BlackRock Greater Europe Investment Trust Plc - Portfolio Update
PR Newswire
London, December 20
The information contained in this release was correct as at 30 November 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 GREATER EUROPE INVESTMENT TRUST PLC (LEI - 5493003R8FJ6I76ZUW55)
All information is at 30 November 2021 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) | 0.3% | 0.5% | 35.1% | 105.8% | 817.2% |
| Net asset value* (diluted) | 0.3% | 0.5% | 35.6% | 105.7% | 817.6% |
| Share price | 1.2% | 1.2% | 41.1% | 122.6% | 852.5% |
| FTSE World Europe ex UK | -1.7% | -2.4% | 15.7% | 41.2% | 361.7% |
* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream
At month end
| Net asset value (capital only): | 676.28p |
| Net asset value (including income): | 677.32p |
| Net asset value (capital only)1: | 676.28p |
| Net asset value (including income)1: | 677.32p |
| Share price: | 696.00p |
| Premium to NAV (including income): | 2.8% |
| Premium to NAV (including income)1: | 2.8% |
| Net gearing: | 9.4% |
| Net yield2: | 0.9% |
| Total assets (including income): | £676.5m |
| Ordinary shares in issue3: | 99,885,411 |
| Ongoing charges4: | 1.02% |
1 Diluted for treasury shares.
2 Based on a final dividend of 4.55p per share and an interim dividend of 1.75p per share for the year ended 31 August 2021.
3 Excluding 17,573,527 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 2021.
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| Top 10 holdings | Country | Fund % |
| ASML | Netherlands | 7.1 |
| LVMH Moët Hennessy | France | 6.0 |
| Sika | Switzerland | 5.3 |
| Lonza Group | Switzerland | 5.3 |
| Novo Nordisk | Denmark | 4.7 |
| RELX | United Kingdom | 4.2 |
| DSV | Denmark | 4.1 |
| Hermes International | France | 3.2 |
| Royal Unibrew | Denmark | 3.1 |
| IMCD | Netherlands | 3.1 |
Commenting on the markets, Stefan Gries, representing the Investment Manager noted:
During the month, the Company's NAV rose by 0.3% and the share price by 1.2%. For reference, the FTSE World Europe ex UK Index fell by 1.7% during the period.
Europe ex UK markets fell during November as fears about the latest Covid variant 'Omicron' caused a set-back in risk assets globally. All sectors in the reference index, except for telecommunications, delivered negative returns. In particular, energy, financials and technology were the weakest sectors during the month.
The Company outperformed its reference index during the month, mainly driven by strong stock selection while sector allocation was slightly negative.
In sector terms, the Company's lower allocation to financials and higher allocation to health care and industrials was positive. Our overweight exposure to technology was negative; however, this was significantly offset by strong stock selection. Zero exposure to defensive sectors such as telecommunications and utilities was negative.
The industrials sector was the largest contributor to relative returns. In particular, Sika was the top performer over the month. Shares rose after the company announced the acquisition of MBCC, the former construction chemicals business of BASF. We believe the deal will be circa 20% accretive in year 1, will further improve Sika's competitive position and will bring cross-selling synergies. The deal has been financed conservatively and we expect Sika to deleverage relatively quickly.
The Company also benefited from strong stock picking within consumer goods. French luxury group Hermes was amongst the best performers, benefiting from strong demand and carefully managed product sell throughs. Our holding in Ferrari also contributed positively as shares rose following strong Q3 results highlighting strong group order intake. Furthermore, the luxury car manufacturer presented their new car, the Daytona SP3, which is the second of its Icona series. First deliveries of the limited supply of 599 cars are expected towards the end of next year. The car has significantly higher margins than its predecessor, the Monza car, and sold out immediately.
The Company's semiconductor-exposed stocks such as BE Semiconductor, VAT Group and ASML all aided returns. BE Semiconductor for example saw strong performance on the back of good results at the end of October. We believe industry trends are likely to remain favourable for BE Semiconductor as the packaging equipment which the company provides becomes increasingly important.
However, our holding in Royal Unibrew weighed on returns. The company posted strong Q3 organic growth but also some margin compression as a result of higher freight costs and, consequently, operating profit undershot expectations. Our position in Allfunds was also amongst the largest detractors despite no stock specific news released over the period.
The Company's holding in Neste Oil experienced volatility, partially driven by negative performance of the energy sector in general and partially driven by concerns over rising competition. Whilst the worries around competition are not new, we believe Neste's renewable process is highly complex and the company is able to use several types of feedstock to produce renewable diesel which is quite unique.
At the end of the period, the Company had a higher allocation than the reference index towards technology, industrials, consumer discretionary and health care, and was neutral energy. The Company had an underweight allocation to financials, consumer staples, utilities, telecoms, real estate and basic materials.
Outlook
We see recent market strength persisting over the coming months, aided by better virus testing capabilities, a successful vaccine rollout and a resilient global consumer, alongside continued accommodative fiscal and monetary policy. This market recovery is unlikely to be equal across all sectors: some companies still lack pricing power and are unable to reinstate dividends; others, however, such as travel exposed stocks, could see a meaningfully brighter 2022. Inflation may be on the horizon, but rates will likely remain low. A period of prolonged negative real rates and higher nominal growth is needed to allow governments globally to work their way out of the post pandemic debt overhang. We see this as being a supportive backdrop for equities overall.
20 December 2021
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.
