Portfolio Update

BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC

All information is at 31 January 2016 and unaudited.

Performance at month end with net income reinvested

	One Month	Three Months	One Year	Three Years	Since 1 April 2012	Five Years
Sterling
Share price	-7.1%	-5.6%	-2.3%	22.8%	48.9%	37.3%
Net asset value	-4.0%	-2.9%	1.3%	27.8%	42.5%	41.3%
FTSE All-Share Total Return	-3.1%	-3.8%	-4.6%	12.5%	26.6%	30.4%
Source: BlackRock

BlackRock took over the investment management of the Company with effect from 1 April 2012.

At month end
Sterling:
Net asset value - capital only:	178.20p
Net asset value - cum income*:	182.24p
Share price:	174.00p
Total assets (including income):	£49.8m
Discount to cum-income NAV:	4.5%
Net Cash:	2.6%
Net yield**:	3.4%
Ordinary shares in issue***:	26,229,268
Gearing range (as a % of net assets)	0-20%
Ongoing charges****:	1.0%

* includes net revenue of 4.04 pence per share

** based on an interim dividend of 2.40p per share in respect of the year ended 31 October 2015 and a final dividend of 3.50p per share in respect of the year ended 31 October 2014.

*** excludes 6,704,664 shares held in treasury

**** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 October 2015.

Benchmark
Sector Analysis	Total assets (%)
Banks	11.4
Support Services	9.1
Travel & Leisure	8.6
Tobacco	8.2
Pharmaceuticals & Biotechnology	8.2
Media	7.4
Oil & Gas Producers	6.9
Life Insurance	6.9
Financial Services	5.5
Food Producers	4.4
Fixed Line Telecommunication	4.4
Non-Life Insurance	4.1
General Retailers	3.1
Technology & Hardware Equipment	2.0
Software & Computer Services	1.1
General Industrials	1.0
Real Estate Investment Trusts	0.6
Industrial Engineering	0.6
Net Current Assets	6.5
Total	100.0

Ten Largest Equity Investments
Company	Total assets (%)
British American Tobacco	5.8
AstraZeneca	5.5
Lloyds Banking Group	4.6
HSBC Holdings	4.6
RELX	4.5
Unilever	4.4
BT Group	4.4
Royal Dutch Shell ‘B’	3.8
Wolseley	3.7
Aviva	3.5

Commenting on the markets, Adam Avigdori and Mark Wharrier representing the Investment Manager noted:

The influence of slowing growth in China, continued weakness in oil prices and deteriorating US high yield credit markets resulted in heightened levels of risk aversion which caused many equity markets to fall sharply during January. While the Federal Reserve have recently started increasing interest rates, the wider deflationary trends prompted other central banks to loosen policy, including the Bank of Japan which resorted to negative interest rates.  This level of policy divergence contributed to heightened levels of market uncertainty and rising risk premia.

Over the month, the Company’s NAV fell by 4.0% whilst the FTSE All Share Index fell by 3.1%. The IA Income Sector fell by 4.3% over the same period.

During the month, performance was impacted by a reversal in momentum in those holdings that had performed strongly towards the end of 2015; particularly more cyclical companies such as Intercontinental Hotels and Cineworld Group. Financials were also a headwind to performance as the sector sharply underperformed the market as risk aversion increased. Lloyds Banking Group, Legal & General, Provident Financial, Hargreaves Lansdown and Barclays were all impacted. We have revisited the investment thesis across our diversified financials and while our holdings have clear economic sensitivity we feel valuation levels are more than discounting the risks, particularly given the successful regulatory stress tests and capital rebuild we have seen in these companies in recent years. Relative performance was also influenced by several large companies which we do not own within the portfolio which performed well; National Grid, Vodafone, Tesco, SABMiller.

The main positive contributors during the month were the more defensive positions. Positive contributions came from holdings in RELX, Admiral Group, Unilever, British American Tobacco and BT Group.

Over the month we used the volatility in the market to add to higher conviction positions such as Provident Financial and Unilever and reduced our holdings in Ashmore Group, Bodycote and Cineworld Group.  We sold our remaining position in Rio Tinto.  While Rio is a mining company with high quality resource long life assets, the outlook for cash generation has deteriorated markedly in the last six months and management attention will need to focus on rebuilding balance sheet strength.

Given the overall economic environment continues to be fragile, we continue to focus on the specific drivers of individual companies and the ability to determine their future rather than positioning for a specific macro outcome. We seek those companies that can drive returns through self-help and have a clear strategy to deploy the cashflow they generate. The portfolio is primarily invested in high free cash flow companies that can sustain cash generation and pay a growing dividend yield, but also has exposure to companies with sustainable growth franchises and turnaround situations which have the potential for higher long term capital growth.

24 February 2016