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About this investment trust

The Company aims to provide capital growth, primarily through investment in a focused portfolio constructed from a combination of the securities of large, mid and small capitalisation European companies, together with some investment in the developing markets of Europe.

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?

Europe is a rich source of innovation and dynamic capitalism. Active management can uncover its most exciting companies. The Trust invests in global brand leaders, plus smaller companies focused on niche, high growth areas, alongside companies in emerging European markets. The Trust looks for high quality, well-capitalised companies with strong management teams that can create real value for shareholders over time. 

Suited to…

This Trust is designed for investors looking to invest in a selection of Europe’s highest quality, fastest-growing companies, irrespective of their size and geography. They must be willing to take on some additional risk to grow their capital over the long term.

GrowthBasic  IWICOTYA20-Winner_Europe

Kepler Rating: As at 30 January 2020.
Investment Week: As at 19 December 2020.
Awards/Ratings have not been superseded to date.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.
  • Overseas investment will be affected by movements in currency exchange rates.
  • Emerging market investments are usually associated with higher investment risk than developed market investments. Therefore the value of these investments may be unpredictable and subject to greater variation.
  • Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
  • 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.

Useful information

Fees & Charges

Annual Expenses as at Date: 31/08/2020

Ongoing Charge (including any Performance Fee): 1.01%

Management Fee Summary: BlackRock receives an annual management fee of 0.85% of the Company's net asset value.

  • ISIN: GB00B01RDH75

    Sedol: B01RDH7

    Bloomberg: BRGE LN

    Reuters: BRGE.L

    LSE code: BRGE

  • 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)370 707 1163

    Place of Registration: England

    Registered Number: 5142459

  • Year End: 31 August

    Results Announced: April (half yearly), October (final)

    AGM: November/December

    Dividends Paid: May (interim), December (annual)

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Fund manager commentary

31 March 2021

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

The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results.

During the month, the Company’s NAV rose by 3.5% and the share price by 1.9%. For reference, the FTSE World Europe ex UK Index returned 4.4% during the period.

Europe ex UK markets rose during March. The global economy continues to improve rapidly, particularly in the US as the vaccination rollout is well ahead which is reflected positively in commentary from a number of European companies. Consumer data also remains robust with strong household balance sheets leading to heightened demand for consumer goods.

Higher growth stocks lagged during the month while classic ‘reflation plays’ such as autos performed well. Overall, all sectors rose higher during March with the telecoms, consumer goods and materials leading the market rally, while health care and oil & gas were behind. 

Despite European re-opening strategies remaining patchy and local lockdowns continuing, we remain in a positive macro recovery environment overall. Our overall portfolio positioning has not changed as we continue to run a portfolio reflecting our constructive view of the world and we expect a positive Q1 reporting season for many of our companies.

The Company slightly underperformed the reference index, driven by weak stock selection within health care and an underweight to European autos. Sector allocation was positive while stock selection detracted.

In sector terms, the Company’s lower allocation to consumer goods, particularly autos, and telecoms was negative for returns. A lower allocation to financials and an overweight to industrials aided returns. 

The health care sector was the largest detractor to returns as more defensive quality assets sold off over the month. Lonza and DiaSorin both weighed on returns. There was no major stock specific news, but it is likely that these stocks were used as funding sources as the market rotated into lower quality names. Our confidence in their nearer term outlook was bolstered by favourable read across from peers raising guidance and giving positive profit warnings.

Within the same sector, Novo Nordisk was also a modest detractor, caused by concerns about insulin pricing in China, as well as some negative sentiment surrounding the likely delay of Food and Drug Administration approval for a high dose version of one of its diabetes drugs. Our position in renewable diesel company Neste Oil detracted as renewables continue to experience volatility and Neste saw small downgrades on weakness in the oil refining market.

Elsewhere, not owning car manufacturers such as Volkswagen detracted from returns. The sector performed well as ambitious corporate strategy updates suggested the electric vehicle (EV) overhang for European auto companies will not be as negative as previously expected by the market. While monitoring developments closely, we remain cautious for now as, at this stage, we are not convinced European manufacturers are in a position to gain significant market share and in the long term we expect EVs to be less profitable than traditional combustion engine vehicles.

On the positive side, the Company benefited from our exposure to the semiconductor sector as end markets including the auto sector and smart phones continue to accelerate, which has led to a global chip shortage. ASML was amongst the best performers as Intel, one of their biggest customers, announced increased investment plans in the US. As the sole maker of EUV lithography machines which are key to produce leading-edge semiconductors, ASML is highly likely to see a significant expansion in its order book for EUV tools. BE Semi, a manufacturer of assembly equipment for the semi industry, and Netcompany also performed strongly.

Luxury group Kering was the top performer over the month after a potential merger with Richemont was rejected. Importantly, the Company remains positive on the APAC region, seeing strong trends in China while their key brand, Gucci, is also well-positioned to benefit from stimulus payments in the US.

Both Sika and IMCD contributed positively. Sika announced an acquisition of a Brazilian mortar manufacturer which will help to provide access to builders merchants in the region, aiding cross-selling opportunities. Shares in IMCD continued to perform well in March following strong results in February. Last year’s pandemic driven crisis was an accelerator for the company as larger players looked to cut costs by using IMCD in place of inhouse distribution. We see significant opportunities for them to build out their specialty chemicals network in the US over the coming years.

At the end of the period the Company had a higher allocation than the reference index towards technology, consumer discretionary and industrials and was neutral health care. The Company had an underweight allocation to financials, utilities, consumer staples, telecoms, basic materials and energy.

Outlook

We see recent market strength persisting over the coming months, aided by better virus testing capabilities, a successful vaccine rollout and a resilient global consumer, alongside continued accommodative fiscal and monetary policy. This market recovery is unlikely to be equal across all sectors: some companies still lack pricing power and are unable to reinstate dividends; others, however, such as travel exposed stocks, could see a meaningfully brighter 2021. Inflation may be on the horizon, but rates will likely remain low. A period of prolonged negative real rates and higher nominal growth is needed to allow governments globally to work their way out of the post pandemic debt overhang. We see this as being a supportive backdrop for equities overall.

Unless otherwise stated all data is sourced from BlackRock as at 31 March 2021.

Information correct as at 23 April 2021.

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.

Risk: 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 biography

Stefan Gries is co-manager of BlackRock Greater Europe Investment Trust plc. He is a member of the European Equity team within the Fundamental Equity division of BlackRock’s Active Equity Group. He is co-manager on the European Absolute return (long/short) portfolios as well as on Pan European and Europe ex UK long-only portfolios. Prior to joining BlackRock in 2008, he spent two years at Scottish Widows Investment Partnership. Since joining BlackRock, he has worked both as a portfolio manager and as an analyst covering, at various times, energy, pharmaceuticals and insurance on behalf of the European Equity team. He earned an MA in economics and Spanish.

Sam Vecht co-manager of BlackRock Greater Europe Investment Trust plc. He is Head of the Emerging Europe, Frontiers and LatAm team within the Fundamental Active Equity division of BlackRock's Active Equities Group and is responsible for managing long-only and long/short portfolios in both Emerging and Frontier markets. He is also co-manager of the BlackRock Frontiers Investment Trust plc and BlackRock Latin American Investment Trust plc. Sam joined BlackRock in 2000 in the Global Emerging Markets Team. He has a degree in international relations and history.

Olivia Markham profile photo
Stefan Gries
Portfolio Manager
Evy Hambro profile photo
Sam Vecht
Portfolio Manager

Board of directors

All the Directors are non-executive and independent of the Investment Manager. The Board as a whole constitutes the Audit and Management Engagement Committee.

Eric Sanderson (appointed April 2013) (Chairman) is a chartered accountant and a banker and was Chief Executive of British Linen Bank from 1989 to 1997 and a member of the management board of Bank of Scotland in his role as Head of Group Treasury Operations from 1997 to 1999. He was formerly Chairman of MyTravel Group PLC, MWB Group Holdings and Dunedin Fund Managers Limited. He is presently Chairman of Schroder UK Mid Cap Fund plc.

Peter Baxter (appointed April 2015) (Chairman of the Audit and Management Engagement Committee) has over 30 years’ experience in the investment management industry. He is an Executive Director of Snowball Impact Management Ltd, a social impact investment organisation, a Non-Executive director of Civitas Social Housing plc, and a Trustee of Trust for London, and was a member of the Financial Reporting Council’s Conduct Committee. Previously he was Chief Executive of Old Mutual Asset Managers (UK) Ltd and worked for Schroders and Hill Samuel in a variety of investment roles.

Davina Curling (appointed December 2011) has over 25 years’ experience of investment management and was Managing Director and Head of Pan European Equities at Russell Investments. Prior to this she was Head of European Equities at F&C, ISIS, Royal & SunAlliance and Nikko Capital Management (UK). She is also a Non-Executive Director of Invesco Income Growth Trust plc and Henderson Opportunities Trust plc and a member of the St James’s Place Wealth Management Investment Committee.

Paola Subacchi (appointed July 2017) is an economist, writer and commentator on the functioning and governance of the international financial and monetary system. She is Professor of International Economics and Chair of the Advisory Board, Global Policy Institute, Queen Mary University of London, Visiting Professor at the University of Bologna, Non-Executive Director of Scottish Mortgage Investment Trust PLC as well as Founder of Essential Economics Ltd. She writes regularly on Project Syndicate.

Investment strategies targeting growth and income
Investment strategies targeting growth and income
Over 25 years of proven experience running investment trusts
Over 27 years of proven experience running investment trusts. (December 2019)
Unparalleled research capabilities
Unparalleled research capabilities and experienced stock pickers
Contact
To get in touch contact us on:
Telephone: 020 7743 3000
Email: cosec@blackrock.com

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