BlackRock Greater Europe Investment Trust Plc - Portfolio Update
All information is at
Performance at month end with net income reinvested
One Three One Three Launch Month Months Year Years (20 Sep 04) Net asset value (undiluted) 2.2% 12.7% 20.3% 29.7% 834.9% Share price 1.4% 12.7% 21.5% 23.4% 797.0% FTSE World Europe ex UK 3.7% 6.9% 13.8% 31.8% 450.9%
Sources: BlackRock and Datastream
At month end
Net asset value (capital only): 671.09p Net asset value (including income): 673.12p Share price: 638.00p Discount to NAV (including income): 5.2% Net gearing: 10.1% Net yield1: 1.1% Total assets (including income): £675.6m Ordinary shares in issue2: 100,363,934 Ongoing charges3: 0.98%
1
Based on an interim dividend of 1.75p per share, and a final dividend of 5.00p per share, for the year ended
2
Excluding 17,565,004 shares held in treasury.
3
The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation, write back of prior year expenses and certain non-recurring items for the year ended
Country Analysis Total Assets (%) France 22.0 Sector Analysis Total Assets (%) Netherlands 20.2 Industrials 25.2 Switzerland 17.6 Consumer Discretionary 22.8 Denmark 12.6 Technology 21.5 United Kingdom 6.4 Health Care 15.2 Sweden 5.7 Financials 8.6 Ireland 5.3 Basic Materials 5.5 Italy 3.8 Consumer Staples 1.1 United States 2.8 Net Current Assets 0.1 Belgium 1.8 ----- Germany 1.7 100.0 Net Current Assets 0.1 ===== ----- 100.0 =====
Top 10 holdings Country Fund % Novo Nordisk Denmark 9.0 ASML Netherlands 7.2 LVMH France 6.2 RELX United Kingdom 5.8 Hermès France 4.2 BE Semiconductor Netherlands 4.0 Safran France 3.9 Ferrari Italy 3.8 ASM International Netherlands 3.4 Partners Group Switzerland 3.2
Commenting on the markets,
During the month, the Company’s net asset value rose by 2.2% and the share price was up by 1.4%. For reference, the FTSE World Europe ex
The Company underperformed its reference index during the month, driven by both sector allocation and stock selection. In sector terms, the Company’s lower weight to the financial sector was negative for returns as particularly the banking sector delivered strong performance during the month. The Company’s higher allocation to technology was the largest detractor from returns as the sector saw somewhat of a reversal after very strong performance in January and February. The portfolio benefited from lower weights in consumer staples and telecommunications.
The technology sector was the largest detractor from relative returns. The sector gave back some of its very strong performance in previous months. Additionally, BE Semiconductor (Besi) was hit by negative newsflow, which led to shares falling close to 15%. Press reports during the month suggested that the adoption of Besi’s hybrid bonding offering may be slower than some had hoped for, specifically in the high bandwidth memory applications. While the short-term uptake of this new technology may be delayed for a short period, we think it is likely that hybrid bonding will play a significant role in high bandwidth memory production in future years and so our medium-term view on the stock is unchanged.
Exposure to the consumer discretionary sector was also negative as particularly the luxury industry was dragged down by Kering’s (not held in the Company) profit warning. Whilst not owning Kering was positive, shares in LVMH stumbled in sympathy despite no fundamental newsflow.
A mixed contribution came from the banking sector during the month. The sector was up on a mix of generally better economic activity, rate expectations holding up better than some had feared and support from share buybacks.
A number of shares from the industrials sector performed well – for example, IMCD rose on signs that destocking in some end markets is coming to an end. The company reported FY 2023 results in line with expectations, while 2024 consensus estimates seem to be in a good place compared to the updates provided by management.
Positioning within health care continues to be additive with a positive effect from owning Novo Nordisk and Lonza, while avoiding more defensive assets such as Roche and Novartis that continue to lag the market gains. The investment case for Novo Nordisk continues to tick along nicely with news in March supportive of a growing total addressable market for their GLP-1 treatments. The US approved Wegovy for cardiovascular risk reduction in people with obesity, and in doing so, opened the door for Medicare coverage. Late in the month, we saw the first US insurers agree to begin paying for Wegovy through Medicare.
Outlook
We remain fairly constructive on European equities as the set-up should be positive: inflation is on a downwards trajectory and the economy appears relatively robust,
The corporate sector in
Nevertheless, the asset class has been under-owned ever since the Russian invasion of
Long-term structural trends and large amounts of fiscal spending via the Recovery fund, Green Deal and the REPowerEU plan in
ENDS
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