Portfolio Update

BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC

All information is at 31 October 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	-1.6%	2.2%	4.1%	24.6%	64.1%	65.7%
Net asset value	-0.9%	2.8%	5.2%	26.9%	54.4%	65.2%
FTSE All-Share Total Return	0.6%	4.2%	12.2%	16.8%	47.6%	57.4%
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:	185.85p
Net asset value - cum income*:	190.52p
Share price:	185.00p
Total assets (including income):	£50.3m
Discount to cum-income NAV:	2.9%
Net gearing:	1.3%
Net yield**:	3.2%
Ordinary shares in issue***:	25,354,268
Gearing range (as a % of net assets)	0-20%
Ongoing charges****:	1.2%

* includes net revenue of 4.67 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 2015 final dividend of 3.60p per share declared on 15 January 2016, paid to shareholders on 4 March 2016 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 2015.

Sector Analysis	Total assets (%)
Pharmaceuticals & Biotechnology	9.2
Travel & Leisure	9.0
Tobacco	8.8
Media	8.5
Support Services	6.9
Banks	6.6
Financial Services	6.5
Oil & Gas Producers	6.3
Food Producers	5.0
General Industrials	4.3
General Retailers	4.3
Fixed Line Telecommunication	4.0
Wireless Telecommunication Services	3.7
Non-Life Insurance	3.1
Food & Drug Retailers	2.8
Construction & Materials	2.4
Aerospace & Defence	2.3
Real Estate Investment & Services	2.0
Chemicals	1.1
Real Estate Investment Trusts	0.5
Net Current Assets	2.7
Total	100.0

Ten Largest Equity Investments
Company	Total assets (%)
British American Tobacco	6.3
Unilever	5.0
AstraZeneca	4.5
BT Group	4.0
RELX	3.9
Vodafone	3.7
Royal Dutch Shell ‘B’	3.6
John Laing Group	3.5
Lloyds Banking Group	3.5
GlaxoSmithKline	3.2

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

The UK equity market ended October broadly flat while sterling weakened further against the dollar and euro. Economic data was supportive of growth and inflation which supported cyclical sectors such as mining, oil and banks. In bond markets, both in the US and UK, the yield curve steepened and break-even inflation rates increased. Companies with lower economic sensitivity that had previously benefited from falling bond yields continued to be under pressure.

During the month the Trust returned -0.9% whilst the FTSE All Share Index returned +0.6%.

While the Trust slightly lagged the market during the month, once again a broad range of companies contributed to relative performance. Tesco was the largest contributor to performance. The company reported a significant recovery in interim operating profits and importantly set a margin target which was significantly ahead of market expectations, from a management that have historically been conservative in setting guidance. Recruiter Hays also added to relative performance after the company provided a resilient Q1 trading update with strength in the international business offsetting weakness in the UK.

The underweight position in the mining sector continued to be a headwind to performance during the month.  While the outlook for Emerging Markets and commodity demand has improved, as stated in previous reports, we prefer exposure through more consumer sensitive companies such as Inchcape and BAT where capital intensity is also lower.

During the month we added to new positions in Derwent London and Babcock. Derwent has an excellent collection of assets in London’s west end, where rents remain affordable and vacancy rates are low. The Brexit result has led the shares de-rate to a significant discount to net asset value and we feel the company offers attractive upside potential for management action to restore value. We also purchased Babcock, a non-cyclical company with strong revenue visibility and high barriers to entry, which having de-rated after a difficult two years, we now feel offers potential upside to the current valuation.

Macroeconomic volatility has been an important driver of equities so far this year which has tended to overwhelm the stock specific factors at the heart of our process.  However over the longer term earnings and cashflow growth tend to be the dominant driver of share prices.  If equity markets fail to recognise that, corporates buyers have the potential to; the bid for Arm during the summer was a good reminder of that dynamic.  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.

* NAV - Inc. performance.

14 November 2016