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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 conviction-led portfolio delivers exposure to a balanced range of sectors and company shares, focused on the UK, which have the potential to deliver capital growth and a growing dividend income.

Suited to…

Investors targeting a steady income that grows over time, useful for retirement planning. The Trust also aims to grow investors’ capital in the longer term.

Kepler income rating logo

Kepler Rating: As at 20 January 2021.
This rating has not been superseded to date.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: 31/10/2020

Ongoing Charge (including any Performance Fee): 1.19%

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)

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The Board’s approach to ESG

Environmental, social and governance (ESG) issues can present both opportunities and risks to long-term investment performance. These ethical and sustainability issues are a key focus of the Board, and your Board is committed to a diligent oversight of the activities of the Manager in these areas. The Board believes effective engagement with management is, in most cases, the most effective way of driving meaningful positive change in the behaviour of investee company management. The Board believes that BlackRock is well placed as Manager to fulfil these requirements due to the integration of ESG into its investment processes, the emphasis it places on sustainability, its collaborative approach in its investment stewardship activities and its position in the industry as one of the largest suppliers of sustainable investment products in the global market.

Sustainable investing: BlackRock’s approach

Sustainability is BlackRock’s standard for investing, based on the investment conviction that integrating sustainability can help investors build more resilient portfolios and achieve better long-term, risk-adjusted returns. BlackRock believes that climate change is a defining factor in companies’ long-term prospects and that it will have a significant and lasting impact on economic growth and prosperity. BlackRock believes that climate risk equates to investment risk and this will drive a profound reassessment of risk and asset values as investors seek to react to the impact of climate policy changes. This in turn is likely to drive a significant reallocation of capital away from traditional carbon intensive industries over the next decade. More information in respect of the actions taken by BlackRock in 2020 on making sustainability the new standard for investing can be found here.

Environmental, Social and Governance: integration into BlackRock’s investment management process

Environmental, Social and Governance (ESG) investing is often conflated or used interchangeably with the term “sustainable investing.” BlackRock has identified sustainable investing as being the overall framework and ESG as a data toolkit for identifying and informing our solutions. BlackRock has defined ESG Integration as the practice of incorporating material ESG information and consideration of sustainability risks into investment decisions in order to enhance risk-adjusted returns. BlackRock recognises the relevance of material ESG information across all asset classes and styles of portfolio management.  ESG information and sustainability risks are included as a consideration in investment research, portfolio construction, portfolio review, and investment stewardship processes. The Investment Manager considers ESG insights and data, including sustainability risks, within the total set of information in its research process and makes a determination as to the materiality of such information in its investment process. ESG insights are not the sole consideration when making investment decisions and the extent to which ESG insights are considered during investment decision making will also be determined by the characteristics or objectives of the Company. The Investment Manager’s evaluation of ESG data may be subjective and could change over time in light of emerging sustainability risks or changing market conditions. This approach is consistent with the Investment Manager’s regulatory duty to manage the Company in accordance with its investment objective and policy and in the best interests of the Company’s investors. The Investment Manager’s Risk and Quantitative Analysis group will review portfolios to ensure that sustainability risks are considered regularly alongside traditional financial risks, that investment decisions are taken in light of relevant sustainability risks and that decisions exposing portfolios to sustainability risks are deliberate, and the risks diversified and scaled according to the investment objectives of the Company.

BlackRock’s approach to ESG integration is to broaden the total amount of information the Investment Manager considers with the aim of improving investment analysis and understanding the likely impact of sustainability risks on the Company’s investments. The Investment Manager assesses a variety of economic and financial indicators, which may include ESG data and insights, to make investment decisions appropriate for the Company objectives. This can include relevant third-party insights or data, internal research or engagement commentary and input from BlackRock Investment Stewardship.  

ESG integration does not change the Company’s investment objective or constrain the Investment Manager’s investable universe and does not mean that an ESG investment strategy or exclusionary screens has been or will be adopted by the Company. Similarly, ESG integration does not determine the extent to which the Company may be impacted by sustainability risks.

Investment stewardship

BlackRock undertakes investment stewardship engagements and proxy voting with the goal of protecting and enhancing the long-term value of clients’ investments for relevant asset classes. In our experience, sustainable financial performance and value creation are enhanced by sound governance practices, including risk management oversight, board accountability, and compliance with regulations. We focus on board composition, effectiveness and accountability as a top priority. In our experience, high standards of corporate governance are the foundations of board leadership and oversight. We engage to better understand how boards assess their effectiveness and performance, as well as their position on director responsibilities and commitments, turnover and succession planning, crisis management and diversity. For further detail regarding BlackRock’s work on investment stewardship please refer to the website here.

Engagement with portfolio companies in 2020

The Board receive periodic updates from the Manager in respect of activity undertaken for the year under review. Over the year to 31 October 2020, 94 total company engagements were held with the management teams of 36 portfolio companies, representing 75% of the portfolio at 31 October 2020. To put this into context, there were 48 companies in BlackRock Income and Growth Investment Trust plc’s portfolio at 31 October 2020 (31 October 2019: 48).  In total 1,018 proposals were voted on at 59 shareholder meetings.

Fund manager commentary

31 August 2021

Please note that the commentary below includes historic information in respect of 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.

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.

Stocks:

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.

Outlook:

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.

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

Information correct as at 21 September 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 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.

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.

Win Robbins (appointed 15 December 2020) has extensive investment management experience having held various senior positions including eight years as Managing Director of Credit Suisse Asset Management Limited from 1996 until 2004 and Managing Director and Head of Non-US Fixed Income at Citigroup Asset Management from 2004 to 2006. Win holds the Diploma in Investment Management from the London Business School.

Investment strategies targeting growth and income
Investment strategies targeting growth and income
Over 28 years of proven experience running investment trusts (Dec 2020)
Over 28 years of proven experience running investment trusts (Dec 2020)
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