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Fund Profile

BlackRock Income & Growth 20 December 2023

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
BRIG is trading at a wide discount versus its five-year history which could be an attractive entry point for long-term investors…
Overview

Adam Avigdori and David Goldman have managed BlackRock Income & Growth Investment Trust (BRIG) since April 2012 and July 2017, respectively. Over this time, they have constructed a well-diversified, yet concentrated portfolio of around 40 stocks, reflecting their best ideas. Both managers are avid stock pickers driven by bottom-up fundamental research and remain steadfast in their investment process, refusing to change what they look for based on the latest market trend.

The managers will avoid deep value stocks, i.e. businesses that are cheap for a good reason, and unprofitable growth companies. Instead, they want to invest in businesses that they feel showcase strong balance sheets, sustainable free cash flows, discipline in capital allocation and an adherence to their ESG values, which is what delivers a higher quality bias (see Portfolio section). They view any potential and current investments under three categories, allocating roughly 70% of the portfolio to ‘income’ generators, featuring companies with sustainably high free cash flows and a growing dividend, 20% towards ‘growth’ companies and the remaining 10% to ‘turnaround’ opportunities.

BRIG has marginally outperformed the FTSE All-Share Index over the past five years, buoyed by its bias towards quality stocks, and more recently, some exposure to value stocks (see Performance section). However, there have been periods where performance has lagged, largely when style factors have solely driven the market, like the growth rally we experienced during the pandemic.

BRIG’s strong revenue reserves allowed it to maintain its dividends throughout the pandemic (see Dividend section). The trust trades on a discount of 13.7%, wider than average for the sector.

Analyst's View

We believe BRIG offers a differentiated approach to growth and income investing. The managers avoid sector or style biases, allowing for flexibility in portfolio construction when market conditions change, and their focus on quality companies, coupled with a more cautious approach to gearing, provides a defensive element to the portfolio. The total return focus means that BRIG does not pay as high dividends as others in the sector, but we believe that its focus on dividend and capital growth should be attractive to long-term investors.

BRIG’s performance was strong at the beginning of Adam’s tenure, but amidst a volatile macro backdrop over the last five years it has struggled a bit. The investment process reflects a more balanced factor approach than most peers in the sector, meaning it’s not strongly tilted to either growth or value. Over the last five years, we’ve experienced some significant rotations in style, whereby market performance has been led by either growth or value stocks, which has meant the trust underperformed the sector. That said, having a more balanced approach than some peers has meant it has delivered better relative performance more recently (see Performance section) and over the long term. We would argue that it could be a good way to invest in troubled market environments where value and growth rotations are no longer driving performance, but quality is more important. BRIG’s discount is much wider than its historical average, so if performance continues, it could lead to the discount narrowing. This would provide investors with an extra kicker to returns and therefore could make it a compelling investment proposition for patient investors looking for exposure to the UK market.

Bull

  • A higher dividend yield than the benchmark, coupled with growth prospects
  • Wider than average discount could present an attractive long-term entry point for investors
  • Portfolio’s quality and value investments have done well amidst the style rotation away from growth

Bear

  • Higher level of gearing can magnify losses on the downside
  • Small trust size limits institutional investors and liquidity
  • Having a more balanced approach to style factors could mean it lags peers when either growth or value drives market performance
Continue to Portfolio

Fund History

07 Feb 2024 Range anxiety
We look at what context we can gain from ten years of discount analysis…
02 Jan 2024 Results analysis: BlackRock Income and Growth
BRIG is trading at a wide discount versus its five-year history which could be an attractive entry point for long-term investors…
20 Dec 2023 Fund Analysis
BRIG is trading at a wide discount versus its five-year history which could be an attractive entry point for long-term investors…
06 Dec 2023 Fool's gold
Cash would have been a poor investment through this period of high inflation…
26 May 2023 The outlook for dividends as bond yields rise
Bond yields are now at their highest level in a decade, pushed up by rising interest rates. What does this mean for the relative merits of dividend-paying equities? David Goldman, manager on the BlackRock Income & Growth Investment Trust, looks at why they may still have appeal...
12 Apr 2023 Fund Analysis
(LON:BRIG) BRIG is an attractive long-term total return option…
10 Feb 2023 Results analysis: BlackRock Income and Growth
BRIG has proved resilient to market wobbles and is a differentiated income proposition with the discount close to double digits…
29 Sep 2022 Fund Analysis
BRIG provides the assurance of a solid income to see you through the short-term uncertainty...
02 Sep 2022 Dividends: a friend for tough times
At a time of higher inflation and interest rates, investors may start to prioritise dividends, says David Goldman, co-manager on the BlackRock Income & Growth Investment Trust plc. However, selectivity is vitally important…
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...
29 Nov 2017 Fund Analysis
An income focused investment trust with solid dividend cover with a popular OEIC counterpart managed by the same team...
20 Nov 2017 Thin ice...
Our analysis shows the extent to which funds in the UK equity income sector are concentrated on just a few dividend paying stocks…
13 Sep 2017 Big Issue(rs)
We highlight the UK equity trusts that have issued and bought back the most shares over the course of 2017 so far and how these actions have affected shareholders...
03 Jul 2017 2017: A level head in testing times
The BlackRock Income & Growth team explain how they view the world given the uncertain backdrop…
27 Jun 2017 What's driving frontier markets?
Can political and economic reforms make a difference when it comes to looking for growth?
15 Jun 2017 Signs of continental shift
BlackRock's Stefan Gries explains what's driving opportunities in Greater Europe...
12 Jun 2017 MAYDAY!
As the Conservative party founders, we examine the impact of last week’s disastrous election on trusts...
08 Jun 2017 The long game
Highlights from BlackRock Income & Growth's annual general meeting...
07 Jun 2017 Omnishambles...
Given the huge levels of political-induced uncertainty, we analyse recent drivers and themes within the UK equity market ahead of the upcoming election
30 May 2017 Income funds in focus
We introduce a new rating system designed by us to identify trusts which generate a real, dependable income without sacrificing capital....
11 May 2017 Storm proofing...
Our research shows dividend cover among UK equity income trusts is at its highest level in decade...
20 Apr 2017 The quest for income and growth
BlackRock’s Mark Wharrier discusses how he selects companies with the ability to overcome the dual challenges of growing a portfolio and enjoying sustainable income in the current environment...
29 Mar 2017 Good things come in small packages...
Mike Prentis, BlackRock’s portfolio manager for smaller companies, explains his rationale for picking companies...
15 Mar 2017 Never mind the ballots
Despite political uncertainty in Europe, the continent remains home to some of the world's strongest brands and companies...
10 Mar 2017 The long and short of it
BlackRock's Dan Whitestone explains how 'shorting' a company can make money for investors on a falling share price...
25 Jan 2017 Frontier markets can give you the edge…
Gordon Fraser, portfolio manager for frontier markets at BlackRock, highlights everything investors need to know about high growth frontier markets...
06 Jan 2017 Confidence returns to commodities
Tom Holl, co-manager of BlackRock’s Commodities Income Investment Trust, discusses the future for this diverse sector...
19 Dec 2016 Salvation for Latin America?
BlackRock’s portfolio manager for Latin America, Will Landers, assesses the region’s potential for growth....
10 Dec 2015 AIC Flexible Investment: A closer look
We examine the AIC's new sector, and take a closer look at each of the ten funds that will sit in it
01 Dec 2015 Investment trusts without the discount volatility
A new breed of investment trusts operates a 'zero discount' policy, meaning they are effectively priced like OEICs...
View all

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