Portfolio Update

The information contained in this release was correct as at 31 March 2021.  Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at:

https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. 

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 31 March 2021 and unaudited.
Performance at month end is calculated on a cum income basis

	One Month %	Three months %	One year %	Three years %	Five years %
Net asset value	4.0	6.7	76.1	50.4	125.0
Share price	4.6	5.6	75.6	75.4	177.0
Benchmark*	4.3	9.9	71.3	26.2	57.4

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:	785.94p
Net asset value incl. income:	788.68p
Share price	800.00p
Premium to cum income NAV	1.4%
Net yield1:	1.3%
Total Gross assets2:	£722.7m
Net market exposure as a % of net asset value3:	123.2%
Ordinary shares in issue4:	91,629,137
2020 ongoing charges (excluding performance fees)5,6:	0.60%
2020 ongoing charges ratio (including performance fees)5,6,7:	1.60%

1. Calculated using the 2020 interim dividend declared on 23 July 2020 and paid on 26 August 2020, together with the 2020 final dividend declared on 10 February 2021 and paid on 31 March 2021.

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 2020.

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	31.2
Consumer Services	21.4
Financials	16.4
Consumer Goods	11.5
Technology	8.0
Health Care	5.3
Telecommunications	3.5
Basic Materials	2.2
Consumer Discretionary	0.2
Net current assets	0.3
	-----
Total	100.0
	=====
Country Weightings	% of Total Assets
United Kingdom	89.6
United States	7.2
France	1.3
Australia	0.8
Denmark	0.6
Netherlands	0.4
Israel	0.1
	-----
Total	100.0
	=====

Market Exposure (Quarterly)
	31.05.20 %	31.08.20 %	30.11.20 %	28.02.21 %
Long	118.6	121.0	120.4	126.8
Short	2.1	2.4	1.9	1.5
Gross exposure	120.7	123.4	122.3	128.3
Net exposure	116.6	118.6	118.6	125.3

Ten Largest Investments
Company	% of Total Gross Assets
Electrocomponents	3.1
Gamma Communications	3.0
Games Workshop	2.8
YouGov	2.7
Watches of Switzerland	2.5
Moonpig Group	2.4
Impax Asset Management	2.3
Pets at Home	2.2
CVS Group	2.0
Dr Martens	2.0

Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:

During March the Company returned 4.0%¹, marginally trailing its benchmark, the Numis Smaller Companies plus AIM (excluding Investment Companies) Index, which returned 4.3%¹. The long book rose during the month but lagged the benchmark, while the short book modestly detracted which should be expected in light of the strong market movements (both on a gross basis).

March saw an extension of the theme from February, with markets continuing to rise and the shares in favour were generally those associated with “re-opening” or other companies and industries that had endured a difficult 2020. Conversely, “growth” shares tended to lag the market. This is not to say that they fell - in fact some rose to new highs by the end of March - but generally, they did lag behind re-opening shares. As with last month, we have continued to see strong trading updates from our long holdings and look forward to the first quarter reporting in April. Profits continue to move forward, and we expect share prices will follow. We have also started to see large equity raises from many re-opening companies, and we believe that the extra shares in issue caps the upside and limits our appetite to chase them.

Despite trailing the benchmark, the Company did not suffer any meaningful disappointments at the stock level and underperformance was more a result of broader market forces and of share price retrenchment, which we are convinced will be temporary given the strong underlying trading that many of these companies continue to report. Dr Martens gave back some share price gains after a very strong IPO (Initial Public Offering) in January, and Chegg, one of our US holdings which has traded exceptionally well over the past year, fell during the month despite the attractive runway for growth in online education that Chegg remains well set to monetise. XP Power also fell despite no negative newsflow, and subsequently (during April), the group provided a positive first quarter trading update which reaffirmed our confidence in the long-term prospects for this business.

On the positive side, Gamma Communications, a long-term holding which we have added to in recent months, reported results in March which were strong. Gamma continues to be at the forefront of the structural change within cloud communications-as-a-service in UK and is increasingly building its European presence where cloud penetration rates are even lower. We also saw very strong trading updates from Oxford Instruments and CVS Group which are all large holdings in the portfolio, and we are confident in the growth outlook for revenues and profits in both companies.

The discussion over interest rates and the recovery trade continued in March from where it left off in February, and our outlook remains unchanged. As mentioned last month, we continue to believe that higher interest rates won’t be an enduring phenomenon as any rise in inflation will be tolerated by central bankers, therefore we do not expect material rises in policy rates. Our main takeaway from March is that the increased number of equity issues among recovery names speaks to the fact that debts have substantially increased over 2020. Since equity issuance is now being used to pay down this debt it is best to avoid looking at the 2019 share price as a target because there are likely to be many more shares in issue in 2021 than 2019. Meanwhile, many cash generative and growing companies continue to trade well, often beating and “raising their forecasts”, and in some cases shrinking their share count. Most importantly, we have been impressed by the strength in trading in many of our core holdings, as highlighted above.

We continue to believe the Company remains in great shape and we are very positive on the prospects for our holdings in the long book. We remain extremely positive on the opportunity set for the Company and this is reflected in our net exposure which is now c.120%. We thank shareholders for their support.

¹Source: BlackRock as at 31 March 2021

27 April 2021

ENDS

Latest information is available by typing www.blackrock.com/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.