BlackRock Grtr Eur Portfolio Update

 
TIDMBRGE 
 
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc (LEI - 5493003R8FJ6I76ZUW55) 
All information is at 31 December 2017 and unaudited. 
 
Performance at month end with net income reinvested 
 
 
                                        One     Three       One     Three        Launch 
                                      Month    Months      Year     Years   (20 Sep 04) 
 
Net asset value (undiluted)            1.8%      1.5%     19.7%     57.1%        344.6% 
 
Net asset value* (diluted)             1.9%      1.5%     19.7%     57.1%        345.0% 
 
Share price                            0.1%      4.1%     23.0%     57.5%        336.7% 
 
FTSE World Europe ex UK                0.5%      0.4%     17.5%     48.2%        244.5% 
 
* Diluted for treasury shares and subscription shares. 
Sources: BlackRock and Datastream 
 
 
At month end 
 
Net asset value (capital only):                                                 346.20p 
 
Net asset value (including income):                                             347.06p 
 
Net asset value (capital only)1:                                                346.20p 
 
Net asset value (including income)1:                                            347.06p 
 
Share price:                                                                    338.00p 
 
Discount to NAV (including income):                                                2.6% 
 
Discount to NAV (including income)1:                                               2.1% 
 
Net cash:                                                                          0.1% 
 
Net yield2:                                                                        1.6% 
 
Total assets (including income):                                                GBP308.2m 
 
Ordinary shares in issue3:                                                   88,801,863 
 
Ongoing charges4:                                                                 1.10% 
 
1  Diluted for treasury shares. 
2  Based on a final dividend of 3.70p per share and an interim dividend of 
1.75p per share for the year ended 31 August 2017. 
3  Excluding 21,527,075 shares held in treasury. 
4  Calculated as a percentage of average net assets and using expenses, 
excluding interest costs, after relief for taxation, for the year ended 
31 August 2017. 
 
Sector Analysis                 Total     Country Analysis             Total 
                               Assets                                 Assets 
                                  (%)                                    (%) 
 
Industrials                      30.5     France                        17.1 
 
Health Care                      18.2     Switzerland                   15.9 
 
Consumer Goods                   15.6     Netherlands                   13.2 
 
Consumer Services                13.2     Denmark                       12.8 
 
Technology                        8.0     Germany                       12.6 
 
Financials                        8.0     Sweden                         7.6 
 
Oil & Gas                         4.1     Belgium                        6.0 
 
Basic Materials                   2.3     Russia                         4.1 
 
Net current assets                0.1     Spain                          3.5 
 
                                -----     Finland                        3.4 
 
                                100.0     Israel                         1.7 
 
                                =====     Greece                         1.5 
 
                                          Ukraine                        0.5 
 
                                          Net current assets             0.1 
 
                                                                       ----- 
 
                                                                       100.0 
 
                                                                       ===== 
 
 
 
 
Ten Largest Equity Investments 
 
Company                                           Country                          % of 
                                                                           Total Assets 
 
SAP                                               Germany                           4.7 
 
Unilever                                          Netherlands                       4.6 
 
Fresenius Medical Care                            Germany                           4.4 
 
Lonza Group                                       Switzerland                       4.1 
 
RELX                                              Netherlands                       4.0 
 
Novo Nordisk                                      Denmark                           3.9 
 
Compagnie Financière Richemont                    Switzerland                       3.7 
 
Danske Bank                                       Denmark                           3.7 
 
Industria De Diseno Textil Inditex                Spain                             3.5 
 
DSV                                               Denmark                           3.4 
 
Commenting on the markets, Stefan Gries, representing the Investment Manager 
noted: 
 
During the month, the Company's NAV rose by 1.8% and the share price rose by 
0.1%. For reference, the FTSE World Europe ex UK Index returned 0.5% during the 
period. 
 
The Eurozone economy continued its upward trajectory with industrial 
production, employment and the flash purchasing managers' indexes (PMI) all 
coming in strong. The European Central Bank (ECB) left interest rates and its 
Quantitative Easing programme unchanged. The Bank confirmed that between 
January and September 2018 it will halve its monthly bond purchases to EUR30bn 
and will reinvest the proceeds of any bonds that mature. 
 
Looking at the political landscape, in Catalonia regional elections saw 
separatist parties gain 48% of the vote and claim 70 seats out of 135 - just 
ahead of the 68-seat threshold required to form a government. However, as the 
three pro-independence parties did not join forces during the campaign and 
would now have to agree on a common leadership and political agenda, forming a 
government could be difficult. In Italy, President Sergio Mattarella dissolved 
parliament on 28 December and announced a general election to be held on 4 
March. 
 
The Company outperformed the market over the month. Stock selection was a 
strong driver of returns, whilst sector allocation was neutral. 
 
On a sector basis, the lower allocations to both the basic materials and 
financials sectors, compared with the reference index, detracted from 
performance. With regards to the former, the sector benefited from a firming of 
commodity prices into the year-end. Positively, the lower allocation to the 
utilities sector aided returns, as it suffered losses through the month 
following strong performance in November. 
 
A position in Israeli pharmaceutical company, Teva, proved the top performing 
stock over the month as the share price saw some relief following a period of 
underperformance. Elsewhere in health care, a position in Fresenius Medical 
Care also aided returns. The company has seen good progress in its value-based 
care cost saving programme, with an increasing number of patients enrolled. The 
share price was supported by the announcement of a buyback programme, as well 
as by proposals for US tax reform, with over 70% of its revenues coming from 
the US. 
 
The Company also saw positive performance from a holding in Thales, which made 
an acquisition in December to support its digital business. There is an 
expectation for the deal to close in H2 2018 and deliver substantial revenue 
and cost synergies as Thales combines their Big Data and AI operations with the 
new Gemalto unit. 
 
A holding in Adidas detracted from returns. We had reduced the size of the 
position in November as we felt the stock would face some headwinds into the 
year-end, including the exceptionally promotional environment and a move of 
investor focus on to FY18 guidance which we felt would be conservative. We 
believe the investment case looks robust in the longer term and the group can 
continue a strong growth trajectory. 
 
Outlook 
 
The Euro area recovery appears broad and sustainable. The pillars of demand are 
in place to allow a continuation of growth above the recent historic average. 
The economy looks at little risk of over-heating in the near term, as slack 
continues to exist. Despite falling unemployment and increasing consumer 
confidence driving higher demand, Euro area core inflation remains sluggish and 
continues to undershoot the ECB's target levels. Monetary policy is therefore 
likely to remain accommodative and any withdrawal of liquidity will be slow and 
done with caution. The robustness of the economy, and relatively quiet 
political environment, is allowing for growth in earnings and corporate 
investment. 
 
The caution borne by corporates in the Euro area in the wake of both the 
financial crisis and Euro crisis has left them in a healthy financial 
situation. Alongside continued favourable financing conditions, this is 
providing opportunities for re-leveraging and M&A activity, which could further 
support earnings in the region. The expected easing of the currency headwind 
facing many European corporates going into the first half of 2018 is also 
supportive in this regard. Whilst the market overall is trading around its 
historical average range, we believe a selective approach can help identify 
attractively valued investment opportunities in a market where strategic 
decision making and corporate investment is creating increasing disparity 
between winners and losers. 
 
11 January 2018 
 
ENDS 
 
Latest information is available by typing www.brgeplc.co.uk on the internet, 
"BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV 
terminal).  Neither the contents of the Manager's website nor the contents of 
any website accessible from hyperlinks on the Manager's website (or any other 
website) is incorporated into, or forms part of, this announcement. 
 
 
 
END 
 

(END) Dow Jones Newswires

January 11, 2018 11:49 ET (16:49 GMT)