BlackRock Greater Europe 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
One Three One Three Launch
Month Months Year Years (20 Sep 04)
Net asset value (undiluted) 2.8% 5.1% 0.6% 19.9% 803.9%
Share price 3.2% 6.1% 2.8% 20.1% 772.2%
FTSE World Europe ex UK 4.7% 10.2% 24.3% 52.1% 629.7%
Sources: BlackRock and Datastream
At month end
Net asset value (capital only): 633.94p Net asset value (including income): 635.71p Share price: 605.00p Discount to NAV (including income): 4.8% Net gearing: 2.9% Net yield1: 1.2% Total assets (including income): £586.9m Ordinary shares in issue2: 92,321,027 Ongoing charges3: 0.95%
1
Based on an interim dividend of 1.75p per share and a final dividend of 5.40p per share for the year ended
2
Excluding 25,607,911 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 26.3
Netherlands 15.9
Switzerland 14.3
Sector Analysis Total Assets (%)
Ireland 6.8
Industrials 41.9
Germany 6.7
Financials 17.9
Spain 5.7
Technology 16.9
Finland 4.1
Consumer Discretionary 14.1
Belgium 3.7
Health Care 6.8
United States 3.3
Basic Materials 3.3
Sweden 3.2
Utilities 2.0
Norway 3.1
Net Current -2.9
Liabilities Italy 2.8
----- United Kingdom 2.8
100.0 Austria 2.1
===== Denmark 2.1
Net Current Liabilities -2.9
-----
100.0
=====
Top 10 holdings Country Fund % ASML Netherlands 6.2 Safran France 5.8 Schneider Electric France 5.0 Compagnie Financiere Richemont Switzerland 4.7 BE Semiconductor Netherlands 4.3 Kone Finland 4.0 Belimo Switzerland 4.0 MTU Aero Engines Germany 3.9 Lonza Group Switzerland 3.8 KBC Groep Belgium 3.6
Commenting on the markets,
During the month, the Company’s NAV rose +2.8% and the share price rose +3.2%. For reference, the FTSE Europe ex
Results season continued in February, arguably with European earnings doing slightly better than expected. However, earnings results mattered little to a market that continues to be focused on narratives such as AI disruption. For the most part, moves previously taken to reduce the portfolio’s exposure (e.g. shifting software to semiconductors) meant we were on the right side of the AI tech trade. However, a broader AI disruption trade aiming to buy AI-proof assets, called the HALO trade (Heavy Asset, Low Obsolesce), drove market gains in unlikely areas for the current environment – businesses highly levered to demand outperforming such as telcos, food and beverage, and energy. European banks also came under pressure in the month as momentum unwound and the industry took its turn in the AI disruption crosshairs. The latter was focused both on new AI tools that are seen as having potential to disrupt deposit businesses as well as the broader macro implications of wide-spread job losses being hypothesised.
Sector allocation effects were negative in February driven by underweight positioning to Consumer Staples and those sectors favoured by the move to ‘heavy assets’ deemed AI-proof such as Telcos, Energy and Utilities.
The portfolio’s position in ChemoMetec detracted on weak results that were driven in part by the US government shut down but also by a previously flagged slowdown in instruments given the time it takes for customers to validate new product. Full year guidance was reiterated though this will require a big step up from H1. Longer-term, a new deal signed with Roche appears to be a massive opportunity – one which the market does not know how to value yet - while consolidation going from 3 to 2 players will benefit the growth trajectory over the next 5 years.
Adyen detracted with shares down after a disappointing update that saw 2026 revenue guidance cut. Previously guided for low to mid 20% growth – a target just reiterated at their November CMD – the new guide fell to 20-22% with management citing a deeper review of clients undertaken at the end of 2025 as opposed to deterioration in underlying trends. Regardless, the market had no appetite for downgrades against the backdrop of fear for AI disintermediation.
Despite posting extremely strong earnings, shares in Belimo fell over the month. News of +23% FY25 organic sales growth had already been pre-released, but additional details of margin expansion and a 36% ROCE (Return on Capital Employed) were also impressive. It was the 2026 guidance which led to the negative share price reaction, although mid-teens revenue growth and >20% margins were broadly in line with consensus expectations. We are used to the Belimo management team guiding conservatively and remain confident in the company’s ability to execute so have used the pull back as an opportunity to add to the position.
European banks detracted on the unwind of momentum and AI concerns as noted above. However, banks reported solid results in the month, supportive of our bottom-up investment theses. We do though remain aware of macro concerns in the market and look for improving lending and deposit growth to disprove this narrative.
MTU was a detractor as free cash flow conversion marginally disappointed as sell-side analysts had not factored in the full extent of reinvestments being made into future growth. We are happy with where these investments are being focused and believe it supports the long-term prospects of the company.
Not holding Novo Nordisk was positive for relative returns as the latest Cagrisema trial- a head-to-head against Eli Lilly’s Zepbound – failed to show superiority. The result calls into question consensus’
BE Semiconductor added positive attribution on strong results and evidence they are starting to see the legacy business improve from tightness in semiconductors.
A holding in
Safran was a positive contributor as their earnings release showed strong and sustained trends in the aftermarket business, while the new engine pipeline also looked solid. Cash flow in particular came in better than expected, with 2024-2028 cumulative guide above the previous guide and consensus expectations. A 2026 EBIT (Earnings Before Interest and Taxes) guidance ahead of expectations so early in the year was a confident move from the management team. This implies aftermarket assumptions ahead of consensus expectations and is a positive read across for other civil aerospace holdings in the portfolio.
Outlook
The macro backdrop continues to tread along without major concern. There has been more mixed data out of the US with GDP below estimates but this was largely explained by the government shut down in the back of 2025 and is expected to recover. Unemployment and non-farm payrolls have also shown some volatility month to month but there’s been nothing alarming on balance and we should expect to see this in the US given the higher adoption rate of AI compared to other countries. In
Despite the market volatility, we remain optimistic given the underlying macro backdrop. Nothing we are seeing in the industrial or consumer economy makes us want to panic buy defensive assets for the sake of hiding. We have been pragmatic with our focus on being on the right side of disruption and earnings. We continue to see a resilient bottom-up picture which should support a change in market drivers in time once uncertainties clear, adding breadth to what has been a very narrowly driven market.
ENDS
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