The information contained in this release was correct as at
30 June 2020. 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 June
2020 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) |
6.9% |
24.5% |
10.8% |
40.5% |
479.9% |
Net asset value*
(diluted) |
6.9% |
24.4% |
10.7% |
40.4% |
480.2% |
Share price |
6.8% |
32.5% |
12.5% |
42.1% |
466.5% |
FTSE World Europe ex
UK |
4.9% |
18.9% |
0.5% |
11.3% |
268.5% |
* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream
At month end
Net asset value
(capital only): |
432.54p |
Net asset value
(including income): |
436.48p |
Net asset value
(capital only)1: |
432.54p |
Net asset value
(including income)1: |
436.48p |
Share price: |
422.00p |
Discount to NAV
(including income): |
3.3% |
Discount to NAV
(including income)1: |
3.3% |
Net cash: |
8.5% |
Net
yield2: |
1.4% |
Total assets
(including income): |
£368.1m |
Ordinary shares in
issue3: |
84,323,101 |
Ongoing
charges4: |
1.1% |
1 Diluted for treasury shares.
2 Based on a final dividend of 4.10p per share for the year
ended 31 August 2019 and an interim dividend of 1.75p for the
year ending 31 August 2020.
3 Excluding 26,005,837 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 2019.
Sector
Analysis |
Total
Assets
(%) |
|
Country
Analysis |
Total
Assets
(%) |
Technology |
24.5 |
|
Denmark |
17.8 |
Health Care |
18.5 |
|
Switzerland |
13.4 |
Industrials |
17.6 |
|
Netherlands |
12.5 |
Consumer Goods |
10.5 |
|
France |
12.0 |
Financials |
9.8 |
|
Germany |
9.7 |
Consumer Services |
9.6 |
|
Italy |
6.7 |
Oil & Gas |
3.6 |
|
Russia |
5.5 |
Basic Materials |
3.0 |
|
Sweden |
5.3 |
Telecommunications |
2.5 |
|
United Kingdom |
4.6 |
Net Current
Assets |
0.4 |
|
Spain |
2.8 |
|
------- |
|
Belgium |
2.5 |
|
100.0 |
|
Israel |
2.0 |
|
==== |
|
Finland |
1.8 |
|
|
|
Ireland |
1.8 |
|
|
|
Poland |
0.9 |
|
|
|
Greece |
0.3 |
|
|
|
Net Current
Assets |
0.4 |
|
|
|
|
------- |
|
|
|
|
100.0 |
|
|
|
|
==== |
Ten Largest Equity
Investments |
|
|
Company |
Country |
%
of
Total Assets |
ASML |
Netherlands |
6.6 |
Novo Nordisk |
Denmark |
5.6 |
SAP |
Germany |
5.5 |
Sika |
Switzerland |
5.4 |
Kering |
France |
5.1 |
Lonza Group |
Switzerland |
5.0 |
RELX |
United Kingdom |
4.6 |
Royal Unibrew |
Denmark |
4.4 |
DSV |
Denmark |
4.0 |
Safran |
France |
3.3 |
Commenting on the markets,
Stefan Gries, representing the
Investment Manager, noted:
During the month, the Company’s NAV rose by 6.9% and the share
price by 6.8%. For reference, the FTSE World Europe Ex UK Index
returned 4.9% during the period.
Europe ex UK markets continued
their strong performance in June as countries eased lock-down
restrictions, allowing economies to re-start. The release of global
data during the month boosted sentiment, as PMIs in Europe and the US suggested that activity is
surprising on the upside. Europe’s flash PMIs posted larger than
expected gains across the board. An impressive array of fiscal and
monetary measures in Europe is
getting into place to bridge the economy through this period of
weakness. The latest data points and messages from companies
suggest a strong cyclical recovery is underway. We believe the
stimulus and the European Union (EU) recovery fund can reduce the
risk premia in Europe and improve
investors’ appetite towards the region overall. Against this
backdrop, cyclicals led the market with the financials and
technology sectors rallying, while healthcare and consumer services
underperformed the overall market.
The Company outperformed the reference index over the month,
driven by both strong sector allocation and stock selection. In
sector terms, the Company benefited from a higher allocation to the
technology and industrials sectors, as well as from its lower
allocation to consumer goods. Underweight exposures to financials
and higher allocations to consumer services and healthcare
detracted.
The technology sector was the largest contributor to returns.
The Company’s holdings in semiconductor names ASML and BE
Semiconductor contributed to returns. These companies have
performed well throughout the COVID period as demand for remote
connectivity solutions increased. We believe demand for chips will
continue to grow as the trend towards digitalisation is set to
continue. They are well positioned to benefit from the roll out of
5G handsets and infrastructure, as well as more general investment
in data centres, cloud computing and high performance computing
power.
Also, within the technology sector, the Company benefited from
avoiding Wirecard as shares collapsed with the company forced to
file for insolvency on the back of an announcement that there was
insufficient evidence to account for €1.9bn of cash. While we did
not hold Wirecard, we do hold a position in Wirecard’s competitor
Adyen which is likely to benefit by picking up market share in an
otherwise highly consolidated sector.
Positive contribution also came from the positioning within
industrials. Sika, a global leader in construction chemicals, was
the single best performer during the month, benefiting from better
sentiment in construction. Shares correlated to global trade also
performed strongly. DSV Panalpina, the Danish transport and
logistics company, aided performance as the company said the second
quarter had developed better than expected considering the COVID
crisis. More resilient than expected global trade combined with a
strong management team and business execution led to DSV beating Q2
profit expectations by almost 100%.
While an underweight to the financials sector detracted, stock
selection was positive. In particular, the Company’s position in
FinecoBank was amongst the best performers. The business is
thriving with total financial assets under administration growing
to €82.6bn (+9% year over year) to the end of June despite the
clearly difficult market environment, which for us is testament to
the strength of its asset gathering model. KBC also contributed to
returns, although Russian Sberbank lagged the market rally.
Elsewhere, not owning a number of large cap defensive index
constituents like Roche, Nestlé and Novartis contributed positively
too.
In vitro diagnostics company Diasorin was the largest detractor
for the month. The stock experienced some profit taking after a
strong rally, with shares up almost 60% on a year-to-date basis (as
of 30 June 2020). Novo Nordisk and
Grifols also contributed negatively. While both stocks lagged the
cyclical rally, Grifols also suffered on concerns around new
competition emerging for some of its products. We believe those
concerns are unfounded and see no change in the medium to longer
term attraction of the investment case.
Lastly, on the negative side, RELX detracted from the Company’s
returns due to increasing evidence of library budgets temporarily
coming under pressure on the back of COVID-19 related disruptions.
We see those issues as largely transitory in nature and would point
to the fact that RELX’s STM division – home to its journals
business – has never posted negative revenue growth in the last 70
years, which to our mind highlights the resilience of the
model.
At the end of the period, the Company had a higher allocation
than the reference index towards technology, consumer services,
industrials and health care. The Company had a neutral
weighting towards oil & gas and telecoms and an underweight
allocation to consumer goods, financials, utilities and basic
materials.
Outlook
Over recent years, many investors have avoided exposure to
European equities owing to concerns around political risk, rising
populism, a challenged financial system and the region’s larger
than average exposure to China. We
have long been of the view that one needs to take an active
approach to investing in European equities. With this in mind, we
did not need to be positive on Europe as a region to offer our shareholders
exposure to some truly unique companies that happened to be listed
in the region. The response to the fallout from COVID-19 has the
potential to change that view. For the first time we see a strong
and coordinated monetary and fiscal response that could deliver
real benefits to the region over time. The proposed EU recovery
fund of €750bn, which calls for debt mutualisation among
member states, could act as a catalyst to reduce risk premium
applied to European equities versus other developed markets and
create greater, and lasting, political cohesion in the region. In
this context, both the economy and local stock markets appear well
positioned to make up lost ground, potentially transforming
European equities into a standout opportunity in the developed
world.
15 July 2020
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.