BlackRock Greater Europe Investment Trust Plc - Portfolio Update
PR Newswire
LONDON, United Kingdom, June 18
The information contained in this release was correct as at 31 May 2025. 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 May 2025 and unaudited.
Performance at month end with net income reinvested
| One Month | Three Months | One Year | Three Years | Launch (20 Sep 04) |
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Net asset value (undiluted) | 6.0% | -3.3% | -4.2% | 28.4% | 768.5% |
Share price | 5.2% | -2.6% | -5.9% | 30.0% | 726.8% |
FTSE World Europe ex UK | 3.9% | 2.7% | 7.4% | 37.6% | 502.9% |
Sources: BlackRock and Datastream
At month end
Net asset value (capital only): | 611.33p |
Net asset value (including income): | 616.32p |
Share price: | 579.00p |
Discount to NAV (including income): | 6.1% |
Net gearing: | 2.6% |
Net yield1: | 1.2% |
Total assets (including income): | £590.9m |
Ordinary shares in issue2: | 95,878,900 |
Ongoing charges3: | 0.95% |
1 Based on a final dividend of 5.25p per share for the year ended 31 August 2024 and an interim dividend of 1.75p per share for the year ending 31 August 2025.
2 Excluding 22,050,038 shares held in treasury.
3 The Company's ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation, write back of prior year expenses and certain non-recurring items for the year ended 31 August 2024.
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Top 10 holdings | Country | Fund % |
RELX | United Kingdom | 6.8 |
Safran | France | 6.4 |
Hermès | France | 4.9 |
SAP | Germany | 4.6 |
Ferrari | Italy | 4.5 |
Adyen | Netherlands | 4.3 |
Compagnie Financière Richemont | Switzerland | 4.3 |
Schneider Electric | France | 4.3 |
Linde | United States | 3.9 |
Belimo | Switzerland | 3.8 |
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Commenting on the markets, Stefan Gries and Alexandra Dangoor, representing the Investment Manager noted:
During the month, the Company's NAV rose by 6.0% and the share price by 5.2%. For reference, the FTSE World Europe ex UK Index returned +3.9% during the period.
European equities gained in May driven by risk-on sentiment as investors got the first glimpse of hard-data post the US' liberation day tariffs. Economic activity and labour markets are holding up better than expected after soft data had caused concerns in recent months. Further de-escalations in trade policy - including a reduction in US/China tariffs and a deal made between the US and UK - also contributed to a more benign backdrop for now. We remain cognisant, however, that the original 90-day pause expires in July which has the potential to bring additional market noise in the weeks ahead.
Allocation effects were positive in May driven by the Company's overweight to more cyclical sectors, such as industrials and technology, and underweight to defensives such as health care, consumer staples and utilities.
A position in Adyen contributed positively to outperformance. Q1'25 results were solid with the value-add the business provides its customers on display as they continued to grow despite what management recognise as a macroeconomic backdrop becoming more uncertain.
Positions in Safran and MTU bounced in May. Despite the International Air Transport Association reducing air traffic estimates in the US, estimates for growth in the rest of the world remain intact, providing reassurance that the end markets for these companies remain healthy.
Shares in Belimo continued to rally after strong earnings results and a guidance upgrade was raised in late April. The company is well positioned to continue outpacing the wider heating, ventilation and air conditioning (HVAC) industry, as well as benefiting from indications that hyperscalers would continue to increase spending on AI projects. This improved sentiment to the semiconductor industry also contributed to a positive share price performance for ASMi, BE Semiconductor and Schneider Electric.
The Company's holdings in banks, AIB and KBC, were amongst the top contributors. Momentum in the shares continued as Q1'25 earnings results remained robust, despite rates being cut. In particular, net interest income (NII) showed resilience and there was no deterioration in asset quality.
The portfolio's more defensive businesses, such as RELX, trailed the market's risk-on rally. A holding in Lonza also suffered with the rest of the pharma industry, as it awaits news on sector specific US trade policy. We believe that, despite the uncertainty in the final impact on the industry, Lonza is well positioned to navigate through this uncertain backdrop, not least with the Vacaville acquisition that gives them 50% capacity in the US in their key biologics division. Their qualitative trading update in May suggests that the underlying businesses continue to perform well.
Shares in Swedish real estate platform Hemnet fell over the month. The company is in the process of premiumising their product offering, however limited guidance from the company has meant near-term expectations for the conversion rate to these new packages have outpaced reality. Hemnet maintains a vast majority share of the Swedish real estate market due to their unique business model, however we have reduced positions in the interim as expectations normalise.
A holding in Rational detracted as the market reacted poorly to Q1'25 results, despite limited negative news flow. The share price reaction is likely linked to the uncertainty which remains around tariffs and their potential impact on the German kitchen equipment manufacturer.
Not holding Rheinmetall also detracted with shares rebounding from recent pullbacks.
Outlook
While near-term uncertainty has increased, we continue to see a resilient bottom-up picture of both consumers and corporates. In our home market, Europe is going through a renaissance moment, introducing potential for change with lasting impact to corporate earnings. We are focused on analysing change as it relates to positioning the portfolio for the duration earnings-streams we see likely to be supported for years and decades to come. We believe with some of the significant changes going on in the market - fiscal policy change and earnings cycles turning - that the European equity rally can continue, although given the geopolitical backdrop this is unlikely to be a straight path. We would expect the shape of market drivers to change in time, with earnings becoming a larger determinant of returns as the narrow areas that have been bid up run out of steam.
Historically, Europe has been home to many world-class franchises that earn profits globally, including from the US and China. This remains true, but now there is a stronger domestic earnings contribution driven by an improved outlook for the continent. There is potential recovery within rate-sensitive sectors such as construction, as Europe is currently in a rate-cutting cycle. Economic strength in Europe has been evident in the periphery-Spain and Italy, but now there is change in key countries like Germany with a new government forming and releasing fiscal constraints to stimulate the economy.
While the geopolitical landscape is challenging to navigate, especially with US policy keeping investors on their toes, focusing on changing earnings streams can help deliver strong long-term outcomes for investors. Overall, we retain our core exposure to companies with predictable business models, higher than average returns on capital, strong cash flow conversions and opportunities to reinvest that cash flow into future growth projects at high incremental returns.
18 June 2025
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.
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