The information contained in this release was correct as at
30 September 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 September
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) |
-5.4% |
3.6% |
37.0% |
76.5% |
763.2% |
Net asset value*
(diluted) |
-5.4% |
3.6% |
37.0% |
76.5% |
763.6% |
Share price |
-4.6% |
4.1% |
47.8% |
92.7% |
797.5% |
FTSE World Europe ex
UK |
-3.6% |
0.8% |
22.0% |
30.3% |
356.0% |
* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream
At month end
Net asset value
(capital only): |
639.17p |
Net asset value
(including income): |
641.55p |
Net asset value
(capital only)1: |
639.17p |
Net asset value
(including income)1: |
641.55p |
Share price: |
660.00p |
Premium to NAV
(including income): |
2.9% |
Premium to NAV
(including income)1: |
2.9% |
Net gearing: |
8.2% |
Net
yield2: |
0.9% |
Total assets
(including income): |
£627.0m |
Ordinary shares in
issue3: |
97,725,411 |
Ongoing
charges4: |
1.0% |
1 Diluted for treasury shares.
2 Based on a final dividend of 4.40p per share for the year
ended 30 August 2020 and an interim
dividend of 1.75p per share for the year ending 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 2020.
Sector Analysis |
Total Assets
(%) |
Technology |
24.0 |
Industrials |
22.1 |
Health Care |
16.5 |
Consumer Discretionary |
16.0 |
Financials |
8.9 |
Consumer Staples |
5.0 |
Basic Materials |
4.1 |
Energy |
3.8 |
Net Current Liabilities |
(0.4) |
|
----- |
|
100.0 |
|
===== |
|
|
Country Analysis |
Total Assets
(%) |
Switzerland |
21.9 |
Netherlands |
17.8 |
Denmark |
16.8 |
France |
12.4 |
Sweden |
7.3 |
United Kingdom |
5.7 |
Italy |
4.6 |
Russia |
4.2 |
Finland |
2.0 |
Spain |
2.0 |
Poland |
1.9 |
Ireland |
1.7 |
Israel |
1.2 |
Greece |
0.9 |
Net Current Liabilities |
(0.4) |
|
----- |
|
100.0 |
|
===== |
|
|
Top 10 holdings |
Country |
Fund % |
ASML |
Netherlands |
7.2 |
Lonza Group |
Switzerland |
5.3 |
Sika |
Switzerland |
4.6 |
Novo Nordisk |
Denmark |
4.5 |
DSV |
Denmark |
4.5 |
RELX |
United Kingdom |
4.0 |
LVMH Moët Hennessy |
France |
3.9 |
Royal Unibrew |
Denmark |
3.5 |
Netcompany Group |
Denmark |
3.0 |
Hexagon |
Sweden |
2.9 |
|
Commenting on the markets,
Stefan Gries, representing the
Investment Manager noted:
During the month, the Company’s NAV fell by 5.4% and the share
price by 4.6%. For reference, the FTSE World Europe ex UK Index
returned -3.6% during the period.
Europe ex UK markets were down
during the month. Following a quiet August, September was a
particularly volatile month as concerns around the Chinese property
market, rising bond yields, as well as higher inflation and power
prices, spooked investors. Classic value areas including energy and
financials outperformed the falling market, while most sectors
delivered negative returns.
As we find ourselves in a situation where we see strong
industrial and consumer demand combined with issues in supply
chains, we more than ever focus on companies with strong pricing
power that have the ability to pass on higher prices. Ultimately,
we continue to believe that the inflationary pressures we are
seeing remain transitory.
The Company underperformed its reference index during the month,
with both sector allocation and stock selection being slightly
negative. In sector terms, the Company’s higher allocation to
technology and lower allocation to financials were the largest
detractors from performance. However, our small overweight to
energy was positive. Not owning any utilities was the strongest
contributor in sector terms. Utilities were hit again over the
month as many of these companies have at least some of their sales
locked in at lower prices which creates pressure on revenues and
margins. On top of that, a number of governments, for example in
Spain, are looking to protect
consumers by capping energy prices. In this context, not owning
Iberdrola was particularly helpful.
On a stock basis the largest detractors were companies impacted
by the market rotation, as we witnessed a sell-off in Lonza, Sika,
ASML, Allegro, BE Semi and NetCompany. Whilst movement in interest
rates can cause short-term volatility, it ultimately has no bearing
on the potential earnings power of businesses over any reasonable
investment time horizon. Our research effort remains focused on
finding and owning Europe’s best wealth creating businesses for the
long term. Sell-offs like we saw during September are often an
attractive buying opportunity for us.
In a month that was dominated by energy prices, with crude oil
and natural gas prices rising significantly, it is no surprise that
not owning TotalEnergies was one of the largest detractors, while
our holding in Russian Lukoil was the top performer over the month.
We typically find the most attractive opportunities in energy in
Developing Europe where we can find select ‘value’ opportunities.
However, we remain underweight the Developed European oil sector as
it has been significantly underinvested in recent years and the
transition towards renewable energy is likely to be cost-intensive,
dilutive to returns and take a long time. Similarly, our holding in
Israeli ICL contributed positively to returns, benefiting from a
rise in fertiliser prices on the back of higher gas prices.
A few of our ‘re-opening’ beneficiaries such as travel IT
platform Amadeus also contributed positively, as expectations
for the resumption of international travel and events picked up, on
reports of a travel corridor between the US and the UK.
The Company also benefited from a position in Allfunds, a wealth
tech operator acting as an intermediary between fund houses and
distributors. Allfunds reported its first results after its April
initial public offering (IPO), beating expectations with strong
assets under management growth and margins surprising to the
upside. The management is delivering on its IPO promises, while
continuing to invest in organic and inorganic growth.
At the end of the period, the Company had a higher allocation
than the reference index towards technology, consumer
discretionary, industrials, health care and energy. The Company had
an underweight allocation to financials, utilities, consumer
staples, 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.
14 October 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.