Complete your registration today for a chance to win £50 John Lewis vouchers in our weekly draw Enter now
Fund Profile

BlackRock Throgmorton Trust 28 July 2021


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.

A new version of this profile is available. View Latest

BlackRock Throgmorton Trust (THRG) invests primarily in UK small and mid caps, with lead manager Dan Whitestone able to allocate to both long and short positions. Typically running gross portfolio exposure of c. 120–130%, with ordinary anticipated net exposure of c. 100–110%, the manager seeks to use the short book as an extra source of active stock differentiation.

As we discuss under Performance, THRG’s returns have been exceptionally strong in both the short term and over the past five years. Indeed, they are currently the strongest in the peer group over five years on a share price basis (and second strongest on an NAV total return basis). Perhaps as a result, THRG trades on a premium (as discussed under Discount). The board has been active in issuing shares to help to manage this whilst also growing the trust.

Presently THRG has net exposure of 119.8% (long positions minus short positions), which is above the typical anticipated operating range. As discussed under Portfolio and Gearing, this in part reflects Dan’s reluctance to short stocks into a generalised market rally such as that seen in the recovery from the sharp market contraction in Q1 2020. However, he believes the COVID-19 crisis has boosted pre-existing trends which will lead to increasing and accelerating divergences in fortunes amongst companies and he anticipates widespread ‘corporate Darwinism’. Accordingly, he expects to increase short exposure in the coming months on the expectation that the market will increasingly recognise the fundamental weaknesses of many companies which are being disrupted or are in financially straitened conditions.

Although the investment strategy is focussed on capital growth, the board has increased or maintained dividends every year for the past 11 financial years.

Analyst's View

THRG’s shareholders have enjoyed outstanding returns in recent years, with astute stockpicking (shown by the consistently positive information ratio) and timely adjustments to net exposure seemingly the primary drivers. The decision to run elevated net exposure into a generalised market rally, and to avoid running significant short exposure at a time when many share prices were rallying on sentiment rather than fundamentals, has proven strongly beneficial, as has the pre-existing focus on ‘disruptors’. THRG saw a period of relative consolidation following the announcement around COVID-19 vaccines as value outperformed, a possibility we had warned about in our previous research note. However, absolute returns remained strong and THRG’s relative return profile has started to accelerate ahead of peers and the market once again as constituent companies continue to report. We also note that the manager is extremely bullish on his opportunity set, as shown by his high net exposure. Furthermore, Dan argues that the COVID-19 pandemic and lockdown policy responses are likely to leave many companies in a weakened position operationally. He believes this should offer shorting opportunities in due course, which THRG is notably better able to take advantage of in comparison to the broader peer group.

As government stimulus is withdrawn, we think companies with the balance sheet strength and ability to take the sort of market leadership which Dan insists on seem likely to prosper operationally. Meanwhile, the extensive resources available within the BlackRock team suggest to us that idea generation should remain fertile. The long/short structure and dynamic shifts to net exposure continue to see THRG offering a differentiated product, and it has been reassuring that the trust remained at a premium even as value styles came cyclically into favour over the end of 2020 and start of 2021.

bull bear
Very strong track record of absolute and relative performance
Periods of 'value' outperformance and rallies in cyclicals remain likely to prove a stylistic headwind
Highly exposed to long-term industry change and secular trends which are accelerating as a result of COVID-19
Net market exposure tends to be in excess of 100%, exacerbating downside as well as amplifying upside
Focus on balance sheet strength provides exposure to accelerated 'corporate Darwinism'
Currently trading on a premium to NAV
Continue to Portfolio

Fund History

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...
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
Please enter a valid password
Please enter a valid email address
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
Please enter a company name
Please enter a location name
Please choose an option
Please enter a platform
Please choose an option
Please enter a trust
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
Please select an option
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
Please enter your first name
Please enter your last name
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
Please enter a valid password
Please enter a valid password
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.