At around 5 per cent, the BlackRock Greater Europe Investment Trust is trading at a significantly narrower discount than many of its peers; the average discount in the European Trust sector is around 12 per cent, towards the upper end of a 1-15 per cent range over the past six years.
According to stockbroker, Oriel Securities, the sector has been out of favour with investors who appear to have taken a fairly negative view on prospects for European markets and have generally been keener to invest in Asia and emerging earkets. However, performance in this sector has been relatively good for sterling investors with net asset values (NAVs) up around 42 per cent over one year - similar to the average return delivered by the Asian Fund sector over the same period.
A front-runner in terms of both NAV and share price performance, the BlackRock Greater Europe Investment Trust seeks to achieve capital growth, through investment in a focused portfolio constructed from a combination of securities of large-, mid- and small-capitalisation European companies. While offering exposure to European blue chip companies, the fund also has around 10 per cent of its assets invested in emerging Europe. This emerging market exposure has helped the fund to significantly outperform its benchmark over the last few months.
Managed by Vincent Devlin, the fund is positioned to take advantage of key sources of earnings growth in 2010, with a bias towards companies that will benefit from increasing capital expenditure, the emerging consumer and an uptick in the agriculture cycle.
Despite the recent market volatility, Mr Devlin remains positive on the outlook for European equity markets in 2010, although he admits that there are clear structural issues in some of Europe's peripheral countries, especially regarding government budget deficits and the strict austerity plans expected to follow. He says one of the key issues will be the outlook for policy stimulus and the extent to which private sector demand can replace it.
BLACKROCK GREATER EUROPE (BRGE) | |||
---|---|---|---|
PRICE | 182.75p | NAV | 189.83p |
MARKET VALUE | £185m | PRICE DISCOUNT TO NAV | -3.73 |
No OF SHARES: | 101m | 1 YEAR PRICE PERFORMANCE | 58.60% |
SET UP DATE | 28-Jun-04 | 3 YEAR PRICE PERFORMANCE | 3.10% |
VOLATILITY | 23.49 | 5 YEAR PRICE PERFORMANCE | 70% |
SHARPE RATIO | 2.63 | DIVIDEND YIELD | 1.72% |
GEARING | 103.8 | MORE DETAILS | www.blackrock.co.uk |
Source: Thomson Datastream, BlackRock
Performance figures as at 22 April 2010
Top ten holdings as at February 2010
Holding | Country |
---|---|
AXA | France |
BNP Paribas | France |
Credit Suisse | Switzerland |
Kone | Finland |
Kuehne & Nagel | Switzerland |
Nestle | Switzerland |
Novartis | Switzerland |
Roche | Switzerland |
Societe Generale | France |
Swatch | Switzerland |
Sector Breakdown
Sector | Percentage |
---|---|
Financials | 23.2 |
Consumer Goods | 17.9 |
Industrials | 15.1 |
Health Care | 10.7 |
Oil & Gas | 9.3 |
Consumer Services | 8.3 |
Telecommunications | 6.4 |
Technology | 6.2 |
Basic Materials | 2.6 |
Utilities | 2.5 |
Net current liabilities | -2.2 |