REG-BlackRock Greater Europe Investment Trust Plc: Portfolio Update

Blackrock Greater Europe Investment TrustAnnouncement

Yesterday 15:15

The information contained in this release was correct as at 30 June 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 30 June 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)  1.4%       9.0%          -3.5%     40.7%        780.8%              
 Share price                  2.4%       10.6%         -2.2%     43.8%        746.8%              
 FTSE World Europe ex UK      0.7%       6.1%          9.9%      49.1%        506.9%              

Sources: BlackRock and Datastream
 

 

At month end

 Net asset value (capital only):      620.14p     
 Net asset value (including income):  625.09p     
 Share price:                         593.00p     
 Discount to NAV (including income):  5.1%        
 Net gearing:                         2.2%        
 Net yield 1 :                        1.2%        
 Total assets (including income):     £597.7m     
 Ordinary shares in issue 2 :         95,618,569  
 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 22,310,369 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             34.7              
 Consumer Discretionary  20.5              
 Technology              15.2              
 Health Care             10.6              
 Financials              9.9               
 Basic Materials         8.3               
 Real Estate             0.4               
 Net Current Assets      0.4               
                         -----             
                         100.0             
                         =====             
                                           
                                           
                                           
                                           
                                           
                                           
                                           
                                           
                                             
 Country Analysis        Total Assets (%)  
 France                  18.4              
 Switzerland             14.3              
 Netherlands             13.0              
 Germany                 12.8              
 United Kingdom          6.6               
 Denmark                 6.2               
 Ireland                 5.4               
 Italy                   4.5               
 Sweden                  4.2               
 United States           3.9               
 Finland                 3.2               
 Belgium                 2.7               
 Norway                  2.7               
 Spain                   1.7               
 Net Current Assets      0.4               
                         -----             
                         100.0             
                         =====             
                                           

 


 

 Top 10 holdings                  Country         Fund %  
 Safran                           France          6.9     
 RELX                             United Kingdom  6.6     
 Hermès                           France          4.7     
 SAP                              Germany         4.5     
 Ferrari                          Italy           4.5     
 Schneider Electric               France          4.4     
 Compagnie Financiére Richemont   Switzerland     4.2     
 Adyen                            Netherlands     4.0     
 Belimo                           Switzerland     3.9     
 Linde                            United States   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 1.4% and the share price rose by
2.4%. For reference, in local currency terms, the Europe ex UK market declined
by 1.1% (in EUR); however, a weakening GBP created an FX tailwind, resulting
in a +0.6% gain (in GBP).

 

The European market has become increasingly narrow this year, with few sectors
seeing earnings upgrades. Near-term earnings revisions have gravitated towards
downgrades, particularly in consumer goods, areas of industrial production and
where the FX headwinds of a weaker US Dollar are apparent. The same has been
true in global equity markets. While pockets of weakness exist, global growth
continues to grind ahead as spending on both sides of the Atlantic has been
resilient and hard data readings are admittedly unexciting, yet still positive
in a small way.

 

The Company’s sector allocation provided positive attribution, driven by an
overweight positioning to industrials, in particular the aerospace and defence
industry. Underweight positioning to consumer staples also contributed
positively as concerns regarding consumer weakness remained an overhang. For
this reason, an overweight position to consumer discretionary was a drag. An
underweight position to energy also detracted as increased geopolitical risk
drove oil prices higher, benefiting the sector.

 

Holdings in semiconductor companies, such as ASMi and BE Semiconductor, were
amongst the top contributors as sentiment around the AI theme improved. BE
Semiconductor also released encouraging long-term targets for revenue, gross
profit and operating margin. Whilst the company is not yet seeing any
reacceleration in end market activity, we believe they are well placed for the
next semiconductor cycle, especially due to their strong focus on gross margin
expansion driven by a mix of new hybrid bonding and thermo-compression bonding
tools and further cost efficiencies.

 

Shares in Chemometec rose in anticipation of a strong trading update.
Preliminary revenue figures of DKK496m for the 2024/25 financial year equates
to over 20% year-on-year revenue growth. These results also indicate the
company's high potential to beat margin expectation once the full financial
figures are reported.

 

Holdings in aerospace companies - MTU and Safran - were also amongst the top
contributors as the firms communicated bullish messages regarding civil aero
aftermarket trends at the Paris Air Show. Shares in MTU performed particularly
well as the company raised 2025 guidance reflecting their stronger organic
growth prospects, particularly in their Spare Parts division.

 

Kongsberg also contributed positively to active returns as defence companies
benefited from news flow coming from the 2025 NATO Summit which took place
this month and exceeded market expectations. NATO allies have agreed to spend
5% of GDP on defence and related infrastructure and security by 2035,
equalling a $371bn incremental spend on core defence over the next 10 years if
the target is met. This has further underpinned our belief that the defence
industry is well set to outperform the market on a multiple year basis.
Although shares have re-rated significantly since the start of the year, we
believe they are not yet close to pricing in the real outer-years’ impact of
the fiscal stimulus to come.

 

Shares in Adyen and Mastercard declined due to concerns surrounding stablecoin
and its potential impact on the payments industry. This is not the first time
the status quo of global payments has been challenged. However, we have yet to
see significant disruption to the industry and such predictions tend to under
appreciate the services and extent to which current providers are embedded in
global payments systems. Our alternative data sources indicate Adyen continues
to take market share, driven by their best in class tech and innovative
offerings.

 

Concerns regarding the consumer discretionary sector meant the Company's
holdings in luxury goods companies - Hermés and Richemont - detracted over
the month. Lower levels of tourism from the US to Europe due to the weakening
US dollar disadvantaged the industry and contributed to softer spending data.

 

A holding in Thales pulled back this month after a period of strong
performance. The management team noted caution around expectations for French
defense spending as the precarious state of the national budget means
immediate capital availability may be limited. This does not impact our
long-term investment thesis as the company still offers an attractive
double-digit earnings growth prospect with a strong backlog to underpin
revenue growth in the medium term.

 

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, such as fiscal policy change,
that the European equity strength 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 levels of uncertainty eventually decrease, we see
the potential for the earnings cycle to turn leading to a broader European
market rally.

 

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.

 

ENDS

 

15 July 2025

 

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/22396/4207323/3581483.pdf)  



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