The
information contained in this release was correct as at
30 June 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
30 June
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
|
-3.0%
|
7.7%
|
10.0%
|
18.9%
|
21.5%
|
131.2%
|
Net
asset value
|
-1.5%
|
3.5%
|
10.7%
|
21.3%
|
29.1%
|
133.4%
|
FTSE
All-Share Total Return
|
-1.2%
|
3.7%
|
13.0%
|
23.9%
|
30.9%
|
131.0%
|
|
|
|
|
|
|
|
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:
|
215.92p
|
Net
asset value - cum income*:
|
221.03p
|
Share
price:
|
197.00p
|
Total
assets (including income):
|
£48.5m
|
Discount to
cum-income NAV:
|
10.9%
|
Gearing:
|
6.5%
|
Net
yield**:
|
3.8%
|
Ordinary shares
in issue***:
|
20,111,789
|
Gearing range (as
a % of net assets):
|
0-20%
|
Ongoing
charges****:
|
1.28%
|
* Includes net
revenue of 5.11 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 3.8%
and includes the 2023 final dividend of 4.80p per share declared on
21 December 2023 with pay date 15 March 2024, and the Interim
Dividend of 2.70p per share declared on 20 June 2024 with pay date
03 September 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.
In
addition, the Company's Manager has also agreed to cap ongoing
charges by rebating a portion of the management fee to the extent
that the Company's ongoing charges exceed 1.15% of average net
assets.
|
Sector Analysis
|
Total assets (%)
|
Support
Services
|
11.4
|
Banks
|
9.3
|
Pharmaceuticals
& Biotechnology
|
8.4
|
Financial
Services
|
8.2
|
Oil
& Gas Producers
|
6.9
|
Media
|
6.9
|
Real
Estate Investment Trusts
|
6.2
|
Household Goods
& Home Construction
|
5.9
|
General
Retailers
|
5.8
|
Mining
|
5.2
|
Travel &
Leisure
|
3.2
|
Industrial
Engineering
|
3.2
|
Personal
Goods
|
3.2
|
Nonlife
Insurance
|
3.0
|
Life
Insurance
|
2.4
|
Gas,
Water & Multiutilities
|
2.4
|
Electronic &
Electrical Equipment
|
1.7
|
Food
Producers
|
1.6
|
Tobacco
|
1.3
|
General
Industrials
|
0.9
|
Leisure
Goods
|
0.6
|
Net
Current Assets
|
2.3
|
|
-----
|
Total
|
100.0
|
|
=====
|
Country Analysis
|
Percentage
|
United
Kingdom
|
94.0
|
United
States
|
2.3
|
Switzerland
|
1.4
|
Net
Current Assets
|
2.3
|
|
-----
|
|
100.0
|
|
=====
|
Top 10 holdings
|
Fund %
|
AstraZeneca
|
7.3
|
RELX
|
5.6
|
Shell
|
4.9
|
3i
Group
|
4.6
|
Rio
Tinto
|
3.9
|
HSBC
Holdings
|
3.7
|
London Stock
Exchange Group
|
3.3
|
Unilever
|
3.2
|
Segro
|
2.8
|
Reckitt
|
2.5
|
|
|
Commenting
on the markets, representing the Investment Manager
noted:
Performance
Overview:
The
Company returned -1.5% during the month net of fees,
underperforming the FTSE All-Share which returned -1.2%.
Market
Summary:
The
UK economy grew more strongly than expected in the first half of
2024, though business surveys suggested a slower pace of underlying
growth. The labour market continued to loosen but remained
relatively tight by historical standards.1
Inflation fell to
the Bank of England's (BoE) 2%
target for the first time in three years, leading to speculation
about potential rate cuts later in the year. The BoE, however,
maintained its current policy, awaiting further economic data
before making any changes.2
Large
caps experienced a period of consolidation in June as the FTSE 100
dropped after peaking in May. The sectors that experienced the most
notable underperformance were basic materials and
healthcare.
The
FTSE 250, which is often seen as a barometer of the UK's broader
economic health due to its focus on domestically oriented
companies, rose by 2.3% year-to-date, reaching nearly 20,000
points.3
Stock
comments:
Tate
& Lyle fell on the announcement of its proposed acquisition of
US peer, CP Kelco, a strategically attractive deal but where the
uncertainty it introduces combined with the full price being paid
is weighing on the shares.
Berkeley Group
detracted as the shares fell following its full year results
announcement. The statement showed resilient current trading,
however, highlighted that there are still significant challenges
facing the housebuilding sector. Notably, high interest rates and a
difficult planning, regulatory and tax backdrop that will put
pressure on earnings in future years unless addressed. Hays
detracted giving back some of the previous month's gains as
staffing markets remain sluggish.
3i
provided an update on Action during the month reporting the opening
of 107 new stores. Despite this expansion, there has been a slight
decrease in the year-to-date like-for-like sales growth, now at
+9%, compared to the 9.8% growth in Q1 reflecting strong volume
growth offset by price deflation as Action passed price reductions
on to its customers. Action boasts €825 million in cash reserves
and has successfully completed a refinancing of €2.1 billion
highlighting the group's strong fiscal management and readiness for
future opportunities.
RELX
performed well in the month on limited newsflow and Rentokil
rallied on the news that activist investor, Trian partners, took a
significant stake in the pest control company.
Changes:
During the month,
we started new position in National Grid. We view the recent rights
issue, a dividend cut, and a 20% fall in share price as a valuation
opportunity with the company's shares now being well-funded for the
future. We believe the growing demand for power consumption driven
by electrification and AI advancements indicates a significant
growth trajectory. We also added to Spirax Sarco as we believe the
current share price weakness is a function of cyclical pressures
and fails to recognise the quality of this global franchise and the
attractive long term returns it offers. and We reduced Tate and
Lyle, managing the position size given the CP Kelco
deal.
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. 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 recently improved having been deteriorating
through most of 2023. Despite expectations for rate cuts moderating
significantly, stock markets have continued to make progress in the
developed world. 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.
With
the UK's election date now set for July
4th, we continue to expect that 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 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 will 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, some of which
have started to emerge.
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 a robust buyback yield of
the UK market. Combining this with a dividend yield of 3.7% (FTSE
All Share Index yield as at 30 April
2024 source: The Investment Association), 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, we believe that in the course of time risk
appetite will return and opportunities are emerging. We have
identified a number of potential 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 that
we believe offer 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 seeking to identify the companies that
strengthen their long-term prospects as well as attractive
turnarounds situations.
1 ONS 11/06/2024
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/june2024
2 BOE 19/06/2024
https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2024/june-2024
3 FT 30/06/2024
https://markets.ft.com/data/indices/tearsheet/summary?s=FTSM:FSI
17 July 2024