Last checked at 20 Aug 2021 13:59
BlackRock Frontiers Investment Trust Plc - Portfolio UpdateBlackRock Frontiers Investment Trust Plc - Portfolio Update
PR Newswire
London, August 20
The information contained in this release was correct as at 31 July 2021. Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 July 2021 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 | -3.3 | -4.4 | 34.3 | -12.8 | 12.5 | 71.2 |
| Net asset value | -2.2 | 0.7 | 35.1 | -2.4 | 24.9 | 88.3 |
| Benchmark (NR)** | -2.3 | -1.1 | 11.6 | -6.3 | 26.5 | 54.0 |
| MSCI Frontiers Index (NR) | -1.0 | 6.0 | 31.2 | 17.1 | 47.1 | 80.3 |
| MSCI Emerging Markets Index (NR) | -7.3 | -4.8 | 13.9 | 18.6 | 56.4 | 66.3 |
| US Dollars: | ||||||
| Share price | -2.7 | -4.0 | 42.3 | -7.5 | 17.9 | 53.3 |
| Net asset value | -1.5 | 1.1 | 43.1 | 3.5 | 30.9 | 68.4 |
| Benchmark (NR)** | -1.7 | -0.7 | 18.3 | -0.7 | 32.5 | 38.4 |
| MSCI Frontiers Index (NR) | -0.3 | 6.4 | 39.0 | 24.1 | 54.1 | 60.7 |
| MSCI Emerging Markets Index (NR) | -6.7 | -4.4 | 20.6 | 25.7 | 63.8 | 48.3 |
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: | 172.99c |
| Net asset value - cum income: | 174.99c |
| Sterling: | |
| Net asset value - capital only: | 124.42p |
| Net asset value - cum income: | 125.85p |
| Share price: | 116.50p |
| Total assets (including income): | £238.3m |
| Discount to cum-income NAV: | 7.4% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 4.3% |
| Ordinary shares in issue**: | 189,325,748 |
| 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 4.3% and includes the 2020 final dividend of 4.25 cents per share declared on 11 December 2020 which paid on 12 February 2021. Also included is the 2021 interim dividend of 2.75 cents per share, announced on 01 June 2021 and paid to shareholders on 25 June 2021.
** Excluding 52,497,053 ordinary shares held in treasury.
***Calculated as a percentage of average net assets and using expenses, excluding Performance fees and interest costs for the year ended 30 September 2020.
| Sector Analysis | Gross market value as a % of net assets | Country Analysis | Gross market value as a % of net assets | |
| Financials | 34.7 | Saudi Arabia | 18.8 | |
| Consumer Discretionary | 15.0 | Greece | 8.8 | |
| Materials | 14.6 | Vietnam | 8.6 | |
| Industrials | 12.6 | Indonesia | 7.3 | |
| Energy | 10.3 | Kazakhstan | 7.2 | |
| Consumer Staples | 6.2 | Thailand | 7.1 | |
| Real Estate | 4.3 | Egypt | 5.8 | |
| Information Technology | 3.7 | Poland | 5.6 | |
| Health Care | 2.9 | Chile | 5.5 | |
| Utilities | 1.4 | Hungary | 4.9 | |
| Communication Services | 1.4 | United Arab Emirates | 4.8 | |
| ----- | Philippines | 4.4 | ||
| 107.1 | Malaysia | 3.9 | ||
| ----- | Ukraine | 2.9 | ||
| Short positions | -2.3 | Romania | 2.4 | |
| ===== | Kenya | 2.0 | ||
| Peru | 1.9 | |||
| Qatar | 1.7 | |||
| Pakistan | 1.7 | |||
| Panama | 1.4 | |||
| Nigeria | 0.4 | |||
| ----- | ||||
| Total | 107.1 | |||
| ----- | ||||
| Short positions | -2.3 | |||
| ===== |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 31.08 2020 % | 30.09 2020 % | 31.10 2020 % | 30.11 2020 % | 31.12 2020 % | 31.01 2021 % | 28.02 2021 % | 31.03 2021 % | 30.04 2021 % | 31.05 2021 % | 30.06 2021 % | 31.07 2021 % | |
| Long | 110.2 | 107.8 | 106.9 | 107.3 | 107.9 | 110.5 | 114.0 | 105.7 | 108.5 | 105.3 | 106.8 | 107.1 |
| Short | 0.0 | 0.0 | 0.0 | 0.0 | 1.1 | 1.1 | 4.5 | 3.4 | 2.5 | 2.3 | 4.6 | 2.3 |
| Gross | 110.2 | 107.8 | 106.9 | 107.3 | 109.0 | 111.6 | 118.5 | 109.1 | 111.0 | 107.6 | 111.4 | 109.4 |
| Net | 110.2 | 107.8 | 106.9 | 107.3 | 106.8 | 109.4 | 109.5 | 102.3 | 106.0 | 103.0 | 102.2 | 104.8 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| National Commercial Bank | Saudi Arabia | 4.9 |
| Kaspi | Kazakhstan | 4.4 |
| FPT | Vietnam | 3.7 |
| Mobile World | Vietnam | 3.4 |
| Emaar Properties | United Arab Emirates | 3.3 |
| Saudi British Bank | Saudi Arabia | 3.2 |
| LPP | Poland | 3.1 |
| Ferrexpo | Ukraine | 2.9 |
| CP All | Thailand | 2.8 |
| Sahara International Petrochemical | Saudi Arabia | 2.6 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:
The Company’s NAV returned -1.5%1 versus the Company’s benchmark (the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”)), which returned -1.7% in July2. For reference, the MSCI Emerging Markets Index ended the month -6.7% and the MSCI Frontier Markets Index -0.3%2 over the same period (all performance figures are on a US Dollar basis with net income reinvested).
July news flow was dominated by China with the market down 14% on the month on the back of regulatory tightening. This move led the MSCI Emerging Markets Index to fall 6.7% in July, underperforming the MSCI World Index by 8.7%. The frontier and smaller emerging countries fared much better, especially outside of Asia. The Delta variant remains a key concern, especially affecting countries where vaccinations are still lagging.
Egypt (+7.0%), Turkey (+6.4%) and Argentina (+6.4%) were some of the best performing markets in July while Philippines (-11.7%), Peru (-9.1%) and Thailand (-6.9%) lagged. Philippines and Thailand sold off on Covid-19 concerns and continued impact on travel and tourism in the region. Peru lagged on continued political uncertainty under new president Castillo.
In terms of contributors to performance over the month, the largest contributor once again was stock selection in Vietnam as our holdings in retailer Mobile World (+8.4%) and IT services company FPT Corp (+7.1%) continued their strong earnings and investment performance. Stock selection in Poland also contributed strongly, led by debt collection agency Kruk (+19.3%) benefiting from improved earnings prospects, as did our investment in Polish apparel retailer LPP (+9.5%). Our holding in FinTech company Kaspi (+6.8%) continued to benefit from structural trends. Allocation to Egypt was an additional contributor as the market rallied on hopes of recovery in domestic economy and tourism post Covid-19.
Primary detractors from performance in July were our holdings in the Philippines, tobacco company LT group (-26.0%) and casino and hotel resort operator Bloomberry (-14.8%) as prospect of tourism returning to the region seems further delayed. Peru also detracted through our financial holding in Credicorp (-16.6%) on the back of higher operating expenses as well as continued political uncertainty surrounding the cabinet appointments under new President Castillo. IRPC Thai energy refiner and cracker (-10.6%) share price performance was disconnected from its positive earnings revisions given concerns around Covid-19 in Thailand.
We made a few changes to the portfolio in July. In ASEAN markets we trimmed winners in Vietnam and added to some of the underperformers in the Philippines. We also took some profit in Saudi miner MA’ADEN given uncertainty around aluminium price sustainability at current levels. Elsewhere in materials we added to Ukrainian Iron Ore company Ferrexpo which benefits from strength in ore prices; even as iron ore prices normalize, we expect strong cash generation to support the share price.
Overall, for countries that have stable macro environments and have made timely progress in vaccination rollouts, we believe the global macro recovery provides a favourable backdrop to recover lost economic productivity. Valuations in a lot of the frontier end emerging markets remain attractive relative to their own history and also relative to the more evolved markets. We believe our opportunity set is a compelling universe to generate alpha.
Sources:
1BlackRock as at 31 July 2021
2MSCI as at 31 July 2021
20 August 2021
ENDS
Latest information is available by typing www.blackrock.com/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.