BlackRock Grtr Eur Portfolio Update

 
TIDMBRGE 
 
The information contained in this release was correct as at 30 June 2020. 
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 GREATER EUROPE INVESTMENT TRUST plc (LEI - 5493003R8FJ6I76ZUW55) 
All information is at 30 June 2020 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)            6.9%     24.5%     10.8%     40.5%        479.9% 
 
Net asset value* (diluted)             6.9%     24.4%     10.7%     40.4%        480.2% 
 
Share price                            6.8%     32.5%     12.5%     42.1%        466.5% 
 
FTSE World Europe ex UK                4.9%     18.9%      0.5%     11.3%        268.5% 
 
* Diluted for treasury shares and subscription shares. 
Sources: BlackRock and Datastream 
 
 
At month end 
 
Net asset value (capital only):                                                 432.54p 
 
Net asset value (including income):                                             436.48p 
 
Net asset value (capital only)1:                                                432.54p 
 
Net asset value (including income)1:                                            436.48p 
 
Share price:                                                                    422.00p 
 
Discount to NAV (including income):                                                3.3% 
 
Discount to NAV (including income)1:                                               3.3% 
 
Net cash:                                                                          8.5% 
 
Net yield2:                                                                        1.4% 
 
Total assets (including income):                                                GBP368.1m 
 
Ordinary shares in issue3:                                                   84,323,101 
 
Ongoing charges4:                                                                  1.1% 
 
1  Diluted for treasury shares. 
2  Based on a final dividend of 4.10p per share for the year ended 31 August 
2019 and an interim dividend of 1.75p for the year ending 31 August 2020. 
3  Excluding 26,005,837 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 2019. 
 
Sector Analysis                 Total       Country Analysis              Total 
                               Assets                                    Assets 
                                  (%)                                       (%) 
 
Technology                       24.5       Denmark                        17.8 
 
Health Care                      18.5       Switzerland                    13.4 
 
Industrials                      17.6       Netherlands                    12.5 
 
Consumer Goods                   10.5       France                         12.0 
 
Financials                        9.8       Germany                         9.7 
 
Consumer Services                 9.6       Italy                           6.7 
 
Oil & Gas                         3.6       Russia                          5.5 
 
Basic Materials                   3.0       Sweden                          5.3 
 
Telecommunications                2.5       United Kingdom                  4.6 
 
Net Current Assets                0.4       Spain                           2.8 
 
                              -------       Belgium                         2.5 
 
                                100.0       Israel                          2.0 
 
                                 ====       Finland                         1.8 
 
                                            Ireland                         1.8 
 
                                            Poland                          0.9 
 
                                            Greece                          0.3 
 
                                            Net Current Assets              0.4 
 
                                                                        ------- 
 
                                                                          100.0 
 
                                                                           ==== 
 
 
 
Ten Largest Equity Investments 
 
Company                                           Country                          % of 
                                                                           Total Assets 
 
ASML                                              Netherlands                       6.6 
 
Novo Nordisk                                      Denmark                           5.6 
 
SAP                                               Germany                           5.5 
 
Sika                                              Switzerland                       5.4 
 
Kering                                            France                            5.1 
 
Lonza Group                                       Switzerland                       5.0 
 
RELX                                              United Kingdom                    4.6 
 
Royal Unibrew                                     Denmark                           4.4 
 
DSV                                               Denmark                           4.0 
 
Safran                                            France                            3.3 
 
Commenting on the markets, Stefan Gries, representing the Investment Manager, 
noted: 
 
During the month, the Company's NAV rose by 6.9% and the share price by 6.8%. 
For reference, the FTSE World Europe Ex UK Index returned 4.9% during the 
period. 
 
Europe ex UK markets continued their strong performance in June as countries 
eased lock-down restrictions, allowing economies to re-start. The release of 
global data during the month boosted sentiment, as PMIs in Europe and the US 
suggested that activity is surprising on the upside. Europe's flash PMIs posted 
larger than expected gains across the board. An impressive array of fiscal and 
monetary measures in Europe is getting into place to bridge the economy through 
this period of weakness. The latest data points and messages from companies 
suggest a strong cyclical recovery is underway. We believe the stimulus and the 
European Union (EU) recovery fund can reduce the risk premia in Europe and 
improve investors' appetite towards the region overall. Against this backdrop, 
cyclicals led the market with the financials and technology sectors rallying, 
while healthcare and consumer services underperformed the overall market. 
 
The Company outperformed the reference index over the month, driven by both 
strong sector allocation and stock selection. In sector terms, the Company 
benefited from a higher allocation to the technology and industrials sectors, 
as well as from its lower allocation to consumer goods. Underweight exposures 
to financials and higher allocations to consumer services and healthcare 
detracted. 
 
The technology sector was the largest contributor to returns. The Company's 
holdings in semiconductor names ASML and BE Semiconductor contributed to 
returns. These companies have performed well throughout the COVID period as 
demand for remote connectivity solutions increased. We believe demand for chips 
will continue to grow as the trend towards digitalisation is set to continue. 
They are well positioned to benefit from the roll out of 5G handsets and 
infrastructure, as well as more general investment in data centres, cloud 
computing and high performance computing power. 
 
Also, within the technology sector, the Company benefited from avoiding 
Wirecard as shares collapsed with the company forced to file for insolvency on 
the back of an announcement that there was insufficient evidence to account for 
EUR1.9bn of cash. While we did not hold Wirecard, we do hold a position in 
Wirecard's competitor Adyen which is likely to benefit by picking up market 
share in an otherwise highly consolidated sector. 
 
Positive contribution also came from the positioning within industrials. Sika, 
a global leader in construction chemicals, was the single best performer during 
the month, benefiting from better sentiment in construction. Shares correlated 
to global trade also performed strongly. DSV Panalpina, the Danish transport 
and logistics company, aided performance as the company said the second quarter 
had developed better than expected considering the COVID crisis. More resilient 
than expected global trade combined with a strong management team and business 
execution led to DSV beating Q2 profit expectations by almost 100%. 
 
While an underweight to the financials sector detracted, stock selection was 
positive. In particular, the Company's position in FinecoBank was amongst the 
best performers. The business is thriving with total financial assets under 
administration growing to EUR82.6bn (+9% year over year) to the end of June 
despite the clearly difficult market environment, which for us is testament to 
the strength of its asset gathering model. KBC also contributed to returns, 
although Russian Sberbank lagged the market rally. Elsewhere, not owning a 
number of large cap defensive index constituents like Roche, Nestlé and 
Novartis contributed positively too. 
 
In vitro diagnostics company Diasorin was the largest detractor for the month. 
The stock experienced some profit taking after a strong rally, with shares up 
almost 60% on a year-to-date basis (as of 30 June 2020). Novo Nordisk and 
Grifols also contributed negatively. While both stocks lagged the cyclical 
rally, Grifols also suffered on concerns around new competition emerging for 
some of its products. We believe those concerns are unfounded and see no change 
in the medium to longer term attraction of the investment case. 
 
Lastly, on the negative side, RELX detracted from the Company's returns due to 

increasing evidence of library budgets temporarily coming under pressure on the 
back of COVID-19 related disruptions. We see those issues as largely transitory 
in nature and would point to the fact that RELX's STM division - home to its 
journals business - has never posted negative revenue growth in the last 70 
years, which to our mind highlights the resilience of the model. 
 
At the end of the period, the Company had a higher allocation than the 
reference index towards technology, consumer services, industrials and health 
care. The Company had a neutral weighting towards oil & gas and telecoms and an 
underweight allocation to consumer goods, financials, utilities and basic 
materials. 
 
Outlook 
 
Over recent years, many investors have avoided exposure to European equities 
owing to concerns around political risk, rising populism, a challenged 
financial system and the region's larger than average exposure to China. We 
have long been of the view that one needs to take an active approach to 
investing in European equities. With this in mind, we did not need to be 
positive on Europe as a region to offer our shareholders exposure to some truly 
unique companies that happened to be listed in the region. The response to the 
fallout from COVID-19 has the potential to change that view. For the first time 
we see a strong and coordinated monetary and fiscal response that could deliver 
real benefits to the region over time. The proposed EU recovery fund of EUR 
750bn, which calls for debt mutualisation among member states, could act as a 
catalyst to reduce risk premium applied to European equities versus other 
developed markets and create greater, and lasting, political cohesion in the 
region. In this context, both the economy and local stock markets appear well 
positioned to make up lost ground, potentially transforming European equities 
into a standout opportunity in the developed world. 
 
15 July 2020 
 
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

July 15, 2020 07:34 ET (11:34 GMT)