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BlackRock Income and Growth Investment Trust : Portfolio Update

09/21/2021 | 10:40am

The information contained in this release was correct as at 31 August 2021. Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at:


All information is at 31 August 2021 and unaudited.

Performance at month end with net income reinvested

1 April
Share price -3.1% 3.0% 19.5% 3.7% 21.3% 100.2%
Net asset value 2.6% 2.5% 23.9% 8.7% 27.9% 97.4%
FTSE All-Share Total Return 2.7% 3.4% 26.9% 11.4% 33.3% 92.4%
Source: BlackRock

BlackRock took over the investment management of the Company with effect from 1 April 2012.

At month end


Net asset value – capital only: 201.64p
Net asset value – cum income*: 205.04p
Share price: 189.00p
Total assets (including income): £48.0m
Discount to cum-income NAV: 7.8%
Gearing: 5.9%
Net yield**: 3.8%
Ordinary shares in issue***: 21,459,392
Gearing range (as a % of net assets): 0-20%
Ongoing charges****: 1.2%

* Includes net revenue of 3.40 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 3.8% and includes the 2020 final dividend of 4.60p per share declared on 01 February 2021 and paid to shareholders on 17 March 2021 and the 2021 interim dividend of 2.60p per share declared on 23 June 2021 with a pay date of 1 September 2021.
*** 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 2020.


Sector Analysis Total assets (%)
Support Services 12.6
Financial Services 8.7
Pharmaceuticals & Biotechnology 8.2
Household Goods & Home Construction 8.1
Mining 6.1
Personal Goods 5.2
Oil & Gas Producers 5.1
Media 4.8
Banks 4.6
Life Insurance 4.4
Nonlife Insurance 4.3
Travel & Leisure 4.0
Tobacco 3.8
General Retailers 3.3
Health Care Equipment & Services 2.9
Food & Drug Retailers 2.2
Electronic & Electrical Equipment 1.5
General Industrials 1.4
Electricity 1.4
Industrial Metals & Mining 1.2
Food Producers 1.0
Real Estate Investment Trusts 1.0
Technology Hardware & Equipment 0.7
Industrial Engineering 0.6
Net Current Assets 2.9
Total 100.0


Country Analysis Percentage
United Kingdom 90.8
United States 3.1
France 1.8
Italy 1.4
Net Current Assets 2.9

Top 10 holdings
Fund %
AstraZeneca 6.5
RELX 4.8
Reckitt Benckiser 4.0
Rio Tinto 4.0
Unilever 3.9
Royal Dutch Shell ‘B’ 3.8
British American Tobacco 3.8
Ferguson 3.2
Electrocomponents 3.0
3i 2.9

Commenting on the markets, representing the Investment Manager noted:

Performance Overview:

The Company returned 2.6% during the month, underperforming the FTSE All-Share which returned 2.7%.

Market Summary:

Global equities markets rose during August despite growing concern around rising Delta variant virus cases. Risk assets were helped by the FDA granting full approval to the Pfizer/BioNTech vaccine and U.S. Treasury yields remaining low.

Federal Reserve Chair Jerome Powell reassured markets at the Jackson Hole symposium, making no announcement on tapering but giving a strong signal that one will come before year-end if employment gains keep up.

Flash Purchasing Manager’s Index readings for August suggested that UK economic momentum eased to a six-month low, with constraints from stretched supply chains and staff shortages even as the employment measures hit series record highs. The post-furlough outlook brightened with few signs of any increase in current or planned redundancies. The key messages from the Bank of England’s August Monetary Policy Committee deliberations and Monetary Policy Report were that the peak in UK inflation is now forecast to be significantly higher than previously expected and that the Bank will begin to reduce its stock of bonds once bank rate returns to 0.5%

The FTSE All Share rose 2.7% during August with Technology, Industrials and Consumer Services as top performing sectors while Basic Materials underperformed.


The Company benefitted from a strong backdrop in UK construction. Both Taylor Wimpey, the housebuilder, and Grafton, a building merchant, issued better than expected trading statements during the month as demand for new housing and construction continues to support growth. Both companies are extremely cash generative although use their cash differently. We would expect Taylor Wimpey to use its cashflow to return a significant premium yield over the course of the next 12-18 months. We expect Grafton to largely use its cash to continue to support its roll-out in Europe and extend its growth opportunities. Hays issued a confident statement pointing to the strong trading backdrop in most of its markets including Australia and New Zealand, although these may be impacted by new lockdowns. The group also announced a larger than expected special dividend, returning the £200m raised in the Apr-20 placing and resuming its history of paying special dividends out of excess cashflow.

MasterCard was the top detractor during the period on the back of stalled travel recovery which has reduced its most profitable cross-border revenue streams. We believe this is a delay in revenue rather than a loss in revenue. Smiths Group was another top detractor during the period; the company agreed the sale of their Medical business for a lower than expected price. Rio Tinto also fell following the payment of a large dividend and further Chinese curbs on steel production saw the price of Iron Ore fall.

Portfolio Activity:

During the period, we sold Hemnet Group, the Swedish property portal, given the share price doubled since we purchased the holding and we felt there was no more upside to the valuation. We also added to Whitbread and Electrocomponents and reduced Smiths Group and Grafton.


After five years under a Brexit-induce cloud, the relative position of the UK in the eyes of global investors appears to have improved, helped by the vaccination programme, and evidenced by the resurgence in takeover activity as bidders look to capitalise on the discount at which UK equities trade relative to global peers. Specifically, we’ve seen acquisitions of real assets potentially demonstrating a desire to find unlevered free cash flow.

The pandemic has generated an economic cycle unlike any other with unprecedented fiscal and monetary responses. Despite the continuation of COVID-19 restrictions globally, economic activity has been less impacted as consumers and corporates in Developed Markets have adapted their behaviours since the development of an effective vaccine. Concerns have been raised around new variants; however, recovery has been buoyed by ongoing monumental monetary and fiscal support.

We have seen during this results season, that the growth in economic activity has caused some strains on supply chains with specific industry shortages as well as building inflationary pressures. Whilst there may be a lag time in companies pricing this inflation leading to short term earnings weakness, we continue to concentrate on owning those businesses who display pricing power in the long term. We continue to monitor the bond market to determine if the current surge in inflation is transitory or, fuelled by a more relaxed Fed, a phenomenon that may persist. We are also cognisant of the evolution of relationships between China and the West and the potential impact on industries and shares.

We continue to have conviction in cash-generative companies that have delivered for the Company and we foresee delivering into the future. 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 the future as those companies that had been overdistributing for a number of years reset their dividends during the pandemic. Resilience was a crucial feature of the Company and its underlying holdings in 2020 and while this will still be important in 2021, we are excited by the economic recovery taking place and the opportunity to deliver strong capital and dividend growth for our clients over the long-term.

21 September 2021

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