Last checked at 4 Feb 2020 17:07
BlackRock Frontiers Investment Trust Plc - Correction : Portfolio UpdateBlackRock Frontiers Investment Trust Plc - Correction : Portfolio Update
PR Newswire
London, February 4
Correction to announcement 'PRNUK-2401201345-3651'. This announcement has beencorrected. The portfolio managers’ commentary has been updated with regard tochanges in the portfolio during the period. There are no other changes to theannouncement.
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 December 2019 and unaudited.
Performance at month end with net income reinvested.
| One month % | Three months % | One year % | Three years % | Five years % | Since Launch* % | |
| Sterling: | ||||||
| Share price | 5.1 | 2.3 | 3.6 | 16.7 | 48.1 | 81.2 |
| Net asset value | 0.0 | -4.5 | 1.1 | 9.2 | 36.4 | 76.5 |
| Benchmark (NR)** | 2.0 | -3.9 | 1.9 | 23.1 | 36.4 | 63.9 |
| MSCI Frontiers Index (NR) | 1.9 | -0.8 | 13.4 | 21.3 | 34.4 | 62.7 |
| MSCI Emerging Markets Index (NR) | 4.9 | 4.0 | 13.9 | 29.5 | 54.6 | 47.2 |
| US Dollars: | ||||||
| Share price | 7.6 | 9.9 | 7.8 | 25.3 | 26.1 | 54.6 |
| Net asset value | 2.4 | 2.7 | 5.2 | 17.1 | 16.1 | 50.4 |
| Benchmark (NR)** | 4.4 | 3.3 | 6.0 | 31.9 | 15.9 | 40.4 |
| MSCI Frontiers Index (NR) | 4.3 | 6.6 | 18.0 | 30.0 | 14.2 | 38.2 |
| MSCI Emerging Markets Index (NR) | 7.5 | 11.8 | 18.4 | 38.9 | 31.4 | 25.1 |
Sources: BlackRock and Standard & Poor’s Micropal
* 17 December 2010.
** The Company’s benchmark changed from MSCI Frontier Markets Index to MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (net total return, USD) effective 1/4/2018.
| At month end | |
| US Dollar | |
| Net asset value - capital only: | 165.54c |
| Net asset value - cum income: | 170.91c |
| Sterling: | |
| Net asset value - capital only: | 124.96p |
| Net asset value - cum income: | 129.02p |
| Share price: | 135.00p |
| Total assets (including income): | £311.6m |
| Premium to cum-income NAV: | 4.6% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 5.0% |
| Ordinary shares in issue: | 241,522,801 |
| Ongoing charges**: | 1.4% |
| Ongoing charges plus taxation and performance fee: | 1.4% |
\* The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 5.0% and includes the 2019 final dividend of 4.75 cents per share declared on 06 December 2019 with a pay date of 07 February 2020, and special dividend of 1.0 cents per share declared on 11 December 2018 and paid to shareholders on 7 February 2019. Also included is the 2019 interim dividend of 3.00 cents per share announced on 30 May 2019 and paid to shareholders on 28 June 2019.
**Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 September 2019.
| Sector Analysis | Gross market value as a % of net assets | Country Analysis | Gross market value as a % of net assets | |
| Financials | 25.8 | Indonesia | 13.9 | |
| Consumer Staples | 15.2 | Thailand | 12.3 | |
| Consumer Discretionary | 14.8 | Vietnam | 9.3 | |
| Materials | 12.0 | Egypt | 8.9 | |
| Real Estate | 11.7 | Saudi Arabia | 8.8 | |
| Industrials | 10.1 | Philippines | 6.9 | |
| Energy | 9.2 | United Arab Emirates | 6.1 | |
| Communication Services | 3.7 | Pakistan | 4.4 | |
| Health Care | 2.1 | Kazakhstan | 4.1 | |
| Information Technology | 1.7 | Malaysia | 3.9 | |
| Utilities | 1.7 | Turkey | 3.8 | |
| ----- | Nigeria | 3.4 | ||
| 108.0 | Ukraine | 3.1 | ||
| Short positions | ----- | Colombia | 2.7 | |
| -1.0 | PAN-Africa | 2.4 | ||
| ===== | Romania | 2.3 | ||
| Pan-Emerging Europe | 2.1 | |||
| Qatar | 2.1 | |||
| Poland | 2.0 | |||
| Chile | 1.9 | |||
| Greece | 1.7 | |||
| Kenya | 1.5 | |||
| Argentina | 0.4 | |||
| ----- | ||||
| Total | 108.0 | |||
| ----- | ||||
| Short positions | -1.0 | |||
| ===== | ||||
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 31.01 2019 % | 28.02 2019 % | 31.03 2019 % | 30.04 2019 % | 31.05 2019 % | 30.06 2019 % | 31.07 2019 % | 31.08 2019 % | 30.09 2019 % | 31.10 2019 % | 30.11 2019 % | 31.12 2019 % | |
| Long | 115.1 | 112.9 | 113.1 | 116.0 | 111.0 | 114.1 | 117.0 | 111.5 | 110.1 | 108.0 | 107.8 | 108.0 |
| Short | 7.3 | 6.7 | 6.6 | 6.6 | 8.8 | 8.1 | 5.1 | 4.2 | 4.1 | 2.2 | 1.7 | 1.0 |
| Gross | 122.4 | 119.6 | 119.7 | 122.6 | 119.8 | 122.2 | 122.1 | 115.7 | 114.2 | 110.2 | 109.5 | 109.0 |
| Net | 107.8 | 106.2 | 106.5 | 109.4 | 102.2 | 106.0 | 111.9 | 107.3 | 106.0 | 105.8 | 106.1 | 107.0 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| Astra International | Indonesia | 4.1 |
| Charoen Pokphand Food | Thailand | 3.4 |
| PTT Global Chemical | Thailand | 3.2 |
| United International Transport | Saudi Arabia | 3.2 |
| Vincom Retail | Vietnam | 3.1 |
| Bank Mandiri | Indonesia | 3.0 |
| Bank of the Philippine Islands | Philippines | 2.8 |
| Ecopetrol | Colombia | 2.7 |
| Eastern Tobacco | Egypt | 2.6 |
| LT Group | Philippines | 2.5 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:The Company’s NAV returned 2.4%1 versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which returned +4.4% in December2. For reference, MSCI Emerging Markets Index ended the month +7.5% and MSCI Frontier Markets Index up +4.3%2 over the same period (all performance figures are on a US Dollar basis with net income reinvested).
Our allocations in South East Asia were the top contributors to returns in December with positions in Thailand, Indonesia and Philippines all adding to returns. In particular, our holdings in Indonesian conglomerate Astra International (+8.1%), Philippines tobacco company LT Group (+8.7%) and Bank Mandiri (+11.8%) all did well. Our holdings in Energy were additional contributors driven by holdings in Saudi Aramco (+14.8%) and Colombian energy company Ecopetrol (+11.2%).
The largest detractor from returns this month was our holding in United Arab Emirates (UAE) hospital operator NMC Health (-26.5%) after the stock declined sharply given allegations over its accounting practices. We have since exited the position. Holdings in Egypt and Vietnam were additional detractors. In Egypt healthcare diagnostics company Integrated Diagnostics Holdings (IDH) fell 13.8% over the month. In Vietnam, holdings in food and beverage company Quang Ngai Sugar (-9.2%) and mall operator Vincom Retail (-1.5%) were additional detractors.
We made a few recent changes to the portfolio. We exited our holding in Saudi Aramco post strong price performance in the aftermath of its IPO, as well as trimming Ecopetrol on strength.
We added to Saudi petrochemicals company Yansab given our view that the stock price is not reflecting the oil price increase. The company also has a very strong balance sheet which should support their dividend yield. We added back to Argentina given our view that bond restructuring is becoming more likely, which should prove positive for equity holders while protecting the banking sector. In addition, we are positive on the ASEAN countries supported by their recent currency moves which have so far not translated into equity market performance.
The highest conviction country positions in the Company are Egypt, Vietnam and Pakistan while we remain under-weight Saudi, Malaysia and Kuwait.
We see significant value in the smaller emerging and frontier markets and believe a number of these countries are set up for a strong year in 2020. We see the markets well supported by the lower rate environment and improved local and global liquidity. Emerging Market (EM) equities have lagged with the earnings yield not following the decline in bond yields. The asset class should also get some help from foreign exchange and we note that many EM currencies look to have broken out in recent weeks. We note that several stocks in our universe are trading at extremely low valuations, which we view as an opportunity to invest in a wide subset of countries which exhibit good growth and have low government debt levels. We look for companies there with strong cash flow and high dividend yields, trading on some of the lowest valuations in the world.
Sources:
1BlackRock as at 31 December 2019
2MSCI as at 31 December 2019
24 January 2020
ENDS
Latest information is available by typing www.blackrock.co.uk/brfi on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal). Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on BlackRock’s website (or any other website) is incorporated into, or forms part of, this announcement.