Fund Profile

Disclaimer

This is a non-independent marketing communication commissioned by BlackRock. 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

BlackRock Income & Growth (BRIG) is an all-cap strategy which seeks to balance its stylistic exposure whilst looking to grow both capital and income over the long term through investment in UK equities. BRIG has been run by the UK equity income team at BlackRock since April 2012.

Whilst the managers, Adam Avigdori and David Goldman, utilise a consistent stock analytical approach across BRIG and their open-ended products, they look to utilise the closed-ended structure of BRIG to incorporate less liquid, smaller, companies where they perceive superior long-term potential.

As discussed in the Dividend section, BRIG has maintained or grown its dividend every year since BlackRock took over management of the trust (financial year 2012). The trust retains sizeable revenue reserves to support the dividend in the near term but, the managers note that, in any event, they are seeing income streams starting to recover. Despite this, BRIG remains on a substantial discount relative to its own history and the wider sector.

A majority of the portfolio continues to be allocated towards ‘income generators’, part of a structural element to portfolio construction. This is one of three buckets the managers categorise holdings within. As discussed in the Portfolio section, they identify a number of themes across their portfolio at present including ‘cyclical and industrial tailwinds’, ‘undervalued domestic companies’, and ‘self-help and restructuring’, whilst avoiding highly levered companies and those facing structural challenges.

The managers have deployed a significant proportion of the trust’s current gearing facilities at present, reflecting their optimistic outlook for the UK market and the breadth of stock ideas they are identifying.

Kepler View

Boasting substantial revenue reserves and having seen revenue returns recover in H1 FY 2021, BRIG looks well-placed to us to grow its dividend going forward and maintain the progressive dividend policy enacted in recent years, despite the challenges facing dividend generation in the UK equity market. The managers’ focus on resilient income streams has clearly borne fruit during the crisis. Whilst the tactical adjustments to gearing made by the managers in H1 2020 proved beneficial, shareholders will be disappointed returns have lagged in the sharp market rally seen after the announcement of the successful development of COVID-19 vaccines. We suggest that shareholders view this as evidence of stylistic consistency, with the kind of ‘income generator’ companies BRIG is structurally exposed to typically lagging in this sort of environment. Retaining this allocation has been, we would suggest, consistent with the aim of targeting long-term sustainable dividend growth.

Investors can presently access this track record of dividend growth with the support of substantial revenue reserves at a significant discount to NAV. We note and welcome that the board has remained committed to intervening via buybacks despite this now making cancellation of repurchased shares more practicable than retaining in treasury.

bull bear
Reasonable yield which is well supported by revenue reserves Gearing can amplify downside as well as magnify upside
Closed-ended structure allows access to attractive mid and small cap opportunities without impinging on overall portfolio liquidity
Small size of trust may make it harder to build a position for institutional investors
New ability to invest up to 20% outside the UK enhances opportunity set
Quality characteristics can moderate exposure to cyclical rallies
Continue to Portfolio
2022 Kepler Income & Growth Rated Fund

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

Fund History

17 Jan 2022 Results analysis: BlackRock Income & Growth
BRIG’s managers are seeing a faster recovery in dividends than they expected…
24 Dec 2021 Fund Analysis
BRIG’s long term dividend attractions remain undiminished…
28 Sep 2021 Fund Analysis
BRIG’s substantial revenue reserves should continue to support dividend growth…
21 Sep 2021 Does the UK market still have potential?
The UK has had a strong start to the year, a welcome relief after a tough few years. David Goldman, Co-Manager on the BlackRock Income and Growth Investment Trust says that there is more to come from UK companies.
06 Apr 2021 The UK post-pandemic revival
The UK is back on its feet after a tough pandemic and protracted Brexit negotiations, says David Goldman, Co-Manager of the BlackRock Income and Growth Investment Trust plc.
05 Feb 2021 Results analysis: BlackRock Income and Growth
BlackRock Income and Growth has delivered strong returns since its year end and is well placed to perform in 2021 with a resilient, high quality portfolio and solid reserves supporting its 4% yield…
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
07 Jan 2021 Fund Analysis
BRIG has substantial revenue reserves to support dividend growth...
04 Aug 2020 Resilient income in tough times
David Goldman and Adam Avigdori, Co-Managers of the BlackRock Income and Growth Investment Trust plc, believe these are tough times for dividend seekers in the UK, but active management can help navigate this difficult environment...
30 Jul 2020 Fund Analysis
BRIG aims to provide investors with a rising dividend, as well as capital growth over the long term...
15 Apr 2020 Hold fast
Investment trusts' revenue reserves could make them a vital stronghold for investors facing UK dividend cuts of as much as 47%....
03 Feb 2020 Sustainable financial returns for long-term growth
ESG considerations are becoming more important for investors. Adam Avigdori, Co-Manager of the BlackRock Income and Growth Investment Trust plc, discusses how they draw ESG analysis into their investment process...
12 Dec 2019 Regime change: how manager changes impact performance
Does a change in manager result in improved trust performance?
11 Dec 2019 Fund Analysis
BRIG aims to provide investors with a rising dividend, as well as capital growth over the long term...
05 Dec 2019 Holding something in reserve
A sterling bounce poses a threat to UK dividends - we look at how UK equity income investment trust managers stand prepared…
17 Jul 2019 Ready for action
In the second part of our active management series, we assess the most active managers across the major closed-ended equity sectors…
05 Jun 2019 Fund Analysis
BlackRock Income & Growth (BRIG) aims to provide investors with a rising dividend, as well as capital growth over the long term...
28 Dec 2018 Ingredients for change
The UK market has only been cheaper twice in the last century; and on both occasions the world was at war...
03 Oct 2018 We can be heroes
Our analysis has uncovered the trusts which have generated a solid income through thick and thin - without compromising other aspects of performance...
03 Oct 2018 Fund Analysis
BlackRock Income & Growth (BRIG) aims to provide investors with a rising dividend, as well as capital growth over the long term...
13 Jun 2018 Still waters run deep
UK equity income trusts trade at a discount to their global-equity-income-focused counterparts, yet our research suggests this could be unjustified...
23 May 2018 Fund Analysis
A UK equity income trust that uses a total return investment philosophy, aiming to consistently grow the dividend as well as capital
24 May 2017 Fund Analysis
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