Fund Research

BlackRock Income and Growth Investment Trust

Last update 05 June 2019

BlackRock Income and Growth Investment Trust is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Investment objective

To provide growth in capital and income over the long term through investment in a diversified portfolio of principally UK listed equities.

As at:

04/06/2019

Group/Investment

BlackRock Income and Growth

Ticker

BRIG

Management Company

BlackRock Inc

Manager Name

Adam Avigdori;David Goldman;

Association of Investment Companies (AIC) Sector

UK Equity Income

12 Mo Yield

3.6%

Dividend Distribution Frequency

Semi-Annually


Latest Market Capitalisation

£43,515,924

Latest Net Gearing (Cum Fair)

2%

Latest Ongoing Charge Ex Perf Fee %

1.10

Turnover Ratio %

48.6

Shares Outstanding

23,085,371

(Discount)/ Premium % (Cum Fair)

-5.2

Daily Closing Price

188.5p


BlackRock Income & Growth (BRIG) has twin aims of providing a rising dividend, but also growth in capital over the long term. Whilst BlackRock has only been running the trust since 2012, the team behind it has a much longer pedigree. They have run the same investment process for over 30 years, and (according to BlackRock) the BlackRock UK Income fund holds the impressive record of being the only UK OEIC that has increased its distribution each year for 30 years.

Speaking to co-manager Adam Avigdori recently, he commented on how well suited the trust structure was to their approach. He highlighted that a closed-end fund puts a manager in an ideal position to take controlled risk, and allows them to have strongly held views through a cycle. He feels this aids their investment approach, and together with the relatively small size of the trust currently (£46m of net assets) gives them a competitive advantage over peers, with huge flexibility to buy or sell companies of all sizes. As such, Adam believes BRIG is an ideal vehicle to deliver dividend growth for investors. As we discuss below, since 2012 the team have grown the trust’s dividend by 4.7% a year and built up a reserve equal to a year’s dividend.

Adam and David employ a high-conviction approach to stock picking, with the portfolio expected to have between 30 to 60 holdings at any one time - currently numbering 43. The team buy companies purely on an opportunity led basis, but try to provide some diversification across the portfolio through allocating across three “buckets”, defined by the broad type of investment opportunity. Yield and free-cashflow is typically expected to be the biggest allocation, of between 60-80% of the portfolio, currently 68%. The team also look for growth opportunities, expected to be between 10-30% of the portfolio, currently 23%. The final bucket is turnaround situations, expected to be between 0-10%, currently 9%.

A key differentiator to many other competitor funds and/or trusts is the multi-cap approach. Using the advantages conferred by the closed end structure and the relatively small size of the trust, the team opportunistically venture into the small and mid-cap (SMID) sphere where they have particularly high conviction – with no official maximum weighting. Currently c.18% of the portfolio is in SMID stocks, mostly found in the growth bucket of the portfolio.

Performance over the past five years is impressive, with the trust c.8% ahead of the benchmark but also beating the average investment trust peer by 4.6% and the average open-ended peer by 10.6%. 2014 and 2015 were both very strong years of outperformance, but 2016 proved to be a more difficult environment – with miners rallying hard – an area which the managers have had a long term underweight. Over the past 12 months (to 23 May 2019), BRIG is behind the FTSE All Share by 0.6%. Several stock specifics impacted the portfolio last year, which have so far more than been made up for by calendar year performance to date.

Outside of total returns, BRIG’s raison d’etre is to provide a growing dividend over time. As such, since being awarded the mandate in 2012, the BlackRock team have grown the trust’s dividend by 4.7% a year and built up a reserve equal to a year’s dividend. The trust’s headline yield of 3.7% is modestly lower than the UK Equity Income sector weighted average of 3.9% (source: JPM Cazenove). This reflects the manager’s desire to deliver sustainable dividend growth over time, which is evidenced by the impressive earnings growth delivered by the portfolio since BlackRock took over management of 7.7% pa.

The board has been employing an active discount control mechanism for over five years, and the discount currently stands at a historically wide level of 5.6%. Over time, discount volatility has been relatively low, with the trust’s discount having been broadly in-line with the UK Equity Income sector.

William Heathcoat Amory

Important information

BlackRock Income and Growth Investment Trust is a client of Kepler Trust Intelligence. Material produced by Kepler Trust Intelligence should be considered as factual information only and not an indication as to the desirability or appropriateness of investing in the security discussed.

Please see the important information by following this link or at the bottom of the page.

Kepler Trust Intelligence is a website owned and managed by Kepler Partners LLP. Material produced by Kepler Trust Intelligence should be considered a marketing communication, and is not independent research.

This report has been issued by Kepler Partners LLP for communication only to eligible counterparties and professional clients as defined by the Financial Conduct Authority.  Its contents are not directed at, are not to be communicated to, may not be suitable for and must not be relied on by retail clients

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country.  Persons who access this information are required to inform themselves and to comply with any such restrictions. 

The information contained herein has not been prepared in accordance with legal requirements designed to promote the independence of investment research. The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm’s internal rules. 

Past performance is not necessarily a guide to the future. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. Independent financial advice should be taken before entering into any financial transaction. This website is published solely for informational purposes and has no regard to the specific investment objectives, financial situation or particular needs of any person.  

PLEASE SEE ALSO OUR TERMS AND CONDITIONS

A copy of the firm’s conflict of interest policy is available on request.

Kepler Partners LLP is a limited liability partnership registered in England and Wales at 9/10 Savile Row, London W1S 3PF with registered number OC334771.

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority.

Fund History: BlackRock Income and Growth Investment Trust

More Research

Welcome to Kepler Trust Intelligence

Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority.
Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority. To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please select a range
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
View an example
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase. We do not share your personal information and your answers are not linked to your identity for marketing purposes.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.