The information contained in this release was correct as at
28 February 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 28 February
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 |
-2.6% |
-3.1% |
-0.5% |
-3.7% |
16.8% |
75.6% |
Net asset value |
1.6% |
2.4% |
3.4% |
4.1% |
22.5% |
75.2% |
FTSE All-Share Total Return |
2.0% |
5.1% |
3.5% |
3.8% |
33.0% |
69.8% |
|
|
|
|
|
|
|
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: |
183.24p |
Net asset value – cum
income*: |
184.34p |
Share price: |
168.00p |
Total assets
(including income): |
£44.7m |
Discount to cum-income
NAV: |
8.9% |
Gearing: |
10.5% |
Net yield**: |
4.3% |
Ordinary shares in
issue***: |
22,071,625 |
Gearing range (as a %
of net assets): |
0-20% |
Ongoing
charges****: |
1.2% |
* Includes net revenue of 1.10 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 4.3% and includes the 2020
final dividend of 4.60p per share declared on 1 February 2021 and
due to be paid to shareholders on 17 March 2021 and the 2020
interim dividend of 2.60p per share declared on 24 June 2020
and paid to shareholders on 1 September 2020. |
*** 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 (%) |
Financial
Services |
11.7 |
Support Services |
9.9 |
Mining |
8.4 |
Household Goods &
Home Construction |
8.3 |
Pharmaceuticals &
Biotechnology |
7.6 |
Personal Goods |
6.9 |
Oil & Gas
Producers |
6.9 |
Banks |
4.9 |
Life Insurance |
4.7 |
Travel &
Leisure |
4.0 |
Media |
4.0 |
Tobacco |
3.8 |
Nonlife Insurance |
3.8 |
General Retailers |
3.5 |
Health Care Equipment
& Services |
3.0 |
Industrial Metals
& Mining |
1.5 |
Electronic &
Electrical Equipment |
1.5 |
General
Industrials |
1.4 |
Real Estate Investment
& Services |
1.3 |
Electricity |
1.1 |
Technology Hardware
& Equipment |
1.0 |
Real Estate Investment
Trusts |
0.7 |
Industrial
Engineering |
0.5 |
Industrial
Transportation |
0.2 |
Net Current
Liabilities |
-0.6 |
|
----- |
Total |
100.0 |
|
===== |
Country
Analysis |
Percentage |
United Kingdom |
96.3 |
United States |
3.1 |
Italy |
1.1 |
Netherlands |
0.1 |
Net Current
Liabilities |
-0.6 |
|
----- |
|
100.0 |
|
===== |
*Top
10 holdings |
Fund
% |
AstraZeneca |
6.6 |
Rio Tinto |
5.8 |
Reckitt Benckiser |
4.6 |
Unilever |
4.2 |
Royal Dutch Shell ‘B’ |
4.1 |
RELX |
3.8 |
British American Tobacco |
3.7 |
Smith & Nephew |
2.9 |
Standard Chartered |
2.8 |
Phoenix Group |
2.7 |
*These percentages reflect portfolio exposure per stock and
include more than one holding per stock where relevant.
Commenting on the markets,
representing the Investment Manager noted:
Performance Overview:
The Company returned 1.6% during the month, underperforming the
FTSE All-Share which returned 2.0%.
Market Summary:
Global equity markets rose during February on the back of
continued vaccine deployment and the promise of further fiscal
stimulus in the US.
Optimism around a strong economic recovery led to rising
inflation expectations driving the US 10-year Treasury yield to
1.37%, the highest since March 2020. Commodity prices have
continued to rise. Johnson & Johnson’s single dose Covid-19
vaccine was announced as the third approved vaccine in the US late
in the month.
Strong vaccine rollout continued in the UK as the PM announced
the roadmap out of the current lockdown beginning with the
reopening of schools due in early March with non-essential retail
due to re-open in April. The FTSE All Share rose 2.0% during
February with Basic Materials, Oil & Gas, and Financials
outperforming while Health Care, Utilities and Consumer Goods
underperformed.
Stocks:
Smith & Nephew was a top detractor from the Company during
the month; the recovery in elective procedures is slow and affected
the company’s outlook. RELX was another top detractor; the company
was punished as a bond yield proxy given it is a high-quality
defensive with long term cash flows.
The top positive contributor to the Company during the month was
MoonPig, a company which had its Initial Public Offering (IPO) in
January and followed up with a strong trading update in February.
The online card-and-gifts specialist revealed continued progress in
its key revenue drivers: customer growth, order frequency, and
order value. Whitbread was another top positive contributor;
the Travel & Leisure company was a beneficiary of the positive
news around reopening. Rio Tinto also fared well as the price of
iron ore rose.
Portfolio Activity:
Over the month we purchased a new holding in Smiths Group, a
diversified engineering business consisting of a collection of four
predominantly industrial focused divisions and a Medical devices
division. The imminent sale or demerger of the medical division
this year will leave the rest of the group trading at an attractive
valuation and at a significant discount to industrial peers,
despite its collection of high-quality businesses, while activity
is improving in their end markets.
We also bought new positions in MoonPig and Chart Industries and
added to Legal & General and Berkeley Group and reduced RELX
and Lloyds.
Dividends
From peak to trough, FTSE All Share dividends fell by around
40%. The Company has fared better than this as we have either not
owned or been underweight the biggest cuts, and conversely, we have
been overweight the more resilient parts of the market, we estimate
that our fund has seen a c.30% peak to trough decline in dividends.
We believe that this relative resilience stems from our focus on
identifying cash generative franchises with robust balance
sheets.
When assessing the dividend outlook for the FTSE All Share, we
estimate that around half of this 40% peak-to-trough fall in
dividends will prove permanent and half will be temporary. Turning
to the Company, we expect less than 10% of the portfolio’s dividend
to be permanently impaired and we are already seeing a number of
holdings coming back to the dividend list, in some cases
reinstating dividends that had been deferred during the
pandemic.
We view the dividend outlook for the UK market with renewed
optimism as we expect dividends, in aggregate, to be more resilient
and to grow faster in the future. A number of companies that we
have considered to be overdistributing for a number of years have
now reset their distributions to more appropriate levels. This
gives us confidence that UK Equities offer an attractive source of
yield in an income-starved global context. Additionally, the
Company’s income reserve provides further resilience to the
Company’s dividend outlook.
Outlook:
Given economic activity is heavily suppressed by the health
response to the virus – as opposed to typical business cycle – a
delayed restart could mean a faster recovery once the vaccine is
distributed, unleashing pent-up consumer and corporate demand.
Until then, policy support remains essential with more needed in
Europe as vaccine deployment has
lagged the US and UK. For one of the few times in the past four
decades since partisan alliances became stronger, a single party
controls all branches of the US government – White House, House and
Senate; this will shape the future of US fiscal response. One of
the big issues to watch in 2021 is the extent to which inflationary
pressures build and the response from central banks, especially in
the US with significant implications for market
leadership.
Turning to the UK specifically, we have, finally, got a Brexit
deal that provides increased clarity on the UK’s trading
relationship with the EU. This is against a backdrop of UK
valuations that have been extreme, trading at multi-decade lows
versus other international markets with a recent flurry of M&A
deals highlighting the dispersion and value on offer in the
FTSE.
We continue to believe that this dispersion should narrow given
the increased certainty and reduced risk regarding Brexit. Finally,
we continue to be encouraged by the outlook for UK dividends as a
number of companies used this crisis to reset their dividends to
more sustainable levels and as regulatory, social and economic
pressures ease. Resilience was a crucial feature of the fund and
its underlying holdings in 2020 and while this will still be
important in 2021, 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.
22 March 2021