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

Blackrock Income and Growth Investment TrustAnnouncement

23/09/2025 10:45

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 INCOME & GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16)

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  Five Years  Since 1 April 2012  
 Sterling                                                                                                     
 Share price                  1.9%       4.3%          7.2%      22.0%        55.4%       160.4%              
 Net asset value              -0.7%      1.8%          4.8%      29.8%        61.2%       156.8%              
 FTSE All-Share Total Return  0.9%       5.4%          12.6%     38.6%        77.7%       169.4%              
                                                                                                              
 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:        228.45p     
 Net asset value - cum income*:         232.55p     
 Share price:                           211.00p     
 Total assets (including income):       £50.6m      
 Discount to cum-income NAV:            9.3%        
 Gearing:                               6.0%        
 Net yield**:                           3.6%        
 Ordinary shares in issue***:           19,164,110  
 Gearing range (as a % of net assets):  0-20%       
 Ongoing charges****:                   1.15%       
 * Includes net revenue of 4.10 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 3.6% 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                                10.6              
 Pharmaceuticals & Biotechnology      8.4               
 Support Services                     6.1               
 Nonequity Investment Instruments     6.0               
 Oil & Gas Producers                  5.8               
 Financial Services                   5.8               
 Software & Computer Services         5.1               
 Nonlife Insurance                    4.9               
 Mining                               4.6               
 Tobacco                              4.4               
 General Retailers                    4.1               
 Household Goods & Home Construction  3.9               
 Aerospace & Defence                  3.8               
 Personal Goods                       3.7               
 Real Estate Investment Trusts        3.4               
 Electronic & Electrical Equipment    2.8               
 Travel & Leisure                     2.5               
 Industrial Engineering               2.3               
 Life Insurance                       2.3               
 Food Producers                       1.4               
 General Industrials                  1.0               
 Beverages                            0.5               
 Net Current Assets                   6.6               
                                      -----             
 Total                                100.0             
                                      =====             
 Country Analysis                     Percentage        
 United Kingdom                       91.1              
 United States                        2.3               
 Net Current Assets                   6.6               
                                      -----             
                                      100.0             
                                                        
 Top 10 Holdings                      Fund %            
 AstraZeneca                          8.0               
 RELX                                 5.4               
 British American Tobacco             4.7               
 Shell                                4.5               
 Unilever                             4.0               
 Standard Chartered                   3.7               
 Lloyds Banking Group                 3.6               
 Rio Tinto                            3.4               
 Reckitt                              3.4               
 London Stock Exchange Group          3.2               
                                                        
                                                        
                                                        

Commenting on the markets, representing the Investment Manager noted:

 

Market Summary:

 

August delivered another strong month for global equities. The S&P
500 notched multiple record highs, extending its monthly winning streak with
a return of over 2% for the fourth consecutive month. The MSCI ACWI rose
by 2.5%, reflecting broad-based optimism across developed markets. Investor
sentiment was buoyed by the extension of US-China trade talks and inflation
data that increased expectations for a Federal Reserve rate cut in September.
However, optimism was tempered by a hotter-than-expected Producer Price Index
(PPI) and geopolitical tensions, notably the Trump-Putin summit, which
failed to produce a ceasefire in Ukraine.

 

The month began with a disappointing US July non-farm payrolls report,
showing job growth of just +73,000, alongside significant downward revisions
to prior months. The unemployment rate rose to 4.2%, although remains low
by historical standards. Bond markets responded with the 2-year Treasury
yield falling 20bps to 3.74% and the 10-year yield dropping 12bps to
4.24%. Political uncertainty intensified after the payrolls report,
as President Trump dismissed the head of the Bureau of Labour Statistics. The
market reaction was muted: long-end Treasury yields rose slightly, and the
dollar weakened. Despite this, equities remained resilient, led by mega-cap
tech stocks benefiting from secular AI growth. The earnings season was
robust, with 82% of S&P 500 companies beating (admittedly muted)
estimates. Housing stocks rallied mid-month, supported by improved rate cut
expectations, as global small-caps outperformed their large-cap counterparts.

 

In European markets, growth remained sluggish amid delays in the US-EU trade
deal, which weighed on equity performance. Banks outperformed given strong
results during the month. The European Central Bank (ECB) held rates steady
at 2%, following eight consecutive cuts as inflation is near target, but
policymakers remain open to further easing if growth deteriorates. Political
risk rose in France, where the Prime Minister called a vote of no
confidence (scheduled for 8 September) after failing to secure support for
budget cuts, triggering volatility in French markets.

 

In the UK, the FTSE All-Share underperformed global indices in August,
returning +0.92%, with domestic conditions remaining challenging. The Bank of
England cut the base rate -its fifth cut this year-as inflation hovered
around 3.8%. The decision was narrowly split (5-4), suggesting a more
cautious outlook for the rest of the year as expectations for a November rate
cut are cast in doubt. Unemployment edged up to 4.7%, while CPI remained
elevated. Stagflation concerns grew later in the month, as long-term UK
borrowing costs surged. The 30-year gilt yield hit 5.64%, its highest
since 1998, before easing to 5.6%. This rise, driven by global bond
pressures alongside domestic fiscal uncertainty, has increased scrutiny
on Chancellor Rachel Reeves ahead of the Autumn Budget.
Sector-wise, telecommunications and health care led returns,
while technology and consumer services lagged. Domestic and rate-sensitive
shares continue to struggle as expectations for interest rate cuts are pushed
to the right, particularly housebuilders and the related supply chain given
what this likely means for mortgage affordability and availability in the
near-term.

 

 

Stock comments

 

Detractors for the month were due to stock specific and macro factors,
including detractors around broader market concerns for the future of AI, and
ongoing pressure on UK domestic earnings. The top detractor was WH Smith,
which sold off following the announcement that the company has identified an
`overstatement' in trading EBIT of c.£30m in its North American division,
accounting for around half of the division's expected profitability. The
shares were down c.40% on the day, and we have subsequentially sold the
position.

 

RELX was the second largest detractor from performance over the month. RELX
was hit following a negative read across from Gartner, a research and advisory
firm, which was down as much as c.40% after the growth of its Research segment
slowed from 7% to 4%. Gartner cited weaker demand for IT advisory
subscriptions and tighter tech budgets amid macro / tariff uncertainty, which
hurt RELX's shares. We do not believe there is read across, and we view RELX
as a demonstrative beneficiary to AI - it is seeing more efficient and faster
product development, and the organic growth of Legal & STM is already
accelerating. This was highlighted in the most recent interim results in July
which saw faster growth in both divisions.

 

Great Portland Estates, a property company, has underperformed in recent
months as concerns over the fiscal deficit in the UK continues to put pressure
on government bonds. Howden Joinery, a kitchen supplier, and Derwent, a
property development business, are also top 10 detractors over the period as
growth concerns were exacerbated following the government U-turn over welfare
reform in July, and the resulting expectations of further tax rises in the
Autumn budget.

 

Admiral Group was the top contributor following strong H1'25 results with both
UK Home and UK Motor beating expectations as UK Home showed a step-up in
profitability. The undiscounted loss ratio remains conservative, suggesting
that current underwriting remains at strong levels. The company continues to
retain significant reserves which they will likely release over the next few
years to smooth the cycle. This, alongside EPS and Dividend beats, caused the
shares to perform strongly following the results.

 

The shape of market returns this month has meant that performance has been
driven more by what we do not own than what we do. Companies such as National
Grid, Barclays and SSE underperformed during the period given a more risk-on
environment in markets, and hawkish BoE messaging saw Experian fall over
concerns for ongoing mortgage affordability. Coke bottler Coca-Cola
Europacific Partners (CCEP) also missed volumes as weak consumer sentiment and
concerns over the impact of trade tensions weighed on their annual revenue
forecasts. In addition, CCEP has, over the past year, faced backlash from
consumers in Indonesia as consumers shied away from U.S. brands due to the
Israel-Gaza conflict.

 

Melrose Industries was the next overweight contributor as the company reported
strong 2025 half year results on the first day of August against a backdrop of
tariff disruption. Revenue growth in the Engines business was strong at +11%,
driven primarily by aftermarket as well as continued original equipment (OE)
growth. Revenue was also higher in Defence, where increased build rates are
seen through the period. The company maintained its full-year margin guidance
as well.

 

Rio Tinto was the third overweight contributor during the period, which
performed well following a sell-off into results in July as H1'25 results were
not as bad as market expectations. The company is focused on the strategic
update under their new CEO, which is likely to come in later in 2025, or early
2026.

 

Changes

 

We have sold Derwent as we have continued to focus our positioning in Great
Portland where we added further to the position. We believe Derwent to be
inexpensive but without the required change in strategy, the current market
conditions will continue to overwhelm the shares. We also sold WH Smith given
the disappointing update from the company during the month, which came as a
surprise and fundamentally breeches the investment case in our view.

 

We have added to Unilever given our underweight to the staples sector more
broadly and as the company is starting to execute well. We also added to RELX
on recent weakness, where we believe fears have been overblown.

 

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. Whilst the UK's hard data has showed stability, the lack
of visibility ahead of the Autumn budget restrains business confidence and
risk appetite. 

 

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 have identified several
potential opportunities with new positions initiated throughout the year in
both UK domestic and midcap companies.

 

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.

 

 

 

 

 

 

23 September 2025

 

 



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