BlackRock Income & Growth Investment Trust plc MARK WHARRIER, ADAM AVIGDORI, DAVID GOLDMAN 24 February 2016
BlackRock Income & Growth Investment Trust plc New Team September 2013 Aim to deliver 110%+ of yield on FTSE All Share* Targeting outperformance of FTSE All Share by 3-5% per annum gross* Backed by dedicated UK Team of 18 fund managers and analysts Targets growth in capital and income from UK equities A member of the AIC s UK Equity Income sector** Current yield = 4.3% (31 January 2016) Active discount control mechanism AUM: GBP 48 million (31 January 2016) Investment Region Managers Benchmark Stock Capitalisation Style LARGE MID SMALL BlackRock Income & Growth Investment Trust United Kingdom Adam Avigdori Mark Wharrier FTSE All Share 30-60 shares Income Mark Wharrier 1994-2004 Mercury Asset Management (MLIM) 2004-2013 Newsmith Asset Management Sep 2013- BlackRock (MLIM) Adam Avigdori 2001- BlackRock (MLIM) David Goldman 2004- BlackRock (MLIM) * Please note this is an annual target but not guaranteed ** Sector changed its name from UK Growth and Income on 2 January 2014 2
BlackRock UK Equity Team A significant research capability Absolute Return Income Plus 2 Nigel Ridge Utilities Nick Osborne Banks Food & Drug Retail Head of Research Richard Wingfield Support Services Travel & Leisure Housebuilders Jane Holl General Retail Mark Wharrier Consumer Goods Aerospace & Defence Adam Avigdori Mining David Goldman Support Services James Macpherson Life & Non-Life Insurance Economics & Strategy Team Leader Nick McLeod- Clarke Pharmaceuticals Olutayo Osunkunle General Financials Telecoms Focus Small & Mid Matt Betts Life assurance Nick Little Oil & Gas Imran Sattar Real Estate Economics & Strategy Luke Chappell Media Roland Arnold Technology Small Cap Lucy Marmion Industrials Small Cap Mike Prentis Chemicals Small Cap Dan Whitestone Travel & Leisure Transportation Small Cap Team Leader Team Leader Source: BlackRock as at December 2015. Deliberate Collaborative Robust 3
BlackRock Income & Growth Investment Trust plc performance New Team Performance to 31 October 2015 (%) 3 months YTD 1 year 30-Sep-13 to 31-Oct-15 Since BlackRock inception* 3 years 5 years BlackRock Income & Growth IT Share Price Performance -0.1 8.3 13.8 24.6 57.7 48.8 54.4 NAV Income Performance -1.2 8.8 13.4 27.0 46.7 40.2 54.0 FTSE All-Share TR Index -3.6 1.7 3.0 8.5 31.6 27.7 41.1 NAV relative to FTSE All Share +2.4 +7.1 +10.4 +18.5 +15.1 +12.4 +12.9 Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance. Sources : BlackRock, DataStream, Bloomberg as at 31 October 2015 * Inception 02 April 2012. Performance shown here from 31 March 2012. 4
2015 Another year for stockpicking 2015: Total return for FTSE 100 companies 60 40 20 UK Income Fund: +9.7%* % return -- -20 FTSE 100 total return -1.3% -40-60 -80 Total Return to 31 December 2015 FTSE 100 Companies. Source: DataStream. * Trust Nav performance, year to date to 31 December 2015. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. 5
BlackRock Income & Growth Trust plc performance attribution: 12 months to 31 October 2015 Fund return: 13.4% FTSE All Share Index: 3.0% Shares: Top 10 / Bottom 10 Average weight (%) Portfolio Index Total return (%) Contributors Glencore 0.0% 1.3% -62.7% Carnival 3.0% 0.3% 49.5% Cineworld 1.8% 0.0% 69.6% Direct Line 2.3% 0.2% 50.4% Next 3.4% 0.5% 30.8% Imperial Tobacco 3.7% 1.4% 34.9% Berkeley Group 1.3% 0.2% 54.9% Rentokil 2.6% 0.1% 27.8% Domino Printing 1.0% 0.0% 54.8% DS Smith 1.6% 0.2% 50.7% Detractors WPP 0.0% 0.9% 23.2% Diageo 1.5% 2.2% 5.4% Intl Cons Airlines 0.0% 0.5% 42.4% IMI 0.7% 0.2% -19.5% Esure 0.4% 0.0% 16.7% SABMiller 0.0% 1.6% 15.7% Pearson 0.8% 0.5% -23.4% Reckitt Benckiser 0.7% 1.7% 27.0% Rio Tinto 3.7% 1.6% -16.3% Bodycote 0.9% 0.1% -13.4% -0.2-0.2-0.2-0.2-0.2-0.2-0.3-0.3-0.5-0.5 Estimated performance impact (%) 1.2 1.0 0.9 0.8 0.8 0.7 0.7 0.7 0.6 0.6 Average weight (%) Sectors Portfolio Index Consumer Services 21.0% 11.8% Industrials 15.2% 10.1% Basic Materials 4.4% 6.5% Financials 21.9% 25.9% Oil & Gas 7.2% 12.0% Consumer Goods 16.4% 14.9% Utilities 0.0% 3.7% Technology 0.4% 1.6% Telecomms. 2.0% 5.0% Healthcare 8.3% 8.6% Estimated performance impact (%) -0.3-0.4 0.2 0.0 0.8 1.5 1.3 1.1 3.1 4.0 Source: FactSet / BlackRock as at 31 October 2015. Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. 6
UK Income Fund Attribution: September 2013 to December 2015 20% Growth Companies 70% Yield & Free Cash Flow 10% Turnarounds Differentiated companies with long-term growth potential given strong barriers to entry Businesses generating sustainable Free Cash Flow Unfashionable assets with significant recovery potential Contributed 50bps+ to relative performance Shire Howden Joinery Hargreaves Lansdown Domino Printing Dixons Carphone Ashtead 3i Group RELX Direct Line Legal & General Cineworld Imperial Tobacco Admiral DS Smith Wolseley BAT Altria Next Berkeley Group Compass AstraZeneca Carnival Rentokil Friends Life Detracted Rio Tinto Not Owned/ Underweight Contributors: Glencore, Tesco, Standard Chartered, Anglo American, BHP Billiton, Shell, Rolls Royce Detractors: Vodafone Source: FactSet / BlackRock. As at 31 December 2015. Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. Free cash flow: cash generated after expenses. 7
Overview of 2015 Oil price collapse - Deflation Overcapacity - Deflation $ per barrel 160 140 120 100 80 60 40 20 08 10 12 14 mmt 900 800 700 600 500 400 300 200 100 China Steel Production Brent Crude WTI 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E Rapid technological change Emerging Market weakness - Deflation Years 20 15 10 5 0 Typical Fortune 500 Company Years to 1 billion $ market cap Google (1998) Facebook (2004) Tesla (2003) Uber (2009) Whatsapp (2009) Snapchat (2011) Oculus (2012) Index (Jan 2010 = 100) 110 100 90 80 70 60 Emerging underperforming developed 50 2013 2014 2015 2016 Source: Asset Dispersion & Oil Prices charts: BlackRock. Technology Change Chat: Salim Ismail et al. Exponential Organisations. Overcapacity Deflation chart; Deutsche Bank and Interest rate chart, Bank of America, as at 30 November 2015. Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. The trademarks, logos and images set out in this document are used only for the purposes of this presentation. Estimates may not come to pass. WTI = West Texas Intermediate. 8
Current themes Advantaged Cash Flow Compounders Strong market positions with pricing power No hard bond proxies Utilities, Real Estate Management focussed on cash return Cyclical & Industrial Tailwinds Focus on selective areas of growth Cash generation & balance sheet use driving profit growth Consolidating industries driving returns Banks & Financials Underlying businesses stronger than share prices imply Scope for rising returns and dividends Management focussed on shareholder returns Self Help & Restructuring Thesis not reliant on buoyant economy Management action driving value; Carnival, Rentokil Improving and consolidating markets Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. The trademarks, logos and images set out in this document are used only for the purposes of this presentation. Bond proxies: Defensive equities with high yields. Advantaged Cash Flow Compounders: Continual generation cash flow. Cyclical & Industrial Tailwinds: benefits from changes in the economic cycle and industry. 9
BlackRock Income & Growth Investment Trust plc Annual Performance Performance to (%) 2015 2014 2013 2012* 2011* BlackRock Income & Growth IT Share Price Performance 10.0 9.4 21.6 14.4-8.9 NAV Income Performance 9.7 8.0 17.5 14.8-5.8 FTSE All-Share TR Index 1.0 1.2 20.8 12.3-3.5 NAV relative to FTSE All Share +8.7 +6.8-3.3 +2.5-2.3 Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance. Sources : BlackRock, DataStream, Bloomberg as at 31 December 2015. BlackRock inception 02 April 2012. 10
Important Information Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial ConductAuthority. Registered office: 12 Throgmorton Avenue, London EC2N 2DL. Tel: 020 7743 3000. Registered in England No. 2020394. For your protection telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. BlackRock have not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the Key Features document, current Shareholder circular and the Annual and Half Yearly Reports which give more information about the risk profile of the investment. We recommend you seek independent professional advice prior to investing. The Trust investments may be subject to liquidity constraints, which means that shares may trade less frequently and in small volumes, for instance smaller companies. As a result, changes in the value of investments may be more unpredictable. In certain cases, it may not be possible to sell the security at the last market price quoted or at a value considered to be fairest. Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall. The BlackRock Investment Trusts ISA are managed by BlackRock Investment Management (UK) Limited. The BlackRock Investment Trusts Savings Plan is operated by BlackRock Investment Management (UK) Limited. All the trusts are traded on the London Stock Exchange and dealing may only be through a member of the Exchange. The Trust has appointed BlackRock Investment Management (UK) Limited as Investment Manager. It will not invest more than 15% of its gross assets in other listed investment trusts. SEDOL is a trademark of the London Stock Exchange plc and is used under licence. This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock Group funds and has not been prepared in connection with any such offer. Subject to the express requirements of any client-specific investment management agreement or provisions relating to the management of a fund, we will not provide notice of any changes to our personnel, structure, policies, process, objectives or, without limitation, any other matter contained in this document. 11
Important Information Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. Investment companies can borrow to purchase additional investments. This is called "gearing". It allows investment companies to take advantage of a long-term view on a sector or to take advantage of a favourable situation or a particularly attractive stock without having to sell existing investments. Gearing works by magnifying the company's performance. If a company "gears up"and then markets rise and the returns on the investments outstrip the costs of borrowing, the overall returns to investors will be even greater. But if markets fall and the performance of the assets in the portfolio is poor, then losses suffered by the investor will also be magnified. The fund investments may be subject to liquidity constraints, which means that shares may trade less frequently and in small volumes, for instance smaller companies. As a result, changes in the value of investments may be more unpredictable. In certain cases, it may not be possible to sell the security at the last market price quoted or at a value considered to be fairest. Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. Unless otherwise specified, all information contained in this document is current as at the date on the front page of this presentation. No part of this material may be reproduced, stored in retrieval system or transmitted in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written consent of BlackRock. The investment trusts listed in this document currently conduct their affairs so that their securities can be recommended by IFAs to ordinary retail investors in accordance with the FCA s rules in relation to non-mainstream investment products and intend to continue to do so for the foreseeable future. The securities are excluded from the FCA s restrictions which apply to non-mainstream investment products because they are securities issued by investment trusts. 2016 BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, ishares, BUILD ON BLACKROCK, SO WHAT DO I DO WITH MY MONEY and the stylized i logo are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. 12