BlackRock Frontiers Portfolio Update
June 21 2021 - 2:57AM
UK Regulatory
TIDMBRFI
The information contained in this release was correct as at 31 May 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 31 May 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 -3.8 1.5 36.6 -12.6 30.3 72.1
Net asset value 0.6 5.5 35.6 -2.9 41.5 88.1
Benchmark (NR)** -0.8 3.8 10.9 -4.3 35.9 54.4
MSCI Frontiers Index (NR) 1.3 9.6 19.3 13.5 50.6 72.3
MSCI Emerging Markets Index (NR) -1.2 0.7 30.2 22.3 94.3 72.6
US Dollars:
Share price -1.5 2.9 56.7 -6.8 27.0 57.2
Net asset value 3.0 7.0 55.5 3.5 38.0 71.6
Benchmark (NR)** 1.9 5.5 27.6 2.2 32.8 41.9
MSCI Frontiers Index (NR) 4.0 11.5 37.2 21.3 47.1 57.1
MSCI Emerging Markets Index (NR) 1.1 2.1 49.3 30.3 89.3 56.9
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: 177.80c
Net asset value - cum income: 180.97c
Sterling:
Net asset value - capital only: 125.40p
Net asset value - cum income: 127.64p
Share price: 119.00p
Total assets (including income): £241.7m
Discount to cum-income NAV: 6.8%
Gearing: nil
Gearing range (as a % of gross assets): 0-20%
Net yield*: 4.2%
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 4.2% 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 2021 interim dividend of 2.75 cents
per share, announced on 01 June 2021 and due to pay to shareholders on 25 June
2021.
** Excluding 52,497,053 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 35.9 Saudi Arabia 15.0
Consumer Discretionary 13.9 Indonesia 10.2
Materials 13.3 Greece 9.6
Industrials 12.8 Thailand 7.9
Energy 10.5 Vietnam 7.5
Consumer Staples 6.1 Kazakhstan 6.5
Real Estate 4.4 Egypt 5.7
Information Technology 3.1 Chile 5.6
Health Care 2.5 Philippines 5.2
Utilities 1.5 Poland 4.7
Communication Services 1.3 United Arab Emirates 4.7
----- Malaysia 4.1
105.3 Hungary 2.3
----- Romania 2.3
Short positions -2.3 Peru 2.2
===== Ukraine 1.9
Pakistan 1.8
Pan-Emerging Europe 1.8
Qatar 1.6
Panama 1.6
Colombia 1.4
Kenya 1.3
Nigeria 0.4
-----
Total 105.3
-----
Short positions -2.3
=====
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
30.06 31.07 31.08 30.09 31.10 30.11 31.12 31.01 28.02 31.03 30.04 31.05
2020 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021
% % % % % % % % % % % %
Long 109.8 110.3 110.2 107.8 106.9 107.3 107.9 110.5 114.0 105.7 108.5 105.3
Short 1.5 1.1 0.0 0.0 0.0 0.0 1.1 1.1 4.5 3.4 2.5 2.3
Gross 111.3 111.4 110.2 107.8 106.9 107.3 109.0 111.6 118.5 109.1 111.0 107.6
Net 108.3 109.2 110.2 107.8 106.9 107.3 106.8 109.4 109.5 102.3 106.0 103.0
Ten Largest Investments
Company Country of Risk Gross market value as a
% of net assets
Kaspi Kazakhstan 3.4
National Commercial Bank Saudi Arabia 3.3
Emaar Properties United Arab Emirates 3.2
FPT Vietnam 3.1
Mobile World Vietnam 3.1
Bank Rakyat Indonesia 3.0
CP All Thailand 2.9
LPP Poland 2.6
National Bank of Greece Greece 2.6
Saudi British Bank Saudi Arabia 2.5
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the
Investment Manager noted:
The Company's NAV returned +3.0%1 versus the Company's benchmark (the MSCI
Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index
("Benchmark Index")), which returned +1.9% in May2. For reference, the MSCI
Emerging Markets Index ended the month +2.1% and the MSCI Frontier Markets
Index +4.0%2 over the same period (all performance figures are on a US Dollar
basis with net income reinvested).
Frontier and emerging markets ended the month well after a sell-off
intra-month. MSCI Emerging Markets rose by 2.1% in May, outperforming Developed
Markets (MSCI World). The first half of the month saw the markets under
pressure, triggered by higher-than-expected inflation in the US, which revived
concerns of tighter monetary policy worldwide. Rising COVID-19 cases across the
Emerging Markets added to investor woes. As the month progressed, positive news
regarding the global economic outlook accompanied by US Dollar weakness helped
emerging and frontier markets stage a rebound to end the month in positive
returns. We continue to believe the coming months will remain challenged by
covid-related newsflow while our base case for broad based economic
normalization in H2 2021 remains unchanged. We believe that frontier assets
remain very attractively valued in this context.
Among regions, Emerging Latin America was the best performer (+7.3%) in May
followed by EMEA (+5.3%) and Emerging Asia (+1.1%). Peru led in Latin America
(+10.2%) against the backdrop of its Presidential election. Many Central and
Eastern European countries also performed strongly over the month with the MSCI
Hungary (+16.0%), MSCI Poland (+13.5%) and MSCI Czech Republic (+10.6%). Most
were led by positive earnings revisions and foreign exchange strength.
Our positions in Vietnam and Poland contributed the most to the portfolio in
May. Our holding in information technology (IT) services company FPT benefited
from investor's expectation that FPT could benefit from Indian IT companies
impacted by the COVID-19 situation in India. We took some profit in the name on
the back of strong performance. In Poland, collection agency Kruk (+46.6%) and
apparel retailer LPP (+18.2%) contributed to returns after both reported strong
Q1 earnings numbers. Our holding in Indonesia was the biggest detractor over
the month, led by Indonesian retailer MAPI (-11.5%).
We made a few changes to the portfolio in May. We took profits in some of our
holdings which have done well and where we think our investment view is now at
least in part in the price. These included payments company Kaspi and Yansab
where we view limited further upside from oil prices. We switched up some
ASEAN exposure. We sold down financial Aeon in Thailand taking profit as the
stock has re-rated to reflect fair market value in our view. To keep Thailand
exposure we initiated a position in petrochemical company IRPC which should
benefit from current commodity spreads and rising margins. We added to
Indonesia where the market looks cheap in context of the economy eventually
reopening. The current account looks strong which should support domestic
liquidity and growth should pick up as the economy reopens. We added to our
position in Credicorp in Peru last month and had been monitoring the very close
results in the presidential election of 6th June which leftish candidate Pedro
Castillo won. This adds some uncertainty to what looks like an improving macro
backdrop given Peru's weak currency while the country's terms of trade improved
significantly with the rise in commodity prices.
Globally the economy is recovering quickly and supported by a very
accommodative policy mix in the developed world with extraordinary levels of
both fiscal and monetary support. We believe this backdrop is likely to be
inflationary given the broad spending plans across private and public spending,
which are being reflected in rising commodity prices. While we see the
potential for higher rates globally which could put global equity multiples
under pressure we note that frontier markets are at a very different starting
point given a number of markets still trading significantly below their average
10-year price to book valuations. We believe that frontier markets continue to
look very attractive against this backdrop both on a relative and absolute
basis.
Sources:
1BlackRock as at 31 May 2021
2MSCI as at 31 May 2021
21 June 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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