Last checked at 16 Aug 2018 16:00
BlackRock Frontiers Investment Trust Plc - Portfolio UpdateBlackRock Frontiers Investment Trust Plc - Portfolio Update
PR Newswire
London, August 16
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 July 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 | 5.9 | -5.3 | 9.4 | 50.7 | 63.3 | 96.3 |
| Net asset value | 3.4 | -4.9 | 5.8 | 46.9 | 59.4 | 93.0 |
| Benchmark (NR)** | 4.8 | -0.6 | 11.5 | 45.5 | 52.9 | 64.3 |
| MSCI Frontiers Index (NR) | 4.3 | -4.7 | 3.8 | 35.4 | 42.3 | 53.9 |
| MSCI Emerging Markets Index (NR) | 2.9 | -0.8 | 4.9 | 53.8 | 49.3 | 40.2 |
| US Dollars: | ||||||
| Share price | 5.2 | -9.8 | 8.9 | 26.8 | 41.5 | 65.8 |
| Net asset value | 2.7 | -9.5 | 5.3 | 23.6 | 38.2 | 62.8 |
| Benchmark (NR)** | 4.1 | -5.4 | 11.0 | 22.3 | 32.3 | 39.3 |
| MSCI Frontiers Index (NR) | 3.7 | -9.2 | 3.2 | 13.8 | 23.1 | 29.5 |
| MSCI Emerging Markets Index (NR) | 2.2 | -5.5 | 4.4 | 29.3 | 29.2 | 17.9 |
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 Ordinary Shares | |
| US Dollar | |
| Net asset value - capital only: | 188.57c |
| Net asset value - cum income: | 194.42c |
| Sterling: | |
| Net asset value - capital only: | 143.74p |
| Net asset value - cum income: | 148.21p |
| Share price: | 153.50p |
| Total assets (including income): | £294.4m |
| Premium to cum-income NAV: | 3.6% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 3.4% |
| Ordinary shares in issue: | 198,641,108 |
| 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 3.4% and includes the 2017 final dividend of 4.20 cents per share declared on 4 December 2017 and paid to shareholders on 9 February 2018 and the 2018 interim dividend of 3.00 cents per share announced on 17 May 2018 and paid to shareholders on 29 June 2018.**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 | 35.6 | Argentina | 11.3 | |
| Real Estate | 14.7 | Indonesia | 8.2 | |
| Consumer Discretionary | 13.0 | Vietnam | 8.1 | |
| Materials | 11.0 | Egypt | 7.2 | |
| Industrials | 9.6 | Thailand | 6.9 | |
| Consumer Staples | 8.2 | Kuwait | 6.8 | |
| Health Care | 7.7 | Qatar | 6.7 | |
| Energy | 7.4 | Saudi Arabia | 6.5 | |
| Telecommunication Services | 5.5 | Nigeria | 6.0 | |
| Information Technology | 1.2 | Romania | 5.6 | |
| ----- | Greece | 4.7 | ||
| Total | 113.9 | Poland | 4.7 | |
| ----- | United Arab Emirates | 4.6 | ||
| Short positions | -5.1 | Ukraine | 3.6 | |
| ===== | Kazakhstan | 3.3 | ||
| Malaysia | 3.3 | |||
| Hungary | 2.9 | |||
| Kenya | 2.3 | |||
| Philippines | 2.1 | |||
| Turkey | 1.9 | |||
| PAN-Africa | 1.8 | |||
| Tanzania | 1.2 | |||
| Estonia | 1.0 | |||
| PAN-Asian | 1.0 | |||
| Morocco | 0.9 | |||
| Bangladesh | 0.7 | |||
| Sri Lanka | 0.6 | |||
| ----- | ||||
| Total | 113.9 | |||
| ----- | ||||
| Short positions | -5.1 | |||
| ===== |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 31.08 2017 % | 30.09 2017 % | 31.10 2017 % | 30.11 2017 % | 31.12 2017 % | 31.01 2018 % | 28.02 2018 % | 31.03 2018 % | 30.04 2018 % | 31.05 2018 % | 30.06 2018 % | 31.07 2018 % | |
| Long | 107.9 | 107.7 | 113.4 | 111.0 | 113.3 | 110.2 | 102.1 | 97.0 | 113.2 | 119.5 | 116.2 | 113.9 |
| Short | 0.0 | 0.0 | 2.5 | 3.8 | 3.8 | 3.0 | 3.0 | 2.9 | 3.8 | 4.2 | 4.7 | 5.1 |
| Gross | 107.9 | 107.7 | 115.9 | 114.8 | 117.1 | 113.2 | 105.1 | 99.9 | 117.0 | 123.7 | 120.9 | 119.0 |
| Net | 107.9 | 107.7 | 110.9 | 107.2 | 109.5 | 107.2 | 99.1 | 94.1 | 109.4 | 115.3 | 111.5 | 108.8 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| Astra International | Indonesia | 4.3 |
| Banco Macro | Argentina | 3.7 |
| Industries of Qatar | Qatar | 3.6 |
| MHP | Ukraine | 3.3 |
| Halyk Savings Bank | Kazakhstan | 3.1 |
| YPF | Argentina | 3.1 |
| Ooredoo | Qatar | 3.1 |
| Emaar Properties | United Arab Emirates | 3.1 |
| Land & Houses Public Company Limited | Thailand | 3.0 |
| Chemical Works of Gedeon Richter | Hungary | 2.9 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:In July the Company’s NAV rose by 2.7%* versus its benchmark, the MSCI New Frontier benchmark, which rose by 4.1%**. For reference, its previous benchmark, the MSCI Frontiers Index, rose by 3.7%**, and the MSCI Emerging Markets Index rose by 2.2%**, over the same period (all performance figures are on a US Dollar basis with net income reinvested).
Emerging and Frontier Market equities rebounded in July after a tough second quarter which saw many Emerging and Frontier Markets come under pressure from tightening global liquidity as a result of rising US interest rates and a strong dollar, coupled with fears about increased disruption to global trade. There was some reprieve from these trends in July which benefited the asset class and saw a sharp rebound in some markets that had sold off sharply, such as Argentina.
Our overweight to Argentina was the largest contributor to performance in July as the market rebounded up +14% over the month, led by a 5.5% appreciation in the Argentine Peso. Our holdings in Energy company YPF (+22%), and financials Banco Macro (+16%) and Grupo Supervielle (+27%) all contributed strongly to returns. Our stock selection in Indonesia was additive to returns, driven by our holding in coal miner Indo Tambangraya Megah (+26%). Our underweight to Turkey was another strong contributor as the market continued to sell off in July post a disappointing election outcome and policy stasis.
Detracting from performance in July were our holdings in Nigeria, with all three of our holdings, financials Zenith Bank (-8%) and United Bank (-9%) and beverage company Nigerian breweries (-8%), detracting from returns. The market sold off as the latest economic indicators suggested the pace of economic expansion may slow. Egypt also detracted driven by our holdings in tobacco company Eastern Tobacco (-9%) and healthcare company Integrated Diagnostics (-8%). Meat producer MHP (-6%) in Ukraine was an additional detractor.
The portfolio’s largest country weights are in Argentina where we expect a continued recovery in the currency and market sentiment, Nigeria which has benefited from a pickup in economic activity and Egypt where the fiscal situation has improved markedly. We remain cautious on Malaysia where valuations in aggregate look expensive, Saudi Arabia where activity looks weak and Turkey given currency weakness and poor management of monetary policy. 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:*BlackRock as at 31 July 2018**MSCI as at 31 July 2018
16 August 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 Kazakhstan