Portfolio Update

The information contained in this release was correct as at 30 June 2023. 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 & GROWTH INVESTMENT TRUST PLC (LEI:5493003YBY59H9EJLJ16)

All information is at 30 June 2023 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	-1.3%	-3.4%	7.6%	27.8%	8.1%	110.2%
Net asset value	0.3%	0.1%	9.3%	30.1%	15.1%	111.0%
FTSE All-Share Total Return	1.0%	-0.5%	7.9%	33.2%	16.5%	104.4%
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:	202.89p
Net asset value - cum income*:	207.02p
Share price:	186.50p
Total assets (including income):	£47.3m
Discount to cum-income NAV:	9.9%
Gearing:	3.2%
Net yield**:	3.9%
Ordinary shares in issue***:	20,908,254
Gearing range (as a % of net assets):	0-20%
Ongoing charges****:	1.2%
* Includes net revenue of 4.13 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 3.9% and includes the 2022 final dividend of 4.70p per share declared on 1 February 2023 with pay date 15 March 2023, and the 2023 Interim Dividend of 2.60p per share declared on 21 June 2023 with pay date 1 September 2023.
*** excludes 10,081,532 shares held in treasury.
**** The Company's ongoing charges are calculated as a percentage of average daily net assets and using management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for the year ended 31 October 2022.

Sector Analysis	Total assets (%)
Support Services	10.2
Pharmaceuticals & Biotechnology	10.0
Oil & Gas Producers	9.0
Banks	7.3
Media	7.2
Household Goods & Home Construction	7.2
Financial Services	6.7
Mining	6.6
General Retailers	4.3
Personal Goods	4.3
Health Care Equipment & Services	3.1
Electronic & Electrical Equipment	3.1
Nonlife Insurance	2.8
Life Insurance	2.7
Food Producers	2.6
Tobacco	1.8
Travel & Leisure	1.8
Gas, Water & Multiutilities	1.6
Leisure Goods	1.2
Real Estate Investment Trusts	1.0
Net Current Assets	5.5
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Total	100.0
	=====
Country Analysis	Percentage
United Kingdom	88.2
Switzerland	2.6
United States	2.3
France	1.4
Net Current Assets	5.5
	-----
	100.0
	=====
Top 10 holdings	Fund %
AstraZeneca	7.3
Shell	7.2
Reckitt	4.6
RELX	4.6
Rio Tinto	4.6
3i Group	4.5
Unilever	3.3
Smith & Nephew	3.1
Phoenix Group	2.8
Rentokil Initial	2.7

Commenting on the markets, representing the Investment Manager noted:

Performance Overview:

The Company returned 0.3% during the month net of fees, underperforming the FTSE All-Share which returned 01.0%.

Market Summary:

The FTSE All Share rose 1.0% in June with Technology, Oil & Gas and Basic Materials as top performing sectors while Telecommunications, Utilities and Health Care underperformed.

In the UK, the Bank of England (BoE) boosted interest rates by 50 bps1 in the month, a bigger-than-expected move, after UK inflation and growth data surprised to the upside.

In the US, while the labour market continued to remain tight, headline and core inflation data came in as expected. Core inflation excluding housing had cooled in the past few months, but this was offset by the renewed surge in core goods prices. The Federal Reserve (Fed) elected to hold interest rates in the month but signalled an overall increase in the expected cumulative tightening in this cycle to bring inflation back down to the 2% target.

In China, June PMI data showed manufacturing activity contracting for a third straight month. The central bank cut a key short-term borrowing rate by 10 bps2 amid fading restart momentum as confirmed by the underwhelming credit growth in May.

Contributors to performance:

During the month, there was some weakness in defensives names including Roche, Reckitt Benckiser and Tate & Lyle. Consumer Staples as a sector was under pressure due to ongoing uncertainty over consumer demand.

Admiral was a top detractor from relative performance as the company's share price fell back after previous strength following a broker downgrade.

Smith & Nephew was a top contributor to performance during the month; the company has benefitted from positive sentiment around improved procedure volumes in the US. Games Workshop, a relatively new position in the portfolio, also contributed positively after the release of a strong trading statement.

Ashtead released fiscal year results highlighting the multiyear demand tailwind ahead from US mega projects and reshoring which the company will benefit from.

Changes

During the period, we reduced some of the cyclical exposure in the portfolio through the sales of RS Group and Grafton.

Outlook

Inflation has consistently surprised in its depth and breadth, driven by resilient demand, supply chain constraints, and most importantly by rising wages in more recent data. Central banks across the developed world continue to unwind ten years of excess liquidity by tightening monetary policy desperate to prevent the entrenchment of higher inflation expectations. Meanwhile, March saw the first signs of financial stress with the bankruptcy of Silicon Valley Bank and Signature bank in the US serving to highlight the potential issues of the aggressive retrenchment of liquidity. Whilst the ramifications of this crisis remain unclear, it is likely that credit conditions and the availability of credit will continue to recede. This strengthens our belief that companies with robust balance sheets capable of funding their own growth will outperform. We are mindful of this and feel it is incredibly important to focus on companies with strong, competitive positions, at attractive valuations that can deliver in this environment.

We would expect broader demand weakness into the second half of 2023 although the `scars' of supply chain disruption are likely to support parts of industrial capex demand as companies seek to enhance the resilience of their supply chains. A notable feature of our conversations with a wide range of corporates has been the ease with which they have been able to pass on cost increases and protect or even expand margins during 2022. We believe that as demand weakens and as the transitory inflationary pressures start to fade during 2023 (e.g. commodity prices, supply chain disruption) then pricing conversations will become more challenging despite pressure from wage inflation which may prove more persistent. While this does not bode well for margins in aggregate, we believe that 2023 will see greater differentiation as corporates' pricing power will come under intense scrutiny.

The UK's policy has somewhat diverged from the G7 in fiscal policy terms as the present government attempts to create stability after the severe reaction from the "mini-budget". The challenging divergence in inflation between the UK and other developed markets has seen sterling recover some strength, notably against the dollar as markets infer higher rates for longer. Although the UK stock market retains a majority of internationally weighted revenues, the domestic facing companies have continued to be impacted by this backdrop, notably financials, housebuilders and property companies. The valuation of the UK market continues to be extremely low in absolute terms but particularly versus other developed market indices with many companies, notably the domestic earners trading at COVID or Brexit lows in share price or valuation terms. Although we anticipate further volatility ahead as earnings estimates moderate, we know that in the course of time, risk appetites will return and opportunities are emerging.

In China, the re-opening of the economy post the lockdowns has been slower than expected. There are early signs that the Chinese government is looking to stimulate the economy further which may become more apparent as we enter 2024. We continue to focus the portfolio on cash generative businesses with durable, competitive advantages boasting strong leadership as we believe these companies are best-placed to drive returns over the long-term. We anticipate economic and market volatility will persist throughout the year and we are excited by the opportunities this will likely create by identifying those companies using this cycle to strengthen their long-term prospects as well as attractive turnarounds situations.

1 Source: Financial Times, 22 June 2023 https://www.ft.com/content/1b6efb82-99b7-4b06-b2b6-f2999dfd3df9

2 Source: Financial Times, 20 June 2023 https://www.ft.com/content/bd5ed59e-11f0-409f-ae51-c97c1f5eacbe

18 July 2023

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