BLACKROCK FRONTIERS INVESTMENT TRUST
PLC (LEI: 5493003K5E043LHLO706)
All information is at 30 September
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 |
-2.3 |
-3.6 |
-3.1 |
50.9 |
49.3 |
78.7 |
Net asset value |
-2.6 |
-5.0 |
-4.0 |
43.9 |
53.0 |
77.5 |
Benchmark (NR)** |
-0.3 |
2.8 |
5.3 |
50.5 |
58.6 |
61.2 |
MSCI Frontiers Index
(NR) |
-0.4 |
-0.8 |
-5.1 |
35.7 |
43.0 |
46.4 |
MSCI Emerging Markets
Index (NR) |
-0.9 |
0.1 |
2.0 |
64.8 |
48.3 |
36.5 |
|
|
|
|
|
|
|
US Dollars: |
|
|
|
|
|
|
Share price |
-1.9 |
-4.8 |
-5.7 |
30.1 |
20.5 |
50.1 |
Net asset value |
-2.3 |
-6.1 |
-6.6 |
24.0 |
23.4 |
48.8 |
Benchmark (NR)** |
0.0 |
1.6 |
2.3 |
29.5 |
27.7 |
35.9 |
MSCI Frontiers Index
(NR) |
-0.1 |
-2.0 |
-7.7 |
16.8 |
15.2 |
22.5 |
MSCI Emerging Markets
Index (NR) |
-0.5 |
-1.1 |
-0.8 |
41.9 |
19.4 |
14.1 |
Sources: BlackRock and Datastream
* 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: |
171.02c |
Net asset value - cum
income: |
177.71c |
Sterling: |
|
Net asset value -
capital only: |
131.14p |
Net asset value - cum
income: |
136.27p |
Share price: |
139.75p |
Total assets (including
income): |
£273.4m |
Premium to cum-income
NAV: |
2.6% |
Gearing: |
nil |
Gearing range (as a %
of gross assets): |
0-20% |
Net yield*: |
3.7% |
Ordinary shares in
issue: |
200,616,108 |
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 3.7%
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 |
29.6 |
|
Thailand |
10.2 |
Real Estate |
15.7 |
|
Indonesia |
9.2 |
Consumer
Discretionary |
14.3 |
|
Vietnam |
9.0 |
Consumer Staples |
10.8 |
|
Argentina |
8.8 |
Materials |
10.3 |
|
Egypt |
7.7 |
Health Care |
7.7 |
|
Romania |
6.2 |
Energy |
7.6 |
|
Nigeria |
5.9 |
Telecommunication
Services |
5.8 |
|
United Arab
Emirates |
5.6 |
Industrials |
4.5 |
|
Kuwait |
5.6 |
Information
Technology |
1.4 |
|
Ukraine |
5.5 |
|
----- |
|
Saudi Arabia |
5.1 |
Total |
107.7 |
|
Kazakhstan |
3.4 |
|
----- |
|
Greece |
3.3 |
Short positions |
-7.7 |
|
Qatar |
3.3 |
|
===== |
|
Hungary |
3.2 |
|
|
|
Malaysia |
2.7 |
|
|
|
PAN-Africa |
2.4 |
|
|
|
Poland |
2.4 |
|
|
|
Kenya |
2.0 |
|
|
|
Philippines |
1.8 |
|
|
|
Tanzania |
1.3 |
|
|
|
PAN-Asian |
1.2 |
|
|
|
Morocco |
0.8 |
|
|
|
Sri Lanka |
0.5 |
|
|
|
Other Africa |
0.3 |
|
|
|
Bangladesh |
0.3 |
|
|
|
|
----- |
|
|
|
Total |
107.7 |
|
|
|
|
----- |
|
|
|
Short positions |
-7.7 |
|
|
|
|
===== |
*reflects gross market exposure from contracts for difference
(CFDs).
Market Exposure
|
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
% |
31.08
2018
% |
30.09
2018
% |
Long |
113.4 |
111.0 |
113.3 |
110.2 |
102.1 |
97.0 |
113.2 |
119.5 |
116.2 |
113.9 |
107.7 |
107.7 |
Short |
2.5 |
3.8 |
3.8 |
3.0 |
3.0 |
2.9 |
3.8 |
4.2 |
4.7 |
5.1 |
6.4 |
7.7 |
Gross |
115.9 |
114.8 |
117.1 |
113.2 |
105.1 |
99.9 |
117.0 |
123.7 |
120.9 |
119.0 |
114.1 |
115.4 |
Net |
110.9 |
107.2 |
109.5 |
107.2 |
99.1 |
94.1 |
109.4 |
115.3 |
111.5 |
108.8 |
101.3 |
100.0 |
Ten Largest Investments
Company |
Country of Risk |
Gross market value
as a
% of net assets |
|
|
|
Astra International |
Indonesia |
4.6 |
MHP |
Ukraine |
3.5 |
Halyk Savings Bank |
Kazakhstan |
3.3 |
Ooredoo |
Qatar |
3.3 |
Chemical Works of Gedeon
Richter |
Hungary |
3.2 |
Land & Houses Public Company
Limited |
Thailand |
3.2 |
YPF |
Argentina |
3.1 |
Emaar Properties |
United Arab Emirates |
3.1 |
Indorama Ventures |
Thailand |
3.1 |
Al Rajhi Bank (P-Note) |
Saudi Arabia |
3.0 |
Commenting on the markets, Sam
Vecht and Emily Fletcher,
representing the Investment Manager noted:
In September the Company’s NAV fell by 2.3%1 (on a US
Dollar basis with net income reinvested) versus its benchmark, the
MSCI New Frontier benchmark, which remained flat
(0.0%2). For reference, MSCI Emerging Markets
Index ended the month down by 0.5%2 and MSCI Frontier
Markets Index down by -0.1%2 (all performance figures
are on a US Dollar basis with net income reinvested).
Emerging and Frontier Market equities stabilised in September as
the selloffs in Turkey and
Argentina eased. Dispersion
remains elevated as the combination of the gradual withdrawal of
dollar liquidity, higher oil prices and political risk is leading
to market movements more justified than others in our view, given
their underlying economic fundamentals, fiscal and external account
balances and policy choices. Oil hitting $85 should generally be positive for our
portfolio - opportunities exist in those parts of the market which
have not responded as strongly to a rising oil price as we would
expect – such as Nigeria and UAE
(United Arab
Emirates).
Our holding in Ukrainian Steel company, Ferrexpo, was the
biggest contributor to returns this month, rallying +30% on the
month from low levels as the market recognized the strong cash
flows that the company is generating at current iron ore pellet
prices. Also contributing to returns were positions in
Vietnam, driven by our holding in
electronics and grocery retailer, Mobile World Group. The
Argentine market rebounded through the month, as the currency
stabilized following the expanded IMF (International Monetary Fund)
deal and move by the central bank to monetary aggregate
targeting. Our short positions in the Philippines added to returns as the market
underperformed.
Our positioning in Greece
driven by our holdings in the financials Alpha Bank and National Bank of Greece were the largest detractors with both
stocks down more than 20% on the month amid concerns around bank
capital levels. Returns were also hurt by positions in
Egypt where the market fell post
the announcement of higher than expected inflation numbers for
August and concerns that inflation could trend even higher in
September, which together with the rise in interest rates seen
globally meant that investors thought it would be increasingly
unlikely that interest rates would be cut this year.
In terms of positioning we made few changes to the portfolio in
September. We initiated a position in drinks company ThaiBev.
We believe the stock should benefit from a pickup in activity in
Thailand, it trades at an
attractive valuation relative to the Thai market and the market has
heavily discounted the valuation of its acquisition of Sabeco,
Vietnam’s leading beer company. We believe the business will
be able to pay down its debt faster than the market expects due to
stronger free cash flow generation. Elsewhere we added to
positions we like that have sold off such as IDH in Egypt and energy company Vivo. We
completed the exit of Yanbu National Petrochemical Company, a Saudi
chemicals company, taking profits on a position which was up nearly
25% since entry in the last quarter of 2017.
2018 has seen Emerging and Frontier Markets de-rate considerably
and whilst weaker exchange rates and tighter financial
conditions will affect growth, we do not expect a sharp
slow-down and many countries have significantly improved external
balances than in previous crises, creating significant pockets of
value in our view. In aggregate the wide subset of countries
that make up our investible universe continue to exhibit strong GDP
(Gross Domestic Product) 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 September
2018
2MSCI as at 30 September
2018
18 October 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.