REG-BlackRock Income and Growth Investment Trust Plc: Portfolio Update

Blackrock Income and Growth Investment TrustAnnouncement

13/08/2025 16:00

The information contained in this release was correct as at 31 July 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 INCOME & GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16)

All information is at 31 July 2025 and unaudited.

 

Performance at month end with net income reinvested

 

                              One Month  Three Months  One Year  Three Years  Five Years  Since 1 April 2012  
 Sterling                                                                                                     
 Share price                  4.1%       5.9%          7.8%      18.4%        63.9%       155.4%              
 Net asset value              2.8%       6.4%          5.7%      28.6%        66.4%       158.5%              
 FTSE All-Share Total Return  4.0%       8.8%          12.1%     35.0%        80.4%       166.9%              
                                                                                                              
 Source: BlackRock                                                                                            

 

BlackRock took over the investment management of the Company with effect from
1 April 2012.

 

At month end

Sterling:

 Net asset value - capital only:        231.22p     
 Net asset value - cum income*:         234.16p     
 Share price:                           207.00p     
 Total assets (including income):       £60.0m      
 Discount to cum-income NAV:            11.6%       
 Gearing:                               6.2%        
 Net yield**:                           3.7%        
 Ordinary shares in issue***:           19,216,610  
 Gearing range (as a % of net assets):  0-20%       
 Ongoing charges****:                   1.15%       
 * Includes net revenue of 2.94 pence per share     
 ** The Company's yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.7% and includes the 2024 final dividend of 4.90p per share declared on 07 January 2025 with pay date 14 March 2025 and the Interim Dividend of 2.70p per share declared on 19 June 2025 with pay date 02 September 2025. 
 *** excludes 10,081,532 shares held in treasury.   
 **** The Company's ongoing charges are calculated as a percentage of average daily net assets and using management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for the year ended 31 October 2024. In addition, the Company's Manager has also agreed to cap ongoing charges by rebating a portion of the management fee to the extent that the Company's ongoing charges exceed 1.15% of 
 average net assets.                                

 

 Sector Analysis                      Total assets (%)  
 Banks                                10.2              
 Nonequity Investment Instruments     8.4               
 Pharmaceuticals & Biotechnology      7.9               
 Support Services                     6.9               
 Financial Services                   6.3               
 Oil & Gas Producers                  5.6               
 General Retailers                    5.5               
 Software & Computer Services         5.4               
 Nonlife Insurance                    4.5               
 Tobacco                              4.2               
 Real Estate Investment Trusts        4.1               
 Mining                               3.7               
 Aerospace & Defence                  3.4               
 Household Goods & Home Construction  3.3               
 Personal Goods                       3.1               
 Travel & Leisure                     2.6               
 Industrial Engineering               2.5               
 Life Insurance                       2.1               
 Food Producers                       1.4               
 Electronic & Electrical Equipment    1.1               
 General Industrials                  0.9               
 Beverages                            0.6               
 Net Current Assets                   6.3               
                                      -----             
 Total                                100.0             
                                      =====             
 Country Analysis                     Percentage        
 United Kingdom                       90.6              
 United States                        3.1               
 Net Current Assets                   6.3               
                                      -----             
                                      100.0             
                                                        
 Top 10 Holdings                      Fund %            
 AstraZeneca                          7.6               
 RELX                                 5.8               
 British American Tobacco             4.5               
 Shell                                4.4               
 3i Group                             3.8               
 Standard Chartered                   3.6               
 Lloyds Banking Group                 3.5               
 Unilever                             3.3               
 London Stock Exchange Group          3.2               
 HSBC Holdings                        2.8               
                                                        
                                                        
                                                        

Commenting on the markets, representing the Investment Manager noted:

 

Market Summary:

Markets extended their rally into July, with major indices in the U.S. and UK
reaching new highs. The Trump administration's rollout of multiple trade
agreements and the passage of the One Big Beautiful Bill Act provided policy
clarity and lifted investor sentiment. Still, the long-term effects of renewed
reciprocal tariffs remain uncertain.

 

Early in the month, a rotation into value sectors-energy, banks, and
small-caps-briefly disrupted tech leadership amid a global momentum unwind and
broad de-grossing. By month-end, large caps reclaimed dominance as the Federal
Reserve held rates steady and tech earnings impressed, propelling cyclicals
ahead of defensives. The S&P 500 rose by 2.2%, while the Nasdaq outperformed,
driven by stellar results from mega-cap tech, notably Nvidia and Microsoft,
both surpassing the $4 trillion market cap threshold.

 

Globally, trade optimism buoyed sentiment. The U.S. finalized deals with
Japan, Indonesia, and the Philippines, and advanced negotiations with the EU
to avoid a 30% tariff. China's Shanghai Composite also surged on hopes of
renewed U.S.-China cooperation.

 

In Europe, the ECB opted to maintain the policy rate at 2%, offering a
modestly upbeat assessment of the euro zone economy. In the U.S., strong Q2
earnings and a better-than-expected June jobs report reinforced the
soft-landing narrative. Equities dipped briefly following Trump's tariff
threats targeting 14 countries but rebounded swiftly after the passage of the
fiscal bill. Inflation and deficit concerns resurfaced, and the Fed maintained
its policy rate, citing uncertainty around future tariff impacts.

 

In the UK, political tensions over welfare reforms triggered a government
U-turn, raising concerns about fiscal headroom. The Office for Budget
Responsibility flagged growth risks ahead of the autumn budget, and the
Chancellor signalled potential tax hikes to address the widening fiscal gap.
Weak retail sales and a second consecutive GDP contraction in May heightened
expectations for a Bank of England rate cut in August, as the Monetary Policy
Committee advocated for faster easing. UK equities benefited from global
rotation out of U.S. assets through the month amid tariff tensions and policy
risks. The FTSE All-Share returned  4.0% and the FTSE 100 4.3%, led by
energy, financials, health care and mining stocks as investors sought safe
havens.

 

A second wave of de-grossing hit quant funds late in the month, particularly
those tied to crowded trades. Despite significant underperformance during the
unwind, performance rebounded in the final week as short alpha improved.
Across the board, U.S., European, and UK equities closed the month higher,
reaffirming Big Tech's dominance.

 

 

Stock comments

 

Detractors for the month were primarily due to broader market concerns around
the future of AI and some broader macro concerns, notably, pressure on UK
domestic earnings. Both Bellway, the housebuilder and Great Portland, the
property company, underperformed during the month as concerns over the fiscal
deficit continued to pressure government bonds. The U-turn over welfare reform
again brought growth concerns to the table as it is expected that the prospect
of further tax rises in the Autumn budget would be dilutive to economic
growth. Although both Bellway and Great Portland have delivered upgrades this
year, the low confidence in the prospects for the domestic UK economy continue
to depress both corporates.

 

Elsewhere, both London Stock Exchange and RELX were modestly affected by
concerns over potential negative impacts from AI initiatives led by start-ups.
Whilst we believe concerns are over-blown, we recognise the potential risks to
a company's valuation should these risks materialise. The risk of dislocation
and disintermediation from AI has been a feature since 2023 with the market
increasingly polarised between `winners' and `losers. We continue to monitor
this risk through corporate engagement, assessing the strength and depth of
the companies' investments and closely monitoring the competitor landscape.

 

The portfolio benefitted from strong interim results statements from several
holdings. Standard Chartered contributed positively as 1H results were again
ahead of expectations, with revenue, earnings and cash flow growing strongly.
This allowed the company to announce a further $1.3bn buyback as they look to
hit their target of returning $8bn by 2026.  Similarly, alternatives asset
manager Intermediate Capital Group also had strong results with larger than
expected commitments to its Infrastructure fund. Alongside a faster
fundraising environment in Europe, this supported substantial further upgrades
to earnings. Reckitt Benckiser also contributed positively during the month.
Interim results showed better signs of execution breaking a frustrating trend
which had seen some underperformance. The company, which has been undergoing a
turnaround under new management, were able to beat expectations and raise
guidance for the full year. Whilst early days, we see this as an important
step in recovering its credibility.

 

Finally, British American Tobacco continued to contribute positively through
the month following a pre- close statement which saw guidance raised modestly.
Execution has continued to improve over the past 18 months, with signs that
recent innovation has begun to impact the revenue base more materially,
particularly in non-combustibles. The journey away from traditional
combustibles has had a number of false starts but recent evidence has been
more encouraging, and this has led to very strong year to date share price
performance. 

 

 

Changes

 

During the period we sold Hays and Big Yellow. These changes partially reflect
a further reduction in UK domestic exposure whilst the exit of Hays recognises
a depressed employment landscape which is unlikely to improve.

 

Outlook

 

The outlook for investment markets continues to be driven by a complex
interplay of elevated geopolitical uncertainty, easing monetary policy and
resilient demand. 1H25 saw global markets fall sharply as tariffs were
threatened only to be followed by an impressive recovery as proposed tariff
levels were lowered and their implementation delayed. However, tariffs remain
a key source of market volatility with the potential for outsized impacts on
specific industries and companies. Expectations of Fed rate cuts have
consistently been pushed out this year with two cuts now expected in 2H25. US
President Trump's deliberate unpredictability, whether tariff related or more
generally, suggests volatility in both equity and bond markets is likely to
remain elevated. These factors have also driven weakness in the US Dollar
impacting companies with USD earnings. Our response is to focus on those
companies that have strong and sustainable competitive advantages alongside
sufficient pricing power to navigate these uncertain times while seeking
opportunities that may result from elevated volatility in markets.

 

The outlook for Europe is buoyed by a combination of rate cuts by the ECB
(from 3.0% to 2.0%) and significant fiscal expansion from Germany with an
emphasis on defence and infrastructure spending. This has already led to the
significant outperformance of European defence exposed companies though the
question is whether this spend stimulates economic activity more broadly in
Germany and then Europe as a whole. In our conversations with corporates,
those exposed to highlighted industries, such as defence, are very optimistic,
yet the outlook more generally suggests stabilisation rather than anything
more for now. Meanwhile, China continues to fight weak domestic demand and
deflationary pressures with a broad range of fiscal and monetary tools with
limited success to date; the uncertainty created by US tariffs clearly
hampering their efforts.

 

In the UK, the Labour government seeks to thread the needle of stimulating
growth while preserving fiscal credibility and adhering to its election
pledges, a challenge not helped by external pressures such as US tariffs.
Meanwhile, UK savings rates remain elevated and real wages continue to grow
highlighting the potential for UK economic recovery when consumer and business
confidence improves. As of August 2025, the Bank of England has cut interest
rates three times already this year, bringing the base rate down from 4.75% to
4.00% crucially leading to an improvement in both the cost and availability of
key banking products such as mortgages. With a further reduction in rates
expected during 2H25, we see the potential for increased economic activity to
follow.

 

The UK stock market remains very depressed in valuation terms relative to
other developed markets offering double-digit discounts across a range of
valuation metrics. This valuation anomaly saw further reactions from UK
corporates who continue to use excess cashflows to fund buybacks. Combining
this with a dividend yield of 3.5% (FTSE All Share Index yield as at 30th June
2025; source: FT), the cash return of the UK market is attractive in absolute
terms and higher than other developed markets. This valuation anomaly has also
been evidenced by the continuation of inbound M&A for UK listed companies.
Although we anticipate further volatility ahead, we believe that risk appetite
will return and opportunities are emerging.

 

We continue to focus the portfolio on cash generative businesses that we
believe offer durable, competitive advantages as we believe these companies
are best placed to drive returns over the long term. Whilst we anticipate
economic and market volatility will persist throughout the year, we are
excited by the opportunities this will likely create; by seeking to identify
the companies that strengthen their long-term prospects as well as attractive
turnaround situations.

 

 

13 August 2025

 

 



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