BlackRock Frontiers Portfolio Update
April 09 2021 - 9:31AM
UK Regulatory
TIDMBRFI
The information contained in this release was correct as at 28 February 2021.
Information on the Company's up to date net asset values can be found on the
London Stock Exchange Website at
https://www.londonstockexchange.com/exchange/news/market-news/
market-news-home.html.
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 28 February 2021 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 -1.9 8.9 17.2 -17.5 36.9 69.6
Net asset value 1.3 6.7 14.1 -13.4 39.9 78.3
Benchmark (NR)** -1.1 -0.4 0.0 -10.1 33.0 47.5
MSCI Frontiers Index (NR) -1.7 1.5 -1.0 -4.9 40.7 57.2
MSCI Emerging Markets Index (NR) -1.0 6.5 24.3 18.5 102.6 71.4
US Dollars:
Share price -0.1 14.0 28.3 -16.2 37.4 52.7
Net asset value 3.2 11.7 24.9 -12.1 40.4 60.3
Benchmark (NR)** -0.7 3.0 8.0 -10.0 31.7 31.6
MSCI Frontiers Index (NR) 0.1 6.3 8.4 -3.5 41.2 40.9
MSCI Emerging Markets Index (NR) 0.8 11.5 36.0 20.3 103.2 53.7
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: 167.70c
Net asset value - cum income: 169.15c
Sterling:
Net asset value - capital only: 119.96p
Net asset value - cum income: 120.99p
Share price: 117.25p
Total assets (including income): £229.1m
Discount to cum-income NAV: 3.1%
Gearing: nil
Gearing range (as a % of gross assets): 0-20%
Net yield*: 4.5%
Ordinary shares in issue**: 189,325,748
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 which paid
on 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 31.9 Saudi Arabia 14.1
Materials 16.6 Indonesia 12.6
Consumer Discretionary 15.6 Vietnam 10.6
Industrials 13.0 Kazakhstan 8.0
Energy 11.0 Thailand 7.4
Consumer Staples 8.9 Egypt 6.8
Real Estate 5.4 Greece 6.3
Information Technology 3.3 Philippines 5.5
Utilities 3.0 Chile 5.0
Communication Services 2.7 Malaysia 4.2
Health Care 2.6 Turkey 4.0
----- United Arab Emirates 3.9
114.0 Poland 3.9
----- Pakistan 3.5
Short positions -4.5 Qatar 3.0
===== Hungary 2.2
Peru 2.0
Romania 1.9
Panama 1.6
Pan-Emerging Europe 1.5
Ukraine 1.5
Colombia 1.4
Pan Africa 1.4
Kenya 1.2
Nigeria 0.5
-----
Total 114.0
-----
Short positions -4.5
=====
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
31.03 30.04 31.05 30.06 31.07 31.08 30.09 31.10 30.11 31.12 31.01 28.02
2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020
% % % % % % % % % % % %
Long 106.4 105.9 109.6 109.8 110.3 110.2 107.8 106.9 107.3 107.9 110.4 114.0
Short 2.5 2.6 2.5 1.5 1.1 0.0 0.0 0.0 0.0 1.1 1.1 4.5
Gross 110.9 108.9 108.5 112.1 111.3 111.4 110.2 107.8 106.9 107.3 109.0 118.5
Net 103.3 103.9 103.3 107.1 108.3 109.2 110.2 107.8 106.9 107.3 106.8 109.5
Ten Largest Investments
Company Country of Risk Gross market value as a
% of net assets*
Mobile World Vietnam 3.8
FPT Vietnam 3.3
Bk Rakyat Indonesia 3.3
JSC Kaspi Kazakhstan 3.1
CP All PCL Thailand 3.1
National Commercial Bank Saudi Arabia 3.1
PTT Exploration & Production Public Thailand 3.0
Yanbu National Petrochemical Saudi Arabia 2.8
Tupras Turkey 2.6
Sahara International Petrochemical Saudi Arabia 2.6
*These percentages reflect portfolio exposure gained from both the equity
holdings and exposure through contracts for differences where relevant.
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the
Investment Manager noted:
The Company's NAV returned +3.2%1 versus the Company's benchmark (the MSCI
Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index
("Benchmark Index")), which returned -0.7% in February2. For reference, the
MSCI Emerging Markets Index ended the month +0.8% and the MSCI Frontier Markets
Index +0.1%2 over the same period (all performance figures are on a US Dollar
basis with net income reinvested).
February saw the hope of eventual reopening spread further through frontier
markets. Whilst the majority of countries are still at early stages with their
vaccination programs, frontier markets have started to price the expectation of
reopening.
For emerging markets, February was a volatile month with markets driven by a
rotation favouring cyclicality to the detriment of growth and momentum. The
rotation was more muted within the smaller markets, but sufficient to see many
of our "reopening" and more cyclical trades benefit. Indicators suggest that US
household wealth actually rose substantially through 2020 and as a result of
this pent-up demand, we expect to see a sharp acceleration in growth as the
economy reopens. At the same time, what started as price rises due to supply
side constraints in the commodities sector, has been met with this strong
emergence of demand, causing the majority of both soft and hard commodities to
reach prices that we haven't seen for multiple years. There is, as yet, little
sign of inflation picking up in the vast majority of markets, however, but we
do expect some pick up over the next quarters.
Kazakhstan was the best performing country for the month. Uranium miner,
Kazatomprom, rose 27% as investors concluded that a shift towards lower carbon
sources of energy would likely results in an increased emphasis on nuclear
energy, particularly in China, benefiting Uranium prices. Fintech, Kaspi rose
12% as the company continued to show very strong growth trends, building on its
very high market share in payments in Kazakhstan. February was also a good
month for Vietnam. IT outsourcer, FPT, rose 22% after reporting better than
expected results, with profits up 13% compared with the previous year, despite
the COVID impact. Soy milk producer, Quang Ngai Sugar, rose 14% following the
increase in sugar prices in Vietnam.
Our position in wind energy stock, Terna Energy, was the weakest performer over
the month, falling 14% as the company's Texas operations froze in the
abnormally cold weather. This meant that Terna was forced to purchase
electricity on grid at extremely high prices to cover its contract obligations.
Whilst this had a significant impact on the company, the maximum liability for
this event is known and we continue to think the company offers a very
interesting growth profile through its Greek assets.
We have increased our exposure our exposure to a number of companies which are
currently benefiting from the strong trends in commodity prices, including
Titan Cement and methanol producer, Sahara International Petrochemical. This
has been funded from a reduction some of the exposure that we had to "carry"
countries, those with greater debt loads, who are more reliant on foreign
capital investment, such as Indonesia and the Philippines. We believe that
frontier markets continue to look very attractive both on a relative and
absolute basis, containing 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 28 February 2021
2MSCI as at 28 February 2021
09 April 2021
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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