Investment trust BlackRock Greater Europe (LON:BRGE) has announced a package of strategic initiatives to enhance its appeal to investors and make better use of the investment trust structure.
These changes follow another year of underperformance versus the benchmark which new lead manager Benjamin Moore is seeking to arrest. There will be no change in how the portfolio is managed and the BlackRock team will continue to focus on investing in high-quality growth companies.
Package of initiatives
The changes include an enhanced dividend policy equivalent to 4.5% of NAV (net asset value), with a commitment to increase the dividend in absolute terms to ensure dividend growth. This should broaden the fund’s appeal to income-hungry investors.
BlackRock Greater Europe Investment Trust
In addition, BlackRock Greater Europe plans to reduce its management fees, and introduce a performance-related conditional tender offer for up to 25% of the shares at a 2% discount to prevailing NAV.
| Discount to NAV | 1-yr share price total return (%) | 5-yr share price total return (%) | 10-yr share price total return (%) | |
| Baillie Gifford European Growth | -12.1% | +15.9 | -14.4 | +97.4 |
| JPMorgan European Growth & Income | -4.8% | +4.6 | +82.7 | +193.3 |
| Fidelity European | -5.1% | -0.04 | +45.8 | +193.3 |
| BlackRock Greater Europe | -7.5% | -6.7 | -14 | +122.8 |
Source: The AIC/Morningstar
To reflect the enhance dividend policy, the company also plans to change its name to BlackRock European Growth & Dividend Trust. And the board has vowed to be ‘more strategic’ in its use of gearing to boost long-term returns.
Performance picks up
These announcements accompanied results for the year to August 2026 showing another period of underperformance. The fund’s NAV total return of 8.8% lagged the 20.9% rise in the FTSE World Europe ex UK Total Return Index. The share price total return was 8.4% as the discount widened from 4.7% to 5.2%.
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Chairman Andrew Impey said this disappointing relative performance ‘primarily reflects a continued challenging environment for quality growth investing’, although stock selection was also a negative factor.
Impey pointed out that Moore has refined the investment approach to place ‘greater emphasis on the price paid for quality investments, whilst continuing to focus on quality companies with good long-term growth potential’. The chair also stressed that the trust outperformed the index by 4.1% in H2 under Moore.
We applaud the board for taking bold steps to broaden BlackRock Greater Europe’s investment appeal. The market backdrop for its quality-growth approach has been out of favour for some time. But the portfolio looks well-placed to recover once the pendulum swing back towards quality.
In any case, Moore has broadened the investment approach, placing greater emphasis on valuations and opportunities beyond traditional quality-growth companies. And the introduction of a 4.5% NAV-based dividend policy should entice income-seeking investors onto the register.
However, as QuotedData’s Richard Williams cautioned: ‘These changes are welcome, but a sustained improvement in investment performance will be crucial to securing a stronger rating for BlackRock Greater Europe’s shares and reducing the need for buybacks.’
