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About this investment trust

The Company aims to provide growth in capital and income over the long term through investment in a diversified portfolio of principally UK listed equities.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Why choose it?

With longer lifespans and greater demands on retirement funds, investors need a steady source of income and growth. This trust offers exposure to a range of sectors and company shares predominantly in the UK which have the potential to deliver capital growth and dividend income. Capital growth values may fluctuate and the level of income may vary from time to time and is not guaranteed.

Suited to…

Investors targeting a steady income without sacrificing the opportunity for capital growth.

Kepler income rating logo

Kepler Rating: As at 30 January 2020
This rating has not been superseded to date.

Past performance is not a reliable indicator of future results and should not be the sole factor of consideration when selecting a product or strategy.

What are the risks?

  • Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
  • Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance.
  • The Trust’s investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Trust may not be able to realise the investment at the latest market price or at a price considered fair.
  • Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.

Useful information

Fees & Charges

Annual Expenses as at Date: 31/10/2019

Ongoing Charge (including any Performance Fee): 1.07%

Management Fee Summary: Management fee is 0.6% p.a. of the Company's market capitalisation. There is no additional fee for Company Secretarial and administration services.

  • ISIN: GB0030961691

    Sedol: 3096169

    Bloomberg: BRIG LN

    Reuters: BRIG

    LSE code: BRIG.L

  • Name of Company: BlackRock Fund Managers Limited

    Telephone: 020 7743 3000

    Email: cosec@blackrock.com

    Website: www.blackrock.com/uk

    Correspondence Address: Investor Services,

    BlackRock Investment Management (UK) Limited

    12 Throgmorton Avenue

    London

    EC2N 2DL

    Name of Registrar: Computershare PLC

    Registered Office: 12 Throgmorton Avenue

    London

    EC2N 2DL

    Registrar Telephone: +44 (0)370 703 0076

    Place of Registration: England

    Registered Number: 4223927

  • Year End: October

    Results Announced: December (annual), June (interim)

    AGM: March

    Dividends Paid: March (final), September (interim)

Fund manager commentary

31 May 2020

Please note that the commentary below includes historic information in respect of index performance data and the Company’s NAV performance.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.

Global equities rose in May with the gradual easing of coronavirus-induced lockdowns and signs of activity restarting. May data indicated the worst of the virus may have passed with the number of daily new deaths globally cut by half from its peak in April. Potentially promising vaccine trials supported risk sentiment during the month, however, the potential of a second wave created ongoing caution. After plunging to record lows in April, oil prices rallied in May; fuelled by an easing of lockdowns and a fall in global supply. Geopolitical tensions between US and China re-emerged as the US federal pension fund halted investment in Chinese Equities and threatened to strip Hong Kong of its trade status on China’s imposition of a security legislation on the financial hub. The ECB announced an additional €750bn of stimulus despite Germany’s Constitutional Court, creating an obstacle by stating the Bundesbank will only participate in the PSPP scheme where proved necessary. The Fed balance sheet topped US$7trn, up sharply from US$4.2trn at the beginning of March. The US unemployment rate jumped to over 20% during the month. Prime minister, Boris Johnson announced a gradual relaxation of lockdown restriction encouraging manufacturing and construction industries to resume as soon as possible. Chancellor Sunak announced the Job Retention Scheme, paying 80% of the salary of furloughed workers, will extend into October. During the month, UK sold negative yielding government bonds, 3-year gilts, for the first time. The FTSE All Share index rose +3.4% during the month with Telecommunications, Basic Materials and Technology outperforming and Oil & Gas underperforming.

Over the month, the Company returned 3.8%, outperforming the benchmark, the FTSE All-Share which returned 3.4%.

We saw weakness in Asian-exposed financial stocks on concerns around Hong Kong, and thus the Company’s underweight holding in HSBC also contributed to performance. The Company’s holding in BHP also contributed to performance as materials led were amongst the sectors leading the market higher. The underweight holding in Royal Dutch Shell also contributed to performance. Energy stocks underperformed generally, and shares continued to be weak after the announcement of the dividend cut.

John Laing Group was the top detractor to the Company, lagging the rising market which was driven by risk on sentiment. Standard Chartered also detracted as Asian financials came under pressure. Not owning Experian also detracted from performance after the company announced strong results amidst the coronavirus pandemic.

During the month, we sold positions in Bellway and easyJet. We participated in another capital raise, Whitbread. We reduced positions in AB Foods and John Laing Group. We added to Hiscox, Intermediate Capital and Burberry.

On Dividends:

At the time of writing, around 160 companies in the FTSE All Share have suspended their dividends, and the UK dividend future is estimating around a 47% cut. We are mindful of the scrutiny companies will face with regards to paying dividends, especially for those businesses accepting government support or cutting employee remuneration and/or headcount. For now, the language from the majority of companies has been to suspend, rather than cut the dividend. From here, everything will depend on the duration and severity of this crisis as to how many of these dividends come back. We will continue to monitor the potential scenarios and would hope to provide more clarity later in the year. In the meantime, we will continue to take a long-term approach to dividends and manage the portfolio for the strongest total return.

Outlook

This COVID-19 led crisis is the closest we have got to a global natural disaster in financial markets, and its impact has been immediate and severe. Entire industries are being shut down overnight with revenues effectively going to zero. It has been felt much more acutely than anything we have seen in recent memory. Whilst in ‘normal’ economic downturns, activity slows gradually over months, with ‘lockdowns’ by governments, activity has slowed very dramatically with significant variations by industry and geography.

The hit to nominal GDP from this crisis is likely to be record breaking with early estimates suggesting falls of up to 30% in nominal GDP in a number of developed market economies for the second quarter. Whilst the scale of this crisis has been unprecedented, we have also seen extraordinary government intervention. This should provide a cushion to businesses that are being hurt by the impact of the shutdowns. As we start to ease past the current peak in this crisis, governments now need to determine how they modify their economic support as the impact on businesses and industries becomes clearer. Fiscal policy, for example, has played an earlier, and more prominent role versus the 2008 financial crisis and we expect to see more pressure on governments and central banks to deploy their balance sheets. The role and type of economic support is likely to lead to material dispersion within the market over the medium term.

We recognise the enormous uncertainty still facing society, employers and their employees today. Whether it is the threat of a resurgence of the virus, the emergence of viable treatments and potential vaccines or the different speeds and ways in which governments remove restrictions and support. We are treading cautiously; balancing the significant long-term opportunity we see with a wide range of short-term scenarios and factors. Amongst these are clearly the impact of widespread unemployment, the changes to both consumer and business behaviour with regards to which products and services they consume and how they consume them in addition to the potential for inflation to pick up. Crucially, whilst we expect that the threat from COVID-19 will be addressed, either through a vaccine, rolling containment policies or herd immunity, it is the duration of the pandemic and associated containment policies that will be crucial in determining the state of the economy and speed of recovery thereafter.

In conclusion, we came into this crisis more defensively positioned and with limited gearing which benefited the Company and leaves us in a strong position to take advantage of the dislocation. In times like these, the scale and breadth of the platform at BlackRock allows us to leverage significant resources across stock analytics, market insights and data science. For example, in the month of March, as the crisis unfolded and as 90% of the global workforce began working from home, the UK team still spoke with over 210 management teams; seeking to understand companies’ immediate liquidity needs, balance sheet strain and strategy to navigate the crisis. We know, from our experience in 2008/2009, how important these resources and support are and the opportunities it enables you to find. In the weeks and months ahead, we will continue to utilise these resources and our previous experiences in uncertain markets to continue to build on the promising start to the year to ensure the Company emerges from this period of volatility well placed to deliver strong capital and dividend growth over the long term.

Finally, beyond markets and investments, we also recognise that this has been an extremely tough period for many. We have been encouraged by the support companies in the Company have provided their employees and communities and continue to support these initiatives.

Information correct as at 18 June 2020. Any opinions or forecasts represent an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research, investment advice or a recommendation.

Reference to the names of each company in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies.

 

Portfolio manager biographies

Adam Avigdori, Director, is co-manager of the BlackRock Income and Growth Investment Trust plc, and is a member of the UK Equity Team. Adam joined BlackRock in 2001 and is responsible for managing UK equity portfolios covering the real estate and construction sectors. Adam has a degree in management sciences.

David Goldman, CFA, Director, is co-manager of the BlackRock Income and Growth Investment Trust plc, and is a member of the UK Equity Team. David joined BlackRock in 2004 and is responsible for managing UK equity portfolios covering the support services sectors. David has a degree with first class honours in economics.

Adam Avigdori profile photo
Adam Avigdori
Portfolio Manager
David Goldman profile photo
David Goldman
Portfolio Manager

Board of directors

Graeme Proudfoot (Chairman) (appointed 1 November 2019) spent his executive career at Invesco, latterly as Managing Director, EMEA and CEO of Invesco Pensions. Mr Proudfoot joined Invesco in 1992 as a legal advisor and held various roles within the Invesco Group, before moving to take responsibility for a number of businesses in the UK, including Invesco’s investment trust business which he led from 1999 until his retirement from Invesco in 2019. Mr Proudfoot began his career at Wilde Sapte, Solicitors, practising as a corporate finance lawyer in London and New York.

Nicholas Gold (appointed 17 December 2008) is an experienced investment banker with over 36 years’ advisory experience across a wide range of industries and jurisdictions. He retired as the Managing Director responsible for closed-end fund corporate finance at ING Bank N.V. in 2008. Mr Gold is a chartered accountant and a solicitor. He was formerly a member of the Royal Academy of Dramatic Art Council and chairman of its commercial arm, RADA Enterprises. He is a Special Adviser to Pottinger Co Pty Limited.

George Luckraft (appointed 1 February 2003) joined AXA Framlington in 2002 and is the Lead Fund Manager for the AXA Framlington Managed Income and AXA Framlington Monthly Income funds. Previously he worked for Carrington Pembroke (subsequently ABN AMRO and now Artemis Unit Trust Managers) where he was Head of UK Equities. Mr Luckraft graduated from Cambridge with a degree in Engineering and Land Economy in 1980.

Charles Worsley (appointed 19 April 2010) has over 25 years’ experience in property management and has been a shareholder of the Company since its launch. Mr Worsley has formerly been a director of retail and media companies.

 


Contact

To get in touch contact us on: 
Telephone: 020 7743 3000 
Email: cosec@blackrock.com 

 


 

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