About this investment trust
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.
The Company aims to provide shareholders with long-term capital growth and an attractive total return by investing primarily in UK smaller companies and mid-capitalisation companies traded on the London Stock Exchange.
Why choose it?
The BlackRock Throgmorton Trust looks to back the UK’s strongest emerging companies. An unusual feature of the Trust is its ability to ‘short’ companies that we find unattractive, enabling us to profit if the share price falls. This gives the Trust’s manager the opportunity to back investment ideas with real conviction, within a strong risk framework.
Suited to…
Investors who want a dynamically managed portfolio of growing companies but are comfortable with a limited degree of ‘short’ exposure.
Frequently Asked Questions
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The BlackRock Throgmorton Trust aims to achieve long-term capital growth along with an attractive total return for shareholders. It is a high-conviction portfolio focusing on UK emerging companies with an ability to “short” unattractive companies, providing flexibility and potential for profit. The Trust seeks differentiated, exciting firms with quality management and dominant market positions, aiming to capitalise on industry disruptors within a strong risk framework and is most suited to investors who are comfortable with a dynamically managed portfolio and limited “short” exposure. It employs a unique strategy to back investment ideas with conviction.
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Daniel Whitestone is the lead Portfolio Manager for BlackRock Throgmorton Trust. Daniel joined BlackRock in 2013, previously heading the UK small and mid-cap sales desk at UBS where he ranked first in the Extel Small/Mid-Cap sales ratings in 2011 and 2012.
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A high conviction portfolio can be described as an investment portfolio that holds a relatively concentrated number of positions, typically in a limited number of securities or assets in which the fund manager has high confidence. In other words, the fund manager believes strongly in the potential of the selected investments to outperform the market and as a result allocates a significant portion of the portfolio to those specific assets.
For BlackRock Throgmorton Trust, having a high conviction portfolio is relevant because it aligns with the Trust’s investment objective of achieving long-term capital growth through investing in smaller UK companies. By maintaining a concentrated portfolio of carefully selected securities, the fund manager aims to capitalise on what they believe to be the more promising investment opportunities within the realm of smaller UK companies.
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Investing in UK small and medium-sized companies offers potential for growth, innovation and diversification. These agile firms can capitalise on market inefficiencies, providing opportunities for superior returns. Contributing to economic growth, they may become acquisition targets, adding to their appeal for investors seeking higher-risk, higher-reward opportunities.
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The BlackRock Throgmorton Trust primarily invests in UK small and mid-market companies on the London Stock Exchange. Up to 15% of its assets may be allocated to non-UK securities. The Trust diversifies its portfolio across various sectors, which include industrials, consumer services, financials, technology, healthcare and telecommunications.
AJ Bell Online Personal Wealth Awards 2021: As at 8 March 2021.
AJ Bell Award: As at 3 September 2021.
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.
- The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
- Derivatives may be used substantially for complex investment strategies. These include the creation of short positions where the Investment Manager artificially sells an investment it does not physically own.
- Derivatives can also be used to generate exposure to investments greater than the net asset value of the fund/investment trust. Investment Managers refer to this practice as obtaining market leverage or gearing. As a result, a small positive or negative movement in stockmarkets will have a larger impact on the value of these derivatives than owning the physical investments. The use of derivatives in this manner may have the effect of increasing the overall risk profile of the Funds.
Useful information
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.
Fees & Charges
Annual Expenses as at Date: 30/11/2023
Ongoing Charge (including any Performance Fee): 0.87% as at 30/11/2023
Management Fee Summary: Management fee of 0.35% of the gross assets value of the Company’s long only portfolio plus the gross economic exposure of the total long and short portfolio. The fee structure includes a performance fee of 15% of the NAV (total return) outperformance against the Numis Smaller Companies plus AIM (excluding Investment Companies) Index, measured over a two year rolling basis and applied on average gross assets over two years. A cap on total management fees of 1.25% of average gross assets over a two year period will also apply. As the performance fee model operates on a rolling two year period, there is an annual cap of circa 0.9% on average gross assets over two years. On first day of the financial year outperformance from the previous financial year can be carried forward and accrued in the daily NAV released to the London Stock Exchange on that day. The maximum annual accrual under these circumstances is circa 0.9% of average gross assets.
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ISIN: GB0008910555
Sedol: 0891055
Bloomberg: THRG.LN
Reuters: THRG.L
LSE code: THRG
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Name of Company: BlackRock Fund Managers Limited
Telephone: 020 7743 3000
Email: cosec@blackrock.com
Website: www.blackrock.com/uk
Correspondence Address: Investment Trusts
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 4016
Place of Registration: England
Registered Number: 594634
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Year End: 30 November
Results Announced: July (interim), February (final)
AGM: March
Dividends Paid: August (interim), April (final)
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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Fund manager commentary
31 July 2024
Comments from the Portfolio Manager
Please note that the commentary below includes historic information on the Company’s NAV performance and index performance.
The figures shown relate to past performance. Past performance is not a reliable indicator of future results.
The Company returned 7.3% in July, outperforming its benchmark - the Deutsche Numis Smaller Companies + AIM (excluding Investment Companies) Index - which returned 5.9%.1
To paraphrase a historical leader, there are some years where nothing happens and there are some months where years happen. July was in the latter camp for financial markets. In the month we had a UK general election, a US presidential assassination attempt, Biden’s disastrous debate performance and subsequent withdrawal from the presidential race along with a slew of seemingly contradictory economic and company earnings data. The market’s reaction to all this information was a violent rotation, with multi standard deviation moves under the surface, particularly in the US. As for the UK, it left some isolated from this volatility with the FTSE 100 Index up 3% and the FTSE 250 Index up 6.6%. UK economic data continued to improve, and domestic shares responded well to the General Election which was helpful to the Company’s overall positioning.
The top contributor to performance during the month was WH Smith which rose on no stock specific news but benefitted from the general appreciation in consumer shares. Grafton delivered a resilient trading update highlighting the diversification of its business by geography but is ultimately still waiting for its end markets to recover. The third top contributor was Rosebank, an acquisition vehicle that we supported at IPO, as we know the Management team from Melrose. Another interesting company I’d flag is Breedon, which like Grafton delivered resilient trading in a period of adverse weather and subdued market conditions. Breedon continues to be impacted by negative volumes but has continued to make headway with pricing increases and cost efficiencies to protect profitability while it waits for a volume recovery (N.B. UK concrete volumes are now c.8% below the GFC (Global Financial Crisis) trough, and UK housing starts are at a c.20 year low). Breedon is a market leader with a demonstrable track record in improving ROCE (return on capital employed) and profitability, and we think there is a compelling investment here to play out with many drivers to improve the outlook for volumes (i.e. accommodative monetary policy, fiscal support, UK planning reform, new build housing recovery).
The biggest detractor was Ascential that was bid for at a large premium by Informa. This was a frustrating development as we had owned Ascential for some time but recently sold out. Shares in Boku fell during the month despite a strong trading update indicating around 30% year on year growth (in constant currency) over H1 of 2024, leaving them the requirement of around 9% growth in H2 to meet full year forecasts. Shares in staffing company Robert Walters fell after reporting weaker than expected trading as trading conditions remain subdued, particularly in regions dominated by political uncertainty.
With hopes for a period of greater UK political stability upon us, and a gradual but improving economic backdrop we think the outlook for UK small and mid-caps is compelling. We’ve continued to increase our exposure to domestic shares, notably housebuilders and brick manufacturers, as well as other industrial and consumer companies we think are well placed to benefit from an improving backdrop for volumes as we move through 2024 into 2025. As mentioned above, we see Labour’s victory in the General Election as a positive for our universe. The net of the portfolio is around 108% while the gross is around 112%.
We thank shareholders for your ongoing support.
1Source: BlackRock as at 31 July 2024
Unless otherwise stated all data is sourced from BlackRock as at 31 July 2024.
Any opinions, 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 mentioned 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
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.
Daniel Whitestone, Managing Director, is Head of the Emerging Companies team, within the Fundamental Equity Division of BlackRock's Active Equity business. He is the lead Portfolio Manager for BlackRock Throgmorton Trust plc, BlackRock UK Emerging Companies Hedge Fund and BlackRock UK Emerging Companies Absolute Return Fund.
Dan's service with the firm dates back to 2013. Prior to joining BlackRock, Dan worked for UBS, where he was the head of the UK small and mid-cap sales desk and ranked the number one salesperson in the Extel Small/Mid-Cap sales ratings in 2011 and 2012. Prior to working at UBS, Dan joined Noble and Co in 2006 as a UK small and mid-cap salesman. He began his career at Accenture, in 2003 as a strategy consultant.
Dan earned a BA Hons degree in Combined Studies from the University of Newcastle-Upon-Tyne.
Portfolio Manager
Board of directors
All the Directors are non-executive, independent of the Investment Manager and members of the Audit Committee, Management Engagement Committee and the Nomination Committee.
Christopher Samuel (Chairman) was appointed to the Board in June 2016. He was Chief Executive of Ignis Asset Management from 2009 until its sale to Standard Life Investments in 2014. He was previously Chief Operating Officer at Gartmore and Hill Samuel Asset Management and was a partner at Cambridge Place Investment Management. He is a Non-Executive Director of Quilter plc (including subsidiaries Quilter Financial Planning Limited, Quilter Investment Platform Limited and Quilter Life & Pensions Limited). Mr Samuel was formerly Chairman and a Non-Executive Director of JP Morgan Japanese Investment Trust plc and a non-Executive Director of the Alliance Trust plc, UIL Limited and its subsidiary UIL Finance Limited. He graduated from Oxford with an MA in Philosophy, Politics and Economics. He qualified as a Chartered Accountant with KPMG.
Angela Lane was appointed to the Board in June 2020. She had previously spent 18 years working in private equity at 3i, becoming a partner in 3i's Growth Capital business managing the UK portfolio. Since 2007, Angela has held several non-executive and advisory roles for small and medium capitalised companies across a range of industries including business services, healthcare, travel, media, consumer goods and infrastructure. She is currently the Audit Chair and Non-Executive Director of Pacific Horizon Investment Trust plc, Dunedin Enterprise Investment Trust plc and Seraphim Space Investment Trust plc.
Louise Nash was a UK Small and Mid-Cap Fund Manager, firstly at Cazenove Capital and latterly at M&G Investments which she left in 2015. She now works for family wine business Höpler. She also acts as a consultant to JLC Investor Relations. Louise holds an MA in German and Politics from the University of Edinburgh and the IMRO Investment Management Certificate.
Nigel Burton was appointed to the Board in December 2020. He has spent over 14 years as an investment banker at leading City institutions including UBS Warburg and Deutsche Bank, including as the Managing Director responsible for the energy and utilities industries. Nigel has also spent 15 years as Chief Financial Officer or Chief Executive Officer of a number of private and public companies. He is currently a Non-Executive Director of AIM listed companies DeepVerge plc, Microsaic Systems plc, eEnergy Group plc and Location Sciences Group plc. He was formerly a Non-Executive Director of Digitalbox plc, Corcel plc, Modern Water plc, Alexander Mining plc, Mobile Streams plc and Chairman of Remote Monitored Systems plc.
Merryn Somerset Webb was appointed to the Board in March 2021. She has significant experience of financial matters through her role as a senior columnist for Bloomberg Opinion and writes extensively on this subject across radio and television. She is also a former Editor-in-Chief of MoneyWeek, the UK personal finance magazine. Merryn brings valuable investment trust specific experience. She is a former Non-Executive Director of Murray Income Investment Trust plc, Baillie Gifford Shin Nippon Public Limited Company and Netwealth Investments Limited.
ESG Integration
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. The Investment Manager may incorporate sustainability considerations in its investment processes across all investment platforms. 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 ESG 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 their investment objectives and policies 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.
Sustainability risks are identified at various steps of the investment process, where relevant, from research, allocation, selection, portfolio construction decisions, or management engagement, and are considered relative to the Company’s risk and return objectives. Assessment of these risks is done relative to their materiality (i.e. likeliness of impacting returns of the investment) and in tandem with other risk assessments (e.g. liquidity, valuation, etc.).
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 or impact focused investment strategy or exclusionary screens have 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.