Last checked at 20 Jul 2021 17:23
BlackRock Frontiers Investment Trust Plc - Portfolio UpdateBlackRock Frontiers Investment Trust Plc - Portfolio Update
PR Newswire
London, July 20
The information contained in this release was correct as at 30 June 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 30 June 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 | 2.9 | -2.1 | 30.4 | -4.5 | 27.3 | 77.1 |
| Net asset value | 2.3 | 5.9 | 32.7 | 3.1 | 31.6 | 92.5 |
| Benchmark (NR)** | 2.1 | 3.4 | 9.7 | 0.5 | 32.0 | 57.6 |
| MSCI Frontiers Index (NR) | 5.6 | 14.0 | 23.9 | 23.4 | 51.4 | 82.0 |
| MSCI Emerging Markets Index (NR) | 4.0 | 4.9 | 26.0 | 31.7 | 78.5 | 79.5 |
| US Dollars: | ||||||
| Share price | 0.2 | -2.0 | 45.8 | -0.1 | 31.7 | 57.6 |
| Net asset value | -0.3 | 6.0 | 48.3 | 7.9 | 36.2 | 71.0 |
| Benchmark (NR)** | -0.8 | 3.6 | 22.7 | 5.1 | 36.4 | 40.7 |
| MSCI Frontiers Index (NR) | 2.7 | 14.1 | 38.5 | 29.1 | 56.5 | 61.3 |
| MSCI Emerging Markets Index (NR) | 1.3 | 5.0 | 40.9 | 37.8 | 84.5 | 59.0 |
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: | 176.29c |
| Net asset value - cum income: | 177.72c |
| Sterling: | |
| Net asset value - capital only: | 127.62p |
| Net asset value - cum income: | 128.65p |
| Share price: | 120.50p |
| Total assets (including income): | £243.6m |
| Discount to cum-income NAV: | 6.3% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 4.2% |
| 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 4.2% 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 2020.
| Sector Analysis | Gross market value as a % of net assets | Country Analysis | Gross market value as a % of net assets | |
| Financials | 34.6 | Saudi Arabia | 18.6 | |
| Consumer Discretionary | 15.3 | Greece | 9.0 | |
| Materials | 13.8 | Vietnam | 8.2 | |
| Industrials | 12.9 | Thailand | 7.7 | |
| Energy | 10.8 | Indonesia | 7.4 | |
| Consumer Staples | 6.1 | Kazakhstan | 7.1 | |
| Real Estate | 4.4 | Chile | 5.9 | |
| Information Technology | 3.4 | Egypt | 5.6 | |
| Health Care | 2.7 | Philippines | 5.2 | |
| Utilities | 1.5 | Poland | 4.9 | |
| Communication Services | 1.3 | United Arab Emirates | 4.8 | |
| ----- | Hungary | 4.8 | ||
| 106.8 | Malaysia | 4.1 | ||
| ----- | Romania | 2.3 | ||
| Short positions | -4.6 | Peru | 2.2 | |
| ===== | Kenya | 1.8 | ||
| Ukraine | 1.8 | |||
| Pakistan | 1.7 | |||
| Qatar | 1.7 | |||
| Panama | 1.5 | |||
| Nigeria | 0.5 | |||
| ----- | ||||
| Total | 106.8 | |||
| ----- | ||||
| Short positions | -4.6 | |||
| ===== |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 31.07 2020 % | 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 % | |
| Long | 110.3 | 110.2 | 107.8 | 106.9 | 107.3 | 107.9 | 110.5 | 114.0 | 105.7 | 108.5 | 105.3 | 106.8 |
| Short | 1.1 | 0.0 | 0.0 | 0.0 | 0.0 | 1.1 | 1.1 | 4.5 | 3.4 | 2.5 | 2.3 | 4.6 |
| Gross | 111.4 | 110.2 | 107.8 | 106.9 | 107.3 | 109.0 | 111.6 | 118.5 | 109.1 | 111.0 | 107.6 | 111.4 |
| Net | 109.2 | 110.2 | 107.8 | 106.9 | 107.3 | 106.8 | 109.4 | 109.5 | 102.3 | 106.0 | 103.0 | 102.2 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| National Commercial Bank | Saudi Arabia | 5.1 |
| Kaspi | Kazakhstan | 4.0 |
| FPT | Vietnam | 3.4 |
| Emaar Properties | United Arab Emirates | 3.4 |
| Mobile World | Vietnam | 3.4 |
| Saudi British Bank | Saudi Arabia | 3.3 |
| LPP | Poland | 2.9 |
| CP All | Thailand | 2.8 |
| National Bank of Greece | Greece | 2.4 |
| United International Transport | Saudi Arabia | 2.4 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:
The Company’s NAV returned -0.3%1 versus the Company’s benchmark (the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”)), which returned -0.8% in June2. For reference, the MSCI Emerging Markets Index ended the month +1.3% and the MSCI Frontier Markets Index +2.7%2 over the same period (all performance figures are on a US Dollar basis with net income reinvested).
Market performance during the month remained under pressure amid currency weakness, discussions of potential FED tapering, COVID-19 resurgence in various countries (especially ASEAN), and slow vaccine roll-out. High COVID-19 cases continue to restrict the recovery in many emerging and frontier markets. Commodity-heavy markets did better on the back of rising oil prices. We continue to believe the coming months will remain challenged by COVID-19 newsflow while our base case for broad based economic normalization in H2 2021 remains unchanged. We believe Frontier assets remain very attractively valued in this context.
Latin American equities were up 2.4% in June with Colombia posting the strongest return (+5.6%). Conversely, Peru lagged in the context of the presidential election of the leftist candidate Pedro Castillo. Brent crude rose 10.8% over the month which bolstered market performance in the Middle East with Saudi Arabia (+4.0%). Vietnam also had a strong month (+5.0%).
For the second month running our positions in Vietnam and Poland contributed the most to the portfolio in June. In Poland, apparel retailer LPP (+10.6%) was the biggest contributor after strong Q1 earnings numbers. In Vietnam, our holdings in retailer Mobile World (+9.8%) and IT services company FPT Corp (+4.5%) both contributed strongly. Elsewhere, our holding in Kazakhstan payments company Kaspi (+15.6%) was the single largest stock contributor.
We made a few changes to the portfolio in June. We added to Saudi Arabia where we expect economic growth to accelerate driven by increased government spending on the back of a renewed drive to shift the economy away from oil. We added exposure in financials which should benefit from increased spending and loan activity. We also added other stocks which we believe are geared to a pickup in growth and yet not too USD sensitive. We exited our position in Colombia based on concerns around the fiscal deficit announced for next few years. Oil production in the country is in decline which offsets any benefits from a higher oil price thereby making it difficult to foresee any significant trade balance improvement. We remain cautious the ASEAN countries where COVID-19 cases are escalating anew, and where true cases may prove to be a multiple of the reported numbers. Lockdowns have returned which are once again slowing the economic recovery. As the same time vaccination progress across the region continues slowly.
Globally the economy is recovering quickly and supported by a very accommodative policy mix in the developed world with extraordinary levels of both fiscal and monetary support. We believe this backdrop is inflationary given the broad spending plans across private and public spending, which are being reflected in rising commodity prices. While we see the potential for higher rates globally, which could put global equity multiples under pressure, we note that frontier markets are at a very different starting point given a number of markets are still trading significantly below their average 10-year price to book valuations. We believe that frontier markets continue to look very attractive against this backdrop both on a relative and absolute basis.
Sources:
1BlackRock as at 30 June 2021
2MSCI as at 30 June 2021
20 July 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.