BLACKROCK FRONTIERS INVESTMENT TRUST
PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 January
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 |
4.7 |
8.2 |
19.4 |
71.6 |
110.7 |
109.3 |
Net asset value |
5.7 |
8.7 |
21.0 |
55.0 |
100.3 |
104.9 |
MSCI Frontiers Index
(NR) |
0.6 |
3.0 |
15.6 |
34.8 |
70.8 |
62.5 |
MSCI Emerging Markets
Index (NR) |
3.1 |
5.0 |
24.8 |
47.7 |
47.4 |
46.9 |
|
|
|
|
|
|
|
US Dollars: |
|
|
|
|
|
|
Share price |
10.1 |
16.0 |
35.0 |
62.7 |
89.5 |
91.6 |
Net asset value |
11.2 |
16.5 |
36.9 |
46.9 |
80.0 |
87.3 |
MSCI Frontiers Index
(NR) |
5.7 |
10.3 |
30.7 |
27.6 |
53.2 |
48.2 |
MSCI Emerging Markets
Index (NR) |
8.3 |
12.4 |
41.0 |
40.3 |
32.2 |
33.9 |
Sources: BlackRock and Standard & Poor’s Micropal
* 17 December 2010.
At
month end
Ordinary Shares |
|
US Dollar |
|
Net asset value -
capital only: |
226.41c |
Net asset value - cum
income: |
227.11c |
Sterling: |
|
Net asset value -
capital only: |
159.21p |
Net asset value - cum
income: |
159.71p |
Share price: |
166.00p |
Total assets (including
income): |
£297.6m |
Premium to cum-income
NAV: |
3.9% |
Gearing: |
nil |
Gearing range (as a %
of gross assets): |
0-20% |
Net yield*: |
3.1% |
Ordinary shares in
issue: |
186,316,108 |
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 3.1%
and includes the 2017 final dividend of 4.20
cents per share declared on 4
December 2017 and payable to shareholders on 9 February 2018 and the 2017 interim dividend of
2.70 cents per share announced on
25 May 2017 and paid to shareholders
on 30 June 2017.
**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 |
40.5 |
|
Argentina |
19.0 |
Consumer Staples |
12.8 |
|
Kuwait |
12.2 |
Energy |
9.9 |
|
Vietnam |
9.7 |
Health Care |
9.6 |
|
Egypt |
8.4 |
Materials |
9.4 |
|
Nigeria |
7.8 |
Telecommunication
Services |
8.6 |
|
Romania |
7.2 |
Industrials |
6.2 |
|
Kazakhstan |
7.1 |
Real Estate |
5.9 |
|
Morocco |
5.4 |
Consumer
Discretionary |
4.2 |
|
Saudi Arabia |
4.7 |
Information
Technology |
2.1 |
|
Ukraine |
4.0 |
Utilities |
1.0 |
|
Sri Lanka |
4.0 |
|
----- |
|
Bangladesh |
3.9 |
Total |
110.2 |
|
Kenya |
3.3 |
|
----- |
|
PAN-Middle East |
2.7 |
Short positions |
-3.0 |
|
Philippines |
2.7 |
|
===== |
|
Columbia |
2.0 |
|
|
|
Slovenia |
1.9 |
|
|
|
PAN-Asian |
1.6 |
|
|
|
Estonia |
1.4 |
|
|
|
Tanzania |
1.2 |
|
|
|
|
----- |
|
|
|
Total |
110.2 |
|
|
|
|
----- |
|
|
|
Short positions |
-3.0 |
|
|
|
|
===== |
*reflects gross market exposure from contracts for difference
(CFDs).
Market Exposure
|
28.02
2017
% |
31.03
2017
% |
30.04
2017
% |
31.05
2017
% |
30.06
2017
% |
31.07
2017
% |
31.08
2017
%
|
30.09
2017
% |
31.10
2017
% |
30.11
2017
% |
31.12
2017
% |
31.01
2018
% |
Long |
115.8 |
112.1 |
108.9 |
105.0 |
103.9 |
106.6 |
107.9 |
107.7 |
113.4 |
111.0 |
113.3 |
110.2 |
Short |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
2.5 |
3.8 |
3.8 |
3.0 |
Gross |
115.8 |
112.1 |
108.9 |
105.0 |
103.9 |
106.6 |
107.9 |
107.7 |
115.9 |
114.8 |
117.1 |
113.2 |
Net |
115.8 |
112.1 |
108.9 |
105.0 |
103.9 |
106.6 |
107.9 |
107.7 |
110.9 |
107.2 |
109.5 |
107.2 |
Ten Largest Investments
Company |
Country of Risk |
Gross market value
as a % of net assets |
|
|
|
Grupo Financiero Galicia |
Argentina |
4.2 |
YPF |
Argentina |
4.2 |
The National Bank of Kuwait |
Kuwait |
4.1 |
Halyk Savings Bank |
Kazakhstan |
3.3 |
MHP |
Ukraine |
3.3 |
Equity Group |
Kenya |
3.3 |
Zenith Bank |
Nigeria |
3.2 |
United Bank for Africa |
Nigeria |
3.1 |
Mobile Telecommunications |
Kuwait |
2.9 |
Burgan Bank |
Kuwait |
2.9 |
Commenting on the markets, Sam
Vecht and Emily Fletcher,
representing the Investment Manager noted:
In January, the Company’s NAV rose by 11.2%* on a US Dollar basis
with net income reinvested, marking its best month since launch in
2010. Performance included the reversal of a provision accrued for
a potential Capital Gains Tax liability in Argentina.
Following the enactment of Argentine tax reform (Law No. 27,430),
effective 1 January 2018, it was
noted that ADRs over Argentine equity held by a non-resident
purchaser will not give rise to an Argentine Capital Gains Tax
liability. In addition, the law removed any liability for
unpaid capital gains tax arising from transactions prior to 1
January 2018. The Board therefore decided to reverse the
accrual with effect from 3 January
2018, which amounted to 2.10% of NAV. For reference,
the MSCI Frontier benchmark gained 5.7%*, while the MSCI Emerging
Markets Index added 8.3%* on a US Dollar basis, over the same
period.
Performance for the month was well spread out, as the majority
of frontier markets ended the month in positive territory and
almost half of them up double digits. Broad Nigerian exposure was
the top contributor to performance, with the market gaining 13% in
January as near-term outlook improved amid functioning FX (foreign
exchange) and stronger oil prices, both factors which have led
trade volumes to have tripled over the past six months. Lenders,
Zenith Bank (+21%) and United Bank for Africa (+23%), were both among the strongest
performers. An off-benchmark allocation to Ukrainian food producer,
MHP (+22%), benefitted the Company after reporting a very strong
fourth quarter 2017, after achieving significant poultry price
increases over the year. Management’s shift from domestic sales to
exports, which has resulted in positive pricing trends, supports
MHP being one of the fund’s largest positions on both an absolute
and relative basis. Our long standing overweight to Kazakhstan’s
Haylk Bank (+31%) also continued its streak of strong performance,
ending the month as the Company’s top contributor to returns.
Our two holdings in the
Philippines, one a long position and one a short position,
both contributed positively to returns. Our long position in
LT Group rose 17% as the company significantly increased cigarette
prices with the magnitude of the move above analyst
estimates. The Company also benefited from two holdings
in Colombia, Ecopetrol (+23%) and
Exito (+14%). Having bought Ecopetrol at around $9/ADR (American Depositary Receipts) in
February, we decided to take profits and fully exit our position in
January at around $18/ADR.
Our position in Vietnamese broker, Saigon Securities, rose 19%
following the strong performance of the Vietnamese market.
Whilst we have around 10% of the portfolio in Vietnam, this is an underweight relative to
the index and therefore led to negative relative returns in
Vietnam. Holdings in Sri
Lanka also detracted from relative returns as the market was
flat in January.
We continued to decrease gearing in January, taking profits and
reducing gross exposure across the book following very strong
performance. At the same time, we have built up a long position in
Saudi Arabia, on the view that the
stock market has broadly lagged oil and that in the near-term,
government spending is expected to increase materially. On the
other hand we exited our long-standing position in Kakzakh energy
name, Kazmunaigas, into the long awaited tender offer from its
parent company.
Frontier Markets continue to exhibit strong GDP (Gross Domestic
Product) growth and 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.
23 February 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.