Portfolio Update
BLACKROCK GREATER EUROPE INVESTMENT TRUST plc
All information is at 31 July 2013 and unaudited.
Performance at month end with net income reinvested
One Three One Three Since launch
Month Months Year Years (20 Sep 04)
Net asset value (Undiluted) 7.0% 6.8% 37.2% 48.4% 185.1%
Net asset value (Diluted) 6.1% 5.9% 36.1% 47.2% 182.8%
Share price 7.2% 4.8% 35.2% 49.2% 167.0%
FTSE World Europe ex UK 7.7% 5.8% 36.0% 33.6% 121.4%
Sources: BlackRock and DataStream
At month end
Net asset value (capital only): 238.04p
Net asset value (including income): 244.95p
Net asset value (capital only)*: 237.15p
Net asset value (including income)*: 242.84p
Share price: 228.25p
Discount to NAV (including income): 6.8%
Discount to NAV (including income)*: 6.0%
Subscription share price 18.25p
Gearing: 6.34%
Net yield: 1.8%
Total assets (including income): £283.0m
Ordinary shares in issue: 108,648,716**
Subscription shares in issue 23,254,813
* Diluted for subscription shares.
** Excluding 5,718,353 shares held in treasury.
Benchmark
Sector Analysis Total Assets (%) Index (%) Country Analysis Total Assets (%)
Financials 20.9 22.1 France 21.5
Consumer Goods 17.2 18.6 Switzerland 19.5
Health Care 14.5 12.1 Netherlands 15.2
Consumer Services 12.3 5.7 Germany 14.9
Industrials 12.1 13.9 Belgium 5.8
Technology 10.1 3.7 Sweden 5.5
Basic Materials 6.4 8.4 Russia 4.1
Telecommunications 3.5 4.1 Denmark 4.1
Oil & Gas 2.5 7.6 Ireland 3.5
Utilities - 3.8 Spain 2.1
Net current assets 0.5 - Portugal 0.9
----- ----- Finland 0.9
100.0 100.0 Hungary 0.8
===== ===== Ukraine 0.7
Net current assets 0.5
-----
100.0
=====
Ten Largest Equity Investments (in alphabetical order)
Company
Anheuser Busch Belgium
Bayer Germany
Cie Financière Richemont Switzerland
Continental Germany
Novo Nordisk Denmark
Reed Elsevier Netherlands
Roche Switzerland
Sanofi France
Swiss Re Switzerland
Zurich Insurance Switzerland
Commenting on the markets, Vincent Devlin, representing the Investment Manager
noted:
During the month, the Company's NAV gained 7.0% and the share price rose by
7.2%. For reference, the FTSE World Europe ex UK Index increased by 7.7%
during the same period.
Following June's market correction, European stocks bounced back in July to
register a strong gain, outperforming most other asset classes globally for the
month. Domestically-focused areas of the market outperformed as macroeconomic
indicators for Europe signalled a pick-up in economic momentum on the
industrial and services front. This led investors to search for investment
opportunities in companies exposed to domestic Europe. Peripheral European
equity markets led the way and Italy (MIB) and Spain (IBEX) both posted +8%
gains for the month.
Stock selection was the primary cause of the Company's underperformance when
compared with the broad index. The fact that the Company did not own selected
banks, including Santander in Spain and BNP Paribas in France, harmed relative
returns and a position in OTP bank also fell during the month. In addition,
positions in the consumer services sector detracted from returns, especially
Ryanair, which suffered from profit taking despite its strong operating
performance.
With regard to the Company's sector allocation, the Company's higher weighting
in consumer services and lower weighting in utilities both benefited returns,
but a higher weighting in health care proved especially challenging as the
sector significantly lagged the benchmark.
At the end of the month, the Company had higher weightings (when compared with
the broad market index) in consumer services, technology and health care, and
lower weightings in basic materials, telecoms, consumer goods, financials, oil
& gas, industrials and utilities. At the end of July, the Company was geared
by 6.34%.
Outlook
In July, the Eurozone Purchasing Manager Index (a measure of business
confidence) came in above 50 for the first time in two years. Both the
manufacturing and services elements showed notable improvement, providing
further encouraging evidence that the Eurozone economy is no longer
contracting. In addition, the European Central Bank and Bank of England
changed their communication policies, moving to provide forward guidance on the
direction of rates, which was well received by the markets.
Supportive monetary policies, recovering economic momentum and a relatively
stable political backdrop, notwithstanding some uncertainty ahead of the German
elections in September, provides a reassuring environment for European
equities, and is consistent with our thesis that the Eurozone should continue
to improve for the rest of the year and into 2014. We expect that the European
Equity asset class will continue to be supported by ongoing shifts in investor
allocation towards Europe as more supportive evidence of an improving
macroeconomic picture emerges.
13 August 2013
ENDS
Latest information is available by typing www.brgeplc.co.uk on the internet,
"BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV
terminal). Neither the contents of the Manager's website nor the contents of
any website accessible from hyperlinks on the Manager's website (or any other
website) is incorporated into, or forms part of, this announcement.