BlackRock Frontiers Portfolio Update
January 15 2021 - 10:29AM
UK Regulatory
TIDMBRFI
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 December 2020 and unaudited.
Performance at month end with net income reinvested.
One Three One Three Five Since
month months year years years Launch*
% % % % % %
Sterling:
Share price 10.1 30.3 -5.4 -14.3 45.1 71.4
Net asset value 5.7 25.3 0.1 -8.9 40.5 76.7
Benchmark (NR)** 1.9 10.0 -7.9 -5.9 38.8 50.9
MSCI Frontiers Index (NR) 3.3 5.2 -1.7 -1.0 46.0 59.9
MSCI Emerging Markets Index (NR) 4.8 13.2 14.7 18.4 97.0 68.8
US Dollars:
Share price 12.7 37.8 -2.4 -13.2 34.7 50.9
Net asset value 8.2 32.5 3.3 -7.8 30.5 55.3
Benchmark (NR)** 4.4 16.3 -5.0 -4.9 28.7 33.4
MSCI Frontiers Index (NR) 5.7 11.2 1.4 0.0 35.4 40.2
MSCI Emerging Markets Index (NR) 7.4 19.7 18.3 19.7 82.7 48.0
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: 162.93c
Net asset value - cum income: 163.86c
Sterling:
Net asset value - capital only: 119.20p
Net asset value - cum income: 119.88p
Share price: 118.50p
Total assets (including income): £289.2m
Discount to cum-income NAV: 1.2%
Gearing: nil
Gearing range (as a % of gross assets): 0-20%
Net yield*: 4.5%
Ordinary shares in issue**: 241,210,518
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 4.5% and includes the 2020
final dividend of 4.25 cents per share declared on 11 December 2020 with a pay
date of 12 February 2021. Also included is the 2020 interim dividend of 2.75
cents per share, announced on 28 May 2020 and paid to shareholders on 26 June
2020.
** Excluding 612,283 ordinary shares held in treasury.
***Calculated as a percentage of average net assets and using expenses,
excluding Performance fees and interest costs for the year ended 30 September
2020.
Sector Gross market Country Gross market value as
Analysis value as a % of Analysis a % of net assets*
net assets*
Financials 30.8 Indonesia 14.2
Consumer Discretionary 17.7 Saudi Arabia 11.7
Industrials 14.0 Vietnam 8.7
Materials 13.1 Philippines 8.4
Energy 10.0 Egypt 6.5
Real Estate 5.3 Kazakhstan 5.9
Consumer Staples 5.0 Chile 5.5
Utilities 3.4 Greece 5.5
Communication Services 3.0 Thailand 5.1
Health Care 2.4 Malaysia 4.9
Information Technology 2.1 Poland 4.1
----- Pakistan 3.4
106.8 Qatar 2.9
----- Turkey 2.4
Short positions -1.1 Romania 2.1
===== United Arab Emirates 2.1
Panama 2.0
Hungary 1.9
Pan-Emerging Europe 1.8
Ukraine 1.8
Peru 1.7
Pan Africa 1.6
Kenya 1.0
Colombia 0.8
Nigeria 0.4
Czech Republic 0.4
-----
Total 106.8
-----
Short positions -1.1
=====
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
31.01 29.02 31.03 30.04 31.05 30.06 31.07 31.08 30.09 31.10 30.11 31.12
2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020
% % % % % % % % % % % %
Long 113.0 107.1 106.4 105.9 109.6 109.8 110.3 110.2 107.8 106.9 107.3 107.9
Short 1.1 3.8 2.5 2.6 2.5 1.5 1.1 0.0 0.0 0.0 0.0 1.1
Gross 114.1 110.9 108.9 108.5 112.1 111.3 111.4 110.2 107.8 106.9 107.3 109.0
Net 111.9 103.3 103.9 103.3 107.1 108.3 109.2 110.2 107.8 106.9 107.3 106.8
Ten Largest Investments
Company Country of Risk Gross market value as a
% of net assets
JSC Kaspi Kazakhstan 3.1
Indocement Tunggal Prakarsa Indonesia 3.0
Mobile World Vietnam 2.7
PTT Exploration & Production Public Thailand 2.6
Astra International Indonesia 2.6
Tupras Turkey 2.4
LT Group Philippines 2.4
National Commercial Bank Saudi Arabia 2.3
United International Transport Saudi Arabia 2.3
Quimica Y Minera - ADR Chile 2.3
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the
Investment Manager noted:
The Company's NAV returned +8.2% versus its benchmark the MSCI Emerging ex
Selected Countries + Frontier Markets + Saudi Arabia Index ("Benchmark Index"),
which returned +4.4% in December. For reference, the MSCI Emerging Markets
Index ended the month +7.4% and the MSCI Frontier Markets Index +5.7% over the
same period (all performance figures are on a US Dollar basis with net income
reinvested).
For the year ending December 2020, the Company's NAV returned +3.3% versus its
benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi
Arabia Index ("Benchmark Index"), which returned -5.0% for the year. For
reference, the MSCI Emerging Markets Index ended the year +18.3% and the MSCI
Frontier Markets Index +1.4% over the same period (all performance figures are
on a US Dollar basis with net income reinvested).
December was another very strong month for the Company, both in absolute and
relative terms. As we have discussed extensively over the past few months, the
Company is positioned for a normalizing economic environment and a return of
emerging market growth as COVID-19 pressures ease. News flow around the various
vaccines, pointing to significantly higher than expected efficacy, has given
investors confidence that we can see normalization come through in 2021. On the
back of this, we saw strong returns to our positioning, as some of our more
cyclical positions rallied strongly.
In Kazakhstan, online payment platform Kazpi.kz (+32%) contributed most to the
portfolio as the company continued its post IPO rally. Maiden results, reported
in November 2020, showed operating trends tracking in line with our
expectations and we believe the company is on track to show earnings growth
above 50% for the year.
Aeon (+29%), a credit card operator in Thailand, was also a strong performer
after the company guided for better credit conditions in the kingdom.
National Bank of Greece (+52%) contributed strongly after reporting better
non-performing loan trends in its Q3 results. The company also benefited from
capital going back to European financials and a better environment for
dividends returning across Europe.
Ferrexpo (+37%), an Iron Ore producer in Ukraine, benefited from the continued
tightness in the iron ore market as Vale, the world's second largest producer,
failed to meet production expectations in Q4. Chinese steel demand continues to
be at record levels.
On the other hand, relative detractors came mostly from positions we did not
own in countries like Turkey or Colombia. Our positions in the Philippines gave
back some of their earlier gains on concerns current shutdowns will be extended
following the emergence of more contagious COVID-19 strains in the UK and South
Africa.
As markets have rallied, we have locked some profits on stocks that have shown
very strong performance, such as Aeon in Thailand and Mr DIY in Malaysia. We
initiated a new position in Tupras, a Turkish refiner, expecting some recovery
in spreads in 2021 on which basis we think valuation is very attractive.
However, in aggregate we have traded little, choosing to maintain current
portfolio positioning.
We continue to be positioned for a strong rebound in global economic activity
which we expect to see over the next six months. We believe that the
combination of strong liquidity, easy financial conditions and high levels of
disposable income is a very powerful mix for earnings growth, a factor that has
been scarce in emerging markets for an extended period. Even now, despite the
strong bounce, we believe that frontier and small emerging markets contain some
of the best valued companies globally with a number of markets still trading
significantly below their average 10-year price to book valuations.
Sources:
1BlackRock as at 31 December 2020
2MSCI as at 31 December 2020
15 January 2020
ENDS
Latest information is available by typing www.blackrock.com/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.
END
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