BlackRock Income and Growth Investment Trust Plc - Portfolio Update
The information contained in this release was correct as at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html .
All information is at
Performance at month end with net income reinvested
Since One Three One Three Five 1 April Month Months Year Years Years 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
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 of1.31 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 on21 June 2023 with pay date1 September 2023 , and the 2023 final dividend of 4.80p per share declared on21 December 2023 with pay date15 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 ended31 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 8.3Household Goods & Home Construction 7.4 Media 7.3 General Retailers 4.5 Real Estate Investment Trusts 4.0Nonlife 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 PercentageUnited Kingdom 94.0United States 2.9Switzerland 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
In the
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 January
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. In
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
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
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
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.
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
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
As we have commented several times before, the
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.
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