Portfolio Update

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

All information is at 30 April 2018 and unaudited.

Performance at month end with net income reinvested

	One Month	Three Months	One Year	Three Years	Five Years	Since 1 April 2012
Sterling
Share price	3.7%	-3.9%	2.5%	15.4%	50.2%	83.3%
Net asset value	6.6%	1.4%	6.0%	21.7%	56.3%	78.1%
FTSE All-Share Total Return	6.4%	1.1%	8.2%	22.5%	45.6%	71.0%
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:	205.48p
Net asset value - cum income*:	208.73p
Share price:	196.00p
Total assets (including income):	£50.8m
Discount to cum-income NAV:	6.1%
Gearing:	4.0%
Net yield**:	3.4%
Ordinary shares in issue***:	24,324,268
Gearing range (as a % of net assets)	0-20%
Ongoing charges****:	1.1%

* includes net revenue of 3.25 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 3.4% and includes the 2017 interim dividend of 2.50p per share declared on 26 June 2017 and paid to shareholders on 1 September 2017 and the 2017 final dividend of 4.10p per share declared on 20 December 2017 and paid to shareholders on 9 March 2018.

*** excludes 8,609,664 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 2017.

Sector Analysis	Total assets (%)
Banks	9.9
Oil & Gas Producers	9.0
Pharmaceuticals & Biotechnology	7.5
Support Services	6.5
Financial Services	6.4
Media	6.3
Tobacco	6.2
Non-Life Insurance	5.4
Food Producers	4.4
Industrial Engineering	4.4
Construction & Materials	4.3
Life Insurance	4.1
General Retailers	3.7
Travel & Leisure	3.2
Food & Drug Retailers	2.7
General Industrials	2.5
Forestry & Paper	1.9
Fixed Line Telecommunications	1.7
Chemicals	1.6
Household Goods & Home Construction	1.5
Gas, Water & Multiutilities	1.4
Beverages	0.9
Software & Computer Services	0.9
Net Current Assets	3.6
	------
Total	100.0
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Ten Largest Equity Investments
Company	Total assets (%)
Royal Dutch Shell ‘B’	5.9
British American Tobacco	5.3
Unilever	4.4
Lloyds Banking Group	3.9
RELX	3.8
John Laing Group	3.4
Rentokil Initial	3.4
BP	3.1
Ferguson	3.1
HSBC Holdings	3.0

Commenting on the markets, Adam Avigdori and David Goldman representing the Investment Manager noted:

After a difficult start to the year with three consecutive months of declines, UK Equities delivered a positive return of 6.4% in April, the strongest monthly return in almost five years. Economic data confirmed a moderate pace of economic growth in the US, and the Fed reiterated the likely path of monetary tightening for the remainder of the year. First quarter earnings from the US came in strong, with c.80% of companies beating analysts’ expectations, and earnings remain on track to grow at the highest rate in seven years. Eurozone data proved underwhelming, however still signalled growth and in the UK the headline growth rate of +0.1% quarter-on-quarter was the weakest since Q4 2012, with year-on-year figure now sitting at +1.2%. The oil price surged to a 40-month high off the back tighter U.S. inventories and possible extended OPEC production cuts, which saw the energy sector outperform. Sterling weakness during the month provided support for the UK equity market, while increased corporate activity helped add further fuel to the rally. Large caps outperformed small & mid-caps given the higher international exposure of larger companies and the benefit of sterling weakness to overseas earnings. Over the month the Company delivered a return of 6.6%, outperforming the FTSE All-Share which delivered a return of 6.4%. Rentokil was the largest contributor to performance in April as they posted a strong trading update with total revenue growth of 11% following a busy period of acquisitions. Pest Control, the largest and most attractive division, continues to make good progress with improving margins. Tesco’s share price responded favourably to results that came in ahead of market estimates. The company demonstrated improved cash flow and a reduction in debt levels. We believe the Booker deal is additive to the investment case both financially and strategically. DS Smith showed continued cost recovery which, combined with volume growth resulting in market share gains and synergies from the Interstate deal, led to share price appreciation for the month. An underweight exposure to Royal Dutch Shell was the largest detracted from performance for the month as the shares rose despite no substantial stock specific news. Given the international nature of the company, the shares are susceptible to currency movements. Elementis also detracted from performance as it has seen relatively modest underlying growth recently but we believe overall the business remains in good shape. After 2 years under new CEO Paul Waterman, their strategy is starting to change as they move their portfolio away from Industrials and more towards Personal Care.  British American Tobacco’s AGM statement aimed to reassure investors given the uncertain backdrop for the wider Tobacco industry. The company guided to increased investment in Next Generation Products and have highlighted a currency hit of -8% as a result of Rouble movements. During the month we purchased a new position in Barclays which is trading at a large discount to book value with improvements in cash generation and their capital position. We have added to British American Tobacco on share price weakness as well as to Prudential and Mondi. As competition for capital remains high, these trades were financed through sales in Derwent London and Sabre Insurance alongside a reduction in Direct Line, Shire and John Laing. The outlook for the UK economy is more uncertain given ongoing Brexit negotiations in contrast to the acceleration in growth seen elsewhere.  However, we believe these Brexit fears have provided us with the opportunity to own high quality franchises at attractive valuations. The UK is a hugely international market that is supported by very strong corporate governance, shareholder interaction, regulation, tax and accounting laws and transparency. This renders the UK market a fantastic hunting ground for some high quality international (and domestic) franchises that chose to list on the UK market. We continue to like cash generative consumer staple companies, especially those exposed to the emerging market consumer given the improvement in the trading backdrop in key markets such as India and Brazil.  These companies often generate substantial cash flow which allows them to invest in innovation, marketing and distribution to ensure the longevity of their brands while also paying attractive and growing dividends to shareholders. We have also sought exposure to infrastructure and construction spend, both in the UK and overseas. US and European construction and infrastructure spend remains well below long-term averages and initiatives to boost this spend features prominently in politicians’ manifestos. However, as the last few months have demonstrated, it is crucial to be selective when investing in these industries and to focus on the strong operators that provide a differentiated service and that boast a strong balance sheet.

14 May 2018