REG-BlackRock Greater Europe Investment Trust Plc: Portfolio Update

Blackrock Greater Europe Investment TrustAnnouncement

Thu 16:00

The information contained in this release was correct as at 31 August 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 August 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)  -2.3%      -3.0%         -6.1%     30.3%        742.8%              
 Share price                  -2.4%      -1.6%         -3.9%     29.9%        714.0%              
 FTSE World Europe ex UK      1.2%       3.3%          10.9%     48.8%        522.5%              

Sources: BlackRock and Datastream
 

 

At month end

 Net asset value (capital only):      592.71p     
 Net asset value (including income):  598.08p     
 Share price:                         570.00p     
 Discount to NAV (including income):  4.7%        
 Net cash:                            0.3%        
 Net yield 1 :                        1.2%        
 Total assets (including income):     £569.1m     
 Ordinary shares in issue 2 :         95,155,422  
 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 22,773,516 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             37.6              
 Technology              18.6              
 Consumer Discretionary  14.3              
 Financials              12.5              
 Health Care             7.5               
 Basic Materials         5.8               
 Real Estate             0.4               
 Net Current Assets      3.3               
                         -----             
                         100.0             
                         =====             
                                           
                                             
 Country Analysis        Total Assets (%)  
 France                  19.5              
 Switzerland             15.5              
 Germany                 13.0              
 Netherlands             12.5              
 Ireland                 5.7               
 Italy                   4.8               
 Belgium                 4.3               
 United States           4.3               
 United Kingdom          3.8               
 Finland                 3.3               
 Sweden                  2.8               
 Denmark                 2.7               
 Norway                  2.3               
 Spain                   2.2               
 Net Current Assets      3.3               
                         -----             
                         100.0             
                                           
                                           

 


 

 Top 10 holdings                  Country        Fund %  
 Safran                           France         7.9     
 Ferrari                          Italy          4.9     
 Hermès                           France         4.8     
 Belimo                           Switzerland    4.8     
 Schneider Electric               France         4.6     
 SAP                              Germany        4.6     
 KBC Groep                        Belgium        4.4     
 Linde                            United States  4.4     
 Compagnie Financière Richemont   Switzerland    4.4     
 Lonza Group                      Switzerland    4.3     
                                                         

 

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

 

During the month, the Company’s NAV declined by 2.3% and the share price by
2.4%. For reference, the FTSE World Europe ex UK Index returned +1.2% during
the period.

 

August was characterised by a reversal where sectors and industries that had
done well through the July YTD period declined, while the year’s laggards
gained. Value continued to outperform growth by circa 1.6% over the month,
which was particularly detrimental to the Company’s quality growth
positioning. The market moved with severe share price reactions to even the
slightest concern within corporates.

 

Pressure was on consumers, defence, and information services and software
where fears around the impact of AI have been renewed. The moves witnessed
made little sense in the context of the bottom-up picture we see and we
anticipate a reset in time. There have been signs of a moderate slowdown in
the US economy, though it continues to outpace Europe which remains a mixed
picture. The US data has the potential to support rate cuts later in the year,
while Europe has seen encouraging acceleration in bank lending, a key leading
indicator for the region.

 

French politics grabbed headlines again with the Prime Minister calling for a
confidence vote in an attempt to gather support for a new budget. Opposition
parties were quick to say they will not support spending cuts necessary to
reign in the deficit, which leaves yet another French government in the
precarious position of collapsing. French equities sold off, though this was
not a big impact on the portfolio given limited domestic exposure.

 

Sector allocation effects were negative over the month, driven by the
portfolio’s overweight positioning to industrials and technology.

 

RELX, Nemetschek and SAP were amongst the top detractors as they were impacted
by the software sell off. Contrary to broad market concerns of AI disruption,
these companies all released solid Q2'25 results, delivering revenue in line
with, if not exceeded consensus expectations. Nemetschek, for example,
delivered 22% organic year-on-year revenue growth, 5% ahead of expectations,
and raised the full year revenue guidance range by 3% to 20-22%. These
impressive results were then followed by an almost 15% drawdown in August,
demonstrating the severe market reaction. When looking on a stock-by-stock
basis, we believe these businesses operate in niches AI would struggle to
disrupt. Nemetschek's software is critical for safe structural design and
SAP's Enterprise Resource Planning services are paramount for the smooth
running of business operations; replacing these systems with AI would be too
high risk. AI would also not be able to replicate the breadth, depth and
quality of RELX's proprietary data. In the long term we see the investment
thesis for these companies as unchanged.

 

Shares in Schneider Electric fell as H1’25 earnings suffered from price
versus cost timing effects, resulting in a lower margin print than expected.
We remain confident in the medium-term outlook for the business and the recent
pull back, putting shares at a discount to peers, creates an interesting
investment opportunity from here.

 

Novo Nordisk detracted from relative performance as shares rebounded after we
exited the position at the start of the month. This was due to US competitor
Eli Lilly's oral weight loss drug, Orforglipron, delivering 12.4% weight loss
in phase three trials, less than the market's 15% expectations. This has given
Novo some relief in the oral weight loss market, but this does not change our
view that expectations for Novo remain too high, with data still lacklustre.

 

Adyen shares fell after providing an H1 update where results were
satisfactory; however, management pointed to macro weakness as a reason they
no longer see ‘accelerating’ growth, effectively lowering the FY25 topline
guide. Digging into the details, the pressure is coming from a handful of
Asian-headquartered companies rather than a broad slowdown across clients.
Their CFO confirmed expectations for growth to pick up in 2026 with
opportunity to gain wallet share with existing customers, in addition to new
customer acquisition.

 

Shares in Ferrari rebounded as the market digested poor communication by
management in the Q2’25 conference call. Comments regarding reduced
deliveries to prioritise revenue quality were initially taken as demand
concerns; however, the company has since clarified that this was not a signal
of changing consumer behaviour and instead is part of their model phasing
strategy. Management has reiterated their strong order book, providing
coverage to 2027 and a backlog in Asia reaching record highs, demonstrating
that they are far from any demand issues.

 

Outlook

 

We are hopeful that the tariff agreement between the US and Europe gives
companies the chance to move on from the uncertainty expressed in H1’25 and
continue to believe the real-world impact will be manageable and that
companies will look to share costs throughout the value chains and
geographies. Many of the global companies we own have weathered considerable
challenges since the onset of the pandemic — most notably extended
supply-chain disruptions — and are in many cases better equipped to navigate
today’s complex environment. Meanwhile, we continue to see a resilient
bottom-up picture which should support a change in market drivers in time once
uncertainties clear.

 

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 September 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.



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