BlackRock Throgmorton Trust Half-year results
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.
Hi. I'm Dan Whitestone. Lead Portfolio Manager for the BlackRock
Throgmorton [Investment] Trust. Thanks for watching this.
I was looking at my notes on the way down here, having done a recording for one of these, six months ago and I said back then, which obviously coincided with our full year results of 2023, that my outlook and hope was that there would really be, one, of gradual recovery, and improvement from here. And I think wind the clock forwards to where we are today, I think the evidence of that is building.
If we start with the NAV, the NAV at Throgmorton over that six month period we've just been through, you know, culminating our H1 2024 results in May. We delivered a 19.2%1 net asset value return and that outperformed our benchmark by 2.4%1 over the period. So, if I score myself and the trust, I think we've actually had a decent period both in absolute and relative terms. And my only hope and belief this is just a start. And I say that based on a few things.
Number one, ultimately is that trading remains resilient and actually I think is improving in aggregate across the small-mid-cap complex. Two, I think the macroeconomic backdrop is really improving growth in GDP in Q1 was very strong. Certainly versus the U.S. versus Europe and accelerating, inflation's down at 2, consumer confidence is high. Many people are experiencing real wage growth. I really think the backdrop actually for the consumer and for the UK economy, actually, is a positive one.
Valuations remain low, obviously coming from very depressed places, but earnings are still growing and I think can accelerate meaningfully going forward. Balance sheets are strong and there's lots of M&A activity out there. So, you know, while some people are allocating their money or have been allocating their money away from the UK to the US or other places, or other asset classes, there are certainly many other people wearing different hats, corporate PLC, private equity, that do see, I think, the inherent value on offer, and that can be a double edged sword for us. But one I think that does help us underpin the valuation argument that me and others have been making for some time. I do think the overall outlook from here is an optimistic one.
Reflecting on the returns in the period, the main driver was stock specific's both positive and negative and thankfully got more of a former right than the latter. Thinking about the portfolio positioning, I've always tried to build this trust through, like, a myriad of idiosyncratic investment opportunities, where they can beat to their own rhythm. But it'd be remiss not to pay heedance to the macro I think that's particularly instructive right now when consumer industrials, are such big parts of the gross exposure of this trust. Also, big sectors, within the benchmark. And really my argument is that the operating environment is improving for many of my companies.
And there's two parts to that; one is macro and one that's more fundamental. And I thought I would go through each in turn now. So first one, the macro environment. Let’s start with growth. Q1 GDP was pretty decent, admittedly from a low base, but certainly better than the U.S, and many parts of the of the eurozone, and I think actually can accelerate going forward from here.
Second, the inflation has come down to 2%. It's gotten there much faster than people thought, which really sort of like dents the 'The UK's got a structural embedded inflation problem' narrative, that would lead to it's a long term dedication of core profitability, which basically hasn’t happened. In fact, actually corporate profitability has proved to be pretty resilient and, in many cases, continues to grow.
Three, we were seeing strong evidence of real wage growth, you know, ASDA income tracker, which is effectively a proxy for household cash flow, just registered three consecutive months of double-digit growth. Consumer confidence in the U.K. is a 20 year high. It's higher than in the U.S. It’s higher than in all eurozone countries. The savings ratio actually increased in 2023 amidst a cost-of-living crisis. Now, not many people would have predicted that. So actually, taking a step back, the consumer is in a pretty good place; they’re employed, they’re feeling good about their job, they feel secure, they've got savings on hand. Inflation has fallen, confidence is high and they’re seeing the benefits of that real wage growth. I think that could be a real boost to spending, going forward.
One thing that many of our corps have told us is that what they really want in order to make long term investment decisions, is more stability. Well, I think now, the outcome of Labour's landslide victory, at the very least heralds a period of political stability. I mean, I may have these numbers slightly off, but bear with me. Like in the last five years, I think we’ve had three different prime ministers. We've had five different chancellors, seven education ministers, at least five, maybe seven housing ministers. This is pretty hard if you're running a house builder, you know, if that amount of change to make long term investment decisions. So I do think that will can all play a part. But clearly there are some policies of in Labour's manifesto, particularly in housing and addressing many of the long-term structural issues, which is really about supply and planning permission, I think could be very, very favourable to many parts of small-mid-caps and certainly for Throgmorton’s positioning.
So the macro I think, is getting better. As for the fundamentals, there are many companies and this may be somewhat of a crude simplification to do on a video recording, but there are many companies where we think they've actually protected profitability far better than people appreciate in a volume downturn. And I could think of like brick manufacturers, parts of RMI, some house builders, where they for a combination of structural capacity leaving the industry in some cases capacity temporarily being closed through mothballing, and you combine that with changing your operating footprint and reducing your costs, then actually if you believe that a volume recovery will come, it's a strong argument in that volume recovery, the drop through on those increased volumes, or what we call incremental margin, could be materially higher than people appreciate. And that means that profits in the new cycle can exceed those profits in the previous cycle and other things could help to like, mix effect. I think of, you know, new product lines in brick manufacturers, changes in product mix, that can be extremely beneficial. So I think a combination of those two things; are better and improving macroeconomic backdrop as well as industries who've done a better job of protecting profitability and can be more get into the upside and see new cycle highs in profitability, particularly when they start from a depressed valuations. depressed profitability, I think can be particularly attractive.
So I guess the key question is what are you all doing about it in the fund? So it should be no surprise in light of those comments that one of the key areas that I have been adding to is housebuilders, brick manufacturers, other repair maintenance and improvement companies those exposed to both new builds as well as obviously repair, maintenance and improvement in in your current dwelling, both RESI, and some commercial property which we think is interesting, particularly when you can find companies trading at nearly a 40% discount to an asset value but you know have a dominant position in prime west end real estate where supply is permanently removed, occupancy is high. And I think the outlook therefore for rental rate increases and for development profits I think is really attractive.
So there are many parts in the funds that one would describe as domestic exposure. And I guess for over the last nine plus years, I spend most of my time talking about UK PLC and the amount of companies I have that make their money outside of the UK. So maybe that's interesting in itself is probably the first time in nine plus years I'm deliberately seeking domestic exposure in certain companies that still fit with our processes and philosophy and in many of those cases the starting point is a very depressed valuation, on depressed profit base, a strong balance sheet, strong opposition, a strong outlook for growth where we can see not only typical attractions in the near term, but still a long, long pathway of growth, which is actually very compelling and certainly what we would describe as a very asymmetric risk reward profile.
As for industrials and which accounts for most of, I guess, the large part of our exposure of UK PLC’s; companies that make their money outside the UK, it's been more mixed. I mean, many of these industrials have had to battle various crosscurrents within their own supply chain. Destocking is still the theme of the day in various companies at different points in that destocking cycle. Some of those trends we've got right, others that we have got wrong, but clearly we're looking for ones that have a genuinely differentiated product, or solving a customer solution. Therefore, they're really competing on value-add rather than price and generally are exposed to long term secular megatrends. And that could be anything from various I.O.A, AXE, CHIPS, other big government infrastructure programs both in the UK and certainly in the US and further afield when scientific instrumentation, quantum computing compound semis, you know, certainly big long term attractive industries where we think spending is more resilient. Now generally these companies trade a premium to high domestic exposures reflecting the high organic revenue growth, generally higher margins. But the key thing is they trade at a huge discount to their listed U.S. peers or European peers. But rather than comparing let’s say, a US retailer versus a UK retailer we are comparing two different countries demographics in case of industrials effectively it is a like for like comparison. They have similar organic revenue growth, similar margin profile, similar balance sheets in a free cash flow generating capabilities. And they actually apply their you know, they, you know, apply their trade in the same area. So it's the same geographic exposure, the same product line exposure. So it's truly comparable. And those valuations are being arbitraged away either by the corporates themselves or the private equity. And I think therefore there is an alarming trend which one can monetize in the short term, probably the expense of long-term profits of shareholders. But really about that sort of de-listing and moving to the US where you can capture that valuation upside. But that's another area that we think is of interest and occupies, you know, quite a large exposure in the portfolio. And so, I look to this year with optimism. I would certainly look towards 2025 and 26 and the next cycle with real hope that this could be a fertile period for investing.
So, thanks a lot for watching. And there's much more content in the interim report, which I encourage you to dig out and peruse at your leisure. Thanks very much.
Source
1 BlackRock Throgmorton Investment Trust Half Yearly Financial Report, 31 May 2024
Risk Warnings
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.
Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.
Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.
Trust-specific risks
Complex Derivative Strategies
Derivatives may be used substantially for complex investment strategies. These include the creation of short positions where the Investment Manager artificially sells an investment it does not physically own.
Derivatives can also be used to generate exposure to investments greater than the net asset value of the fund / investment trust. Investment Managers refer to this practice as obtaining market leverage or gearing. As a result, a small positive or negative movement in stockmarkets will have a larger impact on the value of these derivatives than owning the physical investments. The use of derivatives in this manner may have the effect of increasing the overall risk profile of the Funds.
Counterparty Risk
The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
Financial Markets, Counterparties and Service Providers
The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
Gearing Risk
Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
Liquidity Risk
The Fund's investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Fund may not be able to realise the investment at the latest market price or at a price considered fair.
Important Information
In the UK this is issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.
UK Investment Trust Funds: This document is marketing material. The Company is managed by BlackRock Fund Managers Limited (BFM) as the AIFM. BFM has delegated certain investment management and other ancillary services to BlackRock Investment Management (UK) Limited. The Company’s shares are traded on the London Stock Exchange and dealing may only be through a member of the Exchange. The Company will not invest more than 15% of its gross assets in other listed investment trusts. SEDOL™ is a trademark of the London Stock Exchange plc and is used under licence.
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 investment trusts listed in this video currently conduct their affairs so that their securities can be recommended by IFAs to ordinary retail investors in accordance with the Financial Conduct Authority’s rules in relation to nonmainstream investment products and intend to continue to do so for the foreseeable future. The securities are excluded from the Financial Conduct Authority’s restrictions which apply to non-mainstream investment products because they are securities issued by investment trusts. Investors should understand all characteristics of the funds objective before investing. For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in local language in registered jurisdictions.
BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the fund specific risks in the Key Investor Document (KID) which gives more information about the risk profile of the investment. The KID and other documentation are available on the relevant product pages at www.blackrock.co.uk/its. We recommend you seek independent professional advice prior to investing.
Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.
This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.
© 2024 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS and iSHARES are trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.
MKTGH0824E/S-3779183
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.
Hi. I'm Dan Whitestone. Lead Portfolio Manager for the BlackRock
Throgmorton [Investment] Trust. Thanks for watching this.
I was looking at my notes on the way down here, having done a recording for one of these, six months ago and I said back then, which obviously coincided with our full year results of 2023, that my outlook and hope was that there would really be, one, of gradual recovery, and improvement from here. And I think wind the clock forwards to where we are today, I think the evidence of that is building.
If we start with the NAV, the NAV at Throgmorton over that six month period we've just been through, you know, culminating our H1 2024 results in May. We delivered a 19.2%1 net asset value return and that outperformed our benchmark by 2.4%1 over the period. So, if I score myself and the trust, I think we've actually had a decent period both in absolute and relative terms. And my only hope and belief this is just a start. And I say that based on a few things.
Number one, ultimately is that trading remains resilient and actually I think is improving in aggregate across the small-mid-cap complex. Two, I think the macroeconomic backdrop is really improving growth in GDP in Q1 was very strong. Certainly versus the U.S. versus Europe and accelerating, inflation's down at 2, consumer confidence is high. Many people are experiencing real wage growth. I really think the backdrop actually for the consumer and for the UK economy, actually, is a positive one.
Valuations remain low, obviously coming from very depressed places, but earnings are still growing and I think can accelerate meaningfully going forward. Balance sheets are strong and there's lots of M&A activity out there. So, you know, while some people are allocating their money or have been allocating their money away from the UK to the US or other places, or other asset classes, there are certainly many other people wearing different hats, corporate PLC, private equity, that do see, I think, the inherent value on offer, and that can be a double edged sword for us. But one I think that does help us underpin the valuation argument that me and others have been making for some time. I do think the overall outlook from here is an optimistic one.
Reflecting on the returns in the period, the main driver was stock specific's both positive and negative and thankfully got more of a former right than the latter. Thinking about the portfolio positioning, I've always tried to build this trust through, like, a myriad of idiosyncratic investment opportunities, where they can beat to their own rhythm. But it'd be remiss not to pay heedance to the macro I think that's particularly instructive right now when consumer industrials, are such big parts of the gross exposure of this trust. Also, big sectors, within the benchmark. And really my argument is that the operating environment is improving for many of my companies.
And there's two parts to that; one is macro and one that's more fundamental. And I thought I would go through each in turn now. So first one, the macro environment. Let’s start with growth. Q1 GDP was pretty decent, admittedly from a low base, but certainly better than the U.S, and many parts of the of the eurozone, and I think actually can accelerate going forward from here.
Second, the inflation has come down to 2%. It's gotten there much faster than people thought, which really sort of like dents the 'The UK's got a structural embedded inflation problem' narrative, that would lead to it's a long term dedication of core profitability, which basically hasn’t happened. In fact, actually corporate profitability has proved to be pretty resilient and, in many cases, continues to grow.
Three, we were seeing strong evidence of real wage growth, you know, ASDA income tracker, which is effectively a proxy for household cash flow, just registered three consecutive months of double-digit growth. Consumer confidence in the U.K. is a 20 year high. It's higher than in the U.S. It’s higher than in all eurozone countries. The savings ratio actually increased in 2023 amidst a cost-of-living crisis. Now, not many people would have predicted that. So actually, taking a step back, the consumer is in a pretty good place; they’re employed, they’re feeling good about their job, they feel secure, they've got savings on hand. Inflation has fallen, confidence is high and they’re seeing the benefits of that real wage growth. I think that could be a real boost to spending, going forward.
One thing that many of our corps have told us is that what they really want in order to make long term investment decisions, is more stability. Well, I think now, the outcome of Labour's landslide victory, at the very least heralds a period of political stability. I mean, I may have these numbers slightly off, but bear with me. Like in the last five years, I think we’ve had three different prime ministers. We've had five different chancellors, seven education ministers, at least five, maybe seven housing ministers. This is pretty hard if you're running a house builder, you know, if that amount of change to make long term investment decisions. So I do think that will can all play a part. But clearly there are some policies of in Labour's manifesto, particularly in housing and addressing many of the long-term structural issues, which is really about supply and planning permission, I think could be very, very favourable to many parts of small-mid-caps and certainly for Throgmorton’s positioning.
So the macro I think, is getting better. As for the fundamentals, there are many companies and this may be somewhat of a crude simplification to do on a video recording, but there are many companies where we think they've actually protected profitability far better than people appreciate in a volume downturn. And I could think of like brick manufacturers, parts of RMI, some house builders, where they for a combination of structural capacity leaving the industry in some cases capacity temporarily being closed through mothballing, and you combine that with changing your operating footprint and reducing your costs, then actually if you believe that a volume recovery will come, it's a strong argument in that volume recovery, the drop through on those increased volumes, or what we call incremental margin, could be materially higher than people appreciate. And that means that profits in the new cycle can exceed those profits in the previous cycle and other things could help to like, mix effect. I think of, you know, new product lines in brick manufacturers, changes in product mix, that can be extremely beneficial. So I think a combination of those two things; are better and improving macroeconomic backdrop as well as industries who've done a better job of protecting profitability and can be more get into the upside and see new cycle highs in profitability, particularly when they start from a depressed valuations. depressed profitability, I think can be particularly attractive.
So I guess the key question is what are you all doing about it in the fund? So it should be no surprise in light of those comments that one of the key areas that I have been adding to is housebuilders, brick manufacturers, other repair maintenance and improvement companies those exposed to both new builds as well as obviously repair, maintenance and improvement in in your current dwelling, both RESI, and some commercial property which we think is interesting, particularly when you can find companies trading at nearly a 40% discount to an asset value but you know have a dominant position in prime west end real estate where supply is permanently removed, occupancy is high. And I think the outlook therefore for rental rate increases and for development profits I think is really attractive.
So there are many parts in the funds that one would describe as domestic exposure. And I guess for over the last nine plus years, I spend most of my time talking about UK PLC and the amount of companies I have that make their money outside of the UK. So maybe that's interesting in itself is probably the first time in nine plus years I'm deliberately seeking domestic exposure in certain companies that still fit with our processes and philosophy and in many of those cases the starting point is a very depressed valuation, on depressed profit base, a strong balance sheet, strong opposition, a strong outlook for growth where we can see not only typical attractions in the near term, but still a long, long pathway of growth, which is actually very compelling and certainly what we would describe as a very asymmetric risk reward profile.
As for industrials and which accounts for most of, I guess, the large part of our exposure of UK PLC’s; companies that make their money outside the UK, it's been more mixed. I mean, many of these industrials have had to battle various crosscurrents within their own supply chain. Destocking is still the theme of the day in various companies at different points in that destocking cycle. Some of those trends we've got right, others that we have got wrong, but clearly we're looking for ones that have a genuinely differentiated product, or solving a customer solution. Therefore, they're really competing on value-add rather than price and generally are exposed to long term secular megatrends. And that could be anything from various I.O.A, AXE, CHIPS, other big government infrastructure programs both in the UK and certainly in the US and further afield when scientific instrumentation, quantum computing compound semis, you know, certainly big long term attractive industries where we think spending is more resilient. Now generally these companies trade a premium to high domestic exposures reflecting the high organic revenue growth, generally higher margins. But the key thing is they trade at a huge discount to their listed U.S. peers or European peers. But rather than comparing let’s say, a US retailer versus a UK retailer we are comparing two different countries demographics in case of industrials effectively it is a like for like comparison. They have similar organic revenue growth, similar margin profile, similar balance sheets in a free cash flow generating capabilities. And they actually apply their you know, they, you know, apply their trade in the same area. So it's the same geographic exposure, the same product line exposure. So it's truly comparable. And those valuations are being arbitraged away either by the corporates themselves or the private equity. And I think therefore there is an alarming trend which one can monetize in the short term, probably the expense of long-term profits of shareholders. But really about that sort of de-listing and moving to the US where you can capture that valuation upside. But that's another area that we think is of interest and occupies, you know, quite a large exposure in the portfolio. And so, I look to this year with optimism. I would certainly look towards 2025 and 26 and the next cycle with real hope that this could be a fertile period for investing.
So, thanks a lot for watching. And there's much more content in the interim report, which I encourage you to dig out and peruse at your leisure. Thanks very much.
Source
1 BlackRock Throgmorton Investment Trust Half Yearly Financial Report, 31 May 2024
Risk Warnings
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.
Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.
Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.
Trust-specific risks
Complex Derivative Strategies
Derivatives may be used substantially for complex investment strategies. These include the creation of short positions where the Investment Manager artificially sells an investment it does not physically own.
Derivatives can also be used to generate exposure to investments greater than the net asset value of the fund / investment trust. Investment Managers refer to this practice as obtaining market leverage or gearing. As a result, a small positive or negative movement in stockmarkets will have a larger impact on the value of these derivatives than owning the physical investments. The use of derivatives in this manner may have the effect of increasing the overall risk profile of the Funds.
Counterparty Risk
The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
Financial Markets, Counterparties and Service Providers
The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
Gearing Risk
Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
Liquidity Risk
The Fund's investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Fund may not be able to realise the investment at the latest market price or at a price considered fair.
Important Information
In the UK this is issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.
UK Investment Trust Funds: This document is marketing material. The Company is managed by BlackRock Fund Managers Limited (BFM) as the AIFM. BFM has delegated certain investment management and other ancillary services to BlackRock Investment Management (UK) Limited. The Company’s shares are traded on the London Stock Exchange and dealing may only be through a member of the Exchange. The Company will not invest more than 15% of its gross assets in other listed investment trusts. SEDOL™ is a trademark of the London Stock Exchange plc and is used under licence.
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 investment trusts listed in this video currently conduct their affairs so that their securities can be recommended by IFAs to ordinary retail investors in accordance with the Financial Conduct Authority’s rules in relation to nonmainstream investment products and intend to continue to do so for the foreseeable future. The securities are excluded from the Financial Conduct Authority’s restrictions which apply to non-mainstream investment products because they are securities issued by investment trusts. Investors should understand all characteristics of the funds objective before investing. For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in local language in registered jurisdictions.
BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the fund specific risks in the Key Investor Document (KID) which gives more information about the risk profile of the investment. The KID and other documentation are available on the relevant product pages at www.blackrock.co.uk/its. We recommend you seek independent professional advice prior to investing.
Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy.
This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock funds and has not been prepared in connection with any such offer.
© 2024 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS and iSHARES are trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.
MKTGH0824E/S-3779183
Risk Warnings
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.
Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy.
Changes in the rates of exchange between currencies may cause the value of investments to diminish or increase. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time.
Fund-specific risks
BlackRock Throgmorton Trust plc
Description of Fund Risks
Complex Derivative Strategies
Derivatives may be used substantially for complex investment strategies. These include the creation of short positions where the Investment Manager artificially sells an investment it does not physically own.
Derivatives can also be used to generate exposure to investments greater than the net asset value of the fund / investment trust. Investment Managers refer to this practice as obtaining market leverage or gearing. As a result, a small positive or negative movement in stockmarkets will have a larger impact on the value of these derivatives than owning the physical investments. The use of derivatives in this manner may have the effect of increasing the overall risk profile of the Funds.
Counterparty Risk
The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
Financial Markets, Counterparties and Service Providers
The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.
Gearing Risk
Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
Liquidity Risk
The Fund's investments may have low liquidity which often causes the value of these investments to be less predictable. In extreme cases, the Fund may not be able to realise the investment at the latest market price or at a price considered fair.
