BlackRock Frontiers Investment Trust Plc - Portfolio Update
PR Newswire
London, October 27
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 30 September 2020 and unaudited.
Performance at month end with net income reinvested.
| One month % | Three months % | One year % | Three years % | Five years % | Since Launch* % | |
| Sterling: | ||||||
| Share price | -0.9 | -3.1 | -25.8 | -28.7 | 11.0 | 31.5 |
| Net asset value | -2.4 | -2.8 | -23.7 | -23.8 | 14.3 | 41.0 |
| Benchmark (NR)** | -0.1 | -4.4 | -19.6 | -10.4 | 28.0 | 37.2 |
| MSCI Frontiers Index (NR) | 4.3 | 3.5 | -7.3 | -1.4 | 40.9 | 52.1 |
| MSCI Emerging Markets Index (NR) | 1.9 | 4.7 | 5.4 | 11.5 | 80.0 | 49.1 |
| US Dollars: | ||||||
| Share price | -3.8 | 1.4 | -22.1 | -31.2 | -5.1 | 9.5 |
| Net asset value | -5.4 | 1.7 | -19.9 | -26.4 | -2.3 | 17.2 |
| Benchmark (NR)** | -3.5 | 0.0 | -15.6 | -13.7 | 9.3 | 14.7 |
| MSCI Frontiers Index (NR) | 0.7 | 8.3 | -2.7 | -5.0 | 20.3 | 26.1 |
| MSCI Emerging Markets Index (NR) | -1.6 | 9.6 | 10.5 | 7.4 | 53.6 | 23.6 |
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: | 124.60c |
| Net asset value - cum income: | 126.85c |
| Sterling: | |
| Net asset value - capital only: | 96.38p |
| Net asset value - cum income: | 98.12p |
| Share price: | 93.30p |
| Total assets (including income): | £236.7m |
| Discount to cum-income NAV: | 4.9% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 6.2% |
| Ordinary shares in issue**: | 241,210,518 |
| 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 6.2% and includes the 2019 final dividend of 4.75 cents per share declared on 06 December 2019 with a pay date of 07 February 2020. 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 2019.
| Sector Analysis | Gross market value as a % of net assets* | Country Analysis | Gross market value as a % of net assets* | ||
| Financials | 29.1 | Indonesia | 13.5 | ||
| Consumer Discretionary | 16.1 | Saudi Arabia | 10.7 | ||
| Industrials | 13.9 | Vietnam | 9.7 | ||
| Materials | 13.7 | Philippines | 9.5 | ||
| Consumer Staples | 8.0 | Thailand | 7.6 | ||
| Energy | 6.4 | Egypt | 7.5 | ||
| Utilities | 6.3 | Chile | 6.3 | ||
| Real Estate | 5.5 | Kazakhstan | 5.3 | ||
| Communication Services | 3.7 | Greece | 5.1 | ||
| Health Care | 2.9 | Romania | 4.1 | ||
| Information Technology | 2.2 | Pakistan | 3.8 | ||
| ----- | Malaysia | 3.8 | |||
| 107.8 | Qatar | 3.6 | |||
| ----- | Poland | 3.1 | |||
| Short positions | 0.0 | Czech Republic | 1.9 | ||
| ===== | Ukraine | 1.8 | |||
| PAN-Africa | 1.7 | ||||
| Peru | 1.7 | ||||
| United Arab Emirates | 1.7 | ||||
| Pan-Emerging Europe | 1.6 | ||||
| Hungary | 1.4 | ||||
| Kenya | 1.3 | ||||
| Panama | 0.7 | ||||
| Nigeria | 0.4 | ||||
| ----- | |||||
| Total | 107.8 | ||||
| ----- | |||||
| Short positions | 0.0 | ||||
| ===== |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 31.10 2019 % | 30.11 2019 % | 31.12 2019 % | 31.01 2020 % | 29.02 2020 % | 31.03 2020 % | 30.04 2020 % | 31.05 2020 % | 30.06 2020 % | 31.07 2020 % | 31.08 2020 % | 30.09 2020 % | |
| Long | 108.0 | 107.8 | 108.0 | 113.0 | 107.1 | 106.4 | 105.9 | 109.6 | 109.8 | 110.3 | 110.2 | 107.8 |
| Short | 2.2 | 1.7 | 1.0 | 1.1 | 3.8 | 2.5 | 2.6 | 2.5 | 1.5 | 1.1 | 0.0 | 0.0 |
| Gross | 110.2 | 109.5 | 109.0 | 114.1 | 110.9 | 108.9 | 108.5 | 112.1 | 111.3 | 111.4 | 110.2 | 107.8 |
| Net | 105.8 | 106.1 | 107.0 | 111.9 | 103.3 | 103.9 | 103.3 | 107.1 | 108.3 | 109.2 | 110.2 | 107.8 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| PTT Exploration & Production Public | Thailand | 3.2 |
| Bank Mandiri | Indonesia | 3.1 |
| Mobile World | Vietnam | 3.0 |
| LT Group | Philippines | 2.7 |
| Eastern Tobacco | Egypt | 2.7 |
| United International Transport | Saudi Arabia | 2.7 |
| CP All PCL | Thailand | 2.6 |
| Astra International | Indonesia | 2.6 |
| Indocement Tunggal Prakarsa | Indonesia | 2.5 |
| MCB Bank | Pakistan | 2.5 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:
The Company's NAV returned -5.4%1 versus the Company's benchmark (the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index ("Benchmark Index")), which returned -3.5% in September2. For reference, the MSCI Emerging Markets Index ended the month -1.6% and the MSCI Frontier Markets Index +0.7%2 over the same period (all performance figures are on a US Dollar basis with net income reinvested).
Our universe of smaller emerging and frontier markets was under pressure this month particularly in South East Asia and the Middle East.
The biggest contributors to performance in September were our positions in the Philippines, driven by holdings in consumer stocks through the likes of resorts operator Bloomberry. Our positions in Vietnam continue to outperform with companies like Mobile World echoing the strong local economic activity. Under-exposure to Thailand helped this month as the nation was rocked by demonstrations challenging the established royalty. Indonesia was the biggest detractor to performance this month, with consumer discretionary being particularly impacted by the weaker local sentiment. Stocks in retail and automobile were particularly affected and banks took the blunt of the underperformance. We still think that the market is too pessimistic on the resilience of the local economy and we are maintaining exposures, adding to convictions. Our positions in Kazakstan and Saudi detracted on weaker oil trends.
We did not make too many changes to the portfolio in September. We further added to our exposure in Vietnam and Egypt as we continue to like the macroeconomic environment. In Saudi, we continue to rotate away from domestic exposure where we are locking in profits. We have further reduced our oil exposure in Thailand and Malaysia. We continue to add to high conviction Indonesian names. We ended the month overweight in Vietnam, Egypt and Indonesia and underweight in Saudi, Malaysia and Thailand.
While smaller emerging and frontier markets are vulnerable to health issues and an economic fall-out from COVID-19, data thus far on infection rates and fatalities gives some hope that the damage to life and economy will not be as pervasive as originally feared. We are broadly positioned for a normalisation in global economic activity on a one-year basis, preferring cyclicals to growth stocks. We remain positive on prospects of select economies, where policy makers have taken upfront, prudent measures to contain COVID-19, where the foreign exchange debt situation is relatively manageable, that will benefit from lower oil price and whose currencies are not over-valued. More broadly, many of our markets continue to look very compelling at current valuation, trading at sub 9x trailing price-to-earnings and in some cases close to global financial crisis levels. Despite the bounce, the portfolio is still around the lowest valuation levels that we have seen in the last 10 years.
Sources:
1BlackRock as at 30 September 2020
2MSCI as at 30 September 2020
27 October 2020
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.
