BlackRock Greater Europe Investment Trust Plc - Portfolio Update
PR Newswire
London, December 17
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc (LEI - 5493003R8FJ6I76ZUW55)
All information is at 30 November 2019 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) | 4.8% | 4.4% | 22.5% | 56.0% | 446.0% |
| Net asset value* (diluted) | 4.8% | 4.4% | 22.5% | 56.0% | 446.5% |
| Share price | 4.2% | 4.0% | 23.6% | 58.9% | 428.9% |
| FTSE World Europe ex UK | 1.4% | 0.9% | 13.7% | 35.6% | 271.7% |
* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream
At month end
| Net asset value (capital only): | 412.77p |
| Net asset value (including income): | 412.87p |
| Net asset value (capital only)1: | 412.77p |
| Net asset value (including income)1: | 412.87p |
| Share price: | 396.00p |
| Discount to NAV (including income): | 4.1% |
| Discount to NAV (including income)1: | 4.1% |
| Net gearing: | 6.4% |
| Net yield2: | 1.5% |
| Total assets (including income): | £348.2m |
| Ordinary shares in issue3: | 84,339,001 |
| Ongoing charges4: | 1.09% |
1 Diluted for treasury shares.
2 Based on a final dividend of 4.10p per share and an interim dividend of 1.75p for the year ended 31 August 2019.
3 Excluding 25,989,937 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 (%) | |
| Industrials | 22.3 | Denmark | 15.9 | |
| Health Care | 18.8 | Switzerland | 15.7 | |
| Technology | 17.8 | France | 14.6 | |
| Consumer Goods | 15.8 | Germany | 14.3 | |
| Financials | 9.6 | Italy | 7.7 | |
| Consumer Services | 7.8 | Netherlands | 6.7 | |
| Telecommunications | 3.3 | Sweden | 4.9 | |
| Basic Materials | 3.3 | Spain | 4.9 | |
| Oil & Gas | 1.1 | United Kingdom | 4.0 | |
| Net current assets | 0.2 | Israel | 2.7 | |
| ----- | Poland | 1.8 | ||
| 100.0 | Ireland | 1.7 | ||
| ===== | Belgium | 1.5 | ||
| Russia | 1.5 | |||
| Finland | 1.0 | |||
| Greece | 0.9 | |||
| Net current assets | 0.2 | |||
| ----- | ||||
| 100.0 | ||||
| ===== |
| Ten Largest Equity Investments | ||
| Company | Country | % of Total Assets |
| SAP | Germany | 6.5 |
| Safran | France | 6.3 |
| Sika | Switzerland | 5.3 |
| Adidas | Germany | 5.3 |
| Novo Nordisk | Denmark | 5.3 |
| Royal Unibrew | Denmark | 5.3 |
| DSV | Denmark | 4.5 |
| ASML | Netherlands | 4.3 |
| RELX | United Kingdom | 4.0 |
| Lonza Group | Switzerland | 4.0 |
Commenting on the markets, Stefan Gries, representing the Investment Manager noted:
During the month, the Company's NAV rose by 4.8% and the share price by 4.2%. For reference, the FTSE World Europe ex UK Index returned 1.4% during the period.
European ex UK markets rose again during November on the back of 'risk-on' sentiment (when market participants favour assets such as equities) as concerns around economic growth abated. Companies with end markets more exposed to the economic cycle led the market higher, whilst capital flowed out of more defensive areas which had seen an uplift during the summer months.
The Company outperformed the market aided by our allocation to real world cyclicals and positive stock selection. It also outperformed the index over the month with very strong outcomes from stock specifics, as well as a positive contribution from sector allocation.
The higher weighting towards technology proved the main driver of returns on a sector level during the month, with positive contributions also from the lower allocation than the reference index to utilities. The Company's higher allocation to the consumer services sector proved a small detractor.
A position in DSV proved the largest positive contributor over the month as management raised the synergy target for their recent deal with Panalpina. Alongside this, they announced a DKK2.5 billion buy back and raised revenue guidance for the full year. DSV remains a top holding within the portfolio given our belief in the strength of the management team and financial position of the business.
Dental implant manufacturer Straumann, also updated the market with strong results for the third quarter with organic growth at 18.7% and guidance for full year sales raised. Our holding in Royal Unibrew was also amongst the top contributors. The stock recovered after it underperformed unexpectedly last month despite good results and another round of earnings upgrades.
The Company's holding in Lonza was the largest detractor to returns. While we have slightly trimmed the position to reflect increased uncertainty, it remains a core holding.
At the end of the period the Company had a higher allocation than the reference index towards technology, industrials, consumer services and health care. A lower allocation was held in financials, consumer goods, utilities, telecommunications, basic materials and oil & gas.
Outlook
Despite the challenging conditions which continue to plague industrial end markets in Europe, there are reasons emerging to be more hopeful. We have seen stabilisation in certain end markets which should be further supported by policy, both monetary and, in some select instances, fiscal. The strong fiscal position of the region, aided by lower yields, has the potential to make a meaningful difference and is complimented by a resilient consumer boasting some of the highest savings ratios in the developed world. Along with extreme consensus underweight positioning to the region, pillars of an investment case for Europe are building, leading to recommendation upgrades from sell-side commentators. We agree fiscal policy and falling political uncertainty could both give a boost to the region, but caution buying specific exposures based on macro narratives alone. Europe continues to have areas of the market which appear to be value traps, with whole sectors suffering from falling profitability and management teams with limited ability to turn the tide. We believe selectivity in the region and a focus on long-term winners underpinned by superior fundamentals could be meaningful for the overall return achieved from the region. We continue to hold a preference for well positioned luxury goods and aerospace companies and avoid cyclically and structurally challenged areas such as autos and banks.
17 December 2019
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.
