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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.

Image of Kepler Income and Growth rating logo

Kepler Rating: As at 1 January 2022.
Awards/Ratings have not been superseded to date.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.
  • 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: 31/10/2021

Ongoing Charge (including any Performance Fee): 1.21%

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)

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

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.

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

30 April 2022

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 0.8% during the month, outperforming the FTSE All-Share which returned 0.3%.

The UK equity market edged higher during April, returning 0.3%. As a result, the UK remains in positive territory YTD in 2022 with a return of 0.8% making it a clear outlier versus other developed equity markets.

Growth stocks continued to see weakness, led by concerns that the inflationary environment would negatively impact the economy, shifting assets towards safe havens. As a result, traditional defensive sectors such as Pharmaceuticals, Tobacco and Utilities outperformed.

In the U.S., the FED took an even more hawkish stance in April and highlighted its desire to tackle rising prices after the headline inflation climbed to 8.5%1, the highest rate since 1981. The U.S.10-year treasury yield continued to advance throughout the month and closed just below 3%2, creating an even more unfavourable environment for equities trading on high valuations fuelled by speculative future cash flows.

Within the positive return of the UK market as a whole, there was divergence between the size indices. The large cap FTSE 100 index outperformed given its heavy weighting of defensive sectors and US Dollar earners. Meanwhile the small & mid-cap indices lagged as a result of its UK domestic and consumer facing business which struggled against the backdrop of the ongoing cost of living crisis.

Stocks:

The portfolio performed broadly in-line with the benchmark during April; contribution to returns came from our underweight positioning in the Financial sector and our security selection in the Consumer Services and Consumer Goods sectors.

Having had a strong run year-to-date, the Basic Materials sector was weaker during April where portfolio holdings Rio Tinto and BHP were top detractors. More cyclical sectors, including industrial, struggled during the period as investors showed growing concerns around the economic growth impact of inflationary concerns and increased rate expectations. Schneider Electric detracted from returns despite delivering strong results in the month on fears of an economic slowdown, as well as on concerns around further supply chain impacts, notably exacerbated by Chinese lockdowns. We continue to believe in the strong tailwinds for the company from global energy transition, with rising oil and gas prices highlighting the importance of energy and carbon efficiency.

More defensive sectors including Utilities and Health Care fared better during April. Accordingly, our holdings in Sanofi and Smith & Nephew were amongst the top contributors to performance. Consumer Staples names like Tate & Lyle also contributed to returns. Reckitt Benckiser announced better than expected results in the month and contributed to portfolio returns.

Portfolio Activity:

During the month, we sold our holding Tesco as we continued to reduce our Consumer discretionary exposure in the portfolio. We purchased a new holding in Centrica, the British gas company, as we view it as a beneficiary of rising energy costs and increased focus on security of supply.

Outlook:

We are conscious that, at the time of writing, there is a significant conflict and human suffering. Whilst we reference the investment implications of this, we recognise there are also tremendous implications for humanity. The Russian invasion of Ukraine has contributed to not just the volatility of 2022, but also the range of outcomes. The backdrop for global equities therefore, in our view, is mixed. Although demand remains strong, the outlook for corporate revenue and earnings growth is likely to worsen over the course of 2022 as the potential negative jaws of rising oil prices and rates, raises the spectre once again of Stagflation. It is still likely that government stimulus is retracted, and monetary policy is tightened in the face of more persistent inflationary pressures. It will be incredibly important to focus on companies with strong, competitive positions, at attractive valuations that can deliver in this environment.

Central banks, universally across the developed world, have started the year in a far more hawkish manner and as a result, market expectations for higher rates and faster quantitative tightening have risen considerably. Time will tell whether the conflict impacts the growth outlook and therefore the hawkishness of central banks. It is also more likely we will see increasingly divergent regional monetary approaches with the US being somewhat more insulated from the impact of the conflict, than for example Europe. We still do not know whether the current inflationary trends are the temporary impact from the significant Covid stimulus, the unwinding of extreme Covid behaviours, a more structural shift in the cost of labour, the impact on costs from the decarbonisation agenda or a combination of the above. It is difficult to have a high degree of confidence on the outcome but we would note, given the uncertainty, there is a rising risk of a policy mistake; either being too late to tighten and/or tightening too hard. We expect this, and the geopolitical ramifications of the Ukraine war, to be the prevailing debate of 2022 and beyond.

The strain on supply chains, caused by strong economic activity overwhelming Covid afflicted capacity and restricted labour availability, will continue to provide inflationary pressures which can squeeze companies’ margins. As a reminder, we continue to concentrate the portfolio on businesses with pricing power and durable, competitive advantages as we see these as best placed to protect margins and returns over the medium and long-term. However, a notable feature of our conversations with a wide range of corporates in 2021 was the ease with which they were able to pass on cost increases and protect or expand margins. Management teams have pointed to robust demand, prioritisation of security of supply as well as well-publicised supply chain disruption and cost pressures. However, we believe that as some of the transitory inflationary pressures start to fade (e.g. commodity prices, supply chain disruption) then pricing conversations will become more challenging. We are also increasingly focused on wage inflation which may be more structural and yet, in our experience, harder to pass on. Corporates have already pointed to wages picking up, the introduction of bonuses and growing pressure on employee retention rates as competition for labour intensifies. We therefore believe that employee retention will be an important differentiator in 2022 given the productivity benefits of a stable workforce as labour market tighten further.

We also note the UK’s relative valuation discount to global equity markets has continued to widen over the course of 2021, despite the resurgence in takeover activity as bidders capitalise on this arbitrage. Specifically, we’ve seen acquisitions of real assets and a desire to find unlevered free cash flow. As we move into 2022, we see cash generation continuing to improve and dividends payments recovering; broadly speaking we've been surprised by how quickly dividends have come back with large contributions from the mining sector where the likes of Rio Tinto and BHP have been able to pay large special dividends. While most companies are paying dividends once more, we note the large contribution from special dividends that may not persist. That said, as the highest dividend yielding market in the developed world, we see the fundamental valuation of the UK as attractive. We also view the outlook for ordinary dividends for the UK market with optimism as most companies have emerged from the Covid crisis with appropriate dividend policies.

We continue to have conviction in cash generative companies with durable competitive advantages, exceptional management teams and underappreciated growth potential. At present, whilst we are excited by the attractive stock-specific opportunities on offer, we continue to approach the year with balance in the portfolio.

1 Source: 12 April 2022, The Guardian:
(https://www.theguardian.com/business/2022/apr/12/us-inflation-rate-march-2022)

2 Source: 04/05/2022, Trading View:
(https://www.tradingview.com/chart/)

Unless otherwise stated all data is sourced from BlackRock as at 30 April 2022.

Information correct as at 19 May 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 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.

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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