BlackRock Frontiers Portfolio Update
July 20 2021 - 11:23AM
UK Regulatory
TIDMBRFI
The information contained in this release was correct as at 30 June 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 30 June 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 2.9 -2.1 30.4 -4.5 27.3 77.1
Net asset value 2.3 5.9 32.7 3.1 31.6 92.5
Benchmark (NR)** 2.1 3.4 9.7 0.5 32.0 57.6
MSCI Frontiers Index (NR) 5.6 14.0 23.9 23.4 51.4 82.0
MSCI Emerging Markets Index (NR) 4.0 4.9 26.0 31.7 78.5 79.5
US Dollars:
Share price 0.2 -2.0 45.8 -0.1 31.7 57.6
Net asset value -0.3 6.0 48.3 7.9 36.2 71.0
Benchmark (NR)** -0.8 3.6 22.7 5.1 36.4 40.7
MSCI Frontiers Index (NR) 2.7 14.1 38.5 29.1 56.5 61.3
MSCI Emerging Markets Index (NR) 1.3 5.0 40.9 37.8 84.5 59.0
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: 176.29c
Net asset value - cum income: 177.72c
Sterling:
Net asset value - capital only: 127.62p
Net asset value - cum income: 128.65p
Share price: 120.50p
Total assets (including income): £243.6m
Discount to cum-income NAV: 6.3%
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 paid 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 34.6 Saudi Arabia 18.6
Consumer Discretionary 15.3 Greece 9.0
Materials 13.8 Vietnam 8.2
Industrials 12.9 Thailand 7.7
Energy 10.8 Indonesia 7.4
Consumer Staples 6.1 Kazakhstan 7.1
Real Estate 4.4 Chile 5.9
Information Technology 3.4 Egypt 5.6
Health Care 2.7 Philippines 5.2
Utilities 1.5 Poland 4.9
Communication Services 1.3 United Arab Emirates 4.8
----- Hungary 4.8
106.8 Malaysia 4.1
----- Romania 2.3
Short positions -4.6 Peru 2.2
===== Kenya 1.8
Ukraine 1.8
Pakistan 1.7
Qatar 1.7
Panama 1.5
Nigeria 0.5
-----
Total 106.8
-----
Short positions -4.6
=====
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
31.07 31.08 30.09 31.10 30.11 31.12 31.01 28.02 31.03 30.04 31.05 30.06
2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2021
% % % % % % % % % % % %
Long 110.3 110.2 107.8 106.9 107.3 107.9 110.5 114.0 105.7 108.5 105.3 106.8
Short 1.1 0.0 0.0 0.0 0.0 1.1 1.1 4.5 3.4 2.5 2.3 4.6
Gross 111.4 110.2 107.8 106.9 107.3 109.0 111.6 118.5 109.1 111.0 107.6 111.4
Net 109.2 110.2 107.8 106.9 107.3 106.8 109.4 109.5 102.3 106.0 103.0 102.2
Ten Largest Investments
Company Country of Risk Gross market value as a
% of net assets
National Commercial Bank Saudi Arabia 5.1
Kaspi Kazakhstan 4.0
FPT Vietnam 3.4
Emaar Properties United Arab Emirates 3.4
Mobile World Vietnam 3.4
Saudi British Bank Saudi Arabia 3.3
LPP Poland 2.9
CP All Thailand 2.8
National Bank of Greece Greece 2.4
United International Transport Saudi Arabia 2.4
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the
Investment Manager noted:
The Company's NAV returned -0.3%1 versus the Company's benchmark (the MSCI
Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index
("Benchmark Index")), which returned -0.8% in June2. For reference, the MSCI
Emerging Markets Index ended the month +1.3% and the MSCI Frontier Markets
Index +2.7%2 over the same period (all performance figures are on a US Dollar
basis with net income reinvested).
Market performance during the month remained under pressure amid currency
weakness, discussions of potential FED tapering, COVID-19 resurgence in various
countries (especially ASEAN), and slow vaccine roll-out. High COVID-19 cases
continue to restrict the recovery in many emerging and frontier markets.
Commodity-heavy markets did better on the back of rising oil prices. We
continue to believe the coming months will remain challenged by COVID-19
newsflow while our base case for broad based economic normalization in H2 2021
remains unchanged. We believe Frontier assets remain very attractively valued
in this context.
Latin American equities were up 2.4% in June with Colombia posting the
strongest return (+5.6%). Conversely, Peru lagged in the context of the
presidential election of the leftist candidate Pedro Castillo. Brent crude
rose 10.8% over the month which bolstered market performance in the Middle East
with Saudi Arabia (+4.0%). Vietnam also had a strong month (+5.0%).
For the second month running our positions in Vietnam and Poland contributed
the most to the portfolio in June. In Poland, apparel retailer LPP (+10.6%) was
the biggest contributor after strong Q1 earnings numbers. In Vietnam, our
holdings in retailer Mobile World (+9.8%) and IT services company FPT Corp
(+4.5%) both contributed strongly. Elsewhere, our holding in Kazakhstan
payments company Kaspi (+15.6%) was the single largest stock contributor.
We made a few changes to the portfolio in June. We added to Saudi Arabia where
we expect economic growth to accelerate driven by increased government spending
on the back of a renewed drive to shift the economy away from oil. We added
exposure in financials which should benefit from increased spending and loan
activity. We also added other stocks which we believe are geared to a pickup
in growth and yet not too USD sensitive. We exited our position in Colombia
based on concerns around the fiscal deficit announced for next few years. Oil
production in the country is in decline which offsets any benefits from a
higher oil price thereby making it difficult to foresee any significant trade
balance improvement. We remain cautious the ASEAN countries where COVID-19
cases are escalating anew, and where true cases may prove to be a multiple of
the reported numbers. Lockdowns have returned which are once again slowing the
economic recovery. As the same time vaccination progress across the region
continues slowly.
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 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 are 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 30 June 2021
2MSCI as at 30 June 2021
20 July 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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