Portfolio Update

BLACKROCK GREATER EUROPE INVESTMENT TRUST plc

All information is at 31 MAY 2016 and unaudited.

Performance at month end with net income reinvested

One

Three

One

Three

Launch

Month

Months

Year

Years

(20 Sep 04)

Net asset value* (undiluted)

1.6%

4.7%

1.2%

18.0%

227.2%

Net asset value* (diluted)

2.3%

5.1%

2.3%

18.5%

227.5%

Share price

0.8%

-0.1%

-1.4%

17.1%

209.2%

FTSE World Europe ex UK

0.1%

4.4%

-3.6%

14.4%

147.2%

Sources: BlackRock and Datastream

At month end

Net asset value (capital only):

260.01p

Net asset value (including income):

262.81p

Net asset value (capital only)*:

260.01p

Net asset value (including income)*:

262.81p

Share price:

246.50p

Discount to NAV (including income):

6.2%

Discount to NAV (including income)*:

6.2%

Net cash:

0.2%

Net yield**:

2.0%

Total assets (including income):

£270.4m

Ordinary shares in issue***:

102,903,113

Ongoing charges****:

0.89%

* Diluted for treasury shares. ** Based on a final dividend of 3.35p per share for the year ended 31 August 2015 and an interim dividend of 1.65p per share for the year ending 31 August 2016. *** Excluding 7,425,825 shares held in treasury. **** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs, after relief for taxation for the year ended 31 August 2015.

Sector Analysis

Total Assets

Country Analysis

Total Assets

(%)

(%)

Industrials

24.4

France

16.7

Financials

24.3

Switzerland

12.2

Consumer Goods

14.5

Denmark

11.2

Health Care

12.5

Germany

9.7

Technology

10.4

Netherlands

8.9

Consumer Services

8.0

Ireland

8.3

Telecommunications

4.1

Finland

7.5

Basic Materials

1.6

Italy

6.5

Net current assets

0.2

Sweden

5.2

-----

Russia

3.1

100.0

Belgium

2.1

=====

Turkey

2.1

Ukraine

1.7

Spain

1.6

Luxembourg

1.6

Poland

1.4

Net current assets

0.2

-----

100.0

=====

Ten Largest Equity Investments

% of

Company

Country

Total Assets

Novo Nordisk

Denmark

4.3

Zurich Insurance Group

Switzerland

3.0

Heineken

Netherlands

3.0

Adidas

Germany

2.8

Vinci

France

2.8

RELX

Netherlands

2.7

Unibail-Rodamco

France

2.7

Capgemini

France

2.6

Deutsche Telekom

Germany

2.6

Sampo

Finland

2.3

Commenting on the markets, Vincent Devlin, representing the Investment Manager noted:

During the month, the Company’s NAV increased by 1.6% and the share price rose by 0.8%. For reference, the FTSE World Europe ex UK Index was up 0.1% during the period.

European equities were flat in May (FTSE World Europe ex UK, GBP terms). However, performance intra-month was mixed with a very late rally offsetting earlier losses. During the month, global investors focused on the increasing likelihood of a rise in US interest rates (following the release of hawkish Federal Open Market Committee minutes) and the dollar continued strengthening. Weaker Chinese macro data impacted the commodities complex; as a result, the materials sector was the worst performer following sharp falls in iron ore and copper prices. The energy sector also fell, although the oil price continued to recover, Brent Crude briefly trading above USD50 per barrel at the end of the month. The European banking sector received a welcome boost following overall positive comments on minimum capital ratios and forthcoming proposals to address non-performing loans by European Central Bank Supervisory Chief Nouy.

Positive returns came as a result of strong stock selection. Sector allocation also positively contributed. The effect of positioning led movements and volatility that has plagued the market year to date seems to have somewhat subsided and the market has recently been led more directly by fundamentals.

The lower exposure to basic materials was positive for performance during May given the pull back in commodity related names. A lower weighting towards oil & gas was also beneficial for performance.

Danish jeweller Pandora was a top contributing stock over the month, as the company reported sales growth of 38% in the first quarter of the year (9% ahead of consensus), and upgraded full year guidance.

Zurich Insurance also performed strongly, reporting operating profit 17% ahead of consensus, after suffering losses in the fourth quarter of 2015. The stock continues to boast one of the strongest balance sheets in the European insurance sector.

Holdings within Turkish banks, specifically Turkiye Halk Bankasi and Turkiye Garanti Bankasi, detracted from performance. The Turkish market sold off following the resignation of Prime Minister Davutoglu, a move which consolidated President Erdogan’s power and amplified concerns about the increasing authoritarian path of the government.

Positions in Italian Asset Managers Anima and Azimut also detracted from performance, despite reporting continued strong asset inflows. The latter’s results looked slightly weak driven by a low management fee margin; however, we expect these to revert to trend in coming months and believe the impressive asset gathering highlights the strength of the business.

At the end of the period the Company had higher weightings when compared with the reference index to technology, industrials, financials and consumer services. The Company had a lower weighting towards basic materials, consumer goods, oil & gas, utilities and health care.

Outlook

European equities have been caught up in cross-currents over the past few months and the magnitude of the market moves has been a clear manifestation of how sensitive investors have become to short term economic data. Despite the global macroeconomic environment remaining uncertain and political concerns dominating the headlines, the health of the Eurozone economy remains reasonable in our view. The Eurozone recovery seems to persist with the GDP growth print for Q1 2016 exceeding expectations. The rise in the oil price and the resilience of domestic demand has also led the ECB to raise its inflation forecast for 2016 and also increase its GDP growth projection to +1.6% this year. However, Q1 earning results for European companies were weak and led to further downgrades. Therefore, we recognise the need to see earnings growth coming through in order to drive meaningful upside for European equities. Expectations for European earnings are now so low that they could potentially surprise on the upside in the second half of the year, providing the macro environment does not deteriorate. There has also been a flight from the asset class since the beginning of the year; we think investors will remain cautious towards European equities until the British referendum is behind us as this is the most prominent risk event not only for the UK, but also for the broader European Union and indirectly for the global outlook.

Within this context, we retain a keen eye on valuation and we continue to focus on stock selection against a volatile market. We are sticking to companies that offer attractive earnings momentum and stock-specific drivers and looking to avoid value traps in highly cyclical businesses without momentum.

14 June 2016

ENDS

Latest information is available by typing www.brgeplc.co.uk on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.