| BLACKROCK GREATER
EUROPE INVESTMENT TRUST plc |
|
| All information is at
31 January 2016 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) |
-2.4% |
1.8% |
5.4% |
22.2% |
216.4% |
|
| Net asset value*
(diluted) |
-2.0% |
1.7% |
4.9% |
21.6% |
215.1% |
|
| Share price |
-4.9% |
1.4% |
6.3% |
22.3% |
206.8% |
|
| FTSE World Europe ex
UK |
-3.1% |
-2.2% |
-2.1% |
17.0% |
137.2% |
|
| Sources: BlackRock
and Datastream |
|
|
|
| At month
end |
|
| Net asset value (capital
only): |
255.95p |
|
| Net asset value
(including income): |
255.79p |
|
| Net asset value (capital
only)*: |
254.63p |
|
| Net asset value
(including income)*: |
254.49p |
|
| Share price: |
246.25p |
|
| Discount to NAV
(including income): |
3.7% |
|
| Discount to NAV
(including income)*: |
3.2% |
|
| Subscription share
price: |
7.00p |
|
| Net cash: |
0.1% |
|
| Net yield**: |
2.0% |
|
| Total assets (including
income): |
£263.7m |
|
| Ordinary shares in
issue***: |
103,075,838 |
|
| Subscription
shares: |
20,542,076 |
|
| Ongoing
charges****: |
0.89% |
|
|
|
|
* Diluted
for subscription shares and treasury shares.
** Based on a final dividend of 3.35p per share and an interim
dividend of 1.65p per share for the year ended 31 August 2015.
*** Excluding 6,725,825 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 |
29.0 |
|
France |
18.0 |
| Industrials |
18.3 |
|
Switzerland |
15.6 |
| Health Care |
16.9 |
|
Germany |
14.3 |
| Consumer Goods |
12.4 |
|
Netherlands |
8.9 |
| Technology |
8.6 |
|
Denmark |
8.2 |
| Consumer Services |
7.0 |
|
Italy |
7.8 |
| Telecommunications |
4.2 |
|
Ireland |
6.7 |
| Basic Materials |
3.5 |
|
Sweden |
5.4 |
| Net current assets |
0.1 |
|
Finland |
5.1 |
|
----- |
|
Belgium |
2.8 |
|
100.0 |
|
Turkey |
2.4 |
|
===== |
|
Spain |
1.7 |
|
|
|
Poland |
1.5 |
|
|
|
Russia |
1.5 |
|
|
|
Net current assets |
0.1 |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
|
|
|
|
|
| Ten Largest Equity
Investments |
|
|
|
%
of |
|
| Company |
Country |
Total
Assets |
|
|
|
|
|
| Novo Nordisk |
Denmark |
5.2 |
|
| Novartis |
Switzerland |
4.6 |
|
| Bayer |
Germany |
3.5 |
|
| Heineken |
Netherlands |
2.9 |
|
| AXA |
France |
2.8 |
|
| Ryanair |
Ireland |
2.7 |
|
| Deutsche Telekom |
Germany |
2.7 |
|
| Adidas |
Germany |
2.7 |
|
| RELX |
Netherlands |
2.7 |
|
| Capgemini |
France |
2.7 |
|
|
|
|
|
| Commenting on the
markets, Vincent Devlin, representing the Investment Manager
noted: |
|
| During the month, the
Company’s NAV fell by -2.4% and the share price decreased by -4.9%.
For reference, the FTSE World Europe ex UK Index was down -3.1%
during the period. |
|
| In January, markets
continued to be dominated by concerns over global economic growth,
experiencing significant volatility. This was global in nature and
not specific to European equities, although the region was unable
to detach itself from the broader market sell-off. As a result, the
FTSE AW Europe ex UK returned -3.2% in GBP terms in January. The
main drivers of uncertainty remain the Chinese economy and currency
devaluation, as well as depressed commodity prices and fears over
an earnings recession in the United States. On a more positive
note, January saw further action from central banks: the Bank of
Japan took action to move to a negative deposit rate and the
European Central Bank (ECB) appears committed to provide more
monetary support, if needed, after their meeting in March. On a
sector basis, financials and basic materials were the worst
performers in January. The former was led down by Italian banks
after the ECB requested information on their non-performing loans.
Defensive sectors such as utilities and consumer staples performed
best, in particular food and beverages, and personal goods. |
|
| Stock selection drove
the Company’s performance when compared with the reference index
during January, whilst the contribution from sector allocation was
negative. The losses incurred on a sector basis were primarily
driven by the higher weighting towards financials and lower
weighting in utilities. Utilities performed strongly as investors
moved capital into more defensive assets as market sentiment turned
risk-off. The Company benefited from a higher weighting towards
technology and lower weighting in basic materials. |
|
| A holding in Adidas was
the greatest contributor to performance over the month as news of a
new CEO was taken well by the market. Going forward, it is likely
the company will see stronger management of costs and an improved
top line under this new guidance. |
|
| A number of positions
within the industrials sector, where the Company has a high
allocation, also contributed positively to returns. Assa Abloy,
Thales and Vinci performed particularly strongly in this respect.
The latter benefited from positive data points released for APRR,
the fourth largest tolled motorway network in Europe, where both
traffic and sales numbers increased in the fourth quarter. |
|
| Not holding Nestlé
detracted from performance, as the asset continued to see capital
flows as investors looked for perceived safety. In addition, a
holding in Zurich Insurance, which issued a profit warning, also
negatively impacted returns. The Q4 trading figures from the
insurer highlighted US$275m of losses relating to UK floods, as
well as losses suffered from a tornado in Australia. Despite these
losses, the company has stated that their capital position remains
very strong across all key metrics. |
|
| At the end of the
period, the Company had higher weightings when compared with the
reference index to financials, technology, consumer services,
industrials and health care. The Company had lower exposure to
consumer goods, basic materials, oil & gas, utilities and
telecoms. |
|
| Outlook |
| In the face of the
uncertain macroeconomic outlook in 2016 across different regions,
we believe that European equities continue to offer the most
appealing relative prospective returns in the developed world. The
incremental support from the ECB through expansion of the current
quantitative easing programme will, in our view, have a further
positive impact on European GDP growth and the credit cycle. While
there are widespread global macro concerns which could curtail
earnings growth in 2016, it is the combination of the relative
depth of the recent Eurozone recession, together with its late
recovery and a weaker Euro, that offers some base for optimism.
However, investor nervousness and market volatility is likely to
remain elevated whilst the path of economic activity in the US and
China remains unclear. |
|
| Despite the tightening
by the Federal Reserve at the end of 2015, central banks across the
world remain generally accommodative, with the ECB notably hinting
at being prepared to do more if growth slows. This is supportive
for equities in our view, despite the generally uncertain macro
environment. |
|
| Stock selection, as in
2015, remains a key focus during this period of increased
volatility and risk aversion. The main risks to the favourable
European scenario come from a bigger than expected slowdown in the
US and China, and a subsequent global recession. This is not our
core scenario at this stage. |
|
| 11 February 2016 |
|
| 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. |