29th Jun 2016 11:26
LONDON (Alliance News) - BlackRock Income and Growth Investment Trust PLC on Wednesday said it underperformed its benchmark in the six months ended April 30, due to "strongly performing shares in the index which [the company] did not hold".
Blackrock is focused on investing in principally UK listed equities.
The trust posted a negative total return on net asset value of 2.8% for its first half, underpeforming the flat total return from the FTSE All-Share Total Return Index. The company's net asset value per share at the end of April was 178.56 pence, down 4.9% from 187.69p at October 31.
Since the period end and up to June 27, Blackrock's net asset value per share fell by 6.8% compared with a fall in the benchmark of 4.7%, the company added.
"The main driver of the portfolio's relative performance over the six months to April 30 was strongly performing shares in the index which we did not hold. The mining sector demonstrated significant volatility, initially falling in the fourth quarter of 2015, to rebound strongly in the first quarter of 2016. As the portfolio is positioned away from companies that rely on a continuing high commodity price environment, this acted as a material drag on relative performance," the company's investment manager BlackRock Investment Management (UK) Ltd said.
"As predicted by many, we have seen substantial volatility in the equity and financial markets since the result of the vote was announced. Following such a momentous decision, it is not yet possible accurately to predict the long term impact on the UK economy. However, the underlying economy is strong and, as I wrote in January of this year, your fund manager continues to focus on assembling a portfolio of individual companies which, taken as a whole, should prove capable of growing the company's revenue and supporting dividend growth into the future," Chairman Jonathan Cartwright said.
"Looking to the longer term, it is reasonable to expect that the UK will be able to negotiate satisfactory trading arrangements with its European neighbours - and more widely," the chairman added.
Shares in Blackrock were untraded on Tuesday, having last traded at 173.00 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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