Portfolio Update

The information contained in this release was correct as at 31 May 2020. Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at:

https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html. 

BLACKROCK INCOME AND GROWTH INVESTMENT TRUST PLC
(LEI:5493003YBY59H9EJLJ16)
All information is at 31 May 2020 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	-1.2%	-8.0%	-10.8%	-12.4%	0.2%	62.5%
Net asset value	3.8%	-5.7%	-8.9%	-9.2%	6.5%	59.7%
FTSE All-Share Total Return	3.4%	-7.8%	-11.2%	-8.4%	6.9%	51.2%
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:	171.26p
Net asset value - cum income*:	174.73p
Share price:	162.00p
Total assets (including income):	£43.5m
Discount to cum-income NAV:	7.3%
Gearing:	2.6%
Net yield**:	4.4%
Ordinary shares in issue***:	22,605,600
Gearing range (as a % of net assets)	0-20%
Ongoing charges****:	1.1%

* includes net revenue of 3.47 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 4.4% and includes the 2019 final dividend of 4.60p per share declared on 24 December 2019 and paid to shareholders on 16 March 2020, and the 2019 interim dividend of 2.60p per share declared on 25 June 2019 and paid to shareholders on 2 September 2019.

*** excludes 10,093,332 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 2019.

Sector Analysis	Total assets (%)
Pharmaceuticals & Biotechnology	9.0
Household Goods & Home Construction	7.0
Support Services	7.0
Media	6.9
Food Producers	6.8
Mining	6.7
Financial Services	6.6
Tobacco	5.3
Oil & Gas Producers	5.1
Gas, Water & Multiutilities	4.7
Banks	4.4
General Retailers	3.2
Health Care Equipment & Services	3.1
Mobile Telecommunications	3.0
Food & Drug Retailers	3.0
Travel & Leisure	2.9
Life Insurance	2.2
Personal Goods	1.5
Nonlife Insurance	1.2
Electronic & Electrical Equipment	1.2
Industrial Engineering	1.1
Construction & Materials	0.5
Real Estate Investment Trusts	0.4
Beverages	0.3
Net Current Assets	6.9
	------
Total	100.0
	======
Ten Largest Equity Investments
Company	Total assets (%)
AstraZeneca	7.0
British American Tobacco	5.3
Unilever	5.0
BHP	5.0
RELX	4.9
Reckitt Benckiser	4.5
National Grid	3.6
Smith & Nephew	3.1
Vodafone	3.0
Tesco	3.0

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

Global equities rose in May with the gradual easing of coronavirus-induced lockdowns and signs of activity restarting. May data indicated the worst of the virus may have passed with the number of daily new deaths globally cut by half from its peak in April. Potentially promising vaccine trials supported risk sentiment during the month, however, the potential of a second wave created ongoing caution. After plunging to record lows in April, oil prices rallied in May; fuelled by an easing of lockdowns and a fall in global supply. Geopolitical tensions between US and China re-emerged as the US federal pension fund halted investment in Chinese Equities and threatened to strip Hong Kong of its trade status on China’s imposition of a security legislation on the financial hub.  The ECB announced an additional €750bn of stimulus despite Germany’s Constitutional Court creating an obstacle by stating the Bundesbank will only participate in the PSPP scheme where proved necessary. The Fed balance sheet topped $7trn, up sharply from $4.2trn at the beginning of March. The US unemployment rate jumped to over 20% during the month. Prime minister, Boris Johnson announced a gradual relaxation of lockdown restriction encouraging manufacturing and construction industries to resume as soon as possible. Chancellor Sunak announced the Job Retention Scheme, paying 80% of the salary of furloughed workers, will extend into October. During the month, UK sold negative yielding government bonds, 3-year gilts, for the first time. The FTSE All Share index rose +3.4% during the month with Telecommunications, Basic Materials and Technology outperforming and Oil & Gas underperforming. Over the month, the Company returned 3.8%, outperforming the benchmark, the FTSE All-Share which returned 3.4%. We saw weakness in Asian-exposed financial stocks on concerns around Hong Kong, and thus the Company’s underweight holding in HSBC also contributed to performance. The Company’s holding in BHP also contributed to performance as materials led were amongst the sectors leading the market higher. The underweight holding in Royal Dutch Shell also contributed to performance. Energy stocks underperformed generally, and shares continued to be weak after the announcement of the dividend cut. John Laing Group was the top detractor to the Company, lagging the rising market which was driven by risk on sentiment. Standard Chartered also detracted as Asian financials came under pressure. Not owning Experian also detracted from performance after the company announced strong results amidst the coronavirus pandemic. During the month, we sold positions in Bellway and easyJet. We participated in another capital raise, Whitbread. We reduced positions in AB Foods and John Laing Group. We added to Hiscox, Intermediate Capital and Burberry. On Dividends: At the time of writing, around 160 companies in the FTSE All Share have suspended their dividends, and the UK dividend future is estimating around a 47% cut. We are mindful of the scrutiny companies will face with regards to paying dividends, especially for those businesses accepting government support or cutting employee remuneration and/or headcount. For now, the language from the majority of companies has been to suspend, rather than cut the dividend. From here, everything will depend on the duration and severity of this crisis as to how many of these dividends come back. We will continue to monitor the potential scenarios and would hope to provide more clarity later in the year. In the meantime, we will continue to take a long-term approach to dividends and manage the portfolio for the strongest total return.  Outlook This Covid-19 led crisis is the closest we have got to a global natural disaster in financial markets, and its impact has been immediate and severe.  Entire industries are being shut down overnight with revenues effectively going to zero. It has been felt much more acutely than anything we have seen in recent memory. Whilst in ‘normal’ economic downturns, activity slows gradually over months, with ‘lockdowns’ by governments, activity has slowed very dramatically with significant variations by industry and geography. The hit to nominal GDP from this crisis is likely to be record breaking with early estimates suggesting falls of up to 30% in nominal GDP in a number of developed market economies for the second quarter.  Whilst the scale of this crisis has been unprecedented, we have also seen extraordinary government intervention.  This should provide a cushion to businesses that are being hurt by the impact of the shutdowns.  As we start to ease past the current peak in this crisis, governments now need to determine how they modify their economic support as the impact on businesses and industries becomes clearer.  Fiscal policy, for example, has played an earlier, and more prominent role versus the 2008 financial crisis and we expect to see more pressure on governments and central banks to deploy their balance sheets.  The role and type of economic support is likely to lead to material dispersion within the market over the medium-term.  We recognise the enormous uncertainty still facing society, employers and their employees today.  Whether it is the threat of a resurgence of the virus, the emergence of viable treatments and potential vaccines or the different speeds and ways in which governments remove restrictions and support.  We are treading cautiously; balancing the significant long-term opportunity we see with a wide range of short-term scenarios and factors. Amongst these are clearly the impact of widespread unemployment, the changes to both consumer and business behaviour with regards to which products and services they consume and how they consume them in addition to the potential for inflation to pick up.  Crucially, whilst we expect that the threat from Covid-19 will be addressed, either through a vaccine, rolling containment policies or herd immunity, it is the duration of the pandemic and associated containment policies that will be crucial in determining the state of the economy and speed of recovery thereafter. In conclusion, we came into this crisis more defensively positioned and with limited gearing which benefited the Company and leaves us in a strong position to take advantage of the dislocation. In times like these, the scale and breath of the platform at BlackRock allows us to leverage significant resources across stock analytics, market insights and data science. For example, in the month of March, as the crisis unfolded and as 90% of the global workforce began working from home, the UK team still spoke with over 210 management teams; seeking to understand companies’ immediate liquidity needs, balance sheet strain and strategy to navigate the crisis. We know, from our experience in 2008/2009, how important these resources and support are and the opportunities it enables you to find. In the weeks and months ahead, we will continue to utilise these resources and our previous experiences in uncertain markets to continue to build on the promising start to the year to ensure the Company emerges from this period of volatility well placed to deliver strong capital and dividend growth over the long term. Finally, beyond markets and investments, we also recognise that this has been an extremely tough period for many. We have been encouraged by the support companies in the Company have provided their employees and communities and continue to support these initiatives.

19 June 2020