BlackRock Greater Europe 18 December 2019
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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.
BlackRock Greater Europe (BRGE) offers investors an opportunity to access some of the highest quality companies across developed and emerging Europe.
The past five years have seen the trust perform exceptionally strongly. In particular, it has come into its own in 2019, outperforming both benchmark and peers by close to 10%. Much of this outperformance can be put down to the new partnership, formed in 2017, between managers Stefan Gries and Sam Vecht. Together they have changed the shape of the trust, building a more concentrated portfolio which has helped the trust to generate higher levels of alpha. Despite the punchier approach, the trust has not sacrificed volatility for gains, and continues to offer one of the lowest standard deviations in the sector.
Currently the trust trades at a discount of 3.5%, the narrowest in the sector.
Stefan has made an immediate impact on the trust since joining in 2017. He has helped the team to generate returns in excess of the benchmark and peers, explaining he has made the investment process more consistent and disciplined, and increasing emphasis on sustainable cash returns. The decision to increase the portfolio’s concentration has also, in our view, given Stefan a better chance of generating alpha and outperforming the passive ETFs. It is also worth noting that, despite the more concentrated approach, over the past five years BRGE has among the lowest levels of volatility in the sector (source: Morningstar). Furthermore, over a five year period the trust has the highest Sharpe ratio in the peer group (1.05). We think this has largely been due to Stefan’s unrelenting approach to finding high-quality names with strong management and good free cash flow. Furthermore, although the trust has a clear tilt towards growth companies, Stefan tries to balance some of these risks by holding more defensive, high-quality stocks. This has helped to keep volatility down, while giving investors access to the strong returns of the growth companies.
| Bull | bear |
| A manager with a clear philosophy and process |
Europe continues to be clouded with political and macroeconomic uncertainty |
| Strong risk governance with risk and returns diversified by end-market exposures | The discount to NAV is narrow relative to peers |
| A concentrated portfolio, which gives greater outperformance potential |
This trust has been awarded a rating by Kepler Trust Intelligence for growth... Find out more
Fund History
