Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by BlackRock Greater Europe. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
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Overview

The managers of BlackRock Greater Europe (BRGE) aim to offer investors a portfolio of high-quality companies across developed and emerging Europe.

The manager, Stefan Gries, aims to identify the strongest ideas in developed Europe generated by BlackRock’s European research team of 18 analysts. As we discuss under the Portfolio section, this involves searching for high-quality companies with unique franchises and sustainable cash flows. Stefan is supported by co-manager Sam Vecht, who focusses on ideas in developing Europe. Typically, this area will make up between 5% and 10% of the total NAV, and it currently sits towards the top end of this range (10%). The two managers decide together when ideas in developing Europe are good enough to get into the portfolio, but developing Europe holdings tend to be shorter-term, more opportunistic plays.

Since Stefan took over the portfolio in June 2017 he has made a point of concentrating the portfolio, which now has just 42 holdings, with the top ten making up over 50% of total NAV. Under his tenure, the performance has been exceptional, with NAV total returns of 37.4%, in comparison to 8.5% from the benchmark FTSE World Europe ex UK. Equally the returns are impressive when compared to the IA and AIC sector returns, as we discuss in the Performance section. In fact, the trust is the strongest performing in the sector since Stefan’s appointment, with an annualised alpha of c. 8.4%.

The trust consistently trades at one of the narrowest discounts in the sector, currently trading at a discount of 3.9%, narrower than the sector average (c. 10.4%), illustrating the popular demand for the trust.

Kepler View

BRGE is a standout trust for investors looking for long-term European exposure. Since Stefan has taken over, BRGE has been the strongest performer in the sector, with Stefan delivering annualised alpha against the benchmark of over 8%. We think this outperformance has been possible due to the increasingly concentrated high-conviction approach Stefan has been taking. Also, strong stock-picking has been responsible for the vast majority of the strong excess returns over the past year. One advantage Stefan has when it comes to picking stocks is the extensive resources of BlackRock, with a dedicated and established team of 18 analysts and portfolio managers working on developed European equities and a further seven on developing Europe.

Investors should be aware that a more concentrated approach can lead to greater volatility of returns in the short term. This has been illustrated over 2020, and the current cyclical nature of the investments has led to high levels of beta over the past three years. However, Stefan does attempt to balance the risk of growthier names by including more defensive, high-quality stocks that also fulfil his investment criteria. Alongside this, he also works with BlackRock RQA teams to ensure that any portfolio risk is deliberate and well diversified.

Currently the trust is trading at a discount of 7.3%. Although this is narrow relative to peers, it is wide relative to its one-year average and in our opinion offers an attractive entry point at this level.

bull bear
Best performance in the peer group since Stefan took over the portfolio Potential for short-term volatility given long-term investment horizon
High-conviction portfolio but with diverse source of revenues The discount to NAV is narrow relative to peers
Signs of sentiment towards Europe improving with significant policy support Gearing can exacerbate downside as well as amplify upside
Continue to Portfolio
2022 Kepler Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more

Fund History

05 Jan 2022 Kepler’s top-rated trusts for 2022
We unveil the winners of our ratings for 2022 in the Growth, Income & Growth and Alternative Income categories…
29 Dec 2021 Fund Analysis
BRGE continues to rank as the best performing European trust, with the team remaining unphased by near-term market risks…
10 Nov 2021 Results analysis: BlackRock Greater Europe
BRGE continues to rank as the best performing European equity trust, thanks to its high-conviction approach to growth investing…
09 Sep 2021 What next for European equities?
After a strong period for European equity markets, we ask whether this trend can continue…
10 Jun 2021 Fund Analysis
BRGE offers investors an unconstrained approach to European equities and has generated sector-leading performance…
26 May 2021 Stand and deliver
Is a high OCF daylight robbery or should investors keep calm and carry on? Our analysts debate the perennial question…
28 Apr 2021 The next value opportunity?
Two of our analysts debate whether Europe's improving vaccination programme will be the next opportunity for investors in their pursuit of returns...
21 Apr 2021 The importance of investment fundamentals in a crisis
2020 was a treacherous time for companies, but it showed the importance of capable management teams, a strong market position and resilient growth, says Stefan Gries, Co-Manager of the BlackRock Greater Europe Investment Trust plc.
04 Feb 2021 Eurovision 2021
Eight charts to guide investors through Europe...
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
23 Dec 2020 Fund Analysis
BRGE offers a bottom-up European equity portfolio and a strong track record…
28 Oct 2020 Results analysis: BlackRock Greater Europe
Reporting results for the full year ending August 2020, BRGE has continued to perform strongly in the face of uncertain conditions…
07 Oct 2020 Europe: the road to recovery
In Europe, the pandemic has paved the way for a brave new era of co-operation, says Stefan Gries, Co-Manager of the BlackRock Greater Europe Investment Trust plc...
23 Jul 2020 Fund Analysis
The strongest-performing trust in the sector over the past five years, BRGE offers a portfolio of high-growth European opportunities…
18 Dec 2019 Fund Analysis
BRGE offers a concentrated portfolio of high-quality companies located across Europe…
24 Apr 2019 Nothing compares to EU
Currently one of the financial world's most unloved regions, we look at the sectors that are unique to Europe and how the persistent pessimism has presented attractive opportunities…
23 Apr 2019 Fund Analysis
Under a new management structure, BRGE aims to generate capital growth from all-cap companies listed in Europe...
30 May 2018 Forza Italia!
Recent weeks have seen Italy's rocky relationship with the EU thrust into the spotlight once again, but we think volatility for European equities may be a buying opportunity...
24 Jan 2018 Fund Analysis
The only European investment trust which invests in both Developed and Developing Europe, with a new lead manager from a team which has generated excellent alpha...
24 Jan 2018 Signs of continental shift
BlackRock Greater Europe portfolio co-manager Stefan Gries explains what’s driving investment opportunities in Greater Europe...
21 Mar 2017 Continental shift
While Europe remains out of favour with investors, shares from the region can offer value, says portfolio co-manager Vincent Devlin...
13 Dec 2016 Fund Analysis
13 Dec 2016 Small is beautiful
We identify the UK's most efficient trusts, all of which have operational costs below 0.1%...
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