BlackRock Latin American Investment Trust Plc - Portfolio Update
PR Newswire
London, May 25
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151)
All information is at 30 April 2018 and unaudited.
Performance at month end with net income reinvested
| One month % | Three months % | One year % | Three years % | Five years % | |
| Sterling: | |||||
| Net asset value^ | -0.1 | -1.7 | 14.7 | 38.6 | 5.0 |
| Share price | 0.4 | -3.2 | 15.9 | 36.0 | 3.4 |
| MSCI EM Latin America | 0.6 | -2.6 | 11.0 | 34.7 | 3.4 |
| US Dollars: | |||||
| Net asset value^ | -1.9 | -4.9 | 22.1 | 24.2 | -7.0 |
| Share price | -1.5 | -6.3 | 23.3 | 21.9 | -8.5 |
| MSCI EM Latin America | -1.2 | -5.7 | 18.2 | 20.7 | -8.5 |
^cum income
Sources: BlackRock, Standard & Poor's Micropal
| At month end | |
| Net asset value - capital only: | 546.79p |
| Net asset value - cum income: | 550.73p |
| Share price: | 476.50p |
| Total Assets#: | £234.4m |
| Discount (share price to cum income NAV): | 13.5% |
| Average discount* over the month - cum income: | 14.5% |
| Net gearing at month end**: | 9.3% |
| Gearing range (as a % of net assets): | 0-25% |
| Net yield##: | 2.1% |
| Ordinary shares in issue***: | 39,369,620 |
| Ongoing charges****: | 1.1% |
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 2017.
Geographic Exposure
| % of Total Assets | % of Equity Portfolio * | MSCI EM Latin American Index | ||
| Brazil | 67.7 | 67.0 | 58.5 | |
| Mexico | 23.1 | 22.9 | 24.3 | |
| Argentina | 4.9 | 4.8 | 0.0 | |
| Chile | 3.7 | 3.6 | 9.9 | |
| Peru | 1.7 | 1.7 | 3.5 | |
| Colombia | 0.0 | 0.0 | 3.8 | |
| Net current liabilities (inc. Fixed interest) | -1.1 | 0.0 | 0.0 | |
| ----- | ----- | ----- | ||
| Total | 100.0 | 100.0 | 100.0 | |
| ----- | ----- | ----- |
| Sector | % of Equity Portfolio * | % of Benchmark |
| Financials | 30.6 | 31.1 |
| Materials | 18.8 | 17.2 |
| Consumer Staples | 11.6 | 15.8 |
| Consumer Discretionary | 10.7 | 5.0 |
| Energy | 10.1 | 9.9 |
| Telecommunication Services | 7.2 | 6.4 |
| Industrials | 6.0 | 6.0 |
| Utilities | 2.2 | 5.3 |
| Health Care | 1.1 | 0.9 |
| Real Estate | 1.0 | 1.4 |
| Information Technology | 0.7 | 1.0 |
| ----- | ----- | |
| 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 | 8.9 | 7.0 |
| Vale | Brazil | 8.5 | 6.6 |
| Petrobras | Brazil | 8.0 | 6.9 |
| Banco Bradesco | Brazil | 7.2 | 6.3 |
| America Movil | Mexico | 5.5 | 4.6 |
| Femsa | Mexico | 3.7 | 2.8 |
| AmBev | Brazil | 3.7 | 4.7 |
| B3 | Brazil | 2.9 | 2.2 |
| Grupo Financiero Banorte | Mexico | 2.7 | 2.3 |
| Rumo Logistica Operada Multimodal | Brazil | 2.5 | 0.7 |
Commenting on the markets, Will Landers, representing the Investment Manager noted;
For the month of April 2018, the Company's NAV fell by 0.1%* with the share price rising by 0.4%*. The Company's benchmark, the MSCI EM Latin America Index, rose by 0.6%* (all performance figures are in sterling terms with income reinvested).
Stock selection in Brazil was the main contributor led by our overweight to Materials, the only sector that saw positive performance amid commodity price support. Overweights to rail operator, Rumo and pulp producer, Suzano Papel e Celulose, were among the top contributors. Both firms posted strong results, Rumo cited a good harvest and continuing cost efficiencies, while Suzano benefitted from lower costs and higher pulp prices. Positive earnings momentum should be maintained as the company also benefits from the recent FX (foreign exchange) devaluation. Vale was the period's top performer. Our underweight to Info Tech across the region also added to relative performance in April. On the other hand our lack of positioning in Colombia continued to detract on the back of oil strength, supported by speculation over potential re-imposition of sanctions against Iran and Venezuela. Not holding either EcoPetrol or Bancolombia detracted from relative performance amid oil strength and the consolidation surrounding market friendly Presidential candidate, Duque. Our overweight to Itau Unibanco was the worst relative performer, moving in line the broader Brazilian market contraction. Our off-benchmark weight to Argentina also detracted from relative performance.
During the month positioning remained relatively unchanged. We shifted some of our exposure to Brazil, trimming our financials positioning, while topping up Materials names. We also trimmed exposure to Ambev on the expectation of a challenging first quarter. On the other hand we increased exposure to more defensive Mexican staples, adding to existing positions in FEMSA, Arca, and Walmart de Mexico. The Company ended the month being overweight Brazil, while being underweight Chile, Colombia, and Mexico. We also maintain an off-benchmark allocation to Argentina. At the sector level, we are overweight the domestic consumer and materials, while being underweight utilities and industrials.
Our positioning and outlook remain unchanged. The main driver for earnings growth in Brazil has been the economic recovery - persistently low inflation has allowed the Central Bank to continue it easing cycle, which has set the foundation for the recovery (the Central Bank cut rates another 25 bps in March, bringing the SELIC (Sistema Especial de Liquidação e Custodia, the Brazilian Central Bank interest rate) down to 6.50%, finalizing an easing cycle that saw rates fall 775 basis points). The reform agenda continues to be a focus, although pension reform will only be considered after October elections. Meanwhile, NAFTA (North American Free Trade Agreement) negotiations continue but appear unlikely to reach a conclusion in the short term, and uncertainties around the July election, particularly as it relates to congressional support cause us to maintain our cautious view on Mexican growth, and therefore our underweight. Chile also remains an underweight due to rich valuations and lack of free-float liquidity, and we have become more cautious on Peru given disappointing growth figures. We are keeping a close eye on Argentine inflation and the effectiveness of government measures to stabilize the currency, however at this point we remain comfortable with our exposure.
*Source: BlackRock as of 30 April 2018
29 May 2018
ENDS
Latest information is available by typing www.blackrock.co.uk/brla 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 the Manager's website (or any other website) is incorporated into, or forms part of, this announcement.
