# BlackRock Throgmorton Trust delivered 9.1% net return over the period, outperforming benchmark by +5.3%

- Link: https://www.directorstalkinterviews.com/blackrock-throgmorton-trust-delivered-9.1-net-return-over-the-period-outperforming-benchmark-by-5.3/412950314
- Published: 2020-12-24T07:42:47+00:00
- Author: Amilia Stone

**[BlackRock Throgmorton](https://www.directorstalkinterviews.com/company/blackrock-throgmorton-trust-plc/thrg.l)
Trust plc** ([LON:THRG](https://www.directorstalkinterviews.com/company/blackrock-throgmorton-trust-plc/thrg.l))
has provided the following portfolio update.

All information is at **30 November 2020** and unaudited.

**To learn more about the BlackRock Throgmorton Trust plc please follow this link:
[blackrock.com/uk/thrg](https://www.blackrock.com/uk/individual/products/investment-trusts/our-range/blackrock-throgmorton-investment-trust/trust-information?siteEntryPassthrough=true&cid=aff:investmenttrusts2020:thrg:directorstalk:link)**

**Performance at month end is calculated on a cum income basis**

|  | **One
Month% | Threemonths% | Oneyear% | Threeyears% | Fiveyears% | 
| Net asset value | 10.2 | 11.9 | 9.1 | 32.1 | 89.8 | 
| Share price | 9.3 | 10.2 | 8.2 | 57.3 | 121.2 | 
| Benchmark* | 11.1 | 10.9 | 3.8 | 2.0 | 31.4 |

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding 
Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (
excluding Investment Companies) Index as the Company’s benchmark. The performance
of the indices have been blended to reflect this.

| **At month end** | 
| Net asset value capital only: | 675.61p | 
| Net asset value incl. income: | 681.23p | 
| Share price | 682.00p | 
| Premium to cum income NAV | 0.1% | 
| Net yield^(1): | 1.5% | 
| Total Gross assets^(2): | £596.2m | 
| Net market exposure as a % of net asset value^(3): | 118.6% | 
| Ordinary shares in issue^(4): | 87,518,929 | 
| 2019 ongoing charges (excluding performance fees)^(5,6): | 0.59% | 
| 2019 ongoing charges ratio (including performance
fees)^(5,6,7): | 1.75% |

1. Calculated using the 2020 interim dividend declared on 23 July 2020 and paid 
on 26 August 2020, together with the 2019 final dividend declared on 06 February
2020 and paid on 27 March 2020.
2. Includes current year revenue and excludes gross
exposure through contracts for difference.3. Long exposure less short exposure as
a percentage of net asset value.4. Excluding 0 shares held in treasury.5. Calculated
as a percentage of average net assets and using expenses, excluding performance 
fees and interest costs for the year ended 30 November 2019.6. With effect from 
1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets
per annum.7. Effective 1st December 2017 the annual performance fee is calculated
using performance data on an annualised rolling two year basis (previously, one 
year) and the maximum annual performance fee payable is effectively reduced to 0.90%
of two year rolling average month end gross assets (from 1% of average annual gross
assets over one year). Additionally, the Company now accrues this fee at a rate 
of 15% of outperformance (previously 10%). The maximum annual total management fees(
comprising the base management fee of 0.35% and a potential performance fee of 0.90%)
are therefore 1.25% of average month end gross assets on a two-year rolling basis(
from 1.70% of average annual gross assets).

| **Sector Weightings** | **% of Total Assets** | 
|  |  | 
| Industrials | 32.4 | 
| Consumer Services | 18.2 | 
| Financials | 17.3 | 
| Consumer Goods | 10.1 | 
| Technology | 9.6 | 
| Health Care | 6.9 | 
| Telecommunications | 2.5 | 
| Basic Materials | 2.5 | 
| Net current assets |                                 0.5 | 
|  | —– | 
| **Total** | 100.0 | 
|  | ===== |

| **Country Weightings** | **% of Total Assets** | 
|  |  | 
| United Kingdom | 87.7 | 
| United States | 7.5 | 
| France | 2.3 | 
| Australia | 0.9 | 
| Switzerland | 0.8 | 
| Denmark | 0.4 | 
| Netherlands | 0.3 | 
| Israel | 0.1 | 
|  | —– | 
| **Total** | 100.0 | 
|  | ===== |

**Market Exposure (Quarterly)**

|  | **29.02.20
%
 | 31.05.20
%
 | 31.08.20
%
 | 30.11.20
%
 | 
| Long | 119.3 | 118.6 | 121.0 | 120.4 | 
| Short | 8.9 | 2.1 | 2.4 | 1.9 | 
| Gross exposure | 128.2 | 120.7 | 123.4 | 122.3 | 
| Net exposure | 110.4 | 116.6 | 118.6 | 118.6 |

**Ten Largest Investments**

| **Company** | **% of Total Gross Assets** | 
|  |  | 
| Games Workshop | 3.3 | 
| YouGov | 2.8 | 
| Watches of Switzerland | 2.8 | 
| Gamma Communications | 2.5 | 
| Breedon | 2.4 | 
| Pets at Home | 2.4 | 
| Avon Rubber | 2.2 | 
| Dechra Pharmaceuticals | 2.2 | 
| Impax Asset Management | 2.1 | 
| IntegraFin | 2.0 |

> **Commenting on the markets, Dan Whitestone, representing the Investment Manager
> noted:**
> During the month the Company returned 10.2%^(1) (net of fees), modestly trailing
> our benchmark which returned 11.1%^(1). The long book delivered a positive return
> during the month, while the short book detracted marginally. November marks the
> end of the Company’s financial year, and despite what has been a difficult 12 
> month period to say the least, we are pleased to report that the Company delivered
> a positive 9.1%^(1) net return over the period, outperforming our benchmark by
> +5.3%^(1).
> November was an extreme month. It included several major events including the 
> US election, a return to national lockdowns in several European countries (including
> the UK), followed by the significant announcement of effective vaccines against
> COVID-19. Global stock markets were initially weak on lockdowns, but very quickly
> surged after the US election and particularly after the announcement of the >90%
> efficacy of the Moderna vaccine. What particularly characterised the nature of
> the stock market rise in November was the extremely strong reversal towards value
> and away from growth shares. And therefore, while many global indices rose more
> than 10% in the month, the skew within these indices was substantially towards
> the sectors that had been hardest hit in the year (leisure, travel, oil and financials).
> Despite marginally trailing our benchmark, we feel that considering the headwind
> to our strategy from the quantum of the “growth-value” reversal witnessed during
> the month, most particularly acute in the UK market, we think the overall result
> is respectable. We would also highlight that the decision taken earlier during
> the year to close a number of our short positions, thereby locking in some profit,
> was beneficial during the market rally this month.
> Many of the largest detractors to performance during the month were companies 
> that were caught by the market rotation, rather than being impacted by any stock
> specific issues. The largest detractor was **Games Workshop**, which we think 
> simply fell back as investors took profits to fund the purchases of “value” stocks
> as the rotation took hold. This was despite another big upgrade delivered in the
> month, and to illustrate our point, with a c.15% upgrade to profits and a c.15%
> fall in the share price, Games Workshop is now 30% cheaper now than at the start
> of the month, and yet we have even more conviction in its outlook. The same “profit
> taking” dynamic led to **YouGov** appearing among the top detractors in the month.
> We’ve used the weakness to add to our positions in both companies.
> The largest positive contributor to performance was **Watches of Switzerland**
> which continued to rise after their incredibly strong trading update in October(
> when it was also a large contributor to performance). Shares in **Trade Desk**
> rose after reporting strong third quarter results which were ahead of expectations,
> showing that net income had more than doubled year-on-year, resulting in upgrades
> to forward guidance. Within Travel & Leisure our holdings in **Whizz Air** and**
> Jet2** rallied on hopes of increased international travel once a vaccine begins
> to be rolled out.
> There has been much discussion about whether this is now the end of growth. We
> do not share this view. As discussed in previous communications, we believe that
> the powerful structural trends we have identified at industry levels will continue
> and the companies that lead in these areas should be able to deliver double digit
> compound growth for many years to come. We believe this will translate into rising
> share prices as valuations are not stretched, especially in light of super low
> interest rates and the new doses of monetary stimulus that are being widely promised.
> We are watchful of inflation but overall, we expect rises in inflation, if they
> occur, to be tolerated by monetary authorities rather than aggressively curtailed.
> Therefore, we continue with a central expectation that rates will stay low and
> that genuinely cash generative growth companies remain highly differentiated and
> highly attractive. We see November as a small set back, understandable if not 
> desirable in light of the rapid changes of events and the scale of market reactions.
> We remain confident in the holdings in the portfolio, and those that have retraced
> in November we see as merely a pause in a long-term upward path and remain very
> positive on their prospects. We have therefore used share price weakness to add
> to a number of our core holdings and we look to the future with high conviction
> in the portfolio.

^(1)Source: BlackRock as at 30 November 2020

**To learn more about the BlackRock Throgmorton Trust plc please follow this link:
[blackrock.com/uk/thrg](https://www.blackrock.com/uk/individual/products/investment-trusts/our-range/blackrock-throgmorton-investment-trust/trust-information?siteEntryPassthrough=true&cid=aff:investmenttrusts2020:thrg:directorstalk:link)**

23 December 2020

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