| BLACKROCK GREATER
EUROPE INVESTMENT TRUST plc |
|
| All information is at
31 MARCH 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) |
4.2% |
0.5% |
1.6% |
24.0% |
225.6% |
|
| Net asset value*
(diluted) |
3.5% |
0.4% |
1.7% |
22.9% |
222.7% |
|
| Share price |
-0.6% |
-4.6% |
-3.3% |
20.1% |
207.7% |
|
| FTSE World Europe ex
UK |
4.1% |
0.6% |
-4.2% |
20.8% |
146.3% |
|
| Sources: BlackRock
and Datastream |
|
|
|
| At month
end |
|
| Net asset value (capital
only): |
261.84p |
|
| Net asset value
(including income): |
263.17p |
|
| Net asset value (capital
only)*: |
259.54p |
|
| Net asset value
(including income)*: |
260.64p |
|
| Share price: |
247.00p |
|
| Discount to NAV
(including income): |
6.1% |
|
| Discount to NAV
(including income)*: |
5.2% |
|
| Subscription share
price: |
4.88p |
|
| Net gearing: |
0.9% |
|
| Net yield**: |
2.0% |
|
| Total assets (including
income): |
£270.9m |
|
| Ordinary shares in
issue***: |
102,836,916 |
|
| Subscription
shares: |
20,530,998 |
|
| 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 6,975,825 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 |
26.1 |
|
France |
17.4 |
| Industrials |
21.2 |
|
Switzerland |
15.3 |
| Health Care |
17.0 |
|
Germany |
10.3 |
| Consumer Goods |
13.4 |
|
Denmark |
9.7 |
| Consumer Services |
9.9 |
|
Netherlands |
9.2 |
| Technology |
8.9 |
|
Ireland |
8.8 |
| Telecommunications |
4.3 |
|
Italy |
7.5 |
| Net current liabilities |
(0.8) |
|
Finland |
5.9 |
|
----- |
|
Sweden |
5.3 |
|
100.0 |
|
Russia |
3.0 |
|
===== |
|
Turkey |
2.5 |
|
|
|
Belgium |
2.5 |
|
|
|
Poland |
1.8 |
|
|
|
Spain |
1.6 |
|
|
|
Net current
liabilities |
(0.8) |
|
|
|
|
----- |
|
|
|
|
100.0 |
|
|
|
|
===== |
| Ten Largest Equity
Investments |
|
|
|
%
of |
|
| Company |
Country |
Total
Assets |
|
|
|
|
|
| Novo Nordisk |
Denmark |
4.9 |
|
| Novartis |
Switzerland |
4.2 |
|
| Adidas |
Germany |
3.0 |
|
| Heineken |
Netherlands |
2.9 |
|
| Ryanair |
Ireland |
2.9 |
|
| Vinci |
France |
2.8 |
|
| Unibail-Rodamco |
France |
2.8 |
|
| RELX |
Netherlands |
2.7 |
|
| Deutsche Telekom |
Germany |
2.7 |
|
| Cap Gemini |
France |
2.6 |
|
|
|
|
|
|
Commenting on the markets, Vincent Devlin, representing the
Investment Manager noted: |
| During the month, the
Company’s NAV rose by 4.2% and the share price fell by 0.6%. For
reference, the FTSE World Europe ex UK Index was up 4.1% during the
period. |
|
| After the market
sell-off in January and February, stocks were able to bounce back
with Europe ex UK markets returning 4.1% (GBP terms, FTSE World
Europe ex UK) in March. The rally throughout the month was driven
by a normalisation in commodity prices leading to strong
performance in the basic materials sector, making up for the
year-to-date losses. Although global growth is still sluggish, we
have not seen a significant shift in data this year and Europe
remains relatively robust, with pockets of strength in
consumer-related segments of the economy in particular. After the
European Central Bank’s announcement to expand the duration and
scope of its stimulus programme, we initially saw mixed reactions
from the markets; however, stocks rebounded towards the end of the
month as positive data came through from China. Political risk also
influenced markets, particularly around the ‘Brexit’ debate. |
|
| Stock selection drove
performance over the month, whilst sector allocation detracted from
returns. Largely, the negative impact of sector allocation was a
result of a lower weight relative to the index in basic materials,
which rallied over the month. The higher weighting towards health
care also detracted as the sector has sold off of late, despite
continuing to see relatively robust earnings. The higher weighting
towards industrials, however, contributed positively to
returns. |
|
| Italian asset managers
Anima and Azimut were among the top contributors. Both reported
strong Q4 results and continued to show solid inflows despite the
uncertainties in the Italian financial system, proving the
resilience of their business models. Russian internet company
Yandex was also a positive contributor to returns given the move
upward in Russian stocks and the Ruble with the oil price recovery.
Additionally, they successfully launched an important change to
their advertising auction system, helping to optimise pricing.
Elsewhere within the technology sector, Cap Gemini aided returns
given a solid set of results and confirmation of synergies from the
acquisition of IGATE. |
|
| Paddy Power Betfair
proved the top detractor despite both of the underlying companies,
which have traded together since the beginning of February,
reporting strong results. Both potential changes in UK regulation
and a profit warning from William Hill weighed on the shares. |
|
| 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 |
| We recognise that the
macroeconomic environment in 2016 across the various global regions
remains uncertain. However, we remain constructive on European
equities which have a more supportive environment in the face of
diverging monetary policy cycles between the US and Europe. The
incremental support from the European Central Bank via additional
quantitative easing should have a further positive impact on
European GDP growth and the credit cycle, especially loans to
corporates. The favourable low interest rate environment is key for
additional borrowing by firms to finance their needs for capex
spend which was underpinned in the last ECB lending surveys.
Another positive element is the manufacturing Purchasing Managers
Index within Europe which has been in expansionary territory for
more than two years, which bodes well for steady growth in the
region. While the European macro perspective looks broadly
positive, we recognise we need to see earnings growth coming
through in order to drive meaningful upside for European equities.
We expect earnings growth for FY2016 in the mid-to-high single
digit level, regardless of the earnings drag from the energy and
materials sectors. |
|
| Within this context, we
retain a keen eye on valuation and we continue to focus on stock
selection against a volatile market. We are sticking to companies
that offer higher earnings visibility and attractive stock-specific
drivers and looking to avoid value traps in highly cyclical
businesses at a time of uncertainty. |
|
| 18 April 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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|