BlackRock Income Portfolio Update

 
TIDMBRIG 
 
The information contained in this release was correct as at 31 October 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 INCOME & GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16) 
 
All information is at 31 October 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                     -10.7%     6.2%     -14.8%   -12.1%       5.0%     65.5% 
 
Net asset value                  -5.2%    -3.5%     -16.7%   -14.6%       2.2%     50.0% 
 
FTSE All-Share Total Return      -3.8%    -3.2%     -18.6%   -14.4%       8.9%     43.3% 
 
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:                                              158.82p 
 
Net asset value - cum income*:                                               161.72p 
 
Share price:                                                                 162.50p 
 
Total assets (including income):                                               40.4m 
 
Premium to cum-income NAV:                                                      0.5% 
 
Gearing:                                                                        7.2% 
 
Net yield**:                                                                    4.4% 
 
Ordinary shares in issue***:                                              22,511,625 
 
Gearing range (as a % of net assets):                                          0-20% 
 
Ongoing charges****:                                                            1.1% 
 
* Includes net revenue of 2.90 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 4.4% and includes the 2019 
final dividend of 4.60p per share declared on 24 December 2019 and paid to 
shareholders on 19 March 2020 and the 2020 interim dividend of 2.60p per share 
declared on 24 June 2020 and to be paid to shareholders on 1 September 2020. 
 
*** excludes 10,081,532 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 (%) 
 
Financial Services                                                              10.6 
 
Pharmaceuticals & Biotechnology                                                  8.3 
 
Support Services                                                                 8.2 
 
Household Goods & Home Construction                                              7.5 
 
Personal Goods                                                                   6.9 
 
Media                                                                            6.6 
 
Mining                                                                           5.4 
 
Banks                                                                            5.1 
 
Gas, Water & Multiutilities                                                      5.1 
 
General Retailers                                                                4.8 
 
Tobacco                                                                          4.5 
 
Oil & Gas Producers                                                              4.2 
 
Food & Drug Retailers                                                            3.1 
 
Nonlife Insurance                                                                3.1 
 
Travel & Leisure                                                                 2.8 
 
Health Care Equipment & Services                                                 2.7 
 
Life Insurance                                                                   2.2 
 
Industrial Engineering                                                           1.6 
 
Electronic & Electrical Equipment                                                1.5 
 
Technology Hardware & Equipment                                                  0.8 
 
Real Estate Investment Trusts                                                    0.6 
 
Mobile Telecommunications                                                        0.6 
 
Beverages                                                                        0.3 
 
Net Current Assets                                                               3.5 
 
                                                                               ----- 
 
Total                                                                          100.0 
 
                                                                               ===== 
 
 
 
Country Analysis                                                          Percentage 
 
United Kingdom                                                                  94.5 
 
United States                                                                    2.0 
 
Net Current Assets                                                               3.5 
 
                                                                               ----- 
 
                                                                               100.0 
 
                                                                               ===== 
 
 
 
Top 10 holdings                                                               Fund % 
 
AstraZeneca                                                                      6.8 
 
Unilever                                                                         5.6 
 
Reckitt Benckiser                                                                4.8 
 
RELX                                                                             4.8 
 
British American Tobacco                                                         4.5 
 
Rio Tinto                                                                        3.7 
 
Tesco                                                                            3.1 
 
3i                                                                               2.9 
 
Royal Dutch Shell 'B'                                                            2.8 
 
National Grid                                                                    2.8 
 
Commenting on the markets, Adam Avigdori and David Goldman representing the 
Investment Manager noted: 
 
Performance Overview: 
 
The BlackRock Income and Growth Trust returned -5.2% during the month, 
underperforming the FTSE All-Share which returned -3.8%. 
 
Market Summary: 
 
October saw volatility in global markets rise; led by a resurgence in 
coronavirus cases and the announcement of widespread restrictions, the upcoming 
US Presidential Elections, lack of agreement around US fiscal stimulus and 
Brexit. All major European economies have reported new highs in infection 
rates, and ultimately over the month national level restrictions were in many 
cases re-imposed after local restrictions failed to sufficiently reduce cases. 
The IMF upgraded its 2020 growth forecasts in the October World Economic 
Outlook; the CY20 global contraction was trimmed to -4.4% YoY. Asian markets 
were resilient, with strong Chinese data in the month helping emerging market 
stocks to return over 2%. Chinese economic data continues to be strong with 
September imports 13.2% higher year on year. 
 
In the UK, some encouraging messaging around post-Brexit trade talks gave 
sterling a modest boost, however Britain and the EU remain far apart on fishing 
rights and other key sticking points as the looming mid-November deadline 
nears. Government support for the economy continues with additional support 
measures announced including the Government absorbing a greater proportion of 
the Job Support Scheme. The changes should provide a greater incentive for 
companies to retain staff on lower hours, rather than making redundancies, 
which should help mitigate the inevitable rise in unemployment. 
 
The FTSE All Share fell -3.8% in October, with Consumer Goods, Healthcare and 
Basic Materials as top underperforming sectors, while Utilities and 
Telecommunications outperformed. 
 
Stocks: 
 
Not owning HSBC was the biggest detractor to returns during October as the 
shares rallied, alongside the banking sector and rising bond yields in 
anticipation of increased fiscal stimulus. RELX also detracted from returns. 
The company reported results in the month. Whilst the numbers were in line, the 
market took further downgrades for the exhibition business negatively, 
particularly considering the rise in coronavirus cases and further lockdowns 
will likely be slow to recover. BHP Group also detracted from returns as the 
mining sector generally underperformed. 
 
Premier Miton was the top contributor to returns in the month. Having been weak 
for a number of months the market is slowly reacting to the improving AUM flow 
and performance at the business. Bodycote also contributed to returns, a 
beneficiary of the reflation, pro-cyclical rally in the market. Being 
underweight GlaxoSmithKline also contributed to returns. Healthcare stocks were 
generally weak in the month, on US election fears as well as pro cyclical and 
recovery stocks doing better. The company reported at the end of the month with 
consumer health showing weak performance. 
 
Portfolio Activity: 
 
Over the month the Trust purchased Electrocomponents. This is a business we see 
as another market share gainer, with end markets that we expect to recover; 
broad industrials that should recover as well as some growth in data centres. 
The business' gross margin is benefitting from its own brand and share-gaining 

from all their suppliers and the company has potential to see significant 
growth in Asia and the US. We trimmed Next and Ferguson as shares rallied on 
good results and added to Rio Tinto, Royal Dutch Shell and Lloyds, all of which 
were weak during the month. 
 
Dividends 
 
From peak to trough, FTSE All Share dividends fell by around 40%. The Trust has 
fared better than this as we have either not owned or been underweight the 
biggest cuts, and conversely, we have been overweight the more resilient parts 
of the market, we estimate that our fund has seen a c.30% peak to trough 
decline in dividends. We believe that this relative resilience stems from our 
focus on identifying cash generative franchises with robust balance sheets. 
 
When assessing the dividend outlook for the FTSE All Share, we estimate that 
around half of this 40% peak-to-trough fall in dividends will prove permanent 
and half will be temporary. Turning to the Trust, we expect less than 10% of 
the portfolio's dividend to be permanently impaired and we are already seeing a 
number of holdings coming back to the dividend list, in some cases reinstating 
dividends that had been deferred during the pandemic. 
 
We view the dividend outlook for the UK market with renewed optimism as we 
expect dividends, in aggregate, to be more resilient and to grow faster in 
future. A number of companies that we have considered to be overdistributing 
for a number of years have now reset their distributions to more appropriate 
levels. This gives us confidence that UK Equities offer an attractive source of 
yield in an income-starved global context. 
 
Outlook: 
 
We have seen a continued normalisation, with improved economic activity 
benefiting from ongoing fiscal and monetary support while government 
restrictions were easing. In the UK, we have seen schools and offices reopening 
while companies attempt to gauge the underlying demand for their products and 
services as they prepare themselves for the impact of reduced and more 
selective furlough support. We continue to monitor rising unemployment levels 
and note that the banks are already braced for a significant increase in 
impairments. On a more bullish note, however, we have seen evidence of robust 
consumer spending as Covid-19 impacted travel and leisure spend is diverted to 
other parts of the economy as evidenced by retailers posting strong numbers and 
rising house prices. Accordingly, we continue to tread cautiously; balancing 
the significant long-term opportunities we see with the wide range of 
short-term scenarios and factors. We expect volatility is likely to persist 
given large binary events on the horizon in the near-term, notably the US 
election, Brexit 'deal or no deal' as well as news flow around Covid-19 in 
terms of rising case numbers and the potential for further lockdowns as well as 
vaccines and treatment updates. Longer term, we are conscious of the growing 
tension between the US and China, as well as watching for the potential for a 
more inflationary backdrop which would likely have significant implications for 
market leadership. 
 
We continue use the scale and breath of the platform at BlackRock to leverage 
significant resources across stock analytics, market insights and data science. 
We know, from our experience in 2008/2009, how important these resources and 
support are and the opportunities it enables you to find. We seek to ensure the 
Trust continues to build on the resilience it has demonstrated amidst the 
volatility year to date to deliver strong capital and dividend growth over the 
long term. 
 
18 November 2020 
 
 
 
END 
 

(END) Dow Jones Newswires

November 18, 2020 09:24 ET (14:24 GMT)