Portfolio Update

BLACKROCK THROGMORTON TRUST PLC All information is at30 June 2016 and unaudited.
Performance at month end is calculated on a cum income basis
			One		Three		One	Three			Five
			month		months		year	years			years
			%		%		%	%			%
Net asset value (undiluted)#			-10.3		-7.3		-5.0	32.4			60.2
Net asset value (fully diluted)			n/a		n/a		n/a	n/a			53.7
Share price			-11.0		-6.3		-7.3	31.9			65.8
Benchmark*			-6.8		-4.6		-6.6	23.4			39.8
Sources: BlackRock and Datastream #Prior to dilution arising on conversion of subscription shares. *With effect from 1 December 2013 the Numis Smaller Companies excluding AIM (excluding investment companies) Index replaced the Numis Smaller Companies plus AIM (excluding investment companies) Index as the Company’s benchmark. The five year period indices have been blended to reflect this.
At month end
Net asset value capital only:									347.75p
Net asset value incl. income:									352.53p
Share price									295.50p
Discount to cum income NAV									16.2%
Net yield									2.3%*
Total Gross assets									£257.8m**
Net market exposure as a % of net asset value^									103.5%
Ordinary shares in issue:									73,130,326***
2015 ongoing charges (excluding performance fees):									1.1%****
2015 ongoing charges ratio (including performance fees):									2.3%
* Calculated using prior year interim and final dividends paid. ** Includes current year revenue and excludes the gross exposure through contracts for difference. *** Excluding 7,400,000 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 30 November 2015. ^Long positions less short positions as a percentage of net asset value.
Sector Weightings				% of Total Assets
Industrials				27.1
Consumer Services				21.1
Financials				16.3
Consumer Goods				8.5
Health Care				7.9
Technology				7.7
Basic Materials				5.2
Oil & Gas				2.2
Net current assets				4.0
				-----
Total				100.0
				=====
Market Exposure (Quarterly)
	31.08.15	30.11.15				29.02.16				31.05.16
	%	%				%				%
Long	115.2	115.2				118.2				114.4
Short	9.0	9.2				11.2				8.3
Gross exposure	124.2	124.4				129.4				122.7
Net exposure	106.2	106.0				107.0				106.1
Ten Largest Investments
Company				% of Total Gross Assets
4imprint Group				2.6
CVS Group				2.4
Dechra Pharmaceuticals				2.1
Avon Rubber				1.9
Workspace Group				1.7
JD Sports				1.6
Hill & Smith				1.6
Fevertree Drinks				1.6
GB Group				1.5
Headlam Group				1.5
Commenting on the markets, Mike Prentis and Dan Whitestone, representing the Investment Manager noted: Stockmarkets have continued to be volatile and difficult. Until the last minute it looked as though the UK referendum was likely to decide in favour of Remain. The decision to vote to Leave was followed by a violent sell off of stocks most particularly UK consumer cyclicals and real estate stocks. We have been overweight in these areas although less so than earlier in the year. The impact on performance has been significantly negative. The FTSE100 has substantially outperformed on the back of higher exposure to international earnings. During June the Company’s NAV per share fell by 10.3% on a cum income basis whilst our benchmark index fell by 6.8%; the FTSE 100 Index rose by 4.7%. Stock selection, sector allocation and the CFD portfolio all negatively impacted on relative performance during the month. The long only portfolio fell in value by 9.6%, underperforming the benchmark by 3.9%, whilst the CFD portfolio detracted 0.77% from the NAV during the month, both pre-costs of managing the Company. Within the long only portfolio stock selection our holdings in Topps Tiles, Grafton, Workspace, Virgin Money, Lookers and Marshalls all feature amongst our top detractors. Each company is largely UK exposed and cyclical and sold off on the back of post BREXIT recession fears. Each of these stocks saw share price falls of 20% to 33% during the month and in aggregate these stocks detracted 1.6% from relative performance. We have had trading updates from holdings in Grafton, Topps Tiles and Headlam since the month end and these indicate that while trading during the second quarter is satisfactory, sales weakened towards the quarter end. The market is anticipating tougher times ahead for UK consumer cyclical stocks. We also suffered from being underweight the mining sector; not holding stocks such as Evraz and Centamin detracted a further 0.6% from relative performance. Post the referendum result we took the view that a mild recession in the UK looked like a realistic possibility. We decided to raise some cash in the long only portfolio taking cash to 4% of assets. This was achieved by the reduction of some holdings with significant UK consumer cyclical exposure, some with high European exposure which had held up well in share price terms, and a few other holdings where our conviction had been weakening. Turning to the CFD portfolio, June’s return of -0.77% is clearly something we are disappointed with, as we effectively gave back the strong returns generated in the previous month.  The negative performance was driven by the long book which detracted 1.34% principally related to Brexit.  However, it should be noted that June was unfortunately shaping up to be a tough month regardless of Brexit due to 2 stock specific issues in the short book that saw aggressive share price appreciation, as well as a long position – Photo-Me – that saw its shares punished in response to a modest downgrade to a non-core part of its business. Brexit only made things tougher. Although we had recently reduced the risk levels in the CFD portfolio, Brexit was clearly negative for the portfolio’s positioning. The extreme moves that we have seen show the high levels of uncertainty, with a circa 15% correction in small and mid-cap indices in the first 2 days following the vote. We are rapidly adjusting to this new environment, but we were (and are) inclined to view this more as a political crisis rather than a financial crisis, therefore we hope that that the swift resolution to the Conservative Party’s Leadership race will herald a period of greater political and economic clarity. Whilst the outlook is uncertain, we are optimistic as new opportunities continue to emerge, and the long book is built around companies that are defensive in nature, or exposed to secular trends that should triumph over macro. We’ve reduced the gross and net exposure of the portfolio to preserve capital until we have greater certainty, but we are still active in taking advantage of some of valuation opportunities, for instance increasing our holding in MicroFocus (International Technology), Dignity (UK Funeral homes), Dechra (International veterinary pharma).  We’ve had to pedal quite hard on the short book, reducing our exposure to exporters where Sterling weakness will improve their competitive position, whilst adding to shorts in areas that we think will be under further pressure going forward and where the shares are yet to reflect this.  19 July 2016 ENDS Latest information is available by typing www.blackrock.co.uk/thrg 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.