BlackRock Income Portfolio Update

 
TIDMBRIG 
 
BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC 
 
(LEI:5493003YBY59H9EJLJ16) 
 
All information is at 31 January 2020 and unaudited. 
 
Performance at month end with net income reinvested 
 
                                    One    Three       One    Three      Five      Since 
                                  Month   Months      Year    Years     Years    1 April 
                                                                                    2012 
 
Sterling 
 
Share price                       -2.4%     2.0%     11.4%    16.4%     30.0%      98.2% 
 
Net asset value                   -2.5%     4.2%     13.9%    19.0%     33.3%      87.6% 
 
FTSE All-Share Total Return       -3.2%     2.2%     10.7%    18.4%     35.6%      80.1% 
 
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:                                       204.16p 
 
Net asset value - cum income*:                                        209.74p 
 
Share price:                                                          202.00p 
 
Total assets (including income):                                       GBP51.9m 
 
Discount to cum-income NAV:                                              3.7% 
 
Gearing:                                                                 2.6% 
 
Net yield**:                                                             3.6% 
 
Ordinary shares in issue***:                                       22,840,600 
 
Gearing range (as a % of net assets)                                    0-20% 
 
Ongoing charges****:                                                     1.1% 
 
 
 
* includes net revenue of 5.58 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 3.6% and includes the 2019 
final dividend of 4.60p per share declared on 24 December 2019 and due to be 
paid to shareholders on 19 March 2020, and the 2019 interim dividend of 2.60p 
per share declared on 25 June 2019 and paid to shareholders on 27 August 
2019. 
 
*** excludes 10,093,332 shares held in treasury 
 
**** Calculated as a percentage of average net assets and using expenses, 
excluding performance fees and interest costs for the year ended 31 October 
2019. 
 
 
 
Sector Analysis                                              Total assets (%) 
 
Pharmaceuticals & Biotechnology                                           9.4 
 
Financial Services                                                        8.6 
 
Oil & Gas Producers                                                       8.1 
 
Banks                                                                     7.3 
 
Media                                                                     7.3 
 
Support Services                                                          6.9 
 
Food Producers                                                            6.7 
 
Household Goods & Home Construction                                       5.1 
 
Gas, Water & Multiutilities                                               4.9 
 
Life Insurance                                                            4.5 
 
Tobacco                                                                   4.3 
 
Travel & Leisure                                                          4.2 
 
Food & Drug Retailers                                                     3.5 
 
Mining                                                                    3.5 
 
Mobile Telecommunications                                                 2.7 
 
Health Care Equipment & Services                                          2.7 
 
Industrial Engineering                                                    1.3 
 
Electronic & Electrical Equipment                                         1.2 
 
Nonlife Insurance                                                         1.1 
 
General Retailers                                                         0.6 
 
Construction & Materials                                                  0.6 
 
Beverages                                                                 0.2 
 
Net Current Assets                                                        5.3 
 
                                                                       ------ 
 
Total                                                                   100.0 
 
                                                                       ====== 
 
Ten Largest Equity Investments 
 
Company                                                      Total assets (%) 
 
Royal Dutch Shell 'B'                                                     5.0 
 
AstraZeneca                                                               5.0 
 
RELX                                                                      4.4 
 
GlaxoSmithKline                                                           4.4 
 
British American Tobacco                                                  4.3 
 
National Grid                                                             4.0 
 
Unilever                                                                  3.6 
 
Tesco                                                                     3.5 
 
BHP                                                                       3.5 
 
Associated British Foods                                                  3.2 
 
 
 
Commenting on the markets, Adam Avigdori and David Goldman representing the 
Investment Manager noted: 
 
 
After a stellar 2019, risk markets began the new decade positively, before 
volatility picked up towards the end of the month, erasing all the gains from 
the first half. At the start of the month, the signing of a 'Phase 1' 
US-China trade deal signaled progress in de-escalating global trade disputes, 
albeit that significant tariffs are still in place and there remain serious 
challenges to be tackled in the next phase. Gulf tensions rose briefly 
mid-month when President Trump ordered a US airstrike that killed Major 
General Qasem Soleimani, leader of the foreign wing of Iran's Islamic 
Revolution Guard Corps. Global equity markets and oil prices fell sharply at 
the end of the month as the fast-spreading coronavirus prompted concerns that 
the disease would negatively impact the global economy. The UK officially 
exited the EU on 31st January 2020. The UK and EU now need to negotiate a 
free trade agreement over the next 11 months of transition; talk around the 
risk of a hard Brexit is likely to persist to some degree. UK economic data 
improved sufficiently for the Bank of England to keep interest rates on hold. 
The FTSE All-Share fell -3.25% in the month, led by the energy and resources 
sectors, as well as consumer services. 
 
Over the month, the Company returned -2.50%, outperforming the benchmark, the 
FTSE All-Share which returned -3.25%. 
 
National Grid was the largest contributor to performance. Shares of the 
utility stock continued to rally on improved sentiment towards UK utilities, 
following the December General Election. RELX also contributed to 
performance. The company announced the acquisition of ID Analytics, adding 
more datasets to the Fraud and Identity solutions within the company's Risk 
division, its fastest growing division, enabling RELX to deliver more fraud 
detection products to the same customers 
 
Standard Chartered detracted from performance. Companies with emerging market 
exposure saw weakness on fears around the coronavirus. Whitbread also 
detracted from performance. The company announced a cost-driven downgrade for 
the year ahead, while business confidence remains subdued despite government 
pledges to boost regional spending. 
 
In January we purchased Rightmove. We sold positions in Prudential, 
Moneysupermarket.com and Barclays. We added to positions in Vodafone and 3i 
Group, and reduced positions in St James' Place and Hiscox. 
 
2019 proved to be a strong year for equity investors, with the FTSE All-Share 
returning 19%. The 2020 macro environment marks a big shift from the dynamics 
of 2019, when an unusual late-cycle dovish pivot by central banks helped 
offset the negative effect of rising trade tensions. It is unlikely that the 
same level of accommodative monetary policy will be available, either 
conventionally or unconventionally, in developed markets in 2020. From a 
valuation perspective, we recognise that for the most part, valuations are 
higher but not excessive, with trailing p/e of 19x, up from 15x a year ago. 
On a free cash flow basis, equity markets still look attractive, with the UK 
the stand-out at 6.3% and around a 30% discount to the MSCI World across a 
range of valuations. 
 
For the UK economy, and the equity market, the picture looks better than it 
has done for a number of years. For the domestic-facing economy, the 
Conservative majority has brought more political certainty and indeed, 
although it is early days, we have seen signs of sentiment and investment 
returning following the election result. We expect this to continue. We 
believe the UK's economic climate has the potential to improve, supported by 
an expected increase in public sector spending. Entering 2020, the UK will be 
one of the few, if not the only, large developed economy adopting fiscal 
stimulus. With the backdrop of 'full' employment, the recently announced 
increase to the national living wage suggests disposable income will continue 
to improve with underlying growth in nominal and real wages for the first 
time in recent years. 
 
For those who have been following our strategy, we continue to employ a 
bottom-up approach rather than focusing on a specific macro outcome. We 
believe in identifying franchises across the UK market which can sustain 
their competitive advantages over the long term, supporting strong and 
consistent cash generation. Hence, we will continue to focus the portfolio on 
stock specific risk where our resources and long-term analysis is best able 

to deliver capital and income growth over the long-term for shareholders. 
 
We are also conscious that Environmental, Social and Governance matters 
("ESG") is increasingly at the forefront of shareholders' minds. We have 
always looked to our companies to operate within a healthy ecosystem of all 
their stakeholders whether these are shareholders, employees, customers, 
regulators or suppliers. It is our belief that a company's 'ecosystem' is 
crucial to ensuring the sustainability of long-term returns. 
 
18 February 2020 
 
 
 
END 
 

(END) Dow Jones Newswires

February 18, 2020 11:14 ET (16:14 GMT)