REG-BlackRock Frontiers Investment Trust Plc: Portfolio Update
16/04/2024 12:15
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 March 2024 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 -0.5 9.7 18.6 38.7 43.1 150.8
Net asset value 0.6 6.6 19.7 51.4 52.1 175.2
Benchmark (NR)** 0.3 3.4 6.8 24.1 13.3 89.0
MSCI Frontiers Index (NR) 4.3 6.2 11.5 12.3 19.7 79.3
MSCI Emerging Markets Index (NR) 2.6 3.3 5.9 -6.5 15.1 59.9
US Dollars:
Share price -0.6 8.7 21.2 27.1 38.8 104.2
Net asset value 0.5 5.6 22.3 38.7 47.5 123.8
Benchmark (NR)** 0.1 2.5 9.1 13.6 9.8 54.3
MSCI Frontiers Index (NR) 4.2 5.3 14.0 2.8 16.0 45.3
MSCI Emerging Markets Index (NR) 2.5 2.4 8.2 -14.4 11.6 29.6
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: 206.48c
Net asset value - cum income: 209.77c
Sterling:
Net asset value - capital only: 163.45p
Net asset value - cum income: 166.06p
Share price: 152.75p
Total assets (including income): £314.4m
Discount to cum-income NAV: 8.0%
Gearing: Nil
Gearing range (as a % of gross assets): 0-20%
Net yield*: 4.1%
Ordinary shares in issue**: 189,325,748
Ongoing charges***: 1.38%
Ongoing charges plus taxation and performance fee****: 3.78%
*The Company’s yield based on dividends announced in the last 12 months as
at the date of the release of this announcement is 4.1% and includes the 2023
interim dividend of 3.10 cents per share, declared on 6 June 2023, and paid to
shareholders on 7 July 2023 and the 2023 final dividend of 4.90 cents per
share, declared on 30 November 2023, and paid to shareholders on 14 February
2024.
** Excluding 52,497,053 ordinary shares held in treasury.
***The Company’s ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other operating expenses
excluding performance fees, finance costs, direct transaction costs, custody
transaction charges, VAT recovered, taxation and certain non-recurring items
for Year ended 30 September 2023.
**** The Company’s ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other operating expenses
and including performance fees but excluding finance costs, direct transaction
costs, custody transaction charges, VAT recovered, taxation and certain
non-recurring items for Year ended 30 September 2023.
Sector Gross market value as a % of net assets Country Gross market value as a % of net assets
Analysis Analysis
Financials 44.7 Saudi Arabia 17.7
Industrials 15.0 Indonesia 14.3
Energy 12.1 Philippines 10.1
Materials 10.0 Kazakhstan 8.0
Consumer Staples 9.3 United Arab Emirates 6.9
Real Estate 8.2 Hungary 6.8
Consumer Discretionary 8.1 Greece 5.9
Communication Services 6.5 Vietnam 5.2
Information Technology 5.8 Poland 4.8
Health Care 0.7 Chile 4.8
----- Thailand 4.6
120.4 Qatar 4.0
----- Czech Republic 3.9
Short positions -2.7 Georgia 2.6
===== Argentina 2.6
Multi-International 2.5
Kenya 2.5
Colombia 2.3
Malaysia 2.1
Turkey Pakistan Romania Nigeria Cambodia Bangladesh Egypt Total 2.1 1.8 1.5 1.3 0.9 0.7 0.5 ----- 120.4
----
Short positions -2.7
=====
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
30.04 2023 % 31.05 2023 % 30.06 2023 % 31.07 2023 % 31.08 2023 % 30.09 2023 % 31.10 2023 % 30.11 2023 % 31.12 2023 % 31.01 2024 % 29.02 2024 % 31.03 2024 %
Long 108.5 112.9 116.9 113.0 113.3 114.9 118.8 113.1 116.6 119.5 121.4 120.4
Short 3.8 3.6 4.0 3.0 3.0 3.0 3.1 4.6 4.7 3.6 3.5 2.7
Gross 112.3 116.5 120.9 116.0 116.3 117.9 121.9 118.0 121.3 123.1 124.9 123.1
Net 104.7 109.3 112.9 110.0 110.3 111.9 115.7 108.8 111.9 115.9 117.9 117.7
Ten Largest Investments
Company Country of Risk Gross market value as a % of net assets
Saudi National Bank Saudi Arabia 4.8
Bank Central Asia Indonesia 4.7
Kaspi.Kz JCS Kazakhstan 3.8
Emaar Properties United Arab Emirates 3.4
FPT Vietnam 3.2
Abdullah Al Othaim Markets Saudi Arabia 3.0
Ayala Land Philippines 2.9
Etihad Etisalat Saudi Arabia 2.7
Wizz Air Holdings Hungary 2.6
Bank Of Georgia Georgia 2.6
Commenting on the markets, Sam Vecht, Emily Fletcher and Sudaif Niaz,
representing the Investment Manager noted:
The Company’s NAV rose by 0.5% in March, outperforming its benchmark the
MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index
(“Benchmark Index”) which returned 0.1%. For reference, the MSCI Emerging
Markets Index was up 2.5% while the MSCI Frontier Markets Index was up 4.2%
over the same period. All performance figures are on a US Dollar basis with
net income reinvested.
Emerging markets more broadly continued their strong run from February,
gaining +2.5% in March. Latin America finished the month up by 1.1%, with
Argentina outpacing the rest of the region, climbing 12.7%. EMEA finished the
month flat at +0.2%, with Central Europe pulling back after a strong February
and Czech Republic (+3.3%) leading the region. Egypt was the worst performing
market across EM, down -33.0% in USD terms on heels of currency devaluation
that we had been anticipating.
March was yet another good month for the fund where several stocks picks
across a variety of different markets did well. Our Kazakhstan exposure
continued to add to performance with e-commerce company Kaspi (+24.3%) being
the single best performing stock over the period. Turkey exposure through gold
mine operator Eldorado Gold (+35.3%) also helped performance, reversing
February losses. In Asia, Vietnamese IT services provider FPT Corp (+6.3%) and
Philippines based port management company International Container Terminal
Services (ICTSI, +12.9%) both did well. ICTSI delivered a slight beat on
underlying revenues for 4Q 2023 and the free cash flow generation remains
solid.
On the flipside, Polish clothing manufacturer LPP (-13.9%) was the largest
detractor over the month following a short seller report released by
Hindenburg Research claiming the company has continued its operations in
Russia, despite the company's communication with the market suggesting
otherwise. Another detractor over the month was Jeronimo Martins (-17.0%), a
Polish supermarket chain. The stock sold off on week food inflation prints in
Poland. Ukrainian iron ore pellet producer Ferrexpo (-44.2%) continued to
weigh on performance in March. In addition to cancellation of the dividend
announced in January, the company communicated that they needed more time to
finalize FY results, following potential proceedings related to one of their
mining units in Ukraine.
Over the course of March, we made some changes to the portfolio. We locked in
profits by exiting our holding in Peruvian bank Credicorp, which has done very
well. We added to our holding in Philippines based resort and casino operator
Bloomberry Resorts. The stock sold off after having paid $300mn to settle a
decade long dispute with casino management firm Global Gaming Philippines LLC.
This remains a high conviction stock as we are positive on the new property
outlook. Elsewhere, we also exited our holding in Ferrexpo. The ongoing court
proceedings in Ukraine will likely put the operating company in creditor
administration.
We believe global markets are starting to feel the impact of higher interest
rates, noting slowing credit growth in particular as evidence that a demand
slowdown is imminent in developed markets. When combined with a Chinese
economy which is struggling to find its footing we find it difficult to see
where a meaningful pick up in global growth will come from. In contrast we see
better fundamentals in frontier and smaller emerging markets. Monetary
tightening across much of our universe was ahead of that in developed markets,
particularly in Latin America and Eastern Europe. With inflation falling
across many countries within our universe, rate cuts have started to
materialize. This is a good set up for domestically oriented economies to see
a cyclical pick up. Our investment universe, in absolute and relative terms,
remains under-researched and we believe this should enable compelling alpha
opportunities.
Sources:
1BlackRock as at 31 March 2024
2MSCI as at 31 March 2024
16 April 2024
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.
Release (https://mb.cision.com/Main/22403/3962233/2735170.pdf)
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