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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.

Image of Citywire award logoImage of Icya Winner Europe logoImage of Kepler Growth rating logo

Citywire: As at 16 November 2021.
Investment Week: As at 18 November 2021.
Kepler Rating: As at 1 January 2022.

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: 31/08/2021

Ongoing Charge (including any Performance Fee): 1.02%

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)

Latest company announcements

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.

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The Board’s approach to ESG

The Board believes that responsible investment and sustainability are integral to the longer-term delivery of the Company’s success. The Board works closely with the Investment Manager to regularly review the Company’s performance, investment strategy and underlying policies to ensure that the Company’s investment objective continues to be met in an effective, responsible and sustainable way in the interests of shareholders and future investors.

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.

ESG: integration into BlackRock’s investment management process

Environmental, Social and Governance (ESG) investing is often 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. 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 details regarding BlackRock’s work on investment stewardship please refer to the website here.

Fund manager commentary

31 March 2022

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 2.2% and the share price by 3.3%. For reference, the FTSE World Europe ex UK Index returned 2.1% during the period.

With March being another volatile month, markets closed out an extremely tumultuous quarter. Europe ex UK markets took a dive at the beginning of the month which was quickly followed by a sharp rally on hopes for diplomatic progress between Russia and Ukraine. At the end of March, the FTSE Europe ex UK Index finished the month slightly up.

The region saw another big inflation print during the month, although it is important to highlight that increased energy prices are a key factor, whilst Eurozone core inflation remained at 3%.

More defensive sectors such as health care and telecoms delivered the strongest performance during March. The energy sector was also up as prices continued to push higher from already elevated levels. Utilities and the consumer sectors delivered the weakest performance over the period.

The Company slightly outperformed its reference index during the month, largely driven by strong sector allocation while stock selection was negative. In sector terms, our zero exposure to utilities was positive, as the sector fell as EU leaders met to discuss taxing windfall energy profits in an effort to protect consumers.

A higher exposure to industrials was helpful as some assets recovered following sharp sell-offs earlier in the year. A higher allocation to health care also aided returns.

The Company’s overweight to the consumer sectors detracted, as consumer cyclicals came under pressure reflecting increased risks of weaker consumer spending due to higher energy and food prices. However, this was significantly offset by strong stock selection, as the Company is largely exposed to the high-end consumer who should be less challenged by higher prices. Our positions in Hermès and Lindt, for example, were amongst the top performers.

The technology sector was the largest contributor to relative returns during the month. In particular, a holding in ASM International was beneficial for performance. Whilst there was no stock specific news, we saw a rebound in a number of good quality, medium sized companies that execute well which had been overly hurt in the rotation at the beginning of the year. Elsewhere in the sector, Swedish listed Hexagon was also amongst the best performers.

Many of our higher quality, resilient businesses within industrials, which are expected to trade relatively better than more cyclical stocks during volatile times, were also amongst the best performers. IMCD and DSV rebounded following weakness at the beginning of the year, as they have the potential to cope better with higher commodity prices. DSV, for example, had been under pressure as the market expects a normalisation in air freight rates as capacity picks up coming out of a Covid-19 constrained world. However, this has yet to materialise with both air freight and shipping yields remaining high. The company also has a successful M&A track record which is another lever that could be used to help fill any gaps as freight rates normalise.

Similarly, shares in Epiroc bounced as attention shifted to higher commodity prices as a positive for earnings and the structural trends supporting this business - such as electrification and automation of mines - outweighing short-term concerns over mid to high single digit revenue exposure to Russia from their aftermarket and servicing business.

Novo Nordisk was the single largest contributor to performance having held a Capital Markets Day in March in which, amongst other things, they gave further detail on the strong growth opportunities for their obesity drug Wegovy. The Company’s positions in Lonza, Chemometec and DiaSorin also enjoyed support from strength in the health care sector.

Negative performance came primarily from the Company’s Russian stocks which were valued at close to nil by BlackRock at the beginning of March and hence impacted returns during the month.

Royal Unibrew also detracted after disappointing the market on full year numbers. The company reported margins circa 1% weaker than the market had expected, driven by higher input costs and marketing spend. Their guidance on operating profits was also lower than the market had expected, again driven by higher raw material costs. However, the top line performance was strong, driven by higher volumes, and the report showed the company continuing to increase its economic power with several brands strongly increasing market share.

Finally, not holding defensive large-cap names including Roche, Bayer and Novartis was also negative for relative performance.

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

Outlook

After an exceptional 2021 for European markets, the first quarter of 2022 has been challenging, with concerns over the economic implications of the Russia invasion of Ukraine, rising interest rates and continued supply chain disruptions weighing on equity returns.

While we believe the environment remains supportive for corporate profits overall, there is potential for a slowdown as growth begins to normalise during the latter half of the year. Meanwhile, the operating environment for companies continues to be complicated by supply chain and labour market disruptions. In addition, we expect some of the strong cyclical tailwinds and indeed policy support seen in 2021 to fade over the course of 2022. Whilst rate markets and inflation expectations are likely to stay volatile, we do not expect policy in Europe to change meaningfully.

We continue to stay close to our companies which allows us to understand the environment they are operating in. We expect greater dispersion between sector and stock outcomes and, with that, a need for greater selectivity. In our view this will favour well-managed, well-organised businesses with an element of pricing power and we believe that holding these businesses will benefit our shareholders over the medium to long term.

Unless otherwise stated all data is sourced from BlackRock as at 31 March 2022.

Information correct as at 25 April 2022.

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.

Stefan Gries profile photo
Stefan Gries
Portfolio Manager
Sam Vecht 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 Select 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.

Ian Sayers (appointed February 2022) is the former Chief Executive of the Association of Investment Companies (AIC), which he became in 2010 on his promotion from Deputy Director General. Prior to that, he was the AIC’s Technical Director, advising members on areas such as taxation, accounting, company law and regulation, as well as having a key role in its public affairs activity.

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Investment strategies targeting growth and income
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Over 29 years of proven experience running investment trusts (Dec 2021)
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Unparalleled research capabilities and experienced stock pickers
Contact
To get in touch contact us on:
Telephone: 020 7743 3000
Email: cosec@blackrock.com