sector Analysis Total Assets Country Analysis Total Assets
(%) (%)
Financials 31.3 France 19.2
Industrials 16.2 Switzerland 15.3
Health Care 13.7 Germany 14.3
Consumer Goods 12.1 Italy 8.9
Consumer Services 9.0 Netherlands 8.3
Technology 8.0 Sweden 8.0
Telecommunications 4.0 Denmark 7.3
Basic Materials 3.8 Ireland 6.1
Oil & Gas 2.0 Finland 4.8
Net current liabilities (0.1) Belgium 2.4
----- Turkey 2.3
100.0 Spain 1.7
===== Russia 1.5
Net current liabilities (0.1)
-----
100.0
=====
Ten Largest Equity Investments
% of
Company Country Total Assets
Novartis Switzerland 5.0
Novo Nordisk Denmark 4.6
AXA France 3.9
Bayer Germany 3.8
LVMH Moët Hennessy France 3.0
Heineken Netherlands 2.8
Deutsche Telekom Germany 2.7
Unibail-Rodamco France 2.7
RELX Netherlands 2.5
Ryanair Ireland 2.5
Commenting on the markets, Vincent Devlin, representing the Investment Manager
noted:
During the month, the Company's NAV rose by 3.5% and the share price increased
by 4.3%. For reference, the FTSE World Europe ex UK Index was up 5.0% during
the period.
Following two months of market falls, European equities rose very strongly in
October. This relief rally was initially caused by the Federal Reserve's
decision to delay raising rates, which investors interpreted as a signal that
central bank support may relieve some of the weaker data seen in emerging
markets. This was followed up by the European Central Bank (ECB) hinting at
further easing (potentially in December) and the People's Bank of China cutting
its deposit rate. This rally also caused a significant rotation within the
market with areas that had performed very poorly (such as commodity, energy and
emerging market-related stocks) leading the rise. Indeed, autos, oil & gas and
basic materials were the top three performing sectors in October, whereas
sectors including health care and financials significantly underperformed the
market. October also saw the start of third quarter earnings announcements for
European companies, with the results broadly disappointing, especially in
cyclical sectors such as consumer discretionary and industrials.
The Company's underperformance in October was largely due to stock selection;
however, sector allocation also detracted illustrating the effect of the
market's positioning-led rotation that took place towards the beginning of the
month. The largest relative losses were realised from an underweight holding to
consumer goods and an overweight to financials.
Amongst the top detractors to performance over the month were KBC Groep and
Bank of Ireland, as domestic focused stocks underperformed their emerging
market counterparts. Equally, the rhetoric coming from the central banks in
both Europe and the US suggesting lower rates for longer, put increasing
pressure on expectations for net interest income (the spread a bank earns
between the deposits it takes and loans it makes) for the banking sector as a
whole.
We also saw holdings in Novo Nordisk and Novartis detract as the market became
more risk-on and many defensive names gave up some of their strong returns
realised in the last quarter. In the same vein, not holding Nestlé contributed
to relative performance over the month.
Despite its defensive nature, Heineken bucked the downward trend of these
names, delivering strong performance during October. The company released Q3
results with sales 4% ahead of expectations, largely driven by strong trade in
Europe. The largest contributor to performance was Russian internet company
Yandex which reported an 18% year-on-year increase in revenues for Q3.
At the end of the period, the Company had higher weightings when compared with
the reference index to financials, technology, consumer services and
industrials. The Company had lower exposure to consumer goods, basic materials,
oil & gas, health care, utilities and telecoms.
Outlook
Despite the uncertainties and worries which have dominated the market since the
summer, we remain constructive on European equities. With the likelihood of
further incremental support from the ECB through expansion of the current
Quantitative Easing programme, domestic growth should remain underpinned in our
view. Recent positive European economic/sentiment indicators suggest that the
European economy has a degree of resilience in the face of the increased
concerns over a global slowdown, which is encouraging. We believe that the
favourable credit conditions, subdued wage growth and weaker Euro can help
boost economic momentum and in turn European corporate earnings together, with
some additional profit margin normalisation. We remain of the view that the
European equity universe offers undemanding valuation opportunities but stock
selection remains a focus during this period of increased volatility and
heightened uncertainty around the global economic growth outlook.
11 November 2015
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.
END
(END) Dow Jones Newswires
November 11, 2015 07:03 ET (12:03 GMT)
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