BlackRock Throgmorton Trust plc (LON:THRG) has provided the following portfolio update.
All information is at 31 October 2020 and unaudited.
To learn more about the BlackRock Throgmorton Trust plc please follow this link: blackrock.com/uk/thrg
Performance at month end is calculated on a cum income basis
| One Month % | Three months % | One year % | Three years % | Five years % | |
| Net asset value | 1.8 | 8.0 | 5.7 | 17.6 | 74.3 |
| Share price | 6.5 | 9.5 | 8.1 | 42.8 | 114.0 |
| Benchmark* | 0.9 | 6.1 | -2.6 | -9.7 | 18.3 |
Sources: BlackRock and Datastream
*With effect from 22 March 2018 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index replaced the Numis Smaller Companies excluding AIM (excluding Investment Companies) Index as the Company’s benchmark. The performance of the indices have been blended to reflect this.
At month end
| Net asset value capital only: | 612.85p |
| Net asset value incl. income: | 617.92p |
| Share price | 624.00p |
| Premium to cum income NAV | 1.0% |
| Net yield1: | 1.6% |
| Total Gross assets2: | £519.8m |
| Net market exposure as a % of net asset value3: | 120.2% |
| Ordinary shares in issue4: | 84,118,462 |
| 2019 ongoing charges (excluding performance fees)5,6: | 0.59% |
| 2019 ongoing charges ratio (including performance fees)5,6,7: | 1.75% |
1. Calculated using the 2020 interim dividend declared on 23 July 2020 and paid on 26 August 2020, together with the 2019 final dividend declared on 06 February 2020 and paid on 27 March 2020.
2. Includes current year revenue and excludes gross exposure through contracts for difference.
3. Long exposure less short exposure as a percentage of net asset value.
4. Excluding 0 shares held in treasury.
5. Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 November 2019.
6. With effect from 1 August 2017 the base management fee was reduced from 0.70% to 0.35% of gross assets per annum.
7. Effective 1st December 2017 the annual performance fee is calculated using performance data on an annualised rolling two year basis (previously, one year) and the maximum annual performance fee payable is effectively reduced to 0.90% of two year rolling average month end gross assets (from 1% of average annual gross assets over one year). Additionally, the Company now accrues this fee at a rate of 15% of outperformance (previously 10%). The maximum annual total management fees (comprising the base management fee of 0.35% and a potential performance fee of 0.90%) are therefore 1.25% of average month end gross assets on a two-year rolling basis (from 1.70% of average annual gross assets).
| Sector Weightings | % of Total Assets |
| Industrials | 31.1 |
| Financials | 19.4 |
| Consumer Services | 18.5 |
| Technology | 10.7 |
| Consumer Goods | 8.8 |
| Health Care | 6.8 |
| Telecommunications | 2.9 |
| Basic Materials | 2.4 |
| Oil & Gas | 0.2 |
| Net current liabilities | -0.8 |
| —– | |
| Total | 100.0 |
| ===== | |
| Country Weightings | % of Total Assets |
| United Kingdom | 86.6 |
| United States | 7.9 |
| France | 2.5 |
| Australia | 0.9 |
| Switzerland | 0.7 |
| Netherlands | 0.6 |
| Denmark | 0.5 |
| Ireland | 0.2 |
| Israel | 0.1 |
| —– | |
| Total | 100.0 |
| ===== |
Market Exposure (Quarterly)
| 30.11.19 % | 29.02.20 % | 31.05.20 % | 31.08.20 % | |
| Long | 103.2 | 119.3 | 118.6 | 121.0 |
| Short | 7.4 | 8.9 | 2.1 | 2.4 |
| Gross exposure | 110.6 | 128.2 | 120.7 | 123.4 |
| Net exposure | 95.8 | 110.4 | 116.6 | 118.6 |
Ten Largest Investments
| Company | % of Total Gross Assets |
| Games Workshop | 3.2 |
| YouGov | 3.1 |
| Gamma Communications | 2.9 |
| Watches of Switzerland | 2.8 |
| Dechra Pharmaceuticals | 2.6 |
| Breedon | 2.3 |
| IntegraFin | 2.3 |
| Impax Asset Management | 2.3 |
| Avon Rubber | 2.2 |
| Pets at Home | 2.2 |
Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:
During the month the Company returned 1.8%1 (net of fees), outperforming our benchmark, the Numis Smaller Companies plus AIM (excluding Investment Companies) Index, which returned 0.9%1. Performance during the month was driven by the long book, while the short book detracted modestly.
Renewed coronavirus concerns and uncertainty in the run up to the US Presidential Election sent most equity markets lower during October. However, UK small and mid-caps bucked the trend and finished the month in positive territory, in part we think due to encouraging messaging around Brexit trade negotiations, though only time will tell.
Stock specifics continued to drive performance during the month, with several our holdings delivering strong results as we moved into reporting season, enabling these specific investment cases to drive differentiated returns against the wider market. The largest contributor was from Watches of Switzerland, where demand for high end watches and jewellery has been far stronger than expected and the relationship with Rolex has proved a point of differentiation in securing access to watches where demand continues to exceed supply. We increased the holding after the results. The second largest contributor was from YouGov, another long-term holding which reported strong results in the month and continues to deliver on its strategy to monetise its online panel data across an increasing array of industries looking for data insights – we expect demand for this type of service to endure and grow. Elsewhere shares in Bodycote rose in line with many other industrials as part of the rotation towards cyclicals during the month.
When looking through the list of detractors, there were some holdings which have delivered strongly for the portfolio throughout the year, but which have retraced some earlier gains alongside the many growth shares during October. Shares in IMImobile for example, gave back some recent share price gains despite continued strong underlying trading, and Citrix fell despite reporting third quarter, earnings which beat expectations and raising guidance, driven by strong growth in Citrix Workspace. In both cases we expect a recovery in the share prices and have retained the positions. The largest single detractor during the month came from one of our short positions in a UK retirement housebuilder which received a bid from a US private equity firm.
Overall a strong month for the portfolio and another month where outperformance of the benchmark highlights the ability for stock and industry specifics to triumph over broader market forces and macro trends. Where some share prices were weak during the month, we are reassured that much of this will be only temporary because where our holdings have reported they have generally shown very strong results and have raised guidance. This combination of a fall in share price but an increase in profits should quickly underpin valuations and therefore we do not believe there has been permanent loss of value.
We remain very excited about the opportunities ahead. Although we are disappointed to find more COVID-19 lockdowns occurring, in general we are not materially exposed to the worst affected industries, and many of our holdings in the long book will find their competitive advantages strengthened yet again. As such we are excited by the level of opportunity that this brings. We think that the dispersion we have already seen is likely to be enduring because it is causing actual changes at the industry level; changes in market share and changes to profits and cashflows. By focusing on stock and industry analysis and backing the advantaged and the differentiated, we believe the Company remains well set to capitalise on the opportunities ahead. We thank shareholders for their ongoing support.
1Source: BlackRock as at 31 October 2020
24 November 2020
To learn more about the BlackRock Throgmorton Trust plc please follow this link: blackrock.com/uk/thrg
