Blackrock Lat A Regulatory News (BRLA)

BlackRock Latin American Investment Trust Plc - Portfolio Update

PR Newswire

London, February 14

BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151)All information is at 31 January 2019 and unaudited.Performance at month end with net income reinvested

^cum income

^^The Company’s performance benchmark (the MSCI EM Latin America Index) may be calculated on either a Gross or a Net return basis. Net return (NR) indices calculate the reinvestment of dividends net of withholding taxes using the tax rates applicable to non-resident institutional investors, and hence give a lower total return than indices where calculations are on a Gross basis (which assumes that no withholding tax is suffered). As the Company is subject to withholding tax rates for the majority of countries in which it invests, the NR basis is felt to be the most accurate, appropriate, consistent and fair comparison for the Company. Historically the benchmark data for the Company has always been stated on a Gross basis. However, as disclosed in the Company’s Interim Report for the six months ended 30 June 2018, it is the Board’s intention to monitor the Company’s performance with reference to the NR version of the benchmark. For transparency both sets of benchmark data have been provided.

Sources: BlackRock, Standard & Poor’s Micropal

#Total assets include current year revenue.

##Calculated using total dividends declared in the last 12 months as at the date of this announcement (comprising, the 2017 final dividend of 7.00 cents per share, the first interim dividend under the new policy of 7.57 cents per share paid on 23 August 2018, the second interim dividend under the new policy of 7.85 cents per share paid on 9 November 2018 and the third interim dividend under the new policy of 8.13 cents per share declared on 2 January 2019 and payable on 8 February 2019) as a percentage of month end share price. As previously announced, the Board of the BlackRock Latin American Investment Trust plc have introduced a new dividend policy whereby the Company will pay regular quarterly dividends equivalent to 1.25% of the Company’s US Dollar cum income NAV on the last working day of December, March, June and September each year, with the dividends being paid in February, May, August and November each year respectively. The yield on the Company’s shares projecting future quarterly dividends forward based on the August and October 2018 paid dividends and 2 quarters being paid at the same rate as the declared January 2019 dividend, based on the Company’s share price at 31 January 2019 converted to US Dollars at the exchange rate on 31 January 2019, would be 5.1%.

\* The discount is calculated using the cum income NAV (expressed in sterling terms).

**Net cash/net gearing is calculated using debt at par, less cash and cash equivalents and fixed interest investments as a percentage of net assets.

*** Calculated as a percentage of average net assets and using expenses, excluding interest costs for the year ended 31 December 2017.Geographic Exposure

*excluding net current assets & fixed interestTen Largest Equity Investments (in percentage order)

Commenting on the markets, Ed Kuczma and Sam Vecht, representing the Investment Manager noted;

For the month of January 2019, the Company’s NAV returned 12.4%1 with the share price rising by 9.3%1. The Company’s benchmark, the MSCI EM Latin America Index, gained 11.3%2 (on both a net and gross basis)2 (all performance figures are in sterling terms with dividends reinvested).

All countries within the region ended the month in positive territory, as Latin America led Emerging Market outperformance in January. The Company’s gearing facility was a main contributor to performance during the month as we were able to maintain an average 107.9% gross exposure to the market, more effectively capitalizing on the region’s strong performance. Our underweight position in Peru was among the top contributors to relative returns as the market underperformed the region. An off-benchmark allocation to Argentina also benefitted the Company supported by improving investor confidence. In aggregate, the Brazilian selection detracted. However, Brazilian stocks were amongst the month’s top individual performers. The market performed strongly on positive momentum following the inauguration of the new government and a dovish Federal Reserve. Overweight positions in large-cap, macro-sensitive names, Petrobras and Bradesco performed particularly well. Similarly, consumer-oriented names like food retailer GPA and online platform B2W also contributed to performance during the month. With Brazil being the clear outperformer in January, our lack of positioning in Eletrobras and CCR detracted from performance, the former rallied strongly on hopes of further privatization efforts by the Bolsonaro administration. An overweight position in Vale was also one the period’s largest detractors following the collapse of a tailings dam at one of their mines in Brumadinho.

Positioning was relatively unchanged over the month, with Brazil remaining our largest overweight. We notably exited our position in Bancolombia, as lower oil prices will make it more difficult to see proper fiscal consolidation. On the other hand, we have moderately added to our Mexican positions. We also initiated positions in Argentinean lender, Galicia, and energy name, YPF, as the market has showed improved signs of stability, particularly at the currency level. Valuations are increasingly attractive following last year’s market declines and we expect support from inflows following the upcoming reclassification to Emerging Market status. The portfolio ended the month being overweight in Brazil and Mexico while being underweight Chile, Peru, and Colombia. We also maintain an off-benchmark allocation to Argentina. At the sector level, we are overweight in domestic consumer and real estate, while being underweight in utilities and financials.

Brazil remains our largest overweight, given our positive expectations for the incoming administration. So far President-elect Jair Bolsonaro has delivered on his campaign promises, looking to reduce the size of government by initially reducing the number of ministries, naming sector/subject experts to lead cabinets and pointing to a continuation of the reform process initiated two years ago. Meanwhile, the outlook for upcoming corporate results point to a continuation in the economic recovery, providing strong momentum for growth into 2019. Elsewhere, the cancellation of NAIM (the New Mexico International Airport) reminded markets of the concerns regarding increasing populism for the incoming administration in Mexico, reiterating our cautiousness with Mexican equities. We remain underweight the Andean region due to a combination of unattractive valuation and disappointing growth. Finally, the dramatic sell off in Argentina in 2018 leaves the stocks trading at attractive valuations while interest rates and the currency have mostly stabilized providing a foundation for the economy to rebound from the recent downturn.

Sources:1BlackRock as at 31 January 20192Datastream as at 31 January 2019

14 February 2019

ENDS

Latest information is available by typing www.blackrock.co.uk/brla 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 the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.