BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151)
All information is at 31 August 2017 and unaudited.
Performance at month end with net income reinvested
| One month % | Three months % | One year % | Three years % | Five years % | ^^Since 31.03.06 % | |
| Sterling: | ||||||
| Net asset value^ | 7.5 | 16.1 | 24.5 | 7.8 | 17.5 | 102.2 |
| Share price | 8.1 | 15.6 | 25.7 | 9.1 | 16.1 | 89.6 |
| MSCI EM Latin America | 7.1 | 14.3 | 25.1 | 10.0 | 16.1 | 119.9 |
| US Dollars: | ||||||
| Net asset value^ | 5.0 | 15.8 | 22.4 | -16.4 | -4.5 | 50.5 |
| Share price | 5.7 | 15.4 | 23.6 | -15.3 | -5.7 | 41.0 |
| MSCI EM Latin America | 4.6 | 14.1 | 23.1 | -14.6 | -5.8 | 63.4 |
^cum income
^^Date which BlackRock took over the investment management of the Company.
Sources: BlackRock, Standard & Poor's Micropal
| At month end | |
| Net asset value - capital only: | 543.04p |
| Net asset value - cum income: | 549.41p |
| Share price: | 480.00p |
| Total Assets#: | £232.6m |
| Discount (share price to cum income NAV): | 12.6% |
| Average discount* over the month - cum income: | 14.1% |
| Net gearing at month end**: | 7.1% |
| Gearing range (as a % of net assets): | 0-25% |
| Net yield##: | 2.5% |
| Ordinary shares in issue***: | 39,369,620 |
| Ongoing charges****: | 1.2% |
Total assets include current year revenue.
## calculated using total dividends declared in the last 12 months as at the date of this announcement as a percentage of month end share price.
*The discount is calculated using the cum income NAV (expressed in sterling terms).
**Net cash/net gearing is calculated using debt at par, less cash and cash equivalents and fixed interest investments as a percentage of net assets.
***Excluding 2,071,662 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 31 December 2016.
Geographic Exposure
| % of Total Assets | % of Equity Portfolio * | MSCI EM Latin American Index | ||
| Brazil | 63.1 | 63.4 | 56.2 | |
| Mexico | 25.8 | 25.9 | 27.8 | |
| Argentina | 4.2 | 4.3 | 0.0 | |
| Peru | 3.7 | 3.7 | 3.0 | |
| Chile | 1.9 | 1.9 | 9.6 | |
| Panama | 0.5 | 0.4 | 0.0 | |
| Colombia | 0.4 | 0.4 | 3.4 | |
| Net current assets (inc.Fixed interest) | 0.4 | 0.0 | 0.0 | |
| ----- | ----- | ----- | ||
| Total | 100.0 | 100.0 | 100.0 | |
| ----- | ----- | ----- |
| Sector | % of Equity Portfolio * | % of Benchmark |
| Financials | 31.9 | 30.5 |
| Consumer Staples | 17.7 | 16.6 |
| Materials | 14.1 | 15.7 |
| Consumer Discretionary | 10.2 | 6.4 |
| Energy | 9.1 | 7.5 |
| Telecommunication Services | 6.0 | 6.6 |
| Industrials | 5.9 | 6.3 |
| Real Estate | 1.5 | 1.6 |
| Utilities | 1.5 | 6.3 |
| Information Technology | 1.1 | 1.4 |
| Health Care | 1.0 | 1.1 |
| ----- | ----- | |
| Total | 100.0 | 100.0 |
| ----- | ----- |
*excluding net current liabilities & fixed interest
Ten Largest Equity Investments (in percentage order)
Company | Country of Risk | % of Equity Portfolio | % of Benchmark |
| Itau Unibanco | Brazil | 7.4 | 6.4 |
| Banco Bradesco | Brazil | 7.0 | 6.3 |
| Petrobras | Brazil | 6.8 | 4.6 |
| Vale | Brazil | 6.0 | 5.3 |
| Ambev | Brazil | 5.0 | 4.6 |
| America Movil | Mexico | 4.1 | 4.8 |
| Femsa | Mexico | 3.8 | 3.0 |
| Grupo Financiero Banorte | Mexico | 3.3 | 2.6 |
| B3 (formerly BM&F Bovespa) | Brazil | 3.1 | 2.2 |
| Credicorp | Peru | 2.7 | 2.1 |
Commenting on the markets, Will Landers, representing the Investment Manager noted;
For the month of August 2017, the Company's NAV rose by 7.5% with the share price rising by 8.1%. The Company's benchmark, the MSCI EM Latin America Index, rose by 7.1% (all performance figures are in sterling terms with income reinvested and are net of ongoing charges).
Our selection within Mexico was the primary contributor in August, despite marginal Peso weakness and higher inflation both contributing to broad underperformance relative to the other Latin American markets. Our lack of positioning in the media name, Televisa, greatly benefitted the portfolio as the company has experienced falling advertising revenues and a drop in licensing and syndication as client growth declines. Similarly, the decision to not hold positions in airport operators GAP and ASUR, and to exit the low-cost airline, Volaris, last month also contributed to relative performance as traffic volumes continue to decelerate from the first half of the year. Portfolio declines were largely driven by stock specific factors. Cemex was among the top detractors from performance in August as Hurricane Harvey may have a negative impact on the company's Texas-based operations. Our overweight holding in the Brazilian rail logistics company, Rumo, was the largest individual detractor for the period.
During the month broad positioning remained relatively unchanged, though we shifted some Mexican exposure. Specifically, we sold down our Grupo Bimbo position, using the proceeds to buy Gruma on the back of better growth and value dynamics. We also exited our position in tequila producer Becle given weaker than expected performance post its IPO (Initial Public Offering). In Brazil, we took profits from BM&F Bovespa and Hypermarcas, while adding exposure to more domestic consumption-oriented names such as retailers Lojas Americanas and Lojas Renner. The Company ended the month being overweight Brazil and Peru while being underweight Chile and Colombia. We also maintain an off-benchmark allocation to Argentina. At the sector level, we are overweight energy and select consumer names, while being underweight utilities and telecoms.
As we enter September, our positioning and outlook remain relatively unchanged. We continue to be overweight in Brazil, and off-benchmark in Argentina, while being underweight in Chile, Colombia and Mexico. Concerns regarding another potential overhang in Brazil's presidency have abated, allowing the administration to pivot back towards their economic agenda. With increased stability from the political front, the primary drivers for Brazilian equities should remain the same: a) the continued easing cycle by the Central Bank which should help to bring forward the needed economic recovery (the Central Bank cut rates another 100 bps in September to 8.25% - 600 basis points of easing so far during the current cycle); and b) continued progress on the reform agenda, especially pension reform, which should help to bring stability to government accounts in the medium term. Meanwhile, despite a more conciliatory tone from the US government on the trade front, we maintain our cautious view on Mexican growth, and therefore our underweight position in the country - uncertainties regarding next year's presidential cycle add to our conviction on such positioning. We continue to be underweight in Chile due to rich valuations and lack of free-float liquidity, and despite slower than expected progress on the infrastructure front, we continue to favour Peru among its Andean neighbours. Argentina remains another top region for the strategy as fundamentals persist, with October mid-term elections expected to give a boost to President Macri's reform agenda.
20 September 2017
ENDS
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