Portfolio Update

The information contained in this release was correct as at 30 June 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 THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 30 June 2020 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	1.1	22.7	-2.3	16.5	60.8
Share price	1.1	21.2	0.4	39.0	89.2
Benchmark*	1.0	19.2	-10.7	-11.1	7.2

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:	553.44p
Net asset value incl. income:	557.79p
Share price	560.00p
Premium to cum income NAV	0.4%
Net yield1:	1.8%
Total Gross assets2:	£466.6m
Net market exposure as a % of net asset value3:	117.7%
Ordinary shares in issue4:	83,643,462
2019 ongoing charges (excluding performance fees)5,6:	0.6%
2019 ongoing charges ratio (including performance fees)5,6,7:	1.8%

1. Calculated using the 2019 interim dividend declared on 23 July 2019 and paid on 28 August 2019, together with the 2019 final dividend declared on 06 February 2020 and paid on 27 March 2020.
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 0 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 2019.
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
Industrials	31.5
Financials	19.7
Consumer Services	19.1
Consumer Goods	11.2
Technology	7.7
Health Care	6.4
Telecommunications	2.4
Basic Materials	2.3
Net current liabilities	-0.3
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Total	100.0
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Market Exposure (Quarterly)
	31.08.19 %	30.11.19 %	29.02.20 %	31.05.20 %
Long	109.1	103.2	119.3	118.6
Short	11.2	7.4	8.9	2.1
Gross exposure	120.3	110.6	128.2	120.7
Net exposure	97.9	95.8	110.4	116.6

Ten Largest Investments
Company	% of Total Gross Assets
Serco Group	3.1
YouGov	2.9
Dechra Pharmaceuticals	2.6
Breedon	2.5
IntegraFin	2.5
Games Workshop	2.5
Gamma Communications	2.4
Watches of Switzerland	2.2
Avon Rubber	2.2
Learning Technologies	2.1

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

During the month the Company returned +1.1%¹ (net of fees), while our benchmark returned +1.0%¹. Outperformance during the month was generated by the long book, while the short book was flat.

Equity markets remained volatile across June, characterised by style rotations and rapidly shifting investor sentiment, and culminated with broader market weakness towards month end. Much of the period could be characterised by a rotation towards “value”, a headwind for performance considering our strong growth philosophy. Given our focus on company and industry dynamics we take it as a sign of strong underlying fundamentals that the portfolio continued to outperform the market during the month.  Although June tends to be a light month for company news, where it did occur, we were reassured by impressive updates from some of our long positions emphasising again the importance of stock and industry specific outcomes in times of uncertainty.

The largest contributor to performance was Serco, the provider of services to governments around the world. In the month Serco announced trading profits ahead of expectations, with positive developments in all the key areas we look for: order book, revenue growth, margins, cashflow and debt. We have added to our position here as our conviction in the investment case has strengthened. Shares in Chegg, the online education platform, continued to rise after the extremely impressive first quarter results reported in May. Discretionary fund manager, Tatton Asset Management, was the third largest contributor to performance. Despite the negative market return caused by the COVID-19 pandemic, Tatton reported strong full year results which showed continued growth in assets under management, helped by positive inflows from its IFA support business Paradigm.

Turning to detractors, we are pleased to say that most of the largest detractors to performance were not related to company specific news flow, and therefore we are relatively sanguine about recovering any short-term losses here in shares such as IntegraFin and IWG. RWS Holdings fell after reporting a decline in sales and profits in the first half of the year. The company did however maintain its interim dividend and announced additional acquisitions whilst management also gave a positive outlook for the second half of the year.

In summary, June was another positive month for the portfolio, despite the initial style rotation and febrile market environment. Once again this was a month that contained some impressive updates from companies in which we have strong conviction. It does seem to come as a surprise to many people when differentiated companies with compelling product offerings, announce positive updates and continue to trade well at times of financial market uncertainty. But for us that is precisely the opportunity, and this is one of the key reasons we have built our long book and our philosophy around these types of companies, whilst avoiding or shorting companies that don’t exhibit these attributes. We thank shareholders for their ongoing support.

¹Source: BlackRock as at 30 June 2020

16 July 2020

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.