# BlackRock Income and Growth Investment Trust NAV outperforms the FTSE All-Share

- Link: https://www.directorstalkinterviews.com/blackrock-income-and-growth-investment-trust-nav-outperforms-the-ftse-all-share/4121057992
- Published: 2022-03-23T08:01:29+00:00
- 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 **28 February 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 | -4.6% | -2.0% | 10.0% | 6.9% | 9.4% | 93.1% | 
| Net asset value | 0.4% | 4.7% | 14.6% | 17.9% | 22.0% | 100.8% | 
| FTSE All-Share Total Return | -0.5% | 3.8% | 16.0% | 18.4% | 25.7% | 97.0% | 
|  |  |  |  |  |  |  | 
| 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: | 202.90p | 
| Net asset value – cum income*: | 204.02p | 
| Share price: | 178.00p | 
| Total assets (including income): | £47.5m | 
| Discount to cum-income NAV: | 12.8% | 
| Gearing: | 4.6% | 
| Net yield**: | 4.0% | 
| Ordinary shares in issue***: | 21,321,283 | 
| Gearing range (as a % of net assets): | 0-20% | 
| Ongoing charges****: | 1.2% |

^(*) Includes net revenue of 1.12 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 4.0% 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, with pay date 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 | 13.9 | 
| Pharmaceuticals & Biotechnology | 8.8 | 
| Household Goods & Home Construction | 7.9 | 
| Mining | 7.4 | 
| Media | 7.1 | 
| Life Insurance | 6.3 | 
| Oil & Gas Producers | 6.2 | 
| Financial Services | 5.4 | 
| Banks | 4.9 | 
| Nonlife Insurance | 3.9 | 
| Tobacco | 3.7 | 
| Electronic & Electrical Equipment | 2.7 | 
| Travel & Leisure | 2.6 | 
| Food & Drug Retailers | 2.5 | 
| Food Producers | 2.3 | 
| Health Care Equipment & Services | 2.1 | 
| Personal Goods | 1.6 | 
| General Retailers | 1.5 | 
| Electricity | 1.3 | 
| Fixed Line Telecommunications | 1.2 | 
| Software & Computer Services | 0.9 | 
| Real Estate Investment Trusts | 0.8 | 
| Industrial Engineering | 0.8 | 
| Net Current Assets | 4.2 | 
|  | —– | 
| Total | 100.0 | 
|  | ===== |

| **Country Analysis** | **Percentage** | 
| United Kingdom | 88.9 | 
| United States | 3.9 | 
| France | 3.0 | 
| Net Current Assets | 4.2 | 
|  | —– | 
|  | 100.0 | 
|  | ===== | 
| 
**Top 10 holdings** | **Fund %** | 
| AstraZeneca | 7.0 | 
| Shell | 5.4 | 
| Rio Tinto | 5.3 | 
| RELX | 5.1 | 
| Reckitt Benckiser | 4.6 | 
| British American Tobacco | 3.7 | 
| Legal & General Group | 3.3 | 
| 3i Group | 3.2 | 
| Phoenix Group | 3.0 | 
| Standard Chartered | 2.9 |

> **Commenting on the markets, representing the Investment Manager noted:**
> **Performance Overview:**
> The Company returned 0.4% during the month, outperforming the FTSE All-Share which
> returned -0.5%.
> A combination of hawkish pivots by developed market central banks and mounting
> jitters over Russian-Ukraine tensions dominated volatile equity markets during
> February where investor sentiment was firmly risk-off.
> Inflationary expectations and rising rates were the main theme in the first part
> of the month; the Bank of England raised rates by another 25 bps and U.S. headline
> inflation data was higher-than-expected.
> Confirmation that Russian forces launched a military operation in Ukraine late
> in the month pushed the oil price through $100/barrel and drove US Treasury yields
> and equities lower. Russia’s currency and markets fell sharply on the swift announcement
> of Western sanctions in response to the invasion of Ukraine.
> The FTSE All Share fell -0.5% during February with Basic Materials, Utilities,
> and Health Care outperforming while Financials, Technology and Industrials underperformed.
> **Stocks:**
> The top positive contributor to the performance of the Company during the month
> was Oxford Instruments which saw a bid from Spectris. The mining sector performed
> strongly during the period thanks to strong cash returns, confidence around China’s
> outlook and tightness in commodity markets. As a result, the holdings in Rio Tinto
> and BHP were top positive contributors to the returns of the Company during the
> month. Drax also contributed positively as a beneficiary of elevated power prices.
> Given the risk- off environment, more cyclical stocks were weaker during the month.
> This included holdings within the Financials sector where the likes of Phoenix
> Group and Mastercard detracted from performance. Electrocomponents also fell due
> to weakness in the Industrial sector despite having delivered a strong trading
> update.  
> **Portfolio Activity:**
> After the announcement of the Russian invasion of Ukraine, we reduced our holding
> in BP given its large stake in Rosneft, the Russian state oil giant, while adding
> to Shell. We reduced our Consumer exposure by selling Next and we took down US
> exposure with our sale of Analog Devices.
> We continue to approach the year with caution and balance given the difficult 
> circumstances with many moving parts. We’ve been positively surprised with reporting
> thus far with the vast majority of companies displaying strong characteristics
> and cash generation under a difficult backdrop.
> **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.

**For more information on the BlackRock Income and Growth Investment Trust and how
to access the opportunities presented 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)**

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