About this investment trust
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
The Company aims to provide growth in capital and income over the long term through investment in a diversified portfolio of principally UK listed equities.
Why choose it?
With longer lifespans and greater demands on retirement funds, investors need a steady source of income and growth. This conviction-led portfolio delivers exposure to a balanced range of sectors and company shares, focused on the UK, which have the potential to deliver capital growth and a growing dividend income.
Suited to…
Investors targeting a steady income that grows over time, useful for retirement planning. The Trust also aims to grow investors’ capital in the longer term.
What are the risks?
- Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
- Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance.
- The Trust’s investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Trust may not be able to realise the investment at the latest market price or at a price considered fair.
- Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
Useful information
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Fees & Charges
Annual Expenses as at date: 31/10/2023
Ongoing Charge: 1.28%
Management Fee Summary: Management fee is 0.6% p.a. of the Company's market capitalisation. There is no additional fee for Company Secretarial and administration services.
With effect from 1 November 2023, 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.
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ISIN: GB0030961691
Sedol: 3096169
Bloomberg: BRIG LN
Reuters: BRIG
LSE code: BRIG.L
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Name of Company: BlackRock Fund Managers Limited
Telephone: 020 7743 3000
Email: cosec@blackrock.com
Website: www.blackrock.com/uk
Correspondence Address: Investor Services,
BlackRock Investment Management (UK) Limited
12 Throgmorton Avenue
London
EC2N 2DL
Name of Registrar: Computershare PLC
Registered Office: 12 Throgmorton Avenue
London
EC2N 2DL
Registrar Telephone: +44 (0)370 703 0076
Place of Registration: England
Registered Number: 4223927
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Year End: October
Results Announced: December (annual), June (interim)
AGM: March
Dividends Paid: March (final), September (interim)
Latest company announcements
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
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ESG Integration
Environmental, Social and Governance (ESG) investing is often conflated or used interchangeably with the term “sustainable investing”. BlackRock has identified sustainable investing as being the overall framework and ESG as a data toolkit for identifying and informing our solutions. BlackRock has defined ESG Integration as the practice of incorporating material ESG information and consideration of sustainability risks into investment decisions in order to enhance risk-adjusted returns. BlackRock recognises the relevance of material ESG information across all asset classes and styles of portfolio management. The Investment Manager may incorporate sustainability considerations in its investment processes across all investment platforms. ESG information and sustainability risks are included as a consideration in investment research, portfolio construction, portfolio review, and investment stewardship processes.
The Investment Manager considers ESG insights and data, including sustainability risks, within the total set of information in its research process and makes a determination as to the materiality of such information in its investment process. ESG insights are not the sole consideration when making investment decisions and the extent to which ESG insights are considered during investment decision making will also be determined by the ESG characteristics or objectives of the Company. The Investment Manager’s evaluation of ESG data may be subjective and could change over time in light of emerging sustainability risks or changing market conditions. This approach is consistent with the Investment Manager’s regulatory duty to manage the Company in accordance with their investment objectives and policies and in the best interests of the Company’s investors. The Investment Manager’s Risk and Quantitative Analysis group will review portfolios to ensure that sustainability risks are considered regularly alongside traditional financial risks, that investment decisions are taken in light of relevant sustainability risks and that decisions exposing portfolios to sustainability risks are deliberate, and the risks diversified and scaled according to the investment objectives of the Company.
BlackRock’s approach to ESG integration is to broaden the total amount of information the Investment Manager considers with the aim of improving investment analysis and understanding the likely impact of sustainability risks on the Company’s investments. The Investment Manager assesses a variety of economic and financial indicators, which may include ESG data and insights, to make investment decisions appropriate for the Company objectives. This can include relevant third-party insights or data, internal research or engagement commentary and input from BlackRock Investment Stewardship.
Sustainability risks are identified at various steps of the investment process, where relevant, from research, allocation, selection, portfolio construction decisions, or management engagement, and are considered relative to the Company’s risk and return objectives. Assessment of these risks is done relative to their materiality (i.e. likeliness of impacting returns of the investment) and in tandem with other risk assessments (e.g. liquidity, valuation, etc.).
ESG integration does not change the Company’s investment objective or constrain the Investment Manager’s investable universe, and does not mean that an ESG or impact focused investment strategy or exclusionary screens have been or will be adopted by the Company. Similarly, ESG integration does not determine the extent to which the Company may be impacted by sustainability risks.
Fund manager commentary
30 June 2024
Please note that the commentary below includes historic information in respect of index performance data and the Company’s NAV performance.
The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results.
Performance Overview:
The Company returned -1.5% during the month net of fees, underperforming the FTSE All-Share which returned -1.2%.
Market Summary:
The UK economy grew more strongly than expected in the first half of 2024, though business surveys suggested a slower pace of underlying growth. The labour market continued to loosen but remained relatively tight by historical standards.1 Inflation fell to the Bank of England's (BoE) 2% target for the first time in three years, leading to speculation about potential rate cuts later in the year. The BoE, however, maintained its current policy, awaiting further economic data before making any changes.2 Large caps experienced a period of consolidation in June as the FTSE 100 dropped after peaking in May. The sectors that experienced the most notable underperformance were basic materials and healthcare. The FTSE 250, which is often seen as a barometer of the UK's broader economic health due to its focus on domestically oriented companies, rose by 2.3% year-to-date, reaching nearly 20,000 points.3
Stock comments:
Tate & Lyle fell on the announcement of its proposed acquisition of US peer, CP Kelco, a strategically attractive deal but where the uncertainty it introduces combined with the full price being paid is weighing on the shares.
Berkeley Group detracted as the shares fell following its full year results announcement. The statement showed resilient current trading, however, highlighted that there are still significant challenges facing the housebuilding sector. Notably, high interest rates and a difficult planning, regulatory and tax backdrop that will put pressure on earnings in future years unless addressed. Hays detracted giving back some of the previous month’s gains as staffing markets remain sluggish.
3i provided an update on Action during the month reporting the opening of 107 new stores. Despite this expansion, there has been a slight decrease in the year-to-date like-for-like sales growth, now at +9%, compared to the 9.8% growth in Q1 reflecting strong volume growth offset by price deflation as Action passed price reductions on to its customers. Action boasts €825 million in cash reserves and has successfully completed a refinancing of €2.1 billion highlighting the group's strong fiscal management and readiness for future opportunities.
RELX performed well in the month on limited newsflow and Rentokil rallied on the news that activist investor, Trian partners, took a significant stake in the pest control company.
Changes:
During the month, we started new position in National Grid. We view the recent rights issue, a dividend cut, and a 20% fall in share price as a valuation opportunity with the company's shares now being well-funded for the future. We believe the growing demand for power consumption driven by electrification and AI advancements indicates a significant growth trajectory. We also added to Spirax Sarco as we believe the current share price weakness is a function of cyclical pressures and fails to recognise the quality of this global franchise and the attractive long term returns it offers. and We reduced Tate and Lyle, managing the position size given the CP Kelco deal.
Outlook:
Equity markets entered 2024 in a buoyant mood following a strong and broad rally in the latter part of 2023. The outlook, and optimism, is a far cry from 12 months ago, when supply chains were hugely disrupted, and inflation was double digit and well ahead of central banks’ targets prompting rapid and substantial interest rates hikes despite an uncertain demand environment. China was the surprise negative in 2023, with no noticeable COVID re-opening recovery and lacklustre growth despite government attempts to stimulate.
Markets have shifted to ‘goldilocks’ territory whereby slowing inflation has signalled the peak for interest rates while broad macroeconomic indicators that have been weak are not expected to deteriorate further. This is also helpful for the cost and availability of credit which has recently improved having been deteriorating through most of 2023. Despite expectations for rate cuts moderating significantly, stock markets have continued to make progress in the developed world. Labour markets remain resilient for now with low levels of unemployment while real wage growth is supportive of consumer demand albeit presenting a challenge to corporate profit margins.
With the UK’s election date now set for July 4th, we continue to expect that geopolitics will play a more significant role in asset markets. This year will see the biggest election year in history with more than 60 countries representing over half of the world’s population going to the polls. While most, such as the UK’s, are unlikely to have globally significant economic or geopolitical ramifications, others, such as the US elections in November, could have a material impact. We believe political certainty will be helpful for the UK and address the UK’s elevated risk premium that has persisted since the damaging Autumn budget of 2022. Whilst we do not position the portfolios for any particular election outcome, we are mindful of the potential volatility and the opportunities that may result, some of which have started to emerge.
The UK stock market continues to remain 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 with a robust buyback yield of the UK market. Combining this with a dividend yield of 3.7% (FTSE All Share Index yield as at 30 April 2024 source: The Investment Association), the cash return of the UK market is attractive in absolute terms and comfortably higher than other developed markets. Although we anticipate further volatility ahead, we believe that in the course of time risk appetite will return and opportunities are emerging. We have identified a number of 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 turnarounds situations.
1 ONS 11/06/2024 https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/june2024
2 BOE 19/06/2024 https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2024/june-2024
3 FT 30/06/2024 https://markets.ft.com/data/indices/tearsheet/summary?s=FTSM:FSI
Unless otherwise stated all data is sourced from BlackRock as of 30 June 2024
Any opinions or forecasts represent an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results.
This information should not be relied upon by the reader as research, investment advice or a recommendation.
Risk: Reference to the names of each company in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies.
Portfolio manager biographies
Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
Adam Avigdori, Director, is co-manager of the BlackRock Income and Growth Investment Trust plc, and is a member of the UK Equity Team. Adam joined BlackRock in 2001 and is responsible for managing UK equity portfolios covering the real estate and construction sectors. Adam has a degree in management sciences.
David Goldman, CFA, Director, is co-manager of the BlackRock Income and Growth Investment Trust plc, and is a member of the UK Equity Team. David joined BlackRock in 2004 and is responsible for managing UK equity portfolios covering the support services sectors. David has a degree with first class honours in economics.
Board of directors
Graeme Proudfoot (Chairman) (appointed 1 November 2019) spent his executive career at Invesco, latterly as Managing Director, EMEA and CEO of Invesco Pensions. Mr Proudfoot joined Invesco in 1992 as a legal advisor and held various roles within the Invesco Group, before moving to take responsibility for a number of businesses in the UK, including Invesco’s investment trust business which he led from 1999 until his retirement from Invesco in 2019. Mr Proudfoot began his career at Wilde Sapte, Solicitors, practising as a corporate finance lawyer in London and New York.
Nicholas Gold (appointed 17 December 2008) is an experienced investment banker with over 36 years’ advisory experience across a wide range of industries and jurisdictions. He retired as the Managing Director responsible for closed-end fund corporate finance at ING Bank N.V. in 2008. Mr Gold is a chartered accountant and a solicitor. He was formerly a member of the Royal Academy of Dramatic Art Council and chairman of its commercial arm, RADA Enterprises. He is a Special Adviser to Pottinger Co Pty Limited.
Charles Worsley (appointed 19 April 2010) has over 25 years’ experience in property management and has been a shareholder of the Company since its launch. Mr Worsley has formerly been a director of retail and media companies.