REG-BlackRock Greater Europe Investment Trust Plc: Portfolio Update

Blackrock Greater Europe Investment TrustAnnouncement

18/06/2025 11:00

The information contained in this release was correct as at 31 May 2025.
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 GREATER EUROPE INVESTMENT TRUST PLC (LEI - 5493003R8FJ6I76ZUW55)

All information is at 31 May 2025 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)  6.0%       -3.3%         -4.2%     28.4%        768.5%              
 Share price                  5.2%       -2.6%         -5.9%     30.0%        726.8%              
 FTSE World Europe ex UK      3.9%       2.7%          7.4%      37.6%        502.9%              

Sources: BlackRock and Datastream
 

 

At month end

 Net asset value (capital only):      611.33p     
 Net asset value (including income):  616.32p     
 Share price:                         579.00p     
 Discount to NAV (including income):  6.1%        
 Net gearing:                         2.6%        
 Net yield 1 :                        1.2%        
 Total assets (including income):     £590.9m     
 Ordinary shares in issue 2 :         95,878,900  
 Ongoing charges 3 :                  0.95%       

 

1  Based on a final dividend of 5.25p per share for the year ended 31 August
2024 and an interim dividend of 1.75p per share for the year ending 31 August
2025.

2  Excluding 22,050,038 shares held in treasury.
3  The Company’s ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other operating expenses
excluding finance costs, direct transaction costs, custody transaction
charges, VAT recovered, taxation, write back of prior year expenses and
certain non-recurring items for the year ended 31 August 2024.

 

                         
 Sector Analysis         Total Assets (%)  
 Industrials             36.6              
 Consumer Discretionary  20.8              
 Technology              13.6              
 Health Care             10.4              
 Financials              10.3              
 Basic Materials         6.3               
 Real Estate             1.0               
 Net Current Assets      1.0               
                         -----             
                         100.0             
                         =====             
                                           
                                           
                                           
                                           
                                           
                                           
                                           
                                           
                                             
 Country Analysis        Total Assets (%)  
 France                  18.0              
 Switzerland             14.8              
 Germany                 12.5              
 Netherlands             12.4              
 United Kingdom          6.7               
 Denmark                 6.0               
 Ireland                 5.4               
 Sweden                  5.0               
 Italy                   4.5               
 United States           3.8               
 Finland                 3.1               
 Belgium                 2.6               
 Norway                  2.5               
 Spain                   1.7               
 Net Current Assets      1.0               
                         -----             
                         100.0             
                         =====             
                                           


 Top 10 holdings                  Country         Fund %  
 RELX                             United Kingdom  6.8     
 Safran                           France          6.4     
 Hermès                           France          4.9     
 SAP                              Germany         4.6     
 Ferrari                          Italy           4.5     
 Adyen                            Netherlands     4.3     
 Compagnie Financière Richemont   Switzerland     4.3     
 Schneider Electric               France          4.3     
 Linde                            United States   3.9     
 Belimo                           Switzerland     3.8     
                                                          

 

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

 

During the month, the Company’s NAV rose by 6.0% and the share price by
5.2%. For reference, the FTSE World Europe ex UK Index returned +3.9% during
the period.

 

European equities gained in May driven by risk-on sentiment as investors got
the first glimpse of hard-data post the US’ liberation day tariffs. Economic
activity and labour markets are holding up better than expected after soft
data had caused concerns in recent months. Further de-escalations in trade
policy – including a reduction in US/China tariffs and a deal made between
the US and UK – also contributed to a more benign backdrop for now. We
remain cognisant, however, that the original 90-day pause expires in July
which has the potential to bring additional market noise in the weeks ahead.

 

Allocation effects were positive in May driven by the Company’s overweight
to more cyclical sectors, such as industrials and technology, and underweight
to defensives such as health care, consumer staples and utilities.

 

A position in Adyen contributed positively to outperformance. Q1’25 results
were solid with the value-add the business provides its customers on display
as they continued to grow despite what management recognise as a macroeconomic
backdrop becoming more uncertain.

 

Positions in Safran and MTU bounced in May. Despite the International Air
Transport Association reducing air traffic estimates in the US, estimates for
growth in the rest of the world remain intact, providing reassurance that the
end markets for these companies remain healthy.

 

Shares in Belimo continued to rally after strong earnings results and a
guidance upgrade was raised in late April. The company is well positioned to
continue outpacing the wider heating, ventilation and air conditioning (HVAC)
industry, as well as benefiting from indications that hyperscalers would
continue to increase spending on AI projects. This improved sentiment to the
semiconductor industry also contributed to a positive share price performance
for ASMi, BE Semiconductor and Schneider Electric.

 

The Company's holdings in banks, AIB and KBC, were amongst the top
contributors. Momentum in the shares continued as Q1'25 earnings results
remained robust, despite rates being cut. In particular, net interest income
(NII) showed resilience and there was no deterioration in asset quality.

 

The portfolio’s more defensive businesses, such as RELX, trailed the
market’s risk-on rally. A holding in Lonza also suffered with the rest of
the pharma industry, as it awaits news on sector specific US trade policy. We
believe that, despite the uncertainty in the final impact on the industry,
Lonza is well positioned to navigate through this uncertain backdrop, not
least with the Vacaville acquisition that gives them 50% capacity in the US in
their key biologics division. Their qualitative trading update in May suggests
that the underlying businesses continue to perform well.

 

Shares in Swedish real estate platform Hemnet fell over the month. The company
is in the process of premiumising their product offering, however limited
guidance from the company has meant near-term expectations for the conversion
rate to these new packages have outpaced reality. Hemnet maintains a vast
majority share of the Swedish real estate market due to their unique business
model, however we have reduced positions in the interim as expectations
normalise.

 

A holding in Rational detracted as the market reacted poorly to Q1’25
results, despite limited negative news flow. The share price reaction is
likely linked to the uncertainty which remains around tariffs and their
potential impact on the German kitchen equipment manufacturer.

 

Not holding Rheinmetall also detracted with shares rebounding from recent
pullbacks.

 

Outlook

 

While near-term uncertainty has increased, we continue to see a resilient
bottom-up picture of both consumers and corporates. In our home market, Europe
is going through a renaissance moment, introducing potential for change with
lasting impact to corporate earnings. We are focused on analysing change as it
relates to positioning the portfolio for the duration earnings-streams we see
likely to be supported for years and decades to come. We believe with some of
the significant changes going on in the market – fiscal policy change and
earnings cycles turning – that the European equity rally can continue,
although given the geopolitical backdrop this is unlikely to be a straight
path. We would expect the shape of market drivers to change in time, with
earnings becoming a larger determinant of returns as the narrow areas that
have been bid up run out of steam.

 

Historically, Europe has been home to many world-class franchises that earn
profits globally, including from the US and China. This remains true, but now
there is a stronger domestic earnings contribution driven by an improved
outlook for the continent. There is potential recovery within rate-sensitive
sectors such as construction, as Europe is currently in a rate-cutting cycle.
Economic strength in Europe has been evident in the periphery—Spain and
Italy, but now there is change in key countries like Germany with a new
government forming and releasing fiscal constraints to stimulate the economy.

 

While the geopolitical landscape is challenging to navigate, especially with
US policy keeping investors on their toes, focusing on changing earnings
streams can help deliver strong long-term outcomes for investors. Overall, we
retain our core exposure to companies with predictable business models, higher
than average returns on capital, strong cash flow conversions and
opportunities to reinvest that cash flow into future growth projects at high
incremental returns.

 

18 June 2025

 

ENDS

 

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

 Release (https://mb.cision.com/Main/22396/4165910/3512851.pdf)  



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