The
information contained in this release was correct as at
29 February 2024. 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
29 February
2024 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
|
-2.0%
|
0.4%
|
-2.7%
|
19.0%
|
15.7%
|
108.9%
|
Net
asset value
|
-0.9%
|
1.6%
|
-0.9%
|
22.9%
|
26.3%
|
115.2%
|
FTSE
All-Share Total Return
|
0.2%
|
3.3%
|
0.6%
|
25.2%
|
27.7%
|
112.6%
|
|
|
|
|
|
|
|
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:
|
202.48p
|
Net
asset value - cum income*:
|
203.79p
|
Share
price:
|
178.00p
|
Total
assets (including income):
|
£45.6m
|
Discount to
cum-income NAV:
|
12.7%
|
Gearing:
|
8.0%
|
Net
yield**:
|
4.2%
|
Ordinary shares
in issue***:
|
20,401,536
|
Gearing range (as
a % of net assets):
|
0-20%
|
Ongoing
charges****:
|
1.28%
|
* Includes net
revenue of 1.31 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 4.2%
and includes the 2023 Interim Dividend of 2.60p per share declared
on 21 June 2023 with pay date 1 September 2023, and the 2023 final
dividend of 4.80p per share declared on 21 December 2023 with pay
date 15 March 2024.
|
***
excludes 10,081,532 shares held in
treasury.
|
****
The Company's ongoing charges are calculated as a percentage of
average daily net assets and using management fee and all other
operating expenses excluding finance costs, direct transaction
costs, custody transaction charges, VAT recovered, taxation and
certain non-recurring items for the year ended 31 October
2023.
|
Sector Analysis
|
Total assets (%)
|
Support
Services
|
10.8
|
Banks
|
9.1
|
Financial
Services
|
8.5
|
Pharmaceuticals
& Biotechnology
|
8.4
|
Mining
|
8.3
|
Oil
& Gas Producers
|
8.3
|
Household Goods
& Home Construction
|
7.4
|
Media
|
7.3
|
General
Retailers
|
4.5
|
Real
Estate Investment Trusts
|
4.0
|
Nonlife
Insurance
|
3.4
|
Personal
Goods
|
3.2
|
Life
Insurance
|
3.2
|
Food
Producers
|
2.8
|
Travel &
Leisure
|
2.4
|
Tobacco
|
1.7
|
Electronic &
Electrical Equipment
|
1.6
|
Health Care
Equipment & Services
|
1.5
|
Industrial
Engineering
|
1.1
|
Leisure
Goods
|
1.0
|
|
|
Net
Current Assets
|
1.5
|
|
-----
|
Total
|
100.0
|
|
=====
|
Country Analysis
|
Percentage
|
United
Kingdom
|
94.0
|
United
States
|
2.9
|
Switzerland
|
1.6
|
Net
Current Assets
|
1.5
|
|
-----
|
|
100.0
|
|
=====
|
Top 10 holdings
|
Fund %
|
Shell
|
6.7
|
AstraZeneca
|
6.7
|
RELX
|
5.7
|
Rio
Tinto
|
5.4
|
3i
Group
|
4.7
|
Reckitt
|
4.1
|
HSBC
Holdings
|
3.6
|
Phoenix
Group
|
3.1
|
Unilever
|
3.0
|
Mastercard
|
2.9
|
|
|
Commenting
on the markets, representing the Investment Manager
noted:
Performance
Overview:
The
portfolio returned -0.9% during the month net of fees,
underperforming the FTSE All-Share which had returned by
0.2%.
Market
Summary:
The
FTSE All Share Index rose by 0.2% with Industrials, Consumer
Services and Technology as top performing sectors. Strong US
technology company earnings lifted stock markets globally and a
rally in chipmakers helped Japan's
Nikkei set a record high for the first time since 1989.
In
the UK, data revealed that the country fell into technical
recession last year and Consumer Price Index (CPI) data showed that
inflation was still well above the Bank of England (BOE) 2% target. The United Kingdom
Manufacturing Purchasing Managers' Index (PMI) increased in the
month of February, marking a 10-month high. Input costs and selling
prices grew modestly, with the latter reaching a five-month high,
tempering rate cut expectations from investors.
In
the US, apart from strong earnings reports, inflation eased in
January with the Personal Consumption Expenditures (PCE) falling
which supported expectations of interest rate cuts later this year.
The labour market continued to be strong as the economy added
353,000 jobs in January1.
In Europe, Purchasing Managers'
Index (PMI) data showed that the economy was still contracting.
Inflation in the region's two largest economies - Germany and France - fell to its lowest level since
mid-2021, but services remained sticky and continued to raise
concerns for the European Central Bank (ECB).
Stock
comments
Reckitt Benckiser
was the top detractor after the consumer goods company reported
disappointing full year results including an accounting anomaly
relating to the overstatement of net revenue in their Middle
Eastern division. Rio Tinto and BHP also detracted due to weakness
in the price of iron ore as investors' concerns regarding
China's growth
persist.
Smith
& Nephew reported mixed results and the medical equipment
manufacturer was another top detractor from performance of the
Fund. US Orthopaedics continues to struggle in Q4 with knees -3.8%,
hips +1.1% and an impairment of $109m
for Engage's partial knee products which were acquired only in
January 2022 but have been subject to
a recall. Non-US Orthopaedics was much better (knees +14%, hips
+7%), however, there is still much to do here to improve product
availability. The other divisions are performing well with Sports
Medicine the star despite headwinds in China and Wound also delivering, driven by
Bioactives and Negative Pressure.
Information and
analytics company, RELX was one of the largest positive
contributors to performance after the company reported full year
results that were ahead of expectations. Mastercard continued to
see share price strength after reporting strong results earlier in
the year and shares in Standard Chartered re-rated on
better-than-expected reported earnings.
Changes
During the
period, we sold Centrica. The shares have done well since we
initiated the position, however the investment case from here is
more complicated as earnings normalise. We are using the proceeds
to fund better ideas elsewhere in the portfolio.
We
also added to HSBC and NatWest and reduced Smith & Nephew and
Watches of Switzerland.
Outlook
Equity markets
entered 2024 in a buoyant mood following a strong and broad rally
in the latter part of 2023. The outlook, and optimism, is a far cry
from 12 months ago, when supply chains were hugely disrupted, and
inflation was double digit and well ahead of central banks' targets
prompting rapid and substantial interest rates hikes despite an
uncertain demand environment. Despite this, equities had one of
their best years on record outperforming bonds with double digit
increases, in dollar terms, across most of the developed world and
some emerging markets. In the US, the Nasdaq was the standout
rising by 54% driven by the largest seven companies that rebounded
strongly (+c.70%) after a poor 2022, when they had fallen by 39% as
a group. The FTSE All Share had returned by 7.9% in 2023.
China was the surprise negative in
2023, with no noticeable COVID re-opening recovery and lacklustre
growth despite government attempts to stimulate.
Markets have
shifted to `goldilocks' territory whereby slowing inflation has
signalled the peak for interest rates while broad macroeconomic
indicators that have been weak are not expected to deteriorate
further. This is also helpful for the cost and availability of
credit which has been recently improving having deteriorated
through most of 2023. During December, bond markets had begun to
price in 130bps of easing in the US and a not dissimilar amount in
the UK and Europe. Whilst not
unrealistic, we believe that this quantum of cuts may prove overly
aggressive without a significant deterioration in the economy.
Notably, the BoE remains staunchly hawkish as their recent meetings
showed. Labour markets remain resilient for now with low levels of
unemployment while real wage growth is supportive of consumer
demand albeit presenting a challenge to corporate profit
margins.
Notably in 2024,
geopolitics will play a more significant role in asset markets.
This year will see the biggest election year in history with more
than 60 countries representing over half of the world's population,
c.4 billion people, going to the polls. While most, such as the
UK's are unlikely to have globally significant economic or
geopolitical ramifications, others, such as the US elections in
November, could have a material impact. We believe political
certainty may be helpful for the UK and address the UK's elevated
risk premium that has persisted since the damaging Autumn budget of
2022. Whilst we do not position the portfolios for any particular
election outcome, we are mindful of the potential volatility and
the opportunities that may result.
As we
have commented several times before, the UK stock market continues
to remain depressed in valuation terms relative to other developed
markets offering double-digit discounts across a range of valuation
metrics. This valuation `anomaly' saw further reactions from UK
corporates with the buyback yield of the UK, at the end of 2023,
standing at a respectable c.2.5%. Combining this with a dividend
yield of c.4%, the cash return of the UK market is attractive in
absolute terms and comfortably higher than other developed markets.
Although we anticipate further volatility ahead as earnings
estimates moderate, we know that in the course of time risk
appetite will return and opportunities are emerging. As we have
stated in previous commentaries, we have identified a number of
opportunities with new positions initiated throughout the year in
both UK domestic and midcap companies.
We
continue to focus the portfolio on cash generative businesses with
durable, competitive advantages as we believe these companies are
best placed to drive returns over the long-term. Whilst we
anticipate economic and market volatility will persist throughout
the year, we are excited by the opportunities this will likely
create; by identifying the companies that strengthen their
long-term prospects as well as attractive turnarounds
situations.
1Source: Financial
Times, 2 February 2024.
https://www.ft.com/content/34bd389f-f44d-42d8-b5d6-31fe34ea30c6
20 March 2024