Portfolio Update

BLACKROCK GREATER EUROPE INVESTMENT TRUST plc (LEI - 5493003R8FJ6I76ZUW55)
All information is at31 August 2018 and unaudited.

Performance at month end with net income reinvested
 

	One Month	Three Months	One Year	Three Years	Launch (20 Sep 04)
Net asset value (undiluted)	1.8%	6.6%	11.8%	60.1%	392.1%
Net asset value* (diluted)	1.8%	6.6%	11.8%	60.5%	392.5%
Share price	2.3%	8.0%	12.5%	57.2%	371.5%
FTSE World Europe ex UK	-1.4%	3.9%	1.4%	47.4%	251.7%

* Diluted for treasury shares and subscription shares.
Sources: BlackRock and Datastream

At month end

Net asset value (capital only):	377.80p
Net asset value (including income):	382.22p
Net asset value (capital only)1:	377.80p
Net asset value (including income)1:	382.22p
Share price:	363.00p
Discount to NAV (including income):	5.0%
Discount to NAV (including income)1:	5.0%
Net gearing:	1.9%
Net yield2:	1.5%
Total assets (including income):	£330.5m
Ordinary shares in issue3:	86,459,691
Ongoing charges4:	1.10%

1  Diluted for treasury shares.
2  Based on a final dividend of 3.70p per share for the year ended 31 August 2017 and an interim dividend of 1.75p per share for the year ending 31 August 2018.
3  Excluding 23,869,247 shares held in treasury.
4  Calculated as a percentage of average net assets and using expenses, excluding interest costs, after relief for taxation, for the year ended 31 August 2017.

Sector Analysis	Total Assets (%)		Country Analysis	Total Assets (%)
Industrials	35.1		Switzerland	18.8
Health Care	21.0		France	15.5
Consumer Goods	11.5		Germany	12.7
Financials	10.1		Denmark	11.1
Technology	9.2		Netherlands	11.0
Consumer Services	6.2		Sweden	7.1
Basic Materials	3.6		Spain	4.9
Telecommunications	1.8		Italy	4.0
Oil & Gas	1.7		Israel	3.7
Net current liabilities	(0.2)		Russia	3.5
	-----		Finland	2.9
	100.0		Ireland	2.1
	=====		Belgium	1.7
			Greece	1.2
			Net current liabilities	(0.2)
				-----
				100.0
				=====

Ten Largest Equity Investments
Company	Country	% of Total Assets
Lonza Group	Switzerland	5.9
Novo Nordisk	Denmark	4.7
Safran	France	4.7
SAP	Germany	4.6
Sika	Switzerland	4.6
Unilever	Netherlands	3.7
Fresenius Medical Care	Germany	3.6
Thales	France	3.3
Hexagon	Sweden	3.2
DSV	Denmark	3.0

Commenting on the markets, Stefan Gries, representing the Investment Manager noted:

During the month, the Company’s NAV rose by 1.8% and the share price rose by 2.3%. For reference, the FTSE World Europe ex UK Index returned -1.4% during the period.

Continental European markets fell in August. Markets were driven down by the financial sector, which sold off in fear of potential contagion within Turkey, which looked to be heading towards crisis as its currency plunged. In economic data, second quarter Eurozone GDP was revised up slightly to 2.2% but the first half of 2018 was still very soft compared to the end of 2017. The main culprits behind this slowdown were France and Italy. Other peripherals such as Spain, Portugal and Cyprus are growing quicker than the euro area average. August PMI readings showed Services rebounding, whilst Manufacturing continued to edge down, suggesting that the external environment remains challenging, whereas the domestic Eurozone economy is holding up better. German IFO rose to the highest level since March, driven by the expectations index suggesting a possible rebound of growth in the coming quarter as well.

The Company outperformed the market over the month. Strong stock selection was the primary driver of the Company’s performance over the period. Sector allocation also aided returns. The lower allocation to the financials sector was positive for performance, as the banking sector in particular was dragged down on heightened political risk. However, a holding in Sberbank Russia detracted. The higher allocation to both industrials and technology compared with the reference index, also aided returns. The higher allocation to consumer goods, however, dampened returns.

The top performing holding over the period was Israeli Chemicals. The stock rallied in response to rising potash prices, given supply constraints following production issues in Brazil and Argentina.

A position in freight forwarder DSV proved positive for performance. Despite ongoing trade war rhetoric and a number of tariffs imposed, global trade volumes and DSV’s revenues remain healthy. The company reported another strong quarter with earnings ahead of expectations in all divisions. With this, DSV raised guidance for growth by 4% and increased their share buybacks.

Other large active positions, such as Lonza and Safran, also both contributed positively to performance as fundamentals remain robust. A holding in Kingspan also aided returns as first half results came in 5% ahead of expectations at the earnings level. This was driven by pricing dynamics in the insulated board business, improved dynamics from acquisitions and positive trends in the UK.

A position in Inditex detracted from returns, impacted by the disruption of the Turkish Lira given 15% of sourcing costs are from Turkey. Furthermore, as the market moved into more defensive names, those less exposed to the economic cycle given a lower appetite for risk, Nestlé and Roche, outperformed the market. Not holding either of these stocks detracted from the Company’s performance.

At the end of the period the Company had a higher allocation than the reference index towards industrials, technology, consumer services and health care. A lower allocation was held in financials, consumer goods, utilities, telecommunications, basic materials and oil & gas.

Outlook

The apparent attractiveness of European equities has waned year-to-date. Political headlines have shifted sentiment towards the region and expectations have been reset lower. These expectations, and indeed market positioning, have however come from bullish levels at the onset of 2018. We continue to see earnings progressing positively in the region and note that foreign exchange impacts are probably past their worst. The continued global growth has supported revenues in Europe. Risks are clearly present in the market, but resolutions on trade wars could prove a catalyst for the region and particularly for stocks with depressed valuations. We believe navigating risks and extreme valuations through active stock selection is increasingly important at this stage in the cycle. From a fundamental standpoint, there are ample attractive investment opportunities within Europe which can deliver earnings growth and strong cash flow irrespective of the political environment.

19 September 2018

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.