Interim Management Statement - Blue Planet International Financials Investment
Trust plc
Quarter Ended the 31st July 2014
Fund Manager's Review
July, like June before it, proved to be a very volatile month. Just how
volatile is demonstrated by the fact that we started the final day of the month
up 0.4% on the month but ended it down 2.0%. This was largely due to a sharp
sell-off of financials stocks in the last day of the month. The FTSE 100 by
contrast fared better, losing only 0.1%. As regards to our share price, it fell
2.5% in the month to 39p (bid). On the 10th of July the Directors proposed a
dividend for the year to 30th April of 2.30p per share, an increase of 67.9% on
the prior year dividend. This is subject to shareholder approval at the AGM on
21st August. This equates to a yield of 5.9% on the month end share price
(bid).
A number of companies in which we are invested reported their interim earnings
during the month including:
NXP Semiconductors - EPS rose 181.6%; no dividend paid.
Banco Santander - EPS rose 9.1%; dividend unchanged.
General Motors Co - EPS after recall costs fell 42.3%. EPS excluding recall
costs rose 18.5%; $0.30 dividend paid in 2nd quarter (2013: no dividend paid).
GDF Suez - EPS rose 11.1% but the dividend was cut by 40.0%.
Economic data published during the month lends support to our view that the
global economic recovery will continue to gain traction. US GDP expanded 4.0%
in the second quarter driven by an increase in private investment and consumer
spending. In addition, US factory activity in July expanded at its fastest pace
since April 2011. This all bodes well for the global economic recovery. The US
is the world's largest economy and its continued economic recovery will have a
beneficial impact on other economies. In China, the world's second largest
economy, a stimulus package initiated by its Central Bank earlier this year is
starting to bear fruit. Factory activity in July expanded at its fastest pace
in one and a half years as new orders surged to multi-months highs. Earlier
this year, we added Greek Banks to our portfolio in the expectation of
improvements in the Greek economy and the profitability of its banking sector.
This is now happening. Over the past months, big investment banks like Nomura,
Citi, JP Morgan, HSBC and Deutsche Bank have all turned bullish on the Greek
banks and Moody's upgraded Greek long term debt by two notches on 1st August.
This reflected the improved economic outlook and fiscal position of Greece.
Elsewhere, Australia's manufacturing activity expanded in July for the first
time in eight months and consumer confidence edged higher. In Ireland, the
unemployment rate fell to 11.5% in July, the lowest level since April 2009 and
1st quarter GDP expanded by 4.1% as exports rebounded. It is clear from what is
happening at a macro-economic level that there is still plenty of upside for
equities even though this has not been reflected by the market in recent
months. This will, however, come.
Cumulative Performance (%) as of 31st July 2014
Current 1 month 3 months 6 months 1 year 3 years 5 years
(p)
NAV 54.22 -2.0% -2.0% 3.8% 13.9% 22.3% -22.3%
Share Price - 39.00 3.3% 5.9% 8.7% 18.0% 38.4% -20.5%
Total Return
Benchmark -0.1% 0.0% 5.4% 5.3% 29.3% 74.4%
-FTSE 100
Total Return
Discount / + -28.1 -27.7 -29.5 -27.2 -26.5 -32.0 -24.8
Premium (%)
Source: Blue Planet, share price bid to bid, net income reinvested
Portfolio Information as of 31st January 2014
Security Security Country Valuation % of Total
Type Name £ Portfolio
856,629 Equity Henderson Group United 2,086,748 5.2
plc Kingdom
49,280 Equity NXP United 1,819,619 4.6
Semiconductors NV States
293,160 Equity Banco Santander Spain 1,750,382 4.4
S.A.
7,797,380 Equity Bank Of Ireland Eire 1,638,430 4.1
190,215 Equity Och-Ziff Capital United 1,531,993 3.9
Management Group States
LLC
66,995 Equity General Motors Co United 1,342,201 3.4
States
83,800 Equity ETRACS 2x United 1,260,524 3.2
Leveraged Long States
Wells Fargo
Business
Development
Company Index ETN
375,640 Equity Friends Life United 1,248,252 3.1
Group Kingdom
270,000 Equity BAE Systems plc United 1,155,060 2.9
Kingdom
60,000 Equity EDF S.A. France 1,147,762 2.9
74,550 Equity GDF Suez S.A. France 1,137,624 2.8
948,000 Equity Man Group plc United 1,127,172 2.8
Kingdom
95,502 Equity CNP Assurances France 1,111,659 2.8
6,250 Equity Zurich Insurance Switzerland 1,078,015 2.7
Group AG
Other Equity Other Other 13,679,128 34.2
33,114,569 83.0
Security Security Country Valuation % of Total
Type Name £ Portfolio
711,000 Bonds Aviva plc 6.875% United 822,058 2.1
20/05/58 Kingdom
620,000 Bonds LloydsTSB 04/25 United 772,309 1.9
7.625% Kingdom
832,000 Bonds BNP 4.875% 29/10/ France 658,528 1.6
49
350,000 Bonds Santander UK United 424,753 1.1
10.0625% 2049 Kingdom
600,000 Bonds SocGen 8.75% France 367,778 0.9
Perpetual
551,000 Bonds ACAFP Pref Fund France 331,200 0.8
7% 29/01/49
237,000 Bonds Friends Life Grp United 314,248 0.8
12% 21/05/21 Kingdom
3,997,362 10.0
Security Security Country Valuation % of Total
Type Name £ Portfolio
793,000 Preference Lloyds Banking United 1,054,690 2.6
shares 9.25% Kingdom
500,000 Preference Natwest Bank 9% United 657,500 1.6
shares Kingdom
284,000 Preference Santander UK plc United 406,120 1.0
shares 10.375% Kingdom
300,000 Preference Standard United 396,000 1.0
shares Chartered 8.25% Kingdom
200,000 Preference Santander UK plc United 241,000 0.6
shares 8.625% Kingdom
50,000 Preference RSA Insurance United 57,250 0.1
shares 7.375% Kingdom
2,821,560 6.9
Security Cash Security Country Valuation % of Total
Type Name £ Portfolio
Liquid Near Cash Assets GBP 0 0.0
Assets
Liquid Cash GBP 58,093 0.1
Assets
Liquid Cash Other 0 0.0
Assets Currency
58,093 0.0
39,982,584 100.0
For more information, please visit www.blueplanet.eu
You can also contact the Company on 0845 527 7588 or by emailing
info@blueplanet.eu