Last checked at 17 Jul 2019 14:32
BlackRock Frontiers Investment Trust Plc - Portfolio UpdateBlackRock Frontiers Investment Trust Plc - Portfolio Update
PR Newswire
London, July 17
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 30 June 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 | 5.3 | 4.9 | -0.9 | 32.2 | 40.2 | 83.8 |
| Net asset value | 4.2 | 5.3 | 2.1 | 30.4 | 41.4 | 90.7 |
| Benchmark (NR)** | 3.8 | 5.4 | 12.1 | 47.2 | 42.5 | 75.7 |
| MSCI Frontiers Index (NR) | 1.3 | 7.2 | 8.8 | 33.6 | 29.3 | 60.6 |
| MSCI Emerging Markets Index (NR) | 5.2 | 3.0 | 5.0 | 42.3 | 51.9 | 43.1 |
| US Dollars: | ||||||
| Share price | 6.3 | 2.4 | -4.4 | 26.0 | 4.6 | 50.7 |
| Net asset value | 5.2 | 2.9 | -1.5 | 24.2 | 5.4 | 56.1 |
| Benchmark (NR)** | 4.9 | 2.9 | 8.0 | 40.2 | 6.1 | 44.6 |
| MSCI Frontiers Index (NR) | 2.3 | 4.7 | 4.9 | 27.2 | -3.8 | 31.1 |
| MSCI Emerging Markets Index (NR) | 6.2 | 0.6 | 1.2 | 35.5 | 13.1 | 16.8 |
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: | 172.88c |
| Net asset value - cum income: | 177.39c |
| Sterling: | |
| Net asset value - capital only: | 135.83p |
| Net asset value - cum income: | 139.38p |
| Share price: | 137.00p |
| Total assets (including income): | £335.4m |
| Discount to cum-income NAV: | 1.7% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 4.8% |
| Ordinary shares in issue: | 240,672,801 |
| 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 4.8% and includes the 2018 final dividend of 4.40 cents per share and special dividend of 1.0 cents per share, both of which were declared on 11 December 2018 and were 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 2018.
| Sector Analysis | Gross market value as a % of net assets | Country Analysis | Gross market value as a % of net assets | |
| Financials | 30.1 | Indonesia | 14.6 | |
| Real Estate | 14.0 | United Arab Emirates | 9.5 | |
| Consumer Staples | 13.8 | Thailand | 8.9 | |
| Consumer Discretionary | 12.5 | Egypt | 8.8 | |
| Energy | 9.4 | Vietnam | 8.6 | |
| Industrials | 8.9 | Argentina | 8.1 | |
| Materials | 8.5 | Malaysia | 6.9 | |
| Health Care | 7.6 | Kazakhstan | 6.0 | |
| Communication Services | 6.1 | Saudi Arabia | 5.0 | |
| Utilities | 2.0 | Philippines | 5.0 | |
| Information Technology | 1.2 | Kuwait | 4.0 | |
| ----- | Romania | 3.9 | ||
| 114.1 | Nigeria | 3.6 | ||
| Short positions | ----- | Greece | 2.7 | |
| -8.1 | Pakistan | 2.6 | ||
| ===== | Turkey | 2.4 | ||
| Ukraine | 2.4 | |||
| PAN-Africa | 2.3 | |||
| Qatar | 2.3 | |||
| Poland | 2.2 | |||
| Kenya | 1.8 | |||
| Colombia | 1.2 | |||
| PAN-Asian | 0.7 | |||
| Hungary | 0.3 | |||
| Morocco | 0.3 | |||
| ----- | ||||
| Total | 114.1 | |||
| ----- | ||||
| Short positions | -8.1 |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 31.07 2018 % | 31.08 2018 % | 30.09 2018 % | 31.10 2018 % | 30.11 2018 % | 31.12 2018 % | 31.01 2019 % | 28.02 2019 % | 31.03 2019 % | 30.04 2019 % | 31.05 2019 % | 30.06 2019 % | |
| Long | 113.9 | 107.7 | 107.7 | 107.8 | 108.1 | 109.3 | 115.1 | 112.9 | 113.1 | 116.0 | 111.0 | 114.1 |
| Short | 5.1 | 6.4 | 7.7 | 6.8 | 8.6 | 8.6 | 7.3 | 6.7 | 6.6 | 6.6 | 8.8 | 8.1 |
| Gross | 119.0 | 114.1 | 115.4 | 114.6 | 116.7 | 117.9 | 122.4 | 119.6 | 119.7 | 122.6 | 119.8 | 122.2 |
| Net | 108.8 | 101.3 | 100.0 | 101.0 | 99.5 | 100.7 | 107.8 | 106.2 | 106.5 | 109.4 | 102.2 | 106.0 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| Bank Mandiri | Indonesia | 3.5 |
| Banco Macro | Argentina | 3.5 |
| National Medical Care | Saudi Arabia | 3.2 |
| Astra International | Indonesia | 3.2 |
| LT Group | Philippines | 3.0 |
| Vincom Retail | Vietnam | 2.9 |
| Charoen Pokphand Food | Thailand | 2.8 |
| Emaar Development | United Arab Emirates | 2.7 |
| YPF | Argentina | 2.6 |
| NMC Health | United Arab Emirates | 2.6 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:The Company’s NAV returned +5.2%1 versus its benchmark, the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which was up 4.9% in June2. For reference, the MSCI Frontiers Index was up 2.3%2, and the MSCI Emerging Markets Index was up 6.2%2 on a US Dollar basis, over the same period (all performance figures are on a US Dollar basis with net income reinvested).
Our allocation to Argentina was the largest contributor to returns in June for the second month in a row with MSCI Argentina up 27% as the currency stabilized on an improved trade balance, helped by the record harvest. Several polls showed a significant swing in voter sentiment towards Mauricio Macri, putting him back into contention for the coming Presidential election. Our holdings in financial Banco Macro (+46%), energy company YPF (+23%) and electric utility Pampa Energia (+38%) all rallied strongly. We have continued to trim exposure on strong performance while remaining positively positioned overall. Our holdings in Kazakhstan driven by copper miner Kaz Minerals (+19%) also helped returns, as the stock recovered from its sell-off in May as markets interpreted bad news as good news, given the expected Fed Response (as shown by treasury yields) to a weakening of the US economy. Our position in Romanian financial Banca Transilvania (+15%) was an additional contributor as the stock continued to rebound from the December sell off on the back of strong reported activity from the domestic economy.
Positioning in Thailand was the top detractor from returns in June. The market performed strongly over the month (+9.2%) as Junta leader Gen. Prayuth was officially re-appointed as PM (Prime Minister) for a second term. Thailand is a market in which we find a few stock specific investment ideas while we continue to think it looks less attractive from a macro point of view given low growth and high valuations. Our newly initiated position in Pakistan was a drag on returns in June mainly due to ongoing deterioration in the value of the Pakistani rupee which fell more than 8% over the month. Following the replacement of its Finance Minister and Central Bank governor over the last few months, Pakistan finally agreed to a $6bn deal with the IMF. Whilst this is the 13th IMF deal and the size of the deal remains relatively small, the extent of the reform agenda that the country is talking about alongside this deal is impressive. Our holdings in Indonesia were an additional relative detractor, driven by our holdings in conglomerate Astra International (+0.9%) and coal miner PT Indo Tambangraya Megah (+1.2%).
The Company initiated a position in Colombian Energy company Ecopetrol. Our investment thesis is driven by our belief that the company’s free cash flow yield is sustainable at current oil prices, with further upsides potentially coming from increases in recovery factors, well discoveries, and a maintenance of lower crude differential. Elsewhere in the portfolio we continued to trim positions in Argentina and Greece on the back of strong performance.
We continue to find value in the smaller emerging and frontier markets and see the markets well supported by the lower rate environment. In aggregate the wide subset of countries that make up our investible universe continue to exhibit strong 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.
Sources:
1BlackRock as at 30 June 2019
2MSCI as at 30 June 2019
17 July 2019
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 Kazakhstan