Portfolio Update

BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16)

All information is at 28 February 2017 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	3.6%	8.4%	17.4%	29.6%	76.5%	66.3%
Net asset value	4.4%	8.7%	15.1%	28.1%	64.6%	63.1%
FTSE All-Share Total Return	3.1%	7.9%	22.8%	20.1%	56.7%	55.3%
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:	197.94p
Net asset value - cum income*:	199.26p
Share price:	195.00p
Total assets (including income):	£52.5m
Discount to cum-income NAV:	2.1%
Net gearing:	2.0%
Net yield**:	3.2%
Ordinary shares in issue***:	25,354,268
Gearing range (as a % of net assets)	0-20%
Ongoing charges****:	1.0%

* includes net revenue of 1.32 pence per share

** The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.2% and includes the 2016 final dividend of 3.90p per share declared on 21 December 2016, payable to shareholders on 10 March 2017 and the 2016 interim dividend of 2.40p per share announced on 29 June 2016 and paid to shareholders on 2 September 2016.

*** excludes 7,579,664 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 2016.

Sector Analysis	Total assets (%)
Media	9.6
Banks	8.2
Support Services	8.2
Tobacco	7.8
Travel & Leisure	7.7
Pharmaceuticals & Biotechnology	7.3
Oil & Gas Producers	6.0
Financial Services	5.9
Food Producers	5.4
Non-Life Insurance	4.1
General Retailers	4.1
General Industrials	3.9
Fixed Line Telecommunications	3.3
Mobile Telecommunications	3.2
Construction & Materials	2.8
Aerospace & Defence	2.5
Food & Drug Retailers	2.4
Real Estate Investment & Services	1.9
Household Goods & Home Construction	1.6
Chemicals	1.6
Real Estate Investment Trusts	0.7
Net Current Assets	1.8
Total	100.0

Ten Largest Equity Investments
Company	Total assets (%)
British American Tobacco	6.6
Unilever	5.4
Lloyds Banking Group	5.0
RELX	3.8
Sky	3.7
Royal Dutch Shell ‘B’	3.5
BT Group	3.3
AstraZeneca	3.2
Vodafone	3.2
GlaxoSmithKline	3.2

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

The UK stock market rose strongly in February led by the pharmaceutical, personal goods and household goods sectors.  In contrast to recent months, the banks and mining sectors underperformed. Expectations that the US Federal Reserve would raise interest rates in March increased following comments from Federal Reserve committee members. ISM manufacturing survey data in the US was supportive and PMI survey data in Europe also supported the reflationary trend. In the UK, the House of Commons cleared the “Brexit bill” whilst the House of Lords defeated the bill sending it back to the Commons for amendment.

The Company had a strong month in February, returning 4.4% and outperforming the FTSE All-Share which returned 3.1%.

Unilever is our largest active position and was the largest contributor to performance during the month after receiving a surprise £112bn takeover proposal from Kraft, which Unilever rejected. The Kraft proposal has led Unilever to conduct a strategic review which should accelerate shareholder returns from a business which has much potential.

Elementis also contributed strongly to performance as the new management team continue to drive operational improvements and announced a material acquisition to build scale in their personal care business. There was more encouraging news on the dividend front as Lloyds reported strong full year results that included a 13% dividend increase and a commitment to pay a special dividend. Lloyds’ outlook confirmed that the company is able to defend market share whilst also generating strong cashflow.

Performance detractors in February include RPC following an equity raise to finance further acquisitions and Direct Line as a result of the lowering of the Ogden rate (the rate used to discount payments for large bodily injury claims). A lower Ogden rate means that claims costs are likely to rise significantly, however the company should be able to pass these costs on reasonably quickly and we may start to see a small climb in premiums.

As ever, we remain believers that over the longer term earnings and cashflow growth tend to be the dominant driver of share prices and where equity markets fail to recognise that, corporates buyers have the potential to exploit the opportunity; the bid for Unilever this month was a good reminder of that dynamic as was the bid for both Sky and for ARM Holdings last year. With a combination of sterling weakness and a continued low rate environment fuelling cheap debt, we believe that M&A activity will remain a theme throughout the year. Markets are likely to remain skittish given macro headwinds, likely volatility in bond markets and an increasing level of political risks.  However we continue to find opportunities in those companies that can generate cashflow from strong business models, have favourable industry characteristics or scope for management driven self-help.  While sometimes unnerving, we will continue to use market volatility to provide buying opportunities in those types of companies.

16 March 2017