Last checked at 18 Nov 2021 17:55
BlackRock Frontiers Investment Trust Plc - Portfolio UpdateBlackRock Frontiers Investment Trust Plc - Portfolio Update
PR Newswire
London, November 18
The information contained in this release was correct as at 31 October 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 October 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 | 4.9 | 10.3 | 38.5 | 7.8 | 16.3 | 88.8 |
| Net asset value | 2.9 | 13.0 | 46.2 | 22.4 | 28.0 | 112.7 |
| Benchmark (NR)** | 1.7 | 10.7 | 25.6 | 7.8 | 27.5 | 70.4 |
| MSCI Frontiers Index (NR) | 2.3 | 9.4 | 28.4 | 36.8 | 46.6 | 97.2 |
| MSCI Emerging Markets Index (NR) | -0.7 | 0.9 | 10.3 | 32.0 | 39.5 | 67.9 |
| US Dollars: | ||||||
| Share price | 6.6 | 8.7 | 46.9 | 15.6 | 30.7 | 66.7 |
| Net asset value | 4.6 | 11.4 | 55.0 | 31.3 | 43.9 | 87.6 |
| Benchmark (NR)** | 3.4 | 9.1 | 33.2 | 15.7 | 43.2 | 51.0 |
| MSCI Frontiers Index (NR) | 4.0 | 7.9 | 36.1 | 46.8 | 64.6 | 73.4 |
| MSCI Emerging Markets Index (NR) | 1.0 | -0.5 | 17.0 | 41.6 | 56.7 | 47.6 |
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: | 189.83c |
| Net asset value - cum income: | 194.88c |
| Sterling: | |
| Net asset value - capital only: | 138.48p |
| Net asset value - cum income: | 142.17p |
| Share price: | 128.50p |
| Total assets (including income): | £269.2m |
| Discount to cum-income NAV: | 9.6% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 3.2% |
| Ordinary shares in issue**: | 189,325,748 |
| Ongoing charges***: | 1.4% |
| Ongoing charges plus taxation and performance fee: | 2.4% |
\* The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.2% 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 2021.
| Sector Analysis | Gross market value as a % of net assets | Country Analysis | Gross market value as a % of net assets | |
| Financials | 37.6 | Saudi Arabia | 18.5 | |
| Consumer Discretionary | 17.3 | Indonesia | 13.7 | |
| Industrials | 13.8 | Vietnam | 8.9 | |
| Materials | 10.1 | Greece | 7.7 | |
| Energy | 9.9 | Thailand | 7.6 | |
| Consumer Staples | 6.4 | Kazakhstan | 6.9 | |
| Information Technology | 5.0 | United Arab Emirates | 6.0 | |
| Real Estate | 4.1 | Hungary | 5.7 | |
| Health Care | 3.9 | Malaysia | 5.5 | |
| Utilities | 1.3 | Egypt | 5.3 | |
| Communication Services | 1.2 | Philippines | 3.9 | |
| ----- | Poland | 3.9 | ||
| 110.6 | Qatar | 3.3 | ||
| ----- | Chile | 2.5 | ||
| Short positions | -0.4 | Peru | 2.2 | |
| ===== | United States | 2.0 | ||
| Kenya | 2.0 | |||
| Romania | 1.8 | |||
| Pakistan | 1.5 | |||
| Panama | 1.3 | |||
| Nigeria | 0.4 | |||
| ----- | ||||
| Total | 110.6 | |||
| ----- | ||||
| Short positions | -0.4 | |||
| ===== |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 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 % | 31.08 2021 % | 30.09 2021 % | 31.10 2021 % | |
| Long | 107.3 | 107.9 | 110.5 | 114.0 | 105.7 | 108.5 | 105.3 | 106.8 | 107.1 | 104.2 | 108.1 | 110.6 |
| Short | 0.0 | 1.1 | 1.1 | 4.5 | 3.4 | 2.5 | 2.3 | 4.6 | 2.3 | 0.6 | 0.4 | 0.4 |
| Gross | 107.3 | 109.0 | 111.6 | 118.5 | 109.1 | 111.0 | 107.6 | 111.4 | 109.4 | 104.8 | 108.5 | 111.0 |
| Net | 107.3 | 106.8 | 109.4 | 109.5 | 102.3 | 106.0 | 103.0 | 102.2 | 104.8 | 103.6 | 107.7 | 110.2 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| Saudi National Bank | Saudi Arabia | 4.9 |
| Bank Rakyat | Indonesia | 4.0 |
| Mobile World | Vietnam | 3.7 |
| JSC Kaspi | Kazakhstan | 3.5 |
| Saudi British Bank | Saudi Arabia | 3.1 |
| FPT | Vietnam | 3.1 |
| United International Transport | Saudi Arabia | 3.0 |
| Emaar Properties | United Arab Emirates | 3.0 |
| OTP Bank | Hungary | 3.0 |
| MOL Group | Hungary | 2.8 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:
The Company’s NAV returned +4.6% versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which returned +3.4% in October. For reference, the MSCI Emerging Markets Index ended the month +1.0% and the MSCI Frontier Markets Index +4.0% over the same period (all performance figures are on a US Dollar basis with net income reinvested).
October saw our benchmark extend its YTD outperformance over Emerging Markets. Many frontier and smaller emerging countries are now starting to see an acceleration in economic activity, as inoculation rates tick up and borders start to reopen. This is particularly prominent in Indonesia, Thailand, Philippines.
Most countries in the universe performed strongly in October; Egypt (+15.2%), Peru (+13.4%) and Indonesia (+8.3%) were among the notable top performers. Chile (-7.3%) was the worst performer, as concerns around the November presidential election dominated news flow.
In terms of contributors to performance over the month, Kaspi (+36.5%), Kazakh e-commerce and fintech platform, was the largest driver after delivering strong quarterly results, showing continued earnings growth. Kazakh uranium producer Kazatomprom (+22.4%) was another significant contributor as higher uranium prices drove the stock. Recent high gas and carbon prices have raised expectation that nuclear could play a significant part in the decarbonization of electricity. Indonesian cement producer, Indocement (+13.8%), also did well, on expectations of economic recovery.
Primary detractors from performance in October were our holding in Chilean e-commerce stock Falabella (-20.7%), which fell with the Chilean markets despite showing good operating trends. Latin American airline, Copa Holdings (-9.1%), also detracted, as regional travel is yet to normalize. Banca Transilvania (-6.7%), Romanian bank, was the third largest detractor. We still like this stock for its attractive yield at a compelling valuation. The Romanian market has been under pressure following a new peak in COVID cases and a low vaccinate rate of only 30%.
We made a few changes to the portfolio in October, in particular reweighting towards south-east Asia which we believe has lagged the post COVID market recovery that we have seen globally and increasing exposure to the Middle East, where we believe that regional economic growth is underestimated by analysts.
We upped our position in Philippines-based port management company ICT. We bought Astra International, an Indonesian auto conglomerate given promising trends in monthly car sales and a broader reopening theme. We participated in the IPO of Fertiglobe, urea and ammonia exporter based in the UAE, which we feel is well positioned to scale up a clean hydrogen business. We bought Qatar National Bank expecting a re-acceleration of loan growth. The stock has been a relative laggard in Qatar and compared to other financials in the region,
On the other hand, we exited Ukrainian metals player, Ferrexpo, as the stock had performed very strongly on rising iron ore prices, which we believe have peaked. We trimmed a number of holdings on strength, including Mobile World (Vietnamese electronics retailer), Kaspi and Kruk (Polish debt collection).
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 October 2021
2MSCI as at 31 October 2021
18 November 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.