BlackRock Greater Europe Investment Trust Plc – Portfolio Update
The information contained in this release was correct as of December 31, 2021. Information on the current net asset values of the Company is available on the website of the London Stock Exchange at:
BLACK ROCK GREATER EUROPE INVESTMENT TRUST PLC (LEI – 5493003R8FJ6I76ZUW55)
All information is on December 31, 2021 and unaudited.
Month-end performance with net income reinvested
(20 Sep 04)
|Net asset value (undiluted)||1.0%||7.3%||30.5%||120.7%||826.3%|
|Net asset value* (diluted)||1.0%||7.3%||30.5%||120.6%||826.7%|
|FTSE World Europe excluding UK||3.8%||5.1%||17.4%||53.6%||379.1%|
* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream
At the end of the month
|Net asset value (capital only):||682.49p|
|Net asset value (including income):||684.00p|
|Net Asset Value Premium (Including Income):||1.5%|
|Total assets (including income):||£690.5 million|
|Common shares outstanding²:||100 945 411|
1 Based on an interim dividend of 1.75p per share and a final dividend of 4.55p per share for the year ended August 31, 2021.
2 Excluding 16,983,527 treasury shares.
3 Calculated as a percentage of average net assets and using expenses, excluding interest expenses, after tax relief, for the year ended August 31, 2021.
|top 10 holdings||Country||Funds%|
|LVMH Moet Hennessy||France||6.6|
Commenting on the markets, Stefan Gries, representing the Investment Manager noted:
During the month, the Company’s net asset value increased by 1.0% and the share price decreased by 0.3%. For reference, the FTSE World Europe ex UK index returned 3.8% over the period.
Europe Markets outside the UK rose in December, capping off a year of exceptional returns. During the month, the markets were volatile and experienced their last rotation of the year. After a pullback in risk assets in late November due to the emergence of the “Omicron” variant of Covid, markets returned to favor towards the end of December, with studies suggesting milder symptoms in most cases. Industrials, basic materials and healthcare led the market, while consumer services and telecommunications performed weaker.
In December, the company lagged its benchmark, mainly due to its exposure to the semiconductor industry, as well as higher quality stocks, particularly in the healthcare sector, who backed down in the face of Omicron’s diminished fears. However, overall, 2021 was another strong performance for the Company.
In sector terms, the company’s higher allocation to technology detracted from performance as we saw a reversal within the semiconductor industry on concerns about a potential end to the semiconductors. We do not share these fears and have so far not identified any data points that would materially change our view on the sector. Demand, in our view, comes from a wide range of end markets and the companies we own are generally the market leaders in their respective parts of the semiconductor value chain.
A higher allocation to consumer services also hurt returns, as did a lower allocation to basic materials. The company’s overweight in industrials and a lower weighting in telecommunications and financials were positive.
The health care sector was the main drag on relative performance during the month. A number of healthcare names posted strong performances in November, largely driven by the new Omicron variant, and stocks fell in December on waning virus concerns. In more stock-specific news, DiaSorin experienced volatility after a weak capital markets day where management presented a weaker-than-expected financial outlook. However, we continue to believe that DiaSorin remains one of the best positioned life science companies in the world. Europe.
As noted, our exposure to the semiconductor industry was also negative in December. BE Semiconductor, ASML and ASMi were among the main detractors. In addition to the market jitters mentioned above impacting equities during the month, we also saw some short-term equity-specific issues as BE Semiconductor had to lower its Q4 revenue guidance in due to flooding at its main production plant in Malaysia.
The company’s stake in Russian e-commerce name Ozon fell on geopolitical fears, as well as general weakness in the tech sector during the month. Hermès, Adyen and IMCD are other quality names that sold out during the December spin on limited stock specific news.
The best performing position over the period was our position in wealth management technology platform Allfunds, which rebounded strongly after a short period of weaker performance. The shares rose after it became clear that a previously planned placement was not going to materialize. Own the National Bank of Greece was also positive. Elsewhere, shares of combi-oven producer Rational and exposed travel Safran also rebounded on lower Omicron fears and a more positive outlook for the travel and leisure industry in general.
At the end of the period, the Company had an above-benchmark allocation to technology, industrials, consumer discretionary, healthcare and energy. The company had an underweight allocation to financials, consumer staples, utilities, telecommunications, real estate and basic materials.
Markets performed strongly in 2021 on the back of improving activity, vaccine rollouts, and accommodative fiscal and monetary policy. We believe economic growth and overall market earnings remain strong heading into 2022. In particular, we believe strong spending from the EU Recovery Fund will support a number of leading global companies operating in areas such as digitalization and the energy transition that we have in this company.
Additionally, while we still see potential for increased normalization in some market segments and positive economic growth overall, some of the strong cyclical tailwinds, and indeed policy support seen in 2021, are likely to fade in the future. course of 2022. While interest rate markets and inflation expectations will likely remain volatile, we do not expect policy Europe change significantly.
We foresee a greater dispersion between sector and stock market results and, therefore, a need for greater selectivity. As we find ourselves in a situation where we see strong industrial and consumer demand, combined with issues in supply chains, we are more focused than ever on companies with strong pricing power that have the capacity to pass on higher prices.
January 21, 2022
The latest information is available by typing www.blackrock.com/fr/brge on the internet, “BLRKINDEX” on Reuters, “BLRK” on Bloomberg or “8800” on Topic 3 (ICV terminal). Neither the content of the Manager’s website nor the content of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into or forms part of this announcement.