The information contained in this release was correct as at
31 October 2021. 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 INCOME & GROWTH INVESTMENT TRUST PLC
(LEI:5493003YBY59H9EJLJ16)
All information is at 31 October
2021 and unaudited.
Performance at month end with net income reinvested
|
One
Month |
Three
Months |
One
Year |
Three
Years |
Five
Years |
Since
1 April
2012 |
Sterling |
|
|
|
|
|
|
Share price |
-1.0% |
-2.1% |
22.2% |
16.8% |
23.3% |
102.3% |
Net asset value |
0.8% |
1.6% |
30.4% |
16.6% |
26.7% |
95.6% |
FTSE All-Share Total Return |
1.8% |
3.5% |
35.4% |
17.6% |
31.4% |
94.1% |
|
|
|
|
|
|
|
Source: BlackRock |
|
|
|
|
|
|
BlackRock took over the investment management of the Company
with effect from 1 April 2012.
At month end
Sterling:
Net asset value –
capital only: |
198.50p |
Net asset value – cum
income*: |
203.15p |
Share price: |
191.00p |
Total assets
(including income): |
£47.5m |
Discount to cum-income
NAV: |
6.0% |
Gearing: |
6.0% |
Net yield**: |
3.8% |
Ordinary shares in
issue***: |
21,398,842 |
Gearing range (as a %
of net assets): |
0-20% |
Ongoing
charges****: |
1.2% |
* Includes net revenue of 4.65 pence per share |
** The Company’s yield
based on dividends announced in the last 12 months as at the date
of the release of this announcement is 3.8% and includes the 2020
final dividend of 4.60p per share declared on 01 February 2021 and
paid to shareholders on 17 March 2021 and the 2021 interim dividend
of 2.60p per share declared on 23 June 2021 and paid to
shareholders on 1 September 2021. |
*** excludes 10,081,532
shares held in treasury. |
**** Calculated as a
percentage of average net assets and using expenses, excluding
performance fees and interest costs for the year ended 31 October
2020. |
Sector
Analysis |
Total
assets (%) |
Support Services |
15.1 |
Pharmaceuticals &
Biotechnology |
8.9 |
Household Goods &
Home Construction |
7.8 |
Financial
Services |
6.3 |
Media |
6.3 |
Oil & Gas
Producers |
5.8 |
Mining |
5.4 |
Banks |
5.1 |
Life Insurance |
5.0 |
Personal Goods |
4.2 |
Nonlife Insurance |
3.7 |
Tobacco |
3.5 |
General Retailers |
3.3 |
Health Care Equipment
& Services |
2.7 |
Travel &
Leisure |
2.7 |
Electronic &
Electrical Equipment |
2.5 |
Food & Drug
Retailers |
2.3 |
General
Industrials |
1.3 |
Software &
Computer Services |
1.3 |
Electricity |
0.9 |
Real Estate Investment
Trusts |
0.8 |
Technology Hardware
& Equipment |
0.8 |
Food Producers |
0.8 |
Industrial
Engineering |
0.6 |
Net Current
Assets |
2.9 |
|
----- |
Total |
100.0 |
|
===== |
Country
Analysis |
Percentage |
United Kingdom |
89.9 |
United States |
4.3 |
France |
2.9 |
Net Current Assets |
2.9 |
|
----- |
|
100.0 |
|
===== |
|
|
Top 10
holdings |
Fund
% |
AstraZeneca |
7.0 |
RELX |
5.1 |
Royal Dutch Shell ‘B’ |
4.6 |
Reckitt Benckiser |
4.4 |
Unilever |
3.8 |
3i Group |
3.7 |
Rio Tinto |
3.6 |
British American Tobacco |
3.5 |
Electrocomponents |
3.3 |
Ferguson |
3.3 |
Commenting on the markets,
representing the Investment Manager noted:
Performance Overview:
The Company returned 0.8% during the month, underperforming the
FTSE All-Share which returned 1.82%.
Global equities rose in October on the back of a strong start to
US Q3 earnings; 80% of reporting companies beat consensus despite
concerns around supply and cost pressures.
Banks performed relatively well after a broad rise in global
bond yields, notably the UK 10-year gilt which hit a two-year high,
and by strong results in the US banking sector.
The Energy sector gained as crude touched a seven-year high
after OPEC+ stuck with its existing output plans. US employment
report was sufficiently mixed to revive the debate over whether the
US Federal Reserve will really go ahead with the planned
tapering.
There was limited equity market impact from the UK Budget,
however, the greater than expected degree of fiscal stimulus
delivered by the Chancellor sparked debate about Bank of
England plans to withdraw monetary
policy support. The proposed alcohol duty changes provided a boost
for the pub stocks and travel & leisure sector.
The FTSE All Share rose 1.82% during October with Utilities,
Financials and Health Care as top performing sectors while
Telecommunications, Technology and Consumer Goods
underperformed.
Stocks:
In terms of detractors from performance, THG fell during the
month given a slow-down in trading as e-commerce trends lap very
strong 2020 COVID comparators. We are encouraged to see the company
improve its governance, announcing the search for an executive
chairman, removing the golden share and improving disclosure. Two
companies which the Company doesn’t own, HSBC and GlaxoSmithkline
were detractors during the month as good results led to strong
share price performance during the month. Rio Tinto was another
detractor from the portfolio given continued weakness in the price
of iron ore.
Standard Chartered and 3i benefitted from strength in the
Financials sector; both were top contributors to the Company during
the month. Electrocomponents rose after delivering a strong
earnings statement continuing its impressive operational
performance through the COVID era; we remain excited about the
long-term growth potential here. RELX was again a top contributor
on the back of strong results reported previously.
Portfolio Activity:
During the period, we bought a new holding in Pearson as we
believe the education company can successfully navigate the
transition from print to digital in the long term. Whilst we expect
the journey will be volatile, the current strong balance sheet,
strong new management team and well invested base gives us
confidence that the company can achieve this. We sold Bodycote as
we felt the shares were fully valued for the opportunities we can
see in the medium term; the company has been a successful long-term
holding. We also sold Intermediate Capital which is a holding we
purchased during the covid crisis at significantly lower prices;
the shares have nearly doubled since and have been sold given a
move back towards fair value.
Outlook:
As the world approaches some sort of post-covid normalisation
and economies reopen, many opportunities and risks are being
presented. We are closely monitoring how earnings react to factors
including the retraction of government stimulus, changes in
consumer wallets and behaviours. Much like the structural change of
digitisation that arose in the throes of Covid, we monitor these
aforementioned factors and others for signs of other structural
changes.
The growth in economic activity has caused some strains on
supply chains with specific industry shortages as well as building
inflationary pressures which can squeeze companies’ margins.
We continue to concentrate the portfolio on those businesses who
display pricing power and thus able to protect margins over the
medium and long-term. We continue to monitor the bond market to
determine if the current surge in inflation is transitory or,
fuelled by a more relaxed Fed, a phenomenon that may persist. We
are also cognisant of the evolution of relationships between
China and the West and the
potential impact on industries and shares.
After five years under a Brexit-induced cloud, the relative
position of the UK in the eyes of global investors appears to have
improved, helped by the vaccination programme, and evidenced by the
resurgence in takeover activity as bidders look to capitalise on
the discount at which UK equities trade relative to global peers.
Specifically, we’ve seen acquisitions of real assets and a desire
to find unlevered free cash flow.
Amidst market normalisation, we see cash generation improving
and dividends payments recovering. Broadly speaking we've been
surprised by how quickly dividends have come back with large
contributions from the mining sector where the likes of Rio Tinto
and BHP have been able to pay large special dividends. While
dividends are not far off from pre-Covid levels as the majority of
companies are paying dividends once more, we note the large
contribution from special dividends that may not persist. We
view the outlook for ordinary dividends for the UK market with
optimism as most companies have emerged from the Covid crisis with
appropriate dividend policies.
We continue to have conviction in cash-generative companies that
have delivered for the Company and we foresee delivering into the
future. As always, we are focused on stock-specifics and selecting
holdings that are best placed to perform well amidst market
normalisation. At present, we feel liquidity conditions are
relatively supportive and we are excited by the approaching
economic recovery and the opportunity to deliver strong capital and
dividend growth for our clients over the long-term.
23 November 2021.