Portfolio Update

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)

All information is at 31 May 2019 and unaudited.
Performance at month end is calculated on a cum income basis

	One Month	Three months	One year	Three years	Five years
Net asset value	1.2	9.6	-2.2	54.0	86.3
Share price	-2.2	8.6	0.8	70.0	100.9
Benchmark*	-0.9	3.6	-7.0	20.6	31.0

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index as the Company’s benchmark. The performance of the indices have been blended to reflect this.

At month end
Net asset value capital only:	569.76p
Net asset value incl. income:	574.33p
Share price	532.00p
Discount to cum income NAV	7.4%
Net yield1:	1.9%
Total Gross assets2:	£420.0m
Net market exposure as a % of net asset value3:	100.5%
Ordinary shares in issue4:	73,130,326
2018 ongoing charges (excluding performance fees)5,6:	0.6%
2018 ongoing charges ratio (including performance fees)5,6,7:	1.3%

1. Calculated using the 2018 interim dividend declared on 26 July 2018 and paid on 29 August 2018, together with the 2018 final dividend declared on 12 February 2019 and paid on 28 March 2019.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long exposure less short exposure as a percentage of net asset value.
4. Excluding 7,400,000 shares held in treasury.
5. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2018.
6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum.
7. Effective 1st December 2017 the annual performance fee is calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable is effectively reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total management fees (comprising the base management fee of 0.35% and a potential performance fee of 0.90%) are therefore 1.25% of average month end gross assets on a two year rolling basis (from 1.70% of average annual gross assets).

Sector Weightings	% of Total Assets
Consumer Services	27.1
Financials	22.4
Industrials	21.9
Consumer Goods	9.3
Technology	7.7
Health Care	7.6
Basic Materials	2.5
Telecommunications	1.6
Net current liabilities	-0.1
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Total	100.0
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Market Exposure (Quarterly)
	31.08.18	30.11.18	28.02.19	31.05.19
Long	119.4	103.7	108.7	113.7
Short	9.6	10.5	14.9	13.2
Gross exposure	129.0	114.2	123.6	126.9
Net exposure	109.8	93.2	93.8	100.5

Ten Largest Investments
Company	% of Total Gross Assets
YouGov	3.1
Aveva	3.1
JD Sports Fashion	3.0
Dechra Pharmaceuticals	3.0
4imprint Group	2.9
SSP	2.9
IntegraFin	2.8
Watches of Switzerland	2.7
Serco	2.3
Bodycote	2.3

Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:

During May the Company’s NAV per share rose by 1.2%¹ to 574.33p on a cum income basis, outperforming our benchmark index, the Numis Smaller Companies plus AIM (excluding Investment Companies) Index, which fell by -0.9%¹. The long book generated 0.7%¹ and the short book generated 0.6%¹ of gross performance.

This was a strong month for the Company in absolute and relative terms, particularly in the context of wider equity market falls, with the Company benefitting from stock specific alpha driven by positive updates from some of our core long holdings, and also from our short positions which generated a positive return reflecting falling equity markets and some stock specific updates.

The largest positive contributor to performance came from our long position in YouGov, which rose through the month. Some of you may recall that YouGov was the Company’s single biggest stock detractor last month when the shares fell in response to what we thought was a good update from the company, so we really see May’s performance as a reversal of this. The second biggest contributor was from Watches of Switzerland, a new position for the Company off the back of extensive due-diligence conducted ahead of the firm’s decision to float.

The short book delivered a meaningful contribution of 0.6% of positive performance, with the biggest contributor coming from a UK contractor which fell heavily in the month on renewed concerns over its balance sheet and cash generating abilities. We added to this short during the month, and this particular company has subsequently delivered a material profit warning in June.

Turning our attention to what hasn’t been so successful for us in the month, the top 10 detractors individually cost the Company somewhere in the range of 0.1% to 0.2%, so unhelpful but not material. The top two detractors were long positions, namely Workspace and Bodycote. Neither of these were weak on stock specific news but reflected increased concerns over the UK (Workspace) or the global economy (Bodycote).

In summary, May was a challenging month for global stock markets, but the Company had a positive month in absolute and relative terms which is testament to company fundamentals triumphing over macro and politics. Escalating trade tensions clearly present a risk to global growth and potentially to stock markets, but we feel well positioned to deliver a good investment outcome whatever happens next. Global cyclical exposure in the long book has been moderated in recent weeks (despite many structural trends that benefit our long positions here) and our long book is comprised of many advantaged business models with robust finances. The pace of industry change isn’t slowing and multi-year secular trends, like the need for corporates to invest in digital transformation, show no signs of slowing and benefits many of our holdings. On the flip side we remain short in financial leverage, and continue to identify lots of opportunities to short commoditised business with weakening demand, as well as structurally flawed business models who we believe will be the first and real victims of any global slowdown. We continue to operate the portfolio with a lower than average net exposure to the market of c.100%.

¹Source: BlackRock as at 31 May 2019

14 June 2019

ENDS

Latest information is available by typing www.blackrock.co.uk/thrg on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.