BlackRock Throgmorton Trust NAV returned 4.9% in July

BlackRock Throgmorton Trust plc (LON:THRG) has announced its latest portfolio update.

All information is at 31 July 2021 and unaudited.

To learn more about the BlackRock Throgmorton Trust plc please follow this link:

Performance at month end is calculated on a cum income basis

Net asset value4.98.868.061.8170.7
Share price4.

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 has been blended to reflect this.

At month end

Net asset value capital only:943.75p
Net asset value incl. income:951.40p
Share price966.00p
Premium to cum income NAV1.5%
Net yield1:1.1%
Total Gross assets2:£916.7m
Net market exposure as a % of net asset value3:118.3%
Ordinary shares in issue4:96,347,973
2020 ongoing charges (excluding performance fees)5,6:0.60%
2020 ongoing charges ratio (including performance

1. Calculated using the 2021 interim dividend declared on 26 July 2021 and payable on 27 August 2021, together with the 2020 final dividend declared on 10 February 2021 and paid on 1 April 2021.
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 2020.
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
Consumer Discretionary21.6
Consumer Staples7.9
Health Care5.1
Basic Materials2.0
Net current assets                                1.9
Country Weightings% of Total Assets
United Kingdom90.7
United States7.3

Market Exposure (Quarterly)

Gross exposure123.4122.3128.3122.8
Net exposure118.6118.6125.3119.8

Ten Largest Investments

Company% of Total Gross Assets
Gamma Communications3.1
Watches of Switzerland2.9
Impax Asset Management2.8
Oxford Instruments2.5
Pets at Home2.0
Auction Technology2.0

Commenting on the markets, Dan Whitestone, representing the Investment Manager noted:

The Company returned 4.9%1 in July, outperforming its benchmark, the Numis Smaller Companies +AIM ex Investment Trusts Index, which returned 1.0%1. The long book continued to be the key driver of outperformance during the month.

Equity markets rose for a sixth straight month in July as positive and strengthening earnings results more than outweighed the negatives from the spread of the Delta variant. July also saw a continuation of the recent rotation to growth outperforming value, with many of the winners of 2020 continuing to deliver positive results and showing that they are more than just ‘Covid-beneficiaries’, most notably within Technology, Industrials and Healthcare.

Breaking down performance over the month we saw strong share price moves across a wide range of companies, showcasing the depth and breadth of the holdings in the long book. Shares in Auction Technology Group (ATG) rose to new highs after their recent equity raise to fund the acquisition of LiveAuctioneers, the leading curated US Arts and Antiques (A&A) marketplace. This is an equity raise we supported in a material way. Currently ATG is a leader in UK A&A and US I&C (Industrial and Commercial), so the strategic rationale of this deal is compelling, enabling ATG to gain fast access to the leading player in the US A&A market, a market that is 2x bigger than the UK, and with the online segment forecast to grow over 20% per annum. M&A (Mergers & Acquisitions) activity for UK listed companies continued during the month with our holding in video game developer, Sumo Group, receiving an offer from Chinese gaming giant Tencent. Baltic Classifieds Group, an owner of locally dominant online advertising websites, continued to rise after a successful IPO (Initial Public Offering) in late June.

Given the strong outperformance during the month and impressive trading that we have continued to see across the long book, stock specific detractors were limited. The largest detractor was MoonPig which fell despite a strong update with upgrades to outer year forecasts as the market hoped for more. Concerns across the market are increasing for many consumer internet services companies that did experience a benefit from the pandemic, like Moonpig and how growth might be impacted as people return to old habits, however, we believe that the investment case for Moonpig to grow customers, order frequency and basket size remains intact. Shares in Dunelm fell despite the company raising profit guidance for the full year, as it also announced plans to increase investment spend.

Overall, nothing has changed our positive disposition with regard to the fundamental strength of many of our differentiated investments and the power and enduring nature of many secular trends we are witnessing right now. The reporting season has continued to show strength in the underlying trading for many of the holdings within the long book. As stated in last month’s update, we are now seeing more opportunities to introduce short positions back into the portfolio, reflecting tougher trading conditions (competition, costs and further COVID-19 disruption) and where we think expectations have got carried away. In many cases these shares trade at high valuations that we haven’t seen in years so if our analysis is correct then this could be a useful source of incremental alpha. We thank shareholders for their ongoing support.

1Source: BlackRock as at 31 July 2021

25 August 2021

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