Fund Profile

BlackRock Throgmorton Trust 07 August 2023


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The manager of BlackRock Throgmorton Trust (LON:THRG) focusses on UK mid and small-cap companies in the UK, with a preference for companies with long-term growth prospects, or those which are innovative industry disruptors. Manager Dan Whitestone has built one of the most successful track records in the peer group since he joined the team, first as co-manager in 2015 and then as lead manager in 2018. As we discuss in the Performance section, 2022 marked a very difficult year for growth and smaller companies’ strategies in the face of rising interest rates, and THRG’s NAV declined by over 30%. However, long-term performance remains ahead of the benchmark and peer group.

THRG is primarily a vehicle for capital return and portfolio decisions are not influenced by dividends. Nevertheless, THRG has a good record of progressively increasing its dividend, with 2020 the only recent example of the dividend being held. There is over a year’s worth of revenue reserve and the current yield is c. 1.9% .

Dan uses CFDs, rather than debt, to gear THRG. More unusually, he uses CFDs to short a small number of stocks. In the last two or three years, this facility has been used sparingly, with a c. 3% short book. Against this, CFDs are also used to increase long exposure and the overall net exposure . As we discuss in the Gearing section, this closely equates to conventional gearing of c. 112%, equivalent to 8% net gearing. Meanwhile the gross exposure, i.e. the total of long and short, is currently c. 115%.

THRG’s discount is c. 8%, which is narrower than the peer group average of c. 12%. Historically, THRG’s board has issued shares when the NAV has traded at a premium. More recently, the board has taken the reverse action, and in 2022 and 2023 has made active use of share buybacks. As well as enhancing NAV, buybacks enhance revenue reserves per share and may have a limiting effect on discount widening.

Analyst's View

The manager of THRG, Dan Whitestone, has built a strong long-term track record of identifying companies which demonstrate disruptive business models or capitalise on structural growth themes. 2022 saw a sea change in market conditions, with rising interest rates leading to growth equities being particularly hard hit. Smaller-company shares usually suffer in periods of risk aversion, as investors look to reduce exposure to what is deemed a riskier asset class. This can lead to a certain amount of indiscriminate selling, putting companies with strong operating results in the same boat as weaker companies in terms of their stock-market performance. Dan believes that THRG’s portfolio continues to strengthen through market share gains and organic growth, and that the market just needs to work through its current risk-aversion phase in order to start seeing the portfolio’s strong operating performance be rewarded in share-price terms.

Long-term investment requires patience and, while investors work through this phase, we highlight that THRG’s low base management fees are very attractive. Dan and the team are very aligned with shareholders through the capped performance fee, outlined in the Charges section. The board has also been buying shares back during this phase, which we discuss in the Discount section. We think that, while THRG’s current discount of c. 8% is narrower than its peer group average of 12%, this reflects not just the share buyback, but also the long-term record. The evidence shows that THRG can trade above NAV at times when risk appetite is high, meaning there is still an opportunity to benefit from discount-narrowing as sentiment improves.


  • Strong long-term track record against benchmark and peer group
  • Discount may offer attractive entry point
  • Modest use of short positions provides an alternative way to profit from share price movements


  • Equities generally, and small-caps in particular, are currently suffering from investor risk aversion
  • Gearing can amplify losses on the downside
  • Low yield may not suit income-seeking investors
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Fund History

31 May 2024 Always look on the bright side of life
We argue that optimism is more likely to serve investors better than pessimism…
21 May 2024 Fund Analysis
THRG has performed well over the past year, with outperformance accelerating in recent months…
21 Feb 2024 Pitch doctoring
Our analyst argues the upcoming budget should see radical action to boost the UK market…
13 Feb 2024 Results analysis: BlackRock Throgmorton
Easing macroeconomic conditions may provide a catalyst for THRG’s operationally resilient companies to re-rate…
10 Jan 2024 Definitely maybe
Fund flows and discounts may shed some light on a once-in-a-generation opportunity…
07 Aug 2023 Fund Analysis
THRG: falling portfolio valuations mask strong and resilient operational growth trends…
13 Feb 2023 Results analysis: BlackRock Throgmorton
Performance improved for THRG in the second half of the 2022 financial year…
18 Jan 2023 Fortune favours the brave
Our research suggests a recession has already been priced into small cap trusts, but risks abound...
11 Jan 2023 Solving the Rubik’s Cube
We reveal the winners of our investment trust ratings for 2023…
04 Nov 2022 Fund Analysis
THRG’s manager argues macro is driving short-term volatility, but fundamentals should prevail in the long term…
10 Aug 2022 Get ‘em while they’re hot
Wide discounts in the UK Smaller Companies sector may present long term investors with good entry opportunities…
16 Feb 2022 Perfectly formed
Our research suggests that investment trusts really are a better way to gain exposure to smaller companies…
09 Feb 2022 Results analysis: BlackRock Throgmorton
THRG continues to build on its impressive track record by investing in disruptive and innovative UK smaller companies…
30 Dec 2021 Great expectations
As the last of the mince pies wilts in the fridge, topped with a generous helping of stilton, the Kepler Trust Intelligence team stick a finger in the air and point toward their top picks for the year ahead…
08 Dec 2021 Fund Analysis
A dynamic and growth orientated approach to UK smaller companies…
11 Aug 2021 In at the deep end
Does seeking out wider-than-usual discounts help investors systematically outperform in the UK trust space?
28 Jul 2021 Fund Analysis
THRG’s high net exposure reflects the manager’s bullishness about the opportunity set in UK small caps…
08 Jul 2021 London Calling
UK equities represent a ‘once in a generation’ opportunity for investors according to the managers who joined us to discuss the outlook at our event last week…
07 Jul 2021 Slides and Audio: BlackRock Throgmorton
Download the presentation and listen to the audio from our 'Cool Britannia' Summer conference on 01 July...
07 Jul 2021 Slides and Audio: Roundtable - Small is beautiful
Download the presentation and listen to the audio from our second roundtable discussion with Dan Whitestone, Georgina Brittain and Judith MacKenzie...
23 Jun 2021 Time to back Britain?
After a challenging period for the United Kingdom, we wonder if it could be the most exciting market on a five-year view…
09 Jun 2021 Cool Britannia?
Join the team at Kepler Trust Intelligence and six leading UK fund managers as we examine the prospects for UK equities with COVID in retreat and Brexit uncertainty finally behind us…
18 Feb 2021 Results analysis: BlackRock Throgmorton
After another set of strong results, we look at why, in our opinion, THRG continues to be one of the standout trusts in the UK…
10 Feb 2021 Eye of the Pfizer
Mining shares have rallied in recent months. With further potential, what impact could this have on the relative returns of active UK Small cap strategies...
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
BlackRock Throgmorton (THRG) seeks to use both long and short positions to generate alpha...
10 Dec 2020 Lots of uncertainty, but an abundance of investment opportunities
Dan Whitestone rationalises the financial performance of individual companies during the pandemic and how this has affected BlackRock Throgmorton Trust plc...
25 Nov 2020 Britannia Redux?
UK equities have been despised for almost five years and could offer extreme rebound potential…
17 Jun 2020 Fund Analysis
One of the most reliable trusts in the UK smaller-companies sector, THRG uses both a long and a short book to generate alpha, regardless of the wider market conditions…
20 Nov 2019 Making the grade: Kepler's rated trusts report strong performance in 2019
Earlier this year, we launched our new ratings for income and growth. Since then, the 40 trusts to have been awarded the elite Kepler Trust Intelligence ratings have performed strongly…
20 Nov 2019 Fund Analysis
One of the most reliable trusts in the UK, THRG has shown the ability to perform strongly in both rising and falling markets at low levels of volatility…
16 Oct 2019 Thinking big on small companies
10 Apr 2019 Because they're worth it
With the rise of the passives putting more pressure on fees than ever before, we argue that performance fees could be the key to encouraging truly active investment trust managers...
03 Apr 2019 Fund Analysis
Dan Whitestone offers a growth-orientated portfolio of UK small and mid caps, using both long and short positions...
24 Oct 2017 Fund Analysis
A growth-orientated UK small-cap trust that is differentiated from its peers thanks to its ability to take both long and short positions...
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