Last checked at 28 Mar 2018 14:33
BlackRock Frontiers Investment Trust Plc - Portfolio UpdateBlackRock Frontiers Investment Trust Plc - Portfolio Update
PR Newswire
London, March 28
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 28 February 2018 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 | -1.8 | 0.9 | 15.9 | 60.7 | 96.7 | 105.5 |
| Net asset value | 0.5 | 9.3 | 18.8 | 54.5 | 90.7 | 106.0 |
| MSCI Frontiers Index (NR) | 1.7 | 5.5 | 16.7 | 37.0 | 66.4 | 65.2 |
| MSCI Emerging Markets Index (NR) | -1.6 | 5.2 | 17.9 | 45.1 | 40.7 | 44.6 |
| US Dollars: | ||||||
| Share price | -4.9 | 2.8 | 28.4 | 43.5 | 79.0 | 82.3 |
| Net asset value | -2.6 | 11.3 | 31.7 | 37.9 | 73.5 | 82.5 |
| MSCI Frontiers Index (NR) | -1.5 | 7.4 | 29.2 | 22.2 | 51.0 | 46.0 |
| MSCI Emerging Markets Index (NR) | -4.6 | 7.0 | 30.5 | 29.4 | 27.7 | 27.8 |
Sources: BlackRock and Standard & Poor’s Micropal
* 17 December 2010.
| At month end Ordinary Shares | |
| US Dollar | |
| Net asset value - capital only: | 220.54c |
| Net asset value - cum income: | 221.22c |
| Sterling: | |
| Net asset value - capital only: | 160.07p |
| Net asset value - cum income: | 160.56p |
| Share price: | 163.00p |
| Total assets (including income): | £304.9m |
| Premium to cum-income NAV: | 1.5% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 3.1% |
| Ordinary shares in issue: | 189,891,108 |
| Ongoing charges**: | 1.4% |
| Ongoing charges plus taxation and performance fee: | 1.6% |
\* The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.1% and includes the 2017 final dividend of 4.20 cents per share declared on 4 December 2017 and payable to shareholders on 9 February 2018 and the 2017 interim dividend of 2.70 cents per share announced on 25 May 2017 and paid to shareholders on 30 June 2017.
**Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 September 2017.
| Sector Analysis | Gross market value as a % of net assets | Country Analysis | Gross market value as a % of net assets | |
| Financials | 38.7 | Argentina | 17.3 | |
| Consumer Staples | 12.9 | Kuwait | 12.2 | |
| Health Care | 8.7 | Vietnam | 9.9 | |
| Telecommunication Services | 7.5 | Nigeria | 7.7 | |
| Materials | 7.5 | Romania | 7.2 | |
| Energy | 6.8 | Egypt | 6.3 | |
| Consumer Discretionary | 5.8 | Saudi Arabia | 6.1 | |
| Industrials | 5.8 | Kazakhstan | 4.3 | |
| Real Estate | 5.8 | Morocco | 4.2 | |
| Information Technology | 1.9 | Bangladesh | 3.8 | |
| Utilities | 0.7 | Ukraine | 3.8 | |
| ----- | Sri Lanka | 3.2 | ||
| Total | 102.1 | Kenya | 2.9 | |
| ----- | PAN-Middle East | 2.8 | ||
| Short positions | -3.0 | Philippines | 2.5 | |
| ===== | Colombia | 1.9 | ||
| Slovenia | 1.9 | |||
| PAN-Asian | 1.6 | |||
| Tanzania | 1.3 | |||
| Estonia | 1.2 | |||
| ----- | ||||
| Total | 102.1 | |||
| ----- | ||||
| Short positions | -3.0 | |||
| ===== |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 31.03 2017 % | 30.04 2017 % | 31.05 2017 % | 30.06 2017 % | 31.07 2017 % | 31.08 2017 % | 30.09 2017 % | 31.10 2017 % | 30.11 2017 % | 31.12 2017 % | 31.01 2018 % | 28.02 2018 % | |
| Long | 112.1 | 108.9 | 105.0 | 103.9 | 106.6 | 107.9 | 107.7 | 113.4 | 111.0 | 113.3 | 110.2 | 102.1 |
| Short | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 2.5 | 3.8 | 3.8 | 3.0 | 3.0 |
| Gross | 112.1 | 108.9 | 105.0 | 103.9 | 106.6 | 107.9 | 107.7 | 115.9 | 114.8 | 117.1 | 113.2 | 105.1 |
| Net | 112.1 | 108.9 | 105.0 | 103.9 | 106.6 | 107.9 | 107.7 | 110.9 | 107.2 | 109.5 | 107.2 | 99.1 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| The National Bank of Kuwait | Kuwait | 4.3 |
| YPF | Argentina | 4.0 |
| Halyk Savings Bank | Kazakhstan | 3.5 |
| Zenith Bank | Nigeria | 3.3 |
| MHP | Ukraine | 3.2 |
| Banco Macro | Argentina | 3.2 |
| United Bank for Africa | Nigeria | 3.0 |
| Mobile Telecommunications | Kuwait | 2.9 |
| Equity Group | Kenya | 2.9 |
| Ooredoo | PAN-Middle East | 2.8 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:In February, the Company’s NAV fell by 2.6%* on a US Dollar basis with net income reinvested, after the very strong performance in January. For reference, the MSCI Frontier Index (the Company’s benchmark) fell by 1.5%**, while the MSCI Emerging Markets Index down by 4.6%** and MSCI World Index was down by 4.3%**, on a US Dollar basis, over the same period.
February was marked by a sharp correction in global equities and a rise in volatility. This sell-off was triggered by a correction in the US, the epicentre of which was the volatility market. Frontier Markets outperformed both emerging and developed markets during the sell-off, once again showing their lower correlation to global markets.
Our overweight in Quang Ngai Sugar, a sugar producer in Vietnam, and an off-benchmark position in Vietnamese broker, Saigon Securities, continued to rally and contributed to Company’s returns. However, our overall underweight in Vietnam detracted on a relative basis.
The Egyptian tobacco producer, Eastern Tobacco, which holds a monopoly in production in the country, was among the top contributors during the month. The company more than doubled its earnings in 2017 and we expect continued strong growth in 2018 as the company has managed to increase prices by as much as 40% after the depreciation of the local currency in early 2017.
The overweight in Romania was also among the top contributors to returns, as both BRD, a leading bank in the country, and Romgaz, an oil & gas producer, reported strong earnings backed by robust cash flow generation that was helped by the domestic strong macro-economic environment.
Our position in Acacia Mining in Tanzania detracted from performance in February, as the company’s dispute with the Tanzanian government showed few signs of ending. We continue to expect a better outcome than is being priced into the current share price. Hence, we continue to hold the position in the stock.
Argentina was hit hard during the month, being down as much as 13%*** in mid-February before rallying back vigorously. The Argentinian Peso sold off during the month, correcting after strong 2017. The Company’s exposure to Argentina detracted from returns on an absolute basis.
Despite the sell off and increased market concerns during February, we think that Frontier Markets continue to exhibit strong Gross Domestic Product (GDP) growth, have low government debt levels, and represent an opportunity to invest in companies with strong cash flow and high dividend yields, on some of the lowest valuations in the world.
*Source: BlackRock, as at 28 February 2018.** Source: BlackRock, MSCI, as at 28 February 2018.*** Source: BlackRock, Bloomberg, MSCI Argentina, as at 28 February 2018.
28 March 2018
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