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Finding new opportunities in the market volatility – BlackRock Greater Europe Investment Trust plc

BlackRock Greater Europe Investment Trust plc (LON:BRGE) is co-managed by Stefan Gries (developed markets) and Sam Vecht (emerging markets). Gries explains that one of their jobs as active investors is to identify parts of the market that will be problematic and therefore will not create value on a multi-year basis. This informs their focus on high-quality growth businesses that can be held for the long term and on avoiding ‘value traps’. Gries believes that ultimately, the coronavirus-led market sell-off will provide a real opportunity for investors to return to Europe, a market that already had a low allocation from global investors. It will benefit from any improvement in the global economy as c 60% of its revenues are generated outside of the region, ‘which makes me quite excited’, he adds.

NAV outperformance versus the European stock market over 12 months to end-April 2020

The market opportunity

The COVID-19-induced stock market sell-off has been brutal and swift. However, history shows that share prices have always recovered from periods of significant market weakness. Investors with a longer-term perspective may consider the current sell-off provides a good opportunity to revisit a region that has been out of favour for some time.

Why consider investing in BRGE?

■ Differentiated exposure to both developed and emerging European markets.

■ Concentrated portfolio of high-conviction investments.

■ Focus on investing in companies rather than trading in shares.

■ Well-resourced investment team with disciplined, repeatable process.

■ Long-term outperformance versus the continental European market.

■ Top-performing fund in the AIC Europe sector over three and five years.

Discount broadly in line with historical averages

BRGE’s current 4.6% discount to cum-income NAV is not dissimilar to the average discounts of 3.9%, 4.4%, 4.3% and 4.1% over the last one, three, five and 10 years respectively. The trust has a progressive dividend policy and the annual distribution has increased every year since the trust was launched in 2004, using reserves to supplement income when required. It currently offers a 1.6% dividend yield.

To discover more about the BlackRock Greater Europe Investment Trust click here.

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