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) -2.3% -3.9% 19.5% 1.7% 777.5%
Share price -1.0% -3.1% 20.7% -6.5% 738.9%
FTSE World Europe ex UK -1.5% 0.0% 15.3% 21.2% 452.6%
Sources: BlackRock and Datastream
At month end
Net asset value (capital only): 624.57p Net asset value (including income): 630.16p Share price: 595.00p Discount to NAV (including income): 5.6% Net gearing: 7.6% Net yield1: 1.1% Total assets (including income): £622.9m Ordinary shares in issue2: 98,841,640 Ongoing charges3: 0.98%
1
Based on a final dividend of 5.00p per share for the year ended
2
Excluding 19,087,298 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 (%)
Netherlands 21.4
Sector Analysis Total Assets (%) France 19.7
Industrials 31.4 Switzerland 18.0
Consumer Discretionary 21.3 Denmark 9.5
Technology 15.2 United Kingdom 6.6
Health Care 14.4 Ireland 6.2
Financials 9.8 Italy 4.3
Basic Materials 7.2 United States 3.9
Consumer Staples 0.9 Sweden 3.9
Net Current -0.2 Germany 2.7
Liabilities
Finland 2.0
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Belgium 2.0
100.0
Net Current Liabilities -0.2
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100.0
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Top 10 holdings Country Fund % Novo Nordisk Denmark 7.6 ASML Netherlands 7.4 RELX United Kingdom 6.6 Schneider Electric France 4.9 Partners Group Switzerland 4.3 Safran France 4.3 Ferrari Italy 4.3 Hermès France 4.2 Linde United States 3.8 ASM International Netherlands 3.8
Commenting on the markets,
During the month, the Company’s Net Asset Value (NAV) fell by 2.3% and the share price declined by 1.0%. For reference, the FTSE World Europe ex
The market began the month with concerns about the strength of the US economy and, yet again, fears of a sharper economic slowdown. However, the ongoing decline in inflation prompted key central banks, including the
Encouraging news also came from
Market leadership during the month came from real estate, materials and utilities while health care and energy delivered the weakest performance.
Our investment team met with 200+ companies at several industry conferences during September. We continue to see mixed economic trends. Whilst balance sheets are in good shape and banks are not seeing red flags in terms of the general credit environment, some pockets of weakness remain apparent, particularly amongst companies with exposure to
The Company lagged its reference index during the month, largely driven by the portfolio’s exposure to technology.
In sector terms, a higher exposure to both industrials and materials aided relative returns. The Company’s underweight exposure to energy was also positive during
A lower weight to both financials and utilities detracted from relative returns, as did a higher weight to technology.
Shares in Ferrari were also slightly weaker during
Novo Nordisk’s shares fell following disappointing trial results for their experimental obesity pill, Monlunabant, which showed less weight loss than expected. Novo acquired this drug through their purchase of
Elsewhere in health care, shares in Straumann performed strongly. The announcement of the disposal of Dr. Smile earlier in
Chemometec also aided returns as investors remain encouraged by the new CEO and the company’s strong execution in navigating the downturn in the life sciences market relative to its peers. We remain encouraged by the pivot in Chemometec’s strategy to one that should deliver strong commercial results.
A strong contribution came from the industrials sector, particularly within aerospace. Safran was the top performer over the month due to the robust aeroplane aftermarket, with ageing aircrafts driving demand for maintenance services. This ongoing need for upkeep is significantly supporting their business performance.
Several assets in the portfolio benefited from positive sentiment due to falling interest rates. Partners Group, a private equity firm, along with several stocks exposed to construction and real estate markets, such as Kingspan, Belimo and Kone, benefited from falling interest rates and an improved outlook for financing conditions.
Finally, IMCD shares aided performance on a well-received capital markets day. We continue to see a slightly better backdrop for the speciality chemicals companies versus diversified chemicals where pricing is under pressure and volumes remain poor.
Outlook
We believe underlying economic conditions remain robust with consumers and corporates in healthy positions. Inflation is retreating and rate cutting cycles have begun in earnest across the globe, which increases investor propensity to move up the risk curve in search for higher returns. We continue to take scaled and deliberate cyclical risk in European equities as profitability continues to be resilient in many European cyclicals, with their sensitivity to economic shocks and the domestic economy significantly reduced. After a long period of underinvestment, long duration and structural investment spend is now in place to support these businesses and their underlying earnings should move higher over a multi-year period.
Alongside investment opportunities afforded by structural forces, such as the energy transition or artificial intelligence, we also detect a cyclical upturn in a variety of industries like construction, life-sciences and chemicals which have suffered from pronounced volume declines for the best part of two years. We remain positive on the outlook, given a structurally improved market composition in
ENDS
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