# BlackRock Income and Growth Investment Trust NAV outperforms FTSE All-Share in April - Link: https://www.directorstalkinterviews.com/blackrock-income-and-growth-investment-trust-nav-outperforms-ftse-all-share-in-april/4121065386 - Published: 2022-05-20T07:39:01+01:00 - Author: Amilia Stone **BlackRock Income and Growth Investment Trust plc** ([LON:BRIG](https://www.directorstalkinterviews.com/company/blackrock-income-and-growth-investment-trust-plc/brig.l)) has announced its latest portfolio update. **For more information on the BlackRock Income and Growth Investment Trust and how to access the opportunities resented by the income and growth sector, please visit: [www.blackrock.com/uk/brig](https://www.blackrock.com/uk/individual/products/investment-trusts/our-range/blackrock-income-and-growth-investment-trust/trust-information?siteEntryPassthrough=true&cid=aff:investmenttrusts2020:brig:directorstalk:link)** All information is at **30 April 2022** and unaudited. **Performance at month end with net income reinvested** | | **One** **Month** | **Three****Months** | **One****Year** | **Three****Years** | **Five****Years** | **Since****1 April****2012** | | **Sterling** | | | | | | | | Share price | 1.4% | 0.3% | 5.5% | 6.1% | 13.5% | 102.9% | | Net asset value | 0.8% | 2.2% | 7.2% | 13.6% | 21.6% | 104.4% | | FTSE All-Share Total Return | 0.3% | 1.1% | 8.7% | 14.1% | 26.6% | 100.2% | | | | | | | | | | Source: BlackRock | | | | | | | BlackRock took over the investment management of the Company with effect from 1 April 2012. **At month end** **Sterling:** | Net asset value – capital only: | 204.13p | | Net asset value – cum income*: | 207.67p | | Share price: | 187.00p | | Total assets (including income): | £48.0m | | Discount to cum-income NAV: | 10.0% | | Gearing: | 1.4% | | Net yield**: | 3.9% | | Ordinary shares in issue***: | 21,200,636 | | Gearing range (as a % of net assets): | 0-20% | | Ongoing charges****: | 1.2% | ^(*) Includes net revenue of 3.54 pence per share ** The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.9% and includes the 2021 interim dividend of 2.60p per share declared on 23 June 2021 and paid to shareholders on 1 September 2021 and the 2021 final dividend of 4.60p per share declared on 13 January 2022 and paid to shareholders on 17 March 2022. *** excludes 10,081,532 shares held in treasury. **** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 October 2021. | **Sector Analysis** | **Total assets (%)** | | Support Services | 12.8 | | Pharmaceuticals & Biotechnology | 9.0 | | Household Goods & Home Construction | 7.5 | | Oil & Gas Producers | 7.4 | | Media | 7.2 | | Mining | 6.7 | | Life Insurance | 5.9 | | Financial Services | 5.0 | | Banks | 4.6 | | Nonlife Insurance | 3.8 | | Tobacco | 3.4 | | Health Care Equipment & Services | 2.6 | | Food Producers | 2.6 | | Electronic & Electrical Equipment | 2.5 | | Travel & Leisure | 2.4 | | General Retailers | 1.6 | | Personal Goods | 1.6 | | Fixed Line Telecommunications | 1.4 | | Electricity | 1.3 | | Gas, Water & Multiutilities | 1.2 | | Software & Computer Services | 0.9 | | Industrial Engineering | 0.8 | | Real Estate Investment Trusts | 0.7 | | Net Current Assets | 7.1 | | | —– | | Total | 100.0 | | | ===== | | | | | | | | **Country Analysis** | **Percentage** | | United Kingdom | 86.0 | | United States | 4.2 | | France | 2.7 | | Net Current Assets | 7.1 | | | —– | | | 100.0 | | | ===== | | | | | **Top 10 holdings** | **Fund %** | | AstraZeneca | 7.6 | | Shell | 6.6 | | Rio Tinto | 5.0 | | RELX | 5.0 | | Reckitt Benckiser | 4.3 | | British American Tobacco | 3.4 | | 3i Group | 3.2 | | Phoenix Group | 3.1 | | Electrocomponents | 3.1 | | Standard Chartered | 2.9 | > **Commenting on the markets, representing the Investment Manager noted:** > **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](https://www.directorstalkinterviews.com/news/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/ ) **For more information on the BlackRock Income and Growth Investment Trust and how to access the opportunities resented by the income and growth sector, please visit: [www.blackrock.com/uk/brig](https://www.blackrock.com/uk/individual/products/investment-trusts/our-range/blackrock-income-and-growth-investment-trust/trust-information?siteEntryPassthrough=true&cid=aff:investmenttrusts2020:brig:directorstalk:link)** Share on: