REG-BlackRock Frontiers Investment Trust Plc: Final Results
Wed 15:45
BlackRock Frontiers Investment Trust plc
LEI: 5493003K5E043LHLO706
Annual Report and Financial Statements 30 September 2025
Performance record
The Company’s financial statements are presented in US Dollars. The
Company’s shares are listed on the London Stock Exchange and quoted in Pound
Sterling. The Pound Sterling amounts for performance returns shown below are
presented for convenience. The difference in performance returns measured in
US Dollars and in Pound Sterling reflects the change in the value of Pound
Sterling versus the US Dollar over the period.
As at As at
30 September 30 September
2025 2024
US Dollar
Net assets (US$’000) 1 446,738 406,243
Net asset value per ordinary share (cents) 236.03 214.57
Ordinary share price (cents) 2 226.17 194.50
--------------- ---------------
Pound Sterling
Net assets (£’000) 1,2 331,839 302,850
Net asset value per ordinary share (pence) 2 175.32 159.96
Ordinary share price (pence) 168.00 145.00
Discount 3 4.2% 9.4%
========= =========
Performance For the year For the year For the 5 year period ended 30 September 2025 % Since
ended ended inception 4
30 September 30 September %
2025 2024
% %
US Dollar
Net asset value per share (with dividends reinvested) 3 +15.1 +16.5 +128.7 +168.1
Benchmark Index 5,6 +10.6 +15.7 +58.6 +81.9
MSCI Frontier Markets Index 6 +36.2 +15.1 +65.1 +108.1
MSCI Emerging Markets Index 6 +17.3 +26.1 +40.4 +73.5
Ordinary share price (with dividends reinvested) 3 +21.9 +15.8 +133.4 +155.7
--------------- --------------- ---------------
Pound Sterling
Net asset value per share (with dividends reinvested) 3 +14.7 +6.0 +119.4 +209.3
Benchmark Index 5,6 +10.2 +5.3 +52.4 +109.1
MSCI Frontier Markets Index 6 +35.7 +4.7 +58.5 +141.1
MSCI Emerging Markets Index 6 +16.9 +14.7 +34.8 +101.0
Ordinary share price (with dividends reinvested) 3 +21.4 +5.4 +124.0 +194.5
========= ========= =========
1 The change in net assets reflects dividends paid and portfolio
movements during the year.
2 Based on an exchange rate of US$1.3463 to £1 at 30 September 2025
and US$1.3414 to £1 at 30 September 2024.
3 Alternative Performance Measures, see Glossary in the Company’s
Annual Report for the year ended 30 September 2025.
4 The Company was incorporated on 15 October 2010 and its shares
were admitted to trading on the London Stock Exchange on 17 December 2010.
5 With effect from 1 April 2018, the Benchmark Index changed to the
MSCI Frontier + Emerging ex Selected Countries Index. Prior to 1 April 2018,
the Benchmark Index was the MSCI Frontier Markets Index. The performance
returns of the Benchmark Index since inception have been blended to reflect
this change.
6 Total return indices calculate the reinvestment of dividends net
of withholding taxes.
Chair’s Statement
Dear Shareholder
Performance overview
Over the year to 30 September 2025, your Company’s Net Asset Value
(NAV) per share produced a total return in US Dollars of +15.1%, compared to
an increase in the Benchmark Index of +10.6%, resulting in outperformance of
+4.5% 1 . In Pound Sterling Terms, the
equivalent return for the year was +14.7%, with the Benchmark Index returning
+10.2% 1 . This means that your Company’s NAV has risen by
+168.1% since launch in late 2010, more than double the Benchmark
Index return of +81.9% (in US Dollar terms).
Your Company continues to provide shareholders with
differentiated access to high quality businesses across a diverse and
uncorrelated range of frontier and smaller emerging markets. These markets
remain under-researched and often trade at valuations well below those of
developed economies, creating compelling opportunities for active investors.
Over the past year, many countries in our investment universe have
demonstrated resilience despite global tariff tensions and geopolitical
uncertainty, supported by stronger domestic fundamentals, currency stability
and economic policy reforms.
Our portfolio managers provide a detailed description of the key contributors
to and detractors from performance during the period, insight into the
positioning of the portfolio and their views on the outlook for the
forthcoming year in their report, which follows.
Revenue and dividends
The Company’s revenue return per share for the year amounted to
10.15 cents (2024: 9.97 cents). The Directors are recommending the payment of
a final dividend of 6.35 cents per ordinary share (2024: 6.00 cents) in
respect of the year ended 30 September 2025. Together with the interim
dividend of 3.65 cents per share (2024: 3.50 cents), this represents a total
of 10.00 cents per share (2024: 9.50 cents) and an increase of 5.3% over the
previous year.
Whilst the Company does not have a policy of actively targeting income from
the underlying portfolio, we are nevertheless very proud of our track record
of strong income performance such that the Company has produced an average
annualised dividend yield of over 4% since launch in 2010. This year’s
dividend represents a yield of 4.2%, based on the closing share price on 8
December 2025, being the last practicable date prior to the publication of
this report.
Subject to shareholder approval, this dividend will be paid on 26 February
2026 to shareholders on the register at close of business on 5 January 2026.
The ex-dividend date will be 2 January 2026.
Fees and charges
Following its continued strong outperformance of the Benchmark
Index, the Manager generated a performance fee of US$5,980,000 for the year
ended 30 September 2025 (2024: US$3.5m). As is best practice, the performance
fee is subject to a cap and a high water mark. This
mechanism requires the Manager to catch up any cumulative underperformance
against the Benchmark Index since launch before a performance fee can be
generated. The resource-intensive nature of the strategy, the expertise
required to navigate frontier markets successfully and the capacity
constraints they entail support the Company’s prevailing fee arrangements.
The performance fee and other aspects of the Company’s fee structure are
regularly reviewed by the Board to ensure they remain appropriate.
Further details of the Company’s costs and charges can be found in note 4
below and in the Glossary in the Company’s Annual Report for the year ended
30 September 2025.
Share capital management
The Directors believe that in normal market conditions the
Company’s shares should trade at a sustainably narrow discount or premium to
NAV. As such, we monitor this relationship closely and receive regular updates
from the Manager and our corporate broker, Winterflood Securities. For the
year under review, the Company’s ordinary shares traded at an average
discount to NAV of 6.4% and were trading at a discount of 3.2% on a cum-income
basis at 8 December 2025, being the latest practicable date prior to the issue
of this report. It is important to consider the discount in the context of
wider market conditions, with investor sentiment, and hence discounts, being
influenced by various external factors. The Company’s discount compares
favourably to the average discount of the AIC Global Emerging Markets sector,
which stood at 3.4% on 8 December 2025, the latest practicable date prior to
the publication of this report.
We believe the best way to avoid the Company’s shares trading at a wide
discount is to offer a relevant mandate, deliver strong investment performance
at a fair price and communicate the unique attractions of the proposition to
both existing and new shareholders effectively. To this end, during the year
the Board initiated a project to understand investors’ perceptions of the
Company with the help of an external agency. This identified areas that
required better explanation and greater emphasis, enabling us to refine our
marketing strategy to ensure more effective communication. Your Company has a
fantastic story to tell and the Board wants as many people as possible to hear
it.
In addition, the Board may deem it beneficial to buy back or issue shares to
manage imbalances between supply and demand, with the intention of reducing
the volatility of the premium or discount. During the year, the Company bought
back 55,500 ordinary shares at an average discount of 10.0% for a total cost
of US$107,000. All shares were placed into treasury. No shares were issued
during the year under review. Since the year end, no shares have been bought
back or issued as at the date of this report, while the discount has narrowed.
Periodic opportunities for return of capital
When the Company was launched in late 2010, the Board made a
commitment that before the Company’s fifth AGM and at five yearly intervals
thereafter, it would formulate and submit to shareholders proposals to provide
shareholders with an opportunity to realise the value of any number of their
ordinary shares at the prevailing NAV per ordinary share less applicable
costs. This mechanism has provided good optionality for shareholders.
Accordingly, it is proposed that all shareholders will be given the
opportunity to tender their shares for purchase by Winterflood Securities (the
Company’s broker) in February 2026.
The Board is aware that certain investors may wish to increase their
shareholdings in the Company and, as part of the tender offer, the Company’s
broker will have the ability to invite investors to acquire tendered shares
from it in the market rather than the Company repurchasing such shares.
The tender offer proposals will require the approval of shareholders at a
General Meeting which is expected to be held on 23 February 2026 immediately
after the Company’s AGM. Full details of the proposals are set out in the
Circular dated 10 December 2025 which has been posted to shareholders together
with this Annual Report. If the number of shares tendered is such that the
Directors are of the view that the continuation of the Company is not in the
best interests of continuing shareholders, they may withdraw the tender offer
and in such circumstances the Company will put forward alternative proposals
to shareholders. All Directors, with the exception of Christopher Casey, who
only recently joined the Board, hold shares in the Company and no Director
will exercise his or her option to exit for cash. You can read more about the
outlook for the Company and why you might wish to retain your shareholding in
the Investment Manager’s Report which follows.
Gearing
One of the advantages of the investment trust structure is that the
Company can use gearing with the objective of increasing portfolio returns
over the longer term. The Company continued to gear the portfolio through the
use of both long and short contracts for difference during the year. As at the
year end, net gearing stood at 10.6%, reflecting the Investment Manager’s
constructive view on the outlook for smaller emerging and frontier markets.
This compares with 4.0% at the start of the financial year.
Board composition
As at 30 September 2025, the Board consisted of five independent
non-executive Directors. As part of its succession planning, the Board
regularly considers its composition to ensure that a suitable balance of
skills, knowledge, experience, independence and diversity is achieved to
enable the Board to discharge its duties most effectively. The Directors
submit themselves for re-election annually and therefore all Directors will
stand for either election or re-election at the forthcoming AGM, with the
exception of Stephen White, who is stepping down at the end of his nine-year
tenure.
As part of the Board’s succession plans, and as announced on 26 June 2025,
Christopher Casey was appointed a non-executive Director of the Company with
effect from 1 October 2025. Christopher has extensive experience as a
non-executive director and audit committee chairman of public companies and,
in particular, investment trusts. You can read his full biography in the
Company’s Annual Report for the year ended 30 September 2025. We are
delighted to welcome Christopher and believe he will be a great asset to the
Board.
With effect from the conclusion of this year’s AGM, Christopher will succeed
Stephen as Chair of the Company’s Audit and Management Engagement Committee.
I would like to take this opportunity to place on record our deep gratitude to
Stephen, who has led our Audit and Management Engagement Committee with great
skill and diligence during his tenure. He will be missed and we wish him well
in all his future endeavours.
Further information on the Directors’ backgrounds and experience can be
found in the Company’s Annual Report for the year ended 30 September 2025.
Corporate governance
The Board takes its governance responsibilities very seriously and
follows best practice wherever possible. The UK Code of Corporate Governance
(the UK Code) requires enhanced disclosure setting out how we, as Directors,
have fulfilled our duties, taking into account the wider interests of
stakeholders in promoting the success of the Company.
As it does each year, and as required by the UK Code, the Company undertook a
comprehensive Board evaluation during the year. The conclusion was very
positive in terms of the effectiveness of the Board overall and the skills,
expertise and commitment of the individual Directors. The combination of a
clear succession plan, structured search and selection process when making new
appointments and thorough annual performance evaluation means that the Board
remains confident that each Director is discharging their role effectively.
Board diversity
I am pleased to report that the Board is compliant with the
recommendations of the Parker Review on ethnic diversity and the FTSE Women
Leaders Review and, at the date of this report, we have a 50:50 female to male
gender ratio. In accordance with the Listing Rules, we have also disclosed the
ethnicity of the Board and our policy on matters of diversity. The disclosures
can be found in the Company’s Annual Report for the year ended 30 September
2025.
Annual general meeting
This year’s AGM will be held at 1.00 p.m. on Monday, 23 February
2026 at the offices of BlackRock at 12 Throgmorton Avenue, London, EC2N 2DL.
Details of the business of the meeting are set out in the Notice of Annual
General Meeting in the Company’s Annual Report for the
year ended 30 September 2025.
Prior to the formal business of the meeting, our Investment Managers will make
a presentation to shareholders. This will be followed by a question and answer
session. Shareholders who are unable to attend the meeting in person but who
wish to follow the AGM proceedings can do so via a live webinar this year.
Details on how to register, together with access details, will be available
shortly on the Company’s website at:
www.blackrock.com/uk/brfi . It is not possible to attend,
speak or vote via this medium and it is solely intended to provide
shareholders with the ability to watch the proceedings.
Additionally, if you are unable to attend you can exercise your right to vote
by proxy or appoint a proxy to attend in your place. Details of how to do this
are included on the AGM Proxy Card provided to shareholders with the annual
report. If you hold your shares through a platform or nominees, you will need
to contact them and ask them to appoint you as a proxy in respect of your
shares in order to attend, speak and vote at the AGM. Further information on
the business of this year’s AGM can be found in the Notice of the Annual
General Meeting in the Company’s Annual Report for the year ended 30
September 2025.
The Board very much looks forward to meeting shareholders and answering any
questions you may have on the day. We hope you can attend this year’s AGM.
Shareholder communication
The Board takes its responsibilities very seriously and is committed
to exercising the highest standard of corporate governance, seeking to engage
with all shareholders where possible. I was delighted to meet with a number of
our shareholders during the year. As always, it is invaluable to share views
on the Company as well as the wider sector and I look forward to staying in
regular dialogue going forward.
We appreciate how important access to up-to-date information is to our
shareholders. To supplement our Company website, we continue to offer
shareholders the ability to sign up to the Trust Matters newsletter which
includes information on the Company as well as news, views and insights.
In order to facilitate greater attendance and participation at the Company’s
AGM, we have sought to engage with shareholders who hold their shares through
an intermediary or platform via the provisions of Section 793 of the Companies
Act 2006. The Board encourages all shareholders to either attend the AGM or
exercise your right to vote by proxy. The Board is aware that certain
execution only investment platforms are now providing shareholders with the
ability to vote electronically. We encourage shareholders to take advantage of
this functionality where it is available.
Should shareholders wish to contact me, you can do so by emailing me at
chairbrfi@blackrock.com or by
writing to the Company Secretary at the address given in
the Company’s Annual Report for the year ended 30 September 2025.
Outlook
Our Portfolio Managers continue to demonstrate the benefits of
active management in frontier and smaller emerging markets. Since the
financial year end and up to close of business on 8 December 2025, the
Company’s NAV has increased by +3.1% compared with an increase in the
Benchmark Index of +1.5%, representing outperformance of +1.6%. For Pound
Sterling based shareholders, the equivalent return for the financial year to
date is +4.3%, with the Benchmark Index returning +2.6%, representing
outperformance of 1.7% 1 .
Looking ahead, we expect the supportive dynamics that helped drive performance
gains in the year under review to persist. Signs of easing global interest
rates and a softer US Dollar provide a constructive backdrop for our target
markets, enabling central banks to resume monetary easing and stimulate
growth. This, combined with favourable demographics, improving liquidity
conditions and relatively low debt levels, positions these economies for
continued cyclical recovery. Valuations remain attractive both in absolute
terms and relative to history, while limited institutional coverage continues
to create inefficiencies that reward deep research and conviction-driven
investing. As investors finally seek out alternative sources of growth away
from the Magnificent Seven, we expect attention to turn towards the compelling
opportunities within our investment universe, as demonstrated by the recent
recovery in fund flows into emerging markets.
My fellow Directors and I therefore see good reasons to share the Managers’
confidence in the outlook for the portfolio, which is in skilled and
experienced hands, supported by BlackRock’s extensive research resources. In
summary, we believe your Company is well positioned to maintain its long track
record of providing shareholders with strong and uncorrelated returns, as well
as an attractive income stream.
Thank you for your continued support.
KATRINA HART
Chair
10 December 2025
1 All numbers are stated with dividends reinvested.
Investment Manager’s Report for the year ended 30 September 2025
Overview
Our top-down conviction has incrementally strengthened in select smaller
markets, notably Egypt, Turkey and Pakistan. In Egypt, robust population
growth, improved global capital availability as US rates ease, and a reduction
in Middle-East tensions create a supportive backdrop. We see interesting
developments in digitalisation and instant payment networks. In Turkey, the
disinflationary trend has opened the door for rate cuts as inflation
normalises, which could unlock significant upside for equities trading at
historically low valuations. Meanwhile, Pakistan has seen sentiment improve on
the back of IMF support, easing interest rates and a more balanced fiscal
outlook. Sovereign credit rating upgrades and a US trade agreement granting
preferential tariff treatment have further enhanced competitiveness.
We have reduced exposure in Thailand and Indonesia given certain headwinds. In
Thailand, high household leverage, muted credit growth and political
uncertainty have constrained consumption and delayed reforms, while economic
activity remains soft. In Indonesia, policy uncertainty, weak consumption and
pressure from lower commodity exports and bank margins have weighed on
sentiment. Despite some long-term positives, near-term risks justify a more
cautious stance.
Market review
The global investment landscape over the last twelve months has
largely been shaped by geopolitical uncertainty and tariff worries. While
tariff developments have introduced new considerations for investors, the
overall backdrop has remained constructive for our investment universe.
Frontier and smaller emerging markets have shown resilience, supported
primarily by stronger domestic fundamentals. A softer US Dollar has helped
ease debt burdens and attract foreign inflows, and early signs of a shift
toward lower global interest rates may offer central banks in these regions
greater flexibility to stimulate growth.
In terms of performance, a variety of different markets within our investment
universe have done well. Pakistan (+101.4%) emerged as one of the standout
performers over the past year, buoyed by International Monetary Fund (IMF)
support, easing of interest rates and a more balanced fiscal picture. Colombia
(+73.8%), Kenya (+73.1%), Slovenia (+72.1%) and Greece (+71.5%) also showed
extremely strong returns over the year, driven by similar trends of economic
reacceleration post a period of government fiscal consolidation. Sri Lanka
(+63.0%) delivered strong returns following its exit from sovereign default,
supported by successful debt restructuring and easing inflation.
Amongst the larger Association of South East Asian (ASEAN) markets, Indonesia
and Thailand faced headwinds from slowing economic activity. Indonesia
(-22.1%) was the weakest performer, as significant shifts in government
spending priorities under the new President Prabowo Subianto resulted in
disruptions to the domestic economy and saw consumption slow. Investor
confidence was further shaken by President Prabowo Subianto’s abrupt
replacement of Finance Minister Sri Mulyani Indrawati, raising concerns about
policy continuity. Thailand (-8.5%) also experienced a growth slowdown during
the first half of 2025, with softer performance across exports, household
spending and tourism. Thai tourist arrivals fell by 7.4% year-on-year in the
first nine months of 2025, a much greater fall than was expected. The
Philippines (-17.0%) also underperformed, dragged down by the large
bellweather banks, which fell on concerns that interest margins and earnings
would be dragged down by future rate cuts and real estate stocks, which fell
on weak demand. However, one market stood out; Vietnam rose by +37.3% as the
equity market anticipated the upgrade to FTSE Emerging Market status, which
was announced in October 2025 and scheduled for September 2026.
In Europe and the Middle East (EMEA), the Czech Republic (+61.4%) was a
standout performer. The banking sector performed very strongly as loan growth
was reported above expectations and the sector also re-rated upwards as
investors saw that the high dividends on offer could be sustained.
Poland and Hungary benefited from an uptick in foreign fund inflows, rising by
+35.0% and +47.7% respectively, as sentiment remained positive, allowing the
economy to benefit from a stronger currency and lower interest rates. The
United Arab Emirates (UAE) (+34.6%) surged on solid corporate earnings across
the banking and real estate sectors and continued foreign investor interest,
supported by record demand in the property market. Turkey (-2.0%) was hurt by
political uncertainty with the arrest of opposition leader Immamoglu. However,
the country has made solid progress on a disinflationary path, which has
allowed the central banks to start a rate-cutting cycle. If Turkey continues
along this path with inflation falling to normalised levels, then the market
looks exceptionally cheap relative to history.
Elsewhere, Kenya posted strong gains, rising by +73.1% in the last 12 months,
as the central bank was able to assuage concerns around its ability to fund in
the public markets. Since then, we have seen a series of interest rate cuts by
the central bank, and stabilising asset quality in the banks, which has led to
a meaningful re-rating. The country has also continued to build foreign
exchange reserves through 2025 on the back of strong exports.
In Latin America, Chile (+27.4%) posted strong returns as the economy expanded
in the first half of 2025, driven by domestic demand. Whilst political
uncertainty ahead of the November election remains a concern, expectations for
a market-friendly outcome have helped stabilise sentiment. Lower interest
rates provided additional support, and recent US trade actions had minimal
impact, given Chile’s relatively low average tariffs compared to other
regions.
From the road
Over the past year, we travelled across numerous key markets,
meeting management teams and industry participants. These insights helped us
consider many interesting opportunities for the portfolio, meeting businesses
across a broad spectrum from local champions to small niche SMEs.
Visits to Poland and the Czech Republic early in the year confirmed our
positive opinion on Financials. We expected loan growth in both countries to
beat expectations as economic activity picked up, which we have duly seen
through the year. We believe the high relative interest rates in Central
Europe compared to the Eurozone have attracted, and will continue to attract,
substantial portfolio flows, lowering the cost of capital and benefiting
exchange rates across the region, thereby providing a favourable investment
dynamic.
In the Middle East, our discussions in the UAE reinforced confidence in
Dubai’s position as a global hub. The business environment continues to
improve, underpinned by strong infrastructure and a clear ambition to attract
international investment. In an ideal geographical location between East and
West, we see the UAE continuing to bolster its status as a global financial
hub. Our trip to Saudi Arabia highlighted increasing centralisation of
economic activity in Riyadh, with fewer businesses thriving outside the
capital. Whilst the country’s transformation remains significant, we
anticipate some slowdown on mega project spend over the next few years.
Despite these adjustments, there remain pockets of opportunity in a market
that is still significantly underrepresented in global emerging market
portfolios versus the benchmark weight.
Thailand is another country where our ideas are more idiosyncratic, although
we remain somewhat cautious on the overall market outlook. We believe the
country needs significant structural reform to re-energise growth, which has
been difficult to achieve in the unstable political set up that we saw for
much of 2025. Household leverage is high, currently around 87% of gross
domestic product (GDP), which constrains consumption and investment. Banks
continue to grapple with asset quality challenges, with Stage 2 and 3 loans
forming a significant portion of loan books, and credit growth remains muted.
To date, economic activity has been soft, reflected in negative same-store
sales across retailers and a sluggish tourism recovery. The market has been a
substantial underperformer and hence we have been able to find some
opportunities with substantial valuation dislocation.
Our trip to Indonesia highlighted a more challenging backdrop than expected. A
significant shift in policy direction post-election last year has created
somewhat of a hiatus as local businesses adjust to these new directives. This
has had a knock-on impact on consumption which remains weak with negative
same-store sales, while international commodity price softness has added
further pressure as the value of exports in nickel and coal has fallen. Banks
face earnings headwinds from narrowing margins as interest rates decline,
while corporates maintain a cautious stance on investment. On the positive
side, government programmes such as village lending are evolving, and fintech
players continue to scale profitably. Electric vehicle (EV) adoption is
gaining traction, supported by local production plans. Despite near-term
challenges, the market appears oversold. With anticipated improvement in
liquidity and fiscal support in second half of 2025, we expect a rebound.
Another market we visited was Argentina, where we spent time in the capital,
Buenos Aires. In our view, political decision-making remains highly
centralised, with fiscal consolidation a key positive likely to hold. However,
foreign exchange pressures make sustaining growth without a devaluation
challenging, and we maintained a cautious view on the sustainability of
current policy through 2025.
Portfolio review
In the 12 months to 30 September 2025, the Company’s NAV returned
+15.1% (on a US Dollar basis with dividends reinvested), outperforming its
Benchmark Index (the MSCI Frontier + Emerging ex Selected Countries Index),
which returned +10.6%. Over the same period, the MSCI Emerging Markets Index
returned +17.3% and the MSCI Frontier Markets Index rose by +36.2%. Since
inception, the Company’s NAV has returned +168.1%, compared with +81.9% for
its Benchmark Index. For reference, the MSCI Frontier Markets Index and the
MSCI Emerging Markets Index have returned +108.1% and +73.5%, respectively
(all percentages in US Dollar terms with dividends reinvested).
Stock picks across a variety of different markets and sectors performed well.
The largest contributor to returns was our holding in
Lucky Cement (+167.5%), a Pakistani conglomerate with
businesses in local cement production, chemicals, passenger vehicle assembly
and power generation, as well as international cement operations in the Middle
East and Africa. The stock gained on improved activity as interest rates came
down quite significantly in Pakistan, coupled with solid FY earnings, a 22%
rise in August exports, and analyst upgrades. Our position in
Lion Finance Group (+117.5%) (previously Bank of
Georgia) also contributed to returns as the bank saw steady growth in its loan
book and deposits, driven by digital banking initiatives and favourable
macroeconomic trends. Eldorado Gold
(+65.8%), the Turkish gold mine operator, was another contributor as the rise
in gold prices pushed the stock higher. Emaar Properties
(+61.7%) helped performance as the stock gained on
acceleration in pre-sales, reflecting the strong demand in the UAE, along with
strong Q3 2024 results and a higher than expected dividend announcement in the
second half of 2024. Our position in Hungarian bank OTP
Bank (+71.7%) also contributed as the stock reached an
all-time high in January 2025.
On the flipside, our IT services exposure detracted as the sector sold off
more broadly on the back of concerns about the potential impact of tariffs on
US growth. All three of our holdings in the sector, Vietnamese IT services
company FPT (-26.1%), CIS region founded EPAM Systems (-24.2%) and Central
European based Endava Systems (-56.2%), affected performance.
Another area where the portfolio saw challenged performance was in the
Philippines. The country had a tough start to 2025, declining -9.8% in
January, negatively impacted by elevated US interest rates, global trade
shocks and a tight labour market. This impacted our holdings in the
Philippines-based resort and casino operator Bloomberry
(-55.3%) and property developer Ayala
Land (-35.0%).
We made some tactical changes to the portfolio over the 12-month period. We
increased our exposure to Pakistan, reflecting our constructive view on the
country’s economic adjustment programme and the positive impact of interest
rate cuts and IMF support. This was expressed primarily through additions to
Lucky Cement and
MCB Bank , which benefited from strong corporate earnings
and improved fiscal dynamics. In Turkey, we added to
Akbank and Türkiye İş Bankası
, taking advantage of market weakness and maintaining
conviction in the longer - term outlook, even as political
volatility persisted. We also rotated our Eastern European exposure,
initiating positions in PKO Bank Polski
and topping up Polish retailer LPP ,
as we see these markets as potential beneficiaries of improving regional
stability and consumer confidence. In Georgia, we shifted our bank holdings
from Lion Finance Group to
TBC Bank , favouring the latter’s growth
prospects in Uzbekistan. Within Indonesia, we rotated our bank exposure from
Bank Central Asia to
Bank Mandiri , attracted by its favourable valuation and
expectations of an improvement in the liquidity environment. In Thailand, we
initiated a position in Krungthai Card
, taking advantage of a very attractive entry price due to technical selling.
We increased our exposure to the UAE, adding to Emaar
Properties on our view that the property sector remains
healthy, seeing sustained growth in pre-sales. We trimmed positions in
OTP Bank , Eldorado Gold
, Moneta Money Bank
, Raiffeisen Bank and
Athens International Airport to lock in gains after
strong performance. We exited Safaricom
in Kenya, NagaCorp in Cambodia, and
Astra in the Philippines, and reduced
holdings in Indonesian property developers due to sector-specific concerns.
Outlook
The past 12 months have underscored our view that intensifying
geopolitical fragmentation is reshaping global investment flows, driving
competition among major economies while creating opportunities for neutral
countries through increased foreign direct investment as new alliances emerge.
Frontier and smaller emerging markets benefited from policy reforms, currency
stability and IMF support, positioning them as attractive destinations for
active managers. Meanwhile, easing US Dollar strength and signs of lower
global interest rates provided tailwinds for risk assets, even as tariff
tensions and political uncertainty weighed on developed markets. Many smaller
countries are finally enjoying easier domestic liquidity conditions as post
COVID-19 related government fiscal consolidation has stabilised. These
countries are now seeing domestic economic activity stabilise, and in many
cases start to accelerate. Looking ahead, we expect continued opportunities in
under-researched markets as global capital adapts to a more polarised world.
We believe the frontier and smaller emerging markets present a differentiated
opportunity set within the global investment universe. These economies often
operate on distinct and asynchronous cycles, shaped by domestic policy
developments, liquidity conditions and local demand patterns. Their limited
representation in global indices and relatively low levels of institutional
coverage contribute to inefficiencies, while valuations in many of these
markets remain modest compared to larger peers. These characteristics create
an environment where cyclical shifts can offer meaningful opportunities,
particularly important in times of elevated market uncertainty.
In summary, we remain constructive on the outlook for smaller emerging and
frontier markets. With inflation easing across many of our key markets and US
bond yields remaining relatively stable, we anticipate that central banks in
our target countries will resume interest rate cuts in the near term. This
backdrop sets the stage for a cyclical recovery in domestically driven
economies. Valuations across our investment universe remain attractive, both
in absolute and relative terms. Many of these markets are still
under-researched, and we believe this creates fertile ground for finding
high-conviction, alpha-generating opportunities.
SAM VECHT AND EMILY FLETCHER
Blackrock Investment Management (UK) Limited
10 December 2025
Ten largest investments 1
as at 30 September 2025
Together, the Company’s ten largest investments represented 37.4% of the
Company’s portfolio as at 30 September 2025 (2024: 35.0%)
1 ▲ Emaar Properties
(2024: 2nd)
Real Estate (United Arab Emirates)
Portfolio value: US$21,152,000
Percentage of net assets: 4.7% (2024: 4.4%)
Emaar Properties is an Emirati real estate developer. The company is involved
in property investment, development, shopping malls, retail centres,
hospitality and property management services and serves customers in the
United Arab Emirates (UAE).
2 ▲ Al Rajhi Bank
2 (2024: 22nd)
Financials (Saudi Arabia)
Portfolio value: US$19,211,000
Percentage of net assets: 4.3% (2024: 2.1%)
Al Rajhi Bank is a Saudi Arabia-based bank, which is engaged in banking and
investment activities in the Kingdom of Saudi Arabia and internationally. The
company operates through four segments: retail; corporate; treasury; and
investment services, brokerage and other.
3 ▲ Bank Mandiri
(2024: n/a)
Financials (Indonesia)
Portfolio value: US$17,543,000
Percentage of net assets: 3.9% (2024: nil%)
Bank Mandiri is one of the largest banks in Indonesia offering a wide range of
financial services including retail, corporate, and investment banking. It
plays a significant role in the Indonesian banking sector.
4 ► OTP Bank
(2024: 4th)
Financials (Hungary)
Portfolio value: US$17,309,000
Percentage of net assets: 3.9% (2024: 3.6%)
OTP Bank is a leading financial institution in Hungary providing a wide range
of retail, private, and commercial banking services. The bank offers savings
and current accounts, personal and corporate loans, credit and debit cards and
investment products. OTP Bank is known for its innovative digital banking
solutions and extensive network of branches and ATMs across Hungary.
5 ▲ LPP (2024:
46th)
Consumer Discretionary (Poland)
Portfolio value: US$16,565,000
Percentage of net assets: 3.7% (2024: 0.9%)
LPP is a Polish multinational fashion group headquartered in Gdańsk, Poland.
The company specializes in the distribution of clothing, footwear,
accessories, as well as home and pet products, offered under its own brands
through an extensive network of brick-and-mortar stores and e-commerce
channels.
6 ▲ Etihad Etisalat
2 (2024: 7th)
Communication Services (Saudi Arabia)
Portfolio value: US$16,541,000
Percentage of net assets: 3.7% (2024: 3.1%)
Etihad Etisalat is also known as Mobily and is a Saudi Arabia-based
telecommunications operator. The company manages, installs, and operates
telephone networks, terminals and telecommunication unit systems. It also
sells and maintains mobile phones and telecommunication units in Saudi Arabia.
7 ▲ PZU (2024:
20th)
Financials (Poland)
Portfolio value: US$15,460,000
Percentage of net assets: 3.5% (2024: 2.3%)
Powszechny Zaklad Ubezpieczen, commonly known as PZU, is an insurance company
operating in Poland. The company provides life and non-life insurance products
and services in Poland, the Baltic States, and Ukraine.
8 ▲ Akbank
(2024: n/a)
Financials (Turkey)
Portfolio value: US$15,020,000
Percentage of net assets: 3.3% (2024: nil%)
Akbank provides various banking products and services in Turkey and
internationally. The company offers consumer credit, credit cards, wealth
management, health and life insurance, pension plans and other banking
services through its branches in Turkey and overseas.
9 ▲ Lucky Cement
(2024: 26th)
Materials (Pakistan)
Portfolio value: US$14,666,000
Percentage of net assets: 3.3% (2024: 2.0%)
Lucky Cement is a Pakistan-based cement manufacturing company. The principal
activity of the company is manufacturing and marketing of cement. Other
activities include polyester, soda ash, pharma, life sciences and chemicals,
automobiles and mobile phone assembly and power generation.
10 ► Eldorado Gold
(2024: 10th)
Materials (Turkey)
Portfolio value: US$13,844,000
Percentage of net assets: 3.1% (2024: 2.5%)
Eldorado Gold is a mid-tier gold and base metals producer with over 30 years
of experience in building and operating mines. The company has mining,
development, and exploration operations in Turkey, Canada, and Greece.
1 Gross market exposure as a % of net assets.
2 Exposure gained via contracts for difference (CFDs)
only.
The market value shown is the gross exposure to the shares through equity
investments and long derivative positions. For equity investments, the market
value is the fair value of the shares. For long derivative positions, it is
the market value of the underlying shares to which the portfolio is exposed
via the contract.
Percentages in brackets represent the portfolio holding as at 30 September
2024.
Arrows indicate the change in the relative ranking of the position in the
portfolio compared to its ranking as at 30 September 2024.
Country allocation: Absolute weights (Gross market exposure as a % of net
assets) 1
Country 2025 exposure 2024 exposure
Saudi Arabia 16.0 14.3
United Arab Emirates 11.3 8.3
Turkey 10.6 4.8
Poland 9.5 5.7
Indonesia 6.9 15.5
Greece 6.8 2.3
Kazakhstan 6.1 6.0
Thailand 6.0 7.3
Pakistan 5.9 4.1
Hungary 5.6 6.7
Vietnam 4.6 3.3
Kenya 4.2 3.5
Georgia 4.1 2.0
Bangladesh 3.8 3.2
Philippines 3.4 8.6
Global 2.7 1.8
Malaysia 2.3 1.8
Egypt 1.9 1.8
Chile 1.4 1.6
Czech Republic 0.9 2.5
Singapore – 2.4
Qatar – 1.4
Cambodia – 0.9
Argentina – 0.7
Romania – 0.7
Colombia – 0.6
Country allocation relative to the Benchmark Index (%)
1
Turkey 7.6
Kazakhstan 5.4
Pakistan 5.2
Georgia 4.1
Kenya 3.8
Hungary 3.8
Bangladesh 3.6
Greece 3.0
Poland 3.0
Global 2.7
United Arab Emirates 1.9
Egypt 1.4
Vietnam 1.3
Philippines 0.9
Tunisia -0.1
Sri Lanka -0.1
Lithuania -0.1
Estonia -0.1
Czech Republic -0.1
Mauritius -0.2
Luxembourg -0.2
Jordan -0.2
Bahrain -0.2
UK -0.4
Croatia -0.4
Oman -0.5
Indonesia -0.5
Thailand -0.7
Other -0.8
Slovenia -0.8
Colombia -0.9
Romania -1.3
Morocco -1.6
Chile -1.6
Peru -2.2
Qatar -4.6
Kuwait -4.8
Malaysia -5.5
Saudi Arabia -5.8
1 Includes exposure gained through equity positions and long and
short CFD positions
Sources: BlackRock and LSEG Datastream.
Sector allocation: Absolute weights (Gross market exposure as a % of net
assets) 1
Sector 2025 exposure 2024 exposure
Financials 49.9 45.8
Real Estate 11.0 10.4
Consumer Discretionary 10.5 5.5
Industrials 8.6 11.9
Materials 8.1 8.4
Communication Services 8.0 8.7
Information Technology 4.9 5.1
Consumer Staples 4.3 8.6
Health Care 4.3 1.4
Energy 3.5 4.6
Utilities 0.9 1.4
Sector allocation relative to the Benchmark Index (%)
1
Consumer Discretionary 6.9
Real Estate 5.8
Financials 3.3
Information Technology 3.2
Industrials 2.2
Health Care 1.6
Communication Services 0.6
Consumer Staples -0.2
Materials -0.6
Utilities -4.0
Energy -4.8
1 Includes exposure gained through equity positions and long and
short CFD positions
Sources: BlackRock and LSEG Datastream.
Investments as at 30 September 2025
Equity portfolio by country of exposure
Company Principal Sector Fair value 1 Gross market
country of US$’000 exposure as a
operation % of net assets 3
Emaar Properties United Arab Emirates Real Estate 21,152 4.7
Emirate Integrated United Arab Emirates Communication Services 9,286 2.1
Air Arabia United Arab Emirates Industrials 8,790 2.0
Emaar Development United Arab Emirates Real Estate 7,707 1.7
Aldar Properties United Arab Emirates Real Estate 3,535 0.8
--------------- ---------------
50,470 11.3
========= =========
LPP Poland Consumer Discretionary 16,565 3.7
PZU Poland Financials 15,460 3.5
PKO Bank Polski Poland Financials 10,176 2.3
--------------- ---------------
42,201 9.5
========= =========
Eldorado Gold a Turkey Materials 13,844 3.1
Türkiye İş Bankası Turkey Financials 11,209 2.5
Akbank Turkey Financials 8,041 1.8
MLP Saglik Hizmetleri AS Turkey Health Care 7,462 1.7
--------------- ---------------
40,556 9.1
========= =========
Bank Mandiri Indonesia Financials 17,543 3.9
Bank Syariah Indonesia Financials 5,245 1.2
Ciputra Development Indonesia Real Estate 4,910 1.1
Mitra Adiperkasa Indonesia Consumer Discretionary 3,130 0.7
--------------- ---------------
30,828 6.9
========= =========
Athens International Airport b Greece Industrials 11,506 2.6
Hellenic Telecommunications Organisation b Greece Communication Services 9,939 2.2
OPAP b Greece Consumer Discretionary 8,788 2.0
--------------- ---------------
30,233 6.8
========= =========
Kazatomprom Kazakhstan Energy 10,203 2.3
Halyk Savings Bank Kazakhstan Financials 9,015 2.0
JSC Kaspi Kazakhstan Financials 7,902 1.8
--------------- ---------------
27,120 6.1
========= =========
CP All Thailand Consumer Staples 13,019 2.9
Krungthai Card Thailand Financials 9,482 2.1
AMATA Corporation Thailand Real Estate 4,423 1.0
--------------- ---------------
26,924 6.0
========= =========
Lucky Cement Pakistan Materials 14,666 3.3
MCB Bank Pakistan Financials 8,450 1.9
Meezan Bank Pakistan Financials 3,284 0.7
--------------- ---------------
26,400 5.9
========= =========
OTP Bank Hungary Financials 17,309 3.9
Wizz Air Holdings c Hungary Industrials 5,742 1.3
--------------- ---------------
23,051 5.2
========= =========
Equity Group Kenya Financials 10,138 2.3
Kenya Commercial Bank Kenya Financials 8,685 1.9
--------------- ---------------
18,823 4.2
========= =========
BRAC Bank Bangladesh Financials 11,534 2.6
Square Pharmaceuticals Bangladesh Health Care 5,532 1.2
--------------- ---------------
17,066 3.8
========= =========
Ayala Land Philippines Real Estate 7,754 1.7
DigiPlus Interactive Corp Philippines Consumer Discretionary 7,704 1.7
--------------- ---------------
15,458 3.4
========= =========
EPAM Systems Global Information Technology 11,928 2.7
--------------- ---------------
11,928 2.7
========= =========
Frontken Corp Malaysia Industrials 10,357 2.3
--------------- ---------------
10,357 2.3
========= =========
Rasan Information Saudi Arabia Financials 10,207 2.3
--------------- ---------------
10,207 2.3
========= =========
Lion Finance Group c Georgia Financials 9,650 2.2
--------------- ---------------
9,650 2.2
========= =========
Cervecerias Uni-Spon Chile Consumer Staples 3,807 0.8
Cervecerias Unidas Chile Consumer Staples 2,649 0.6
--------------- ---------------
6,456 1.4
========= =========
Commercial International Bank Egypt Financials 3,350 0.7
--------------- ---------------
3,350 0.7
========= =========
Equity investments 401,078 89.8
========= =========
BlackRock’s Institutional Cash Series plc – US Dollar Liquid Environmentally Aware Fund (Cash Fund) d 53,075 11.9
--------------- ---------------
Total equity investments (including Cash Fund) 454,153 101.7
========= =========
a Comprised of two holdings with US Dollar and Canadian
Dollar currency exposure.
b Euro currency exposure.
c Pound Sterling currency exposure.
d See note 1 below.
CFD portfolio by country of exposure
Company Principal Sector Fair value 1 Gross market Gross market
country of US$’000 exposure 3 exposure as a
operation US$’000 % of net assets 3
Long positions
Al Rajhi Bank Saudi Arabia Financials 19,211 4.3
Etihad Etisalat Saudi Arabia Communication Services 16,541 3.7
Yanbu National Petrochemical Saudi Arabia Materials 7,650 1.7
Mouwasat Medical Services Saudi Arabia Health Care 6,046 1.4
ADES Holdings Saudi Arabia Energy 5,407 1.2
Derayah Financial Saudi Arabia Financials 2,703 0.6
--------------- ---------------
57,558 12.9
========= =========
Mobile World Investment Corporation Vietnam Consumer Discretionary 10,654 2.4
FPT Vietnam Information Technology 9,618 2.2
--------------- ---------------
20,272 4.6
========= =========
TBC Bank Group a Georgia Financials 8,680 1.9
--------------- ---------------
8,680 1.9
========= =========
Akbank Turkey Financials 6,979 1.5
--------------- ---------------
6,979 1.5
========= =========
Commercial International Bank Egypt Financials 5,212 1.2
--------------- ---------------
5,212 1.2
========= =========
Wizz Air Holdings a Hungary Industrials 1,618 0.4
--------------- ---------------
1,618 0.4
========= =========
Total long CFD positions 5,872 100,319 22.5
========= ========= =========
Total short CFD positions (1,509) (7,514) (1.7)
--------------- --------------- ---------------
Total CFD portfolio 4,363 92,805 20.8
========= ========= =========
a Pound Sterling currency exposure.
Fair value and gross market exposure of investments as at 30 September 2025
Fair value 3 Gross market Gross market exposure as
exposure 4,5 a % of net assets 5
Portfolio US$’000 US$’000 2025 2024
Long equity investment positions (excluding BlackRock’s Institutional Cash Series plc – US Dollar Liquid Environmentally Aware Fund) 401,078 401,078 89.8 84.6
Long CFD positions 5,872 100,319 22.5 23.3
Short CFD positions (1,509) (7,514) (1.7) (3.9)
--------------- --------------- --------------- ---------------
Subtotal of long and short investment positions 405,441 493,883 110.6 104.0
========= ========= ========= =========
Cash Fund 53,075 53,075 11.9 16.9
--------------- --------------- --------------- ---------------
Total investment and derivatives 458,516 546,958 122.5 120.9
========= ========= ========= =========
Cash and cash equivalents 745 (87,697) (19.7) (18.6)
Other net current liabilities (12,504) (12,504) (2.8) (2.3)
Non-current liabilities (19) (19) 0.0 0.0
--------------- --------------- --------------- ---------------
Net assets 446,738 446,738 100.0 100.0
========= ========= ========= =========
1 The nature of the Company’s portfolio and the fact
the Company gains significant exposure to a number of markets through long and
short CFDs means that the Company will aim to hold a level of cash (or an
equivalent holding in a Cash Fund) on its balance sheet representing the
difference between the notional cost of purchasing or selling the investments
directly and the lower initial cost of making a collateral payment on the long
or short CFD contract.
2 The Company was geared through the use of long and
short CFD positions and gross and net gearing as at 30 September 2025 was
13.9% and 10.6% respectively (30 September 2024: 11.8% and 4.0% respectively).
Gross and net gearing are Alternative Performance Measures, see Glossary in
the Company’s Annual Report for the year ended 30 September 2025.
3 Fair value is determined as follows:
– Long equity investment positions are valued at bid
prices where available, otherwise at latest market traded quoted prices.
– The exposure to securities held through long CFD
positions directly in the market would have amounted to US$94,447,000 at the
time of purchase, and subsequent movements in market prices have resulted in
unrealised gains on the long CFD positions of US$5,872,000 resulting in the
value of the total long CFD market exposure to the underlying securities
increasing to US$100,319,000 as at 30 September 2025. If the long positions
had been closed on 30 September 2025, this would have resulted in a gain of
US$5,872,000 for the Company.
– The notional exposure of selling the securities
gained via the short CFD positions would have been US$6,005,000 at the time of
entering into the contract, and subsequent movements in market prices have
resulted in unrealised losses on the short CFD positions of US$1,509,000
resulting in the value of the total short CFD market exposure of these
investments increasing to US$7,514,000 at 30 September 2025. If the short
positions had been closed on 30 September 2025, this would have resulted in a
loss of US$1,509,000 for the Company.
4 The gross market exposure column for cash and cash
equivalents has been adjusted to assume the Company traded direct holdings
rather than exposure being gained through long and short CFDs.
5 Gross market exposure for equity investments is the
same as fair value; bid prices are used where available and, if unavailable,
latest market traded quoted prices are used. For both long and short CFD
positions, the gross market exposure is the market value of the underlying
shares to which the portfolio is exposed via the contract.
Strategic report
The Directors present the Strategic Report of the Company for the year ended
30 September 2025.
Principal activity
The Company carries on business as an investment trust and its
principal activity is portfolio investment.
Investment objective
The Company’s investment objective is to achieve long-term capital
growth by investing in companies domiciled or listed in, or exercising the
predominant part of their economic activity in, less developed countries.
These countries (the “Frontiers Universe”) are any country which is
neither part of the MSCI World Index of developed markets, nor one of the
eight largest countries by market capitalisation in the MSCI Emerging Markets
Index as at 1 April 2018: being Brazil, China, India, South Korea, Mexico,
Russia, South Africa and Taiwan (the “Selected
Countries”).
Strategy, business model and investment policy
Strategy
To achieve its objective, the Company invests globally in the
securities of companies domiciled or listed in or exercising the predominant
part of their economic activity in, the Frontiers Universe.
Business model
The Company’s business model follows that of an externally managed
investment trust; therefore the Company does not have any employees and
outsources its activities to third party service providers, including
BlackRock Fund Managers Ltd (BlackRock or BFM) (‘the Manager’) which is
the principal service provider.
The management of the investment portfolio and the administration of the
Company have been contractually delegated to the Manager. The Manager has
delegated certain investment management and other ancillary services to
BlackRock Investment Management (UK) Limited (BIM (UK)) (‘the Investment
Manager’). The contractual arrangements with, and assessment of, the Manager
are summarised in the Company’s Annual Report for the
year ended 30 September 2025. The Investment Manager, operating under
guidelines determined by the Board, has direct responsibility for the
decisions relating to the day - to - day
running of the Company and is accountable to the Board for the investment,
financial and operating performance of the Company. Other service providers
include the Depositary and the Fund Accountant, The Bank of New York Mellon
(International) Limited (BNY), and the Registrar, Computershare Investor
Services PLC (Computershare). Details of the contractual terms with third
party service providers are set out in the Directors’ Report.
Investment policy
The Company will seek to maximise total return and will invest
globally in the securities of companies domiciled or listed in or exercising
the predominant part of their economic activity in, the Frontiers Universe.
Performance is measured against the Company’s Benchmark Index, which is a
composite of the MSCI Frontier + Emerging ex Selected Countries Index (net
total return, USD). The Investment Manager is not constrained by the
geographical weightings of the Benchmark Index and the Company’s portfolio
may frequently be overweight or underweight any particular country relative to
the Benchmark Index. The Company will exit any investment as soon as
reasonably practicable following the relevant company ceasing to be domiciled
or listed in or exercising the predominant part of its economic activity in,
the Frontiers Universe.
In order to achieve the Company’s investment objective, the Investment
Manager selects investments through a process of fundamental and geopolitical
analysis, seeking long-term appreciation from mispriced value or growth. The
Investment Manager employs both a top-down and bottom-up approach to
investing. It is expected that the Company will have exposure to between 35 to
65 holdings.
Where possible, investment will generally be made directly in the stock
markets of the Frontiers Universe. Where the Investment Manager determines it
appropriate, investment may be made through collective investment schemes,
although such investments are not likely to be significant. Investment in
other closed-ended investment funds admitted to the Official List will not
exceed more than 10%, in aggregate, of the value of the Gross Assets
(calculated at the time of any relevant investment). It is intended that the
Company will generally be invested in equity investments; however, the
Investment Manager has the ability to invest in equity-related investments,
such as derivatives or convertibles, and, to a lesser extent, in bonds or
other fixed-income securities. These securities may be below investment grade.
Due to national and/or international regulation, excessive operational risk,
prohibitive costs and/or the time period involved in establishing trading and
custody accounts in certain countries in the Frontiers Universe, the Company
may be unable to invest (whether directly or through nominees) in companies in
certain countries in the Frontiers Universe or, in the opinion of the Company
and/or the Investment Manager, it may not be advisable to do so. In such
circumstances, or in countries where acceptable custodial and other
arrangements are not in place to safeguard the Company’s investments, the
Company gains economic exposure to companies in such countries by investing
indirectly through derivatives. Derivatives are financial instruments linked
to the performance of another asset or security, such as promissory notes,
contracts for difference, futures or traded options. Save as provided below,
there is no restriction on the Company investing in derivatives in such
circumstances or for efficient portfolio management purposes.
The Company may be geared through borrowings and/or by entering into
derivative transactions (taking both long and short positions) that have the
effect of gearing the Company’s portfolio with the aim of enhancing
performance. The Company may also use borrowings for the settlement of
transactions, to facilitate share repurchases (where applicable) and to meet
ongoing expenses.
The respective limits on gearing (whether through the use of derivatives,
borrowings or a combination of both) are set out below:
- Maximum gearing through the use of derivatives or
borrowings to gain exposure to long positions in securities: 140% of net
assets
- Maximum exposure to short positions (for shorting
purposes the Company may use indices or individual stocks): 10% of net assets
- Maximum gross exposure (total long exposure plus total
short exposure): 150% of net assets
- Maximum net exposure (total long exposure minus total
short exposure): 130% of net assets
In normal circumstances, the Company will typically have net exposure of
between 95% and 120% of net assets.
When investing via derivatives, the Company will seek to mitigate and/or
spread its counterparty risk exposure by collateralisation and/or contracting
with a potential range of counterparty banks, as appropriate, each of which
shall, at the time of entering into such derivatives, have a Standard &
Poor’s credit rating of at least A- on its long-term senior unsecured debt.
The Company may invest up to 5% of its Gross Assets (at the time of such
investment) in unquoted securities. The Company will invest so as not to hold
more than 15% of its Gross Assets in any one stock or derivative position at
the time of investment (excluding cash management activities).
No material change will be made to the investment policy without the approval
of shareholders by ordinary resolution.
A detailed analysis of the Company’s portfolio has been provided above.
Investment approach and process
Portfolio construction is a continuous process, with the Investment
Manager analysing constantly the impact of new ideas and information on the
portfolio as a whole. The approach is flexible, varying through market and
economic cycles to create a portfolio appropriate to the focused and
unconstrained strategy of the Company. The macro environment is factored into
all portfolio decisions. In general, macro analysis is a more dominant factor
in investment decision-making when the outlook is negative. The macro process
is comprised of three parts: political assessment, macroeconomic analysis and
appraisal of the valuation of a country’s market, which can only take place
with thorough analysis of stock specific opportunities.
The Investment Manager’s research team generates ideas from a diverse range
of sources. When permitted, these include frequent travel to the markets in
which the Company invests and regular conversations with contacts that allow
the Frontiers team to assess the entire eco system around a company, namely
competitors, suppliers, financiers, customers and regulators. The team
leverages the internal research network, sharing information between
BlackRock’s investment teams using a proprietary research application and
database and develops insights from macroeconomic analysis. The Board believes
that BlackRock’s research platform is a significant competitive advantage,
both in terms of information specific to emerging and frontier market equities
and through its global insights across asset classes. Access to companies is
extremely good given BlackRock’s market presence, which makes it possible to
develop a detailed knowledge of a company and its management.
The research process focuses on cash flow and future earnings growth, as the
investment team believes that this is ultimately the driver of share prices
over time. The process is designed to identify companies that can translate
top line revenue growth to free cash flow and invest in these companies when
the analysis suggests that the cash flow stream is undervalued. Financial
models are developed focusing on company financials, particularly cash flow
statements, rather than relying on third party research.
Performance
Details of the Company’s performance for the year are given in the
Financial Highlights in the Company’s Annual Report for the year ended 30
September 2025., Performance Record on above and Chair’s Statement above.
The Investment Manager’s Report above includes a review of the main
developments during the period, together with information on investment
activity within the Company’s portfolio.
Results and dividends
The results for the Company are set out in the Statement of
Comprehensive Income below. The total profit for the year, after taxation, was
US$58,867,000 (2024: US$58,548,000) of which the revenue return amounted to
US$19,205,000 (2024: US$18,884,000) and the capital profit amounted to
US$39,662,000 (2024: US$39,664,000).
The Directors are recommending the payment of a final dividend of 6.35 cents
per ordinary share in respect of the year ended 30 September 2025 (2024: final
dividend of 6.00 cents) as set out in the Chair’s Statement above.
Future prospects
The Board’s main focus is on the achievement of capital growth and
the future of the Company is dependent upon the success of the investment
strategy. The outlook for the Company is discussed in both the Chair’s
Statement and in the Investment Manager’s Report above.
Modern slavery
As an investment vehicle the Company does not provide goods or
services in the normal course of business and does not have customers.
Accordingly, the Directors consider that the Company is not required to make
any slavery or human trafficking statement under the Modern Slavery Act 2015.
In any event, the Board considers the Company’s supply chain, dealing
predominantly with professional advisers and service providers in the
financial services industry, to be low risk in relation to this matter.
Directors, gender representation and employees
The Directors of the Company on 30 September 2025 are set out in the
Directors’ biographies section in the Company’s Annual Report for the year
ended 30 September 2025. As at 8 December 2025, the Board consisted of three
men and three women constituting 50% female Board representation. The Company
does not have any employees.
Key performance indicators
The Directors consider a number of performance measures to assess
the Company’s success in achieving its objectives. The key performance
indicators (KPIs) used to measure the progress and performance of the Company
over time and which are comparable to those reported by other investment
trusts are set out below.
Performance
At each meeting the Board reviews the performance of the portfolio
as well as the net asset value and share price of the Company and compares
this to the return of the Company’s benchmark. The Board considers this to
be an important key performance indicator and has determined that it should
also be used to calculate whether a performance fee is payable to BlackRock.
The Company’s absolute and relative performance is set out in the
performance record table in the Company’s Annual Report for the year ended
30 September 2025.
The Board regularly reviews a number of indices and ratios to understand the
impact on the Company’s relative performance of the various components such
as asset allocation and stock selection. The Board also reviews the
performance of the Company against a peer group of frontier market focused
open and closed-ended funds.
Share rating and discount/premium
The Directors recognise the importance to investors that the
Company’s share price should not trade at a significant discount or premium
to NAV. Accordingly, the Directors monitor the share rating closely and will
consider share repurchases in the market if the discount widens significantly,
or the issue of shares to the market to meet demand to the extent that the
Company’s shares are trading at a premium. In addition, in accordance with
the Directors’ commitment at launch the Company will formulate and submit to
shareholders proposals to provide them with an opportunity at each five year
anniversary since launch to realise the value of their ordinary shares at the
prevailing NAV per share less applicable costs. Such an opportunity took place
in the year ended 30 September 2021. The next opportunity will take place in
early 2026.
For the year under review the Company’s shares traded at an average discount
to the cum-income NAV of 6.4% and were trading at a discount of 3.2% on a
cum-income basis at 8 December 2025. The Directors have the authority to buy
back up to 14.99% of the Company’s issued share capital (excluding treasury
shares). The Directors sought and received shareholder authority at the last
AGM to issue up to 10% of the Company’s issued share capital (via the issue
of new shares or sale of shares from treasury) on a non pre-emptive basis.
Further information can be found in the Directors’ Report in the Company’s
Annual Report for the year ended 30 September 2025.
Ongoing charges
The ongoing charges reflect those expenses which are likely to recur
in the foreseeable future, whether charged to capital or revenue, and which
relate to the operation of the Company, excluding the costs of acquisition or
disposal of investments, financing charges and gains or losses arising on
investments and performance fees. The ongoing charges are based on actual
costs incurred in the year as being the best estimate of future costs. The
Board reviews the ongoing charges and monitors the expenses incurred by the
Company.
The table below sets out the key KPIs for the Company (see Glossary in the
Company’s Annual Report for the year ended 30 September 2025).
Year ended Year ended
30 September 2025 1 30 September 2024 1
£% US$% £% US$%
Net asset value total return 2 +14.7 +15.1 +6.0 +16.5
Share price total return 3 +21.4 +21.9 +5.4 +15.8
Benchmark Index return 4 +10.2 +10.6 +5.3 +15.7
Discount to cum income NAV 4.2 9.4
Ongoing charges excluding performance fees 5 1.42 1.41
Ongoing charges including performance fees 6 2.87 2.33
========= =========
1 Based on an exchange rate of US$1.3463 to £1 at 30
September 2025 and US$1.3414 to £1 at 30 September 2024.
2 Calculated with dividends reinvested.
3 Calculated on a mid to mid basis with dividends
reinvested.
4 The Benchmark Index is a composite of the MSCI Frontier
+ Emerging ex Selected Countries Index. Benchmark Index return calculates the
reinvestment of dividends net of withholding taxes.
5 Ongoing charges excluding
performance fees represent the management fee and all other operating
expenses, excluding performance fees, finance costs, direct transaction costs,
custody transaction charges, VAT recovered, taxation, prior year expenses
written back and certain non-recurring items, as a % of average daily net
assets.
6 Ongoing charges including performance fees represent
the management fee and all other operating expenses, including performance
fees, but excluding finance costs, direct transaction costs, custody
transaction charges, VAT recovered, taxation, prior year expenses written back
and certain non-recurring items, as a % of average daily net assets.
Principal risks
As required by the 2024 UK Code of Corporate Governance, the Board
has in place a robust, ongoing process to identify, assess and monitor the
principal and emerging risks of the Company, including those that they
consider would threaten its business model, future performance, solvency or
liquidity. Emerging risks are considered by the Board as they come into view
and are incorporated into the Company’s risk register where applicable.
Additionally, the Manager considers emerging risks in numerous forums and the
Risk and Quantitative Analysis team produces an annual risk survey. Any
material risks of relevance to the Company identified through the annual risk
survey will be communicated to the Board.
A core element of this is the Company’s risk register, which identifies the
risks facing the Company and assesses the likelihood and potential impact of
each risk, and the quality of the controls operating to mitigate the risk. A
residual risk rating is then calculated for each risk based on the outcome of
this assessment. This approach allows the effect of any mitigating procedures
to be reflected in the final assessment.
The risk register, its method of preparation and the operation of the key
controls in BlackRock’s and other third party service providers’ systems
of internal control are reviewed on a regular basis by the Company’s Audit
and Management Engagement Committee. In order to gain a more comprehensive
understanding of BlackRock’s and other third party service providers’ risk
management processes and how these apply to the Company’s business, the
Audit and Management Engagement Committee periodically receives presentations
from BlackRock’s Internal Audit and Risk and Quantitative Analysis teams,
and reviews Service Organisation Control (SOC 1) reports from BlackRock and
the Company’s Custodian and Fund Accountant, The Bank of New York Mellon
(International) Limited (BNY).
The current risk register includes a range of risks spread between performance
risk, income/dividend risk, legal and regulatory risk, counterparty risk,
operational risk, market risk, political risk and financial risk.
The principal risks and uncertainties faced by the Company during the year,
together with the potential effects, controls and mitigating factors, are set
out below.
Investment Performance Risk
Principal risk
The Board is responsible for:
- setting the investment policy to fulfil the Company’s
objectives; and
- monitoring the performance of the Company’s
Investment Manager and the strategy adopted.
An inappropriate policy or strategy may lead to:
- poor performance compared to the Company’s benchmark
peer group or shareholders’ expectations;
- a widening discount to NAV;
- a reduction or permanent loss of capital; and
- dissatisfied shareholders and reputational damage.
The Board is also cognisant of the long-term risk to performance from
inadequate attention to environmental, social and governance (ESG) issues and
in particular the impact of climate change.
Mitigation/Control
To manage this risk the Board:
- regularly reviews the Company’s investment mandate
and long-term strategy;
- has set, and regularly reviews, the investment
guidelines and has put in place appropriate limits on levels of gearing and
the use of derivatives;
- receives from the Investment Manager a regular
explanation of stock selection decisions, portfolio gearing and any changes in
gearing and the rationale for the composition of the investment portfolio;
- receives from the Investment Manager regular reporting
on the portfolio’s exposure through derivatives, including the extent to
which the portfolio is geared in this manner and the value of any short
positions;
- monitors the maintenance of an adequate spread of
investments in order to minimise the risks associated with particular
countries or factors specific to particular sectors, based on the
diversification requirements inherent in the Company’s investment policy;
- regularly reviews detailed performance attribution
analysis; and
- monitors ESG factors in the portfolio and engagement
with investee companies on ESG issues.
Income/Dividend Risk
Principal risk
The quantum of dividends and future dividend growth will depend on
the income generated by the Company’s underlying portfolio. In addition, any
change in the tax treatment of the dividends or interest received by the
Company (including as a result of withholding taxes or exchange controls
imposed by jurisdictions in which the Company invests) may reduce the level of
dividends received by shareholders.
Mitigation/Control
Although the Company does not have a policy of actively seeking
income, the Board monitors this risk through the receipt of detailed income
forecasts and considers the level of income at each meeting. The Company also
has a revenue reserve and powers to pay dividends from capital which can be
used to support the Company’s dividend if required.
Legal and Regulatory Risk
Principal risk
The Company has been approved by HM Revenue & Customs as an
investment trust, subject to continuing to meet the relevant eligibility
conditions, and operates as an investment trust in accordance with Chapter 4
of Part 24 of the Corporation Tax Act 2010. As such, the Company is exempt
from capital gains tax on the profits realised from the sale of its
investments.
Any breach of the relevant eligibility conditions could lead to the Company
losing its investment trust status and being subject to corporation tax on
capital gains realised within the Company’s portfolio.
In such event the investment returns of the Company may be adversely affected.
Any serious breach could result in the Company and/or the Directors being
fined or the subject of criminal proceedings or the suspension of the
Company’s shares which would in turn lead to a breach of the Corporation Tax
Act 2010. Amongst other relevant laws and regulations, the Company is required
to comply with the provisions of the Companies Act 2006, the Alternative
Investment Fund Managers’ Directive, the Market Abuse Act, the UK Listing
Rules and the Disclosure Guidance & Transparency Rules.
Mitigation/Control
The Investment Manager monitors investment movements, the level of
forecast income and expenditure and the quantum of proposed dividends, if any,
to ensure that the provisions of Chapter 4 of Part 24 of the Corporation Tax
Act 2010 are not breached, and the results are reported to the Board at each
meeting.
Following authorisation under the Alternative Investment Fund Managers’
Directive (AIFMD), the Company and its appointed Alternative Investment Fund
Manager (AIFM) are subject to the risks that the requirements of this
Directive are not correctly complied with. The Board and the AIFM also monitor
changes in government policy and legislation which may have an impact on the
Company.
Compliance with the accounting standards applicable to quoted companies and
those applicable to investment trusts are also regularly monitored to ensure
compliance.
The Company Secretary and the Company’s professional advisers monitor
developments in relevant laws and regulations and provide regular reports to
the Board in respect of the Company’s compliance.
Counterparty Risk
Principal risk
The Company’s investment policy permits the use of both
exchange-traded and over-the-counter derivatives (including contracts for
difference). Counterparty risk represents potential loss that the Company
could incur if a counterparty is unable (or unwilling) to honour its
commitments.
The Company may also gain exposure to the Frontiers Universe by investing
indirectly through Participatory Notes (P-Notes) which presents additional
risk to the Company as P-Notes are uncollateralised resulting in the Company
being subject to full counterparty risk via the P - Note
issuer. P-Notes also present liquidity issues as the Company, being a captive
client of a P-Note issuer, may only be able to realise its investment through
the P-Note issuer and this may have a negative impact on the liquidity of the
P-Notes which does not correlate to the liquidity of the underlying security.
Mitigation/Control
Due diligence is undertaken before contracts are entered into and
exposures are diversified across a number of counterparties. The Board reviews
the controls put in place by the Investment Manager to monitor and to minimise
counterparty exposure, which include intra-day monitoring of exposures to
ensure that these are within set limits.
Operational Risk
Principal risk
In common with most other investment trust companies, the Company
has no employees. The Company therefore relies upon the services provided by
third parties and is dependent on the control systems of BlackRock (the
Investment Manager and AIFM), and of The Bank of New York Mellon
(International) Limited (the Custodian, Depositary and Fund Accountant), which
ensures safe custody of the Company’s assets and maintains the Company’s
accounting records. The Company’s share register is maintained by the
Registrar, Computershare.
Failure by any service provider to carry out its obligations to the Company
could have a material adverse effect on the Company’s performance.
Disruption to the accounting, payment systems or custody records, as a result
of a cyberattack or otherwise, could impact the monitoring and reporting of
the Company’s financial position.
The security of the Company’s assets, dealing procedures, accounting records
and maintenance of regulatory and legal requirements, depend on the effective
operation of these systems.
Mitigation/Control
The Board reviews the overall performance of the Manager, Investment
Manager and all other third-party service providers and compliance with the
investment management agreement on a regular basis.
The Fund Accountant’s and the Manager’s internal control processes are
regularly tested and monitored throughout the year and are evidenced through
their Service Organisation Control (SOC 1) reports, which are subject to
review by an Independent Service Assurance Auditor. The SOC 1 reports provide
assurance in respect of the effective operation of internal controls.
The Company’s assets are subject to a strict liability regime and in the
event of a loss of financial assets held in custody, the Depositary must
return assets of an identical type or the corresponding amount, unless able to
demonstrate that the loss was a result of an event beyond its reasonable
control.
The Board considers succession arrangements for key employees of the Manager
and the Board also considers the business continuity arrangements of the
Company’s key service providers on an ongoing basis and reviews these as
part of its review of the Company’s risk register.
The Board also receives regular reports from BlackRock’s internal audit
function.
Political Risk
Principal risk
Investments in the Frontiers Universe may include a higher element
of risk compared to more developed markets due to greater political
instability. Political and diplomatic events in the Frontiers Universe where
the Company invests (for example, governmental instability, corruption,
adverse changes in legislation or other diplomatic developments such as the
outbreak of war or imposition of sanctions) could substantially and adversely
affect the economies of such countries or the value of the Company’s
investments in those countries.
Mitigation/Control
The Investment Manager mitigates this risk by applying stringent
controls over where investments are made and through close monitoring of
political risks. The Investment Manager’s approach to filtering the
investment universe takes account of the political background to regions and
is backed up by rigorous stock specific research and risk analysis,
individually and collectively, in constructing the portfolio. The management
team has a wide network of business and political contacts which provides
economic insights with public and private bodies. This
enables the Investment Manager to assess potential investments in an informed
and disciplined way, as well as being able to conduct regular monitoring of
investments once made. However, given the nature of political risk, all
investments will be exposed to a degree of risk and the Investment Manager
will ensure that the portfolio remains diversified across countries to
mitigate the risk.
Financial Risk
Principal risk
The Company’s investment activities expose it to a variety of
financial risks which include foreign currency risk, liquidity risk, currency
risk and interest rate risk.
Mitigation/Control
Details of these risks are disclosed in note 17 to the financial
statements, together with a summary of the policies for managing these risks.
Market Risk
Principal risk
The Company is exposed to currency, market and political risk due to
the location of the operations of the businesses in which it may invest.
Market risk arises from volatility in the prices of the Company’s
investments. It represents the potential loss the Company might suffer through
realising investments in the face of negative market movements. The securities
markets of the Frontiers Universe are not as large as the more established
securities markets and have substantially lower trading volume, which may
result in a lack of liquidity and higher price volatility.
Corruption also remains a significant issue across the Frontiers Universe and
the effects of corruption could have a material adverse effect on the
Company’s performance. Accounting, auditing and financial reporting
standards and practices and disclosure requirements applicable to many
companies in developing countries may be less rigorous than in developed
markets. As a result, there may be less information available publicly to
investors in these securities, and such information as is available is often
less reliable. This risk can be partially mitigated by the fact that our
portfolio managers only invest in companies that produce fully audited
accounts.
Companies operating in the sectors in which the Company invests may be
impacted by new legislation governing climate change and environmental issues,
which may have a negative impact on their valuation and share price.
Mitigation/Control
Market risk represents the risks of investment in a particular
market, country or geographic region. Therefore, this is largely outside of
the scope of the Board’s control. However, the Board carefully considers
asset allocation, stock selection and levels of gearing on a regular basis and
has set investment restrictions and guidelines which are monitored and
reported on by the Investment Manager. Market risk is also mitigated through
portfolio diversification across countries and regions. The Board monitors the
implementation and results of the investment process with the Investment
Manager regularly.
The Investment Manager regularly reports to the Board on relative market risks
associated with investment in such regions. Further information is provided
under ‘Political Risk’.
The Board recognises the benefits of a closed-end fund structure in extremely
volatile markets such as those affected by the current environment of
heightened geopolitical tensions and uncertainty. Unlike open-ended
counterparts, closed-end funds are not obliged to sell down portfolio holdings
at low valuations to meet liquidity requirements for redemptions. During times
of elevated volatility and market stress, the ability of a closed-end fund
structure to remain invested for the long term enables the Investment Manager
to adhere to disciplined fundamental analysis from a bottom-up perspective and
be ready to respond to dislocations in the market as opportunities present
themselves.
The Portfolio Managers seek to understand the ESG risks and opportunities
facing companies and industries in the portfolio. The Company does not exclude
investment in stocks based on ESG criteria, but the Portfolio Managers
consider ESG information when conducting research and due diligence on new
investments and again when monitoring investments in the portfolio.
Viability statement
In accordance with the provisions of the UK Corporate Governance
Code, the Directors have assessed the prospects of the Company over a longer
period than the twelve months referred to by the ‘Going Concern’
guidelines. The Board is cognisant of the current environment of heightened
geopolitical risk given global conflicts, the recent conflicts and their
current and potential future impact on the global economy, and the prospects
of the Company’s portfolio holdings. The Board expects the Company to
continue to meet its liabilities as they fall due for the foreseeable future
and has therefore conducted this review for a period of five years. Five years
is considered by the Board to be a reasonable time horizon over which the
performance of the Company can be assessed. The Board
also notes that this aligns with the five-yearly assessment period adopted
when the Company was launched (on the basis that this was an appropriate time
frame for shareholders to judge performance and have the opportunity to tender
their shares at the applicable NAV per ordinary share less relevant costs).
The Board conducted this review for the period up to the AGM in 2031. In
determining this period, the Board took into account the Company’s
investment objective to achieve long-term capital growth and the Company’s
projected income and expenditure. The Directors are satisfied that the Company
has adequate resources to continue in operational existence for the
foreseeable future and is financially sound.
When the Company was launched in late 2010, the Board made a commitment that
before the Company’s fifth AGM and at five yearly intervals thereafter, it
would formulate and submit to shareholders proposals to provide shareholders
with an opportunity to realise the value of their ordinary shares at the
applicable NAV per ordinary share less applicable costs. The Board last put
proposals to shareholders in 2021. The Company received elections to tender
representing 21.5% of the Company’s shares, with the majority of this coming
from a single shareholder. The vast majority of shareholders chose to retain
their investment in the Company. The Board believes this is indicative of the
ongoing attractiveness of the Company’s investment strategy and offering.
The next such opportunity will occur in February 2026. The Board has
considered the potential impact that such an offer may have on the Company’s
going concern assessment, and in particular has considered feedback received
from the Company’s corporate broker regarding shareholder demand for the
Company’s shares and investor appetite for the Company’s investment
strategy. The corporate broker and the sales team at BlackRock remain in
regular communication with shareholders and, based on shareholder views at the
time of publication of this Annual Report, shareholders continue to be
supportive of the investment mandate and there is no indication that demand to
opt for a cash exit will be at a level which would jeopardise the ongoing
viability of the Company.
In making the longer-term viability assessment the Board has considered the
following factors:
- the ongoing relevance of the Company’s investment
objective, business model and investment policy;
- the Company’s principal risks as set out above;
- the level of ongoing demand for the Company’s
ordinary shares;
- the impact of a significant fall in Frontier equity
markets on the value of the Company’s investment portfolio;
- the operational resilience of the Company and its key
service providers and their ability to continue to provide a good level of
service for the foreseeable future; and
- the effectiveness of business continuity plans in place
for the Company and key service providers.
The Board has also considered a number of financial metrics, including:
- the level of current and historic ongoing charges
incurred by the Company;
- the Company’s borrowings and its ability to meet its
liabilities as they fall due;
- the premium or discount to NAV;
- the level of income generated by the Company;
- future income forecasts; and
- the liquidity of the Company’s portfolio.
The Company is an investment company with a relatively liquid equity portfolio
(as at 30 September 2025, 94.6% of the equity portfolio was capable of being
realised in less than 20 days in normal market conditions) and largely fixed
overheads (excluding management fees and performance fees) which comprise a
very small percentage of net assets (1.42%). In addition, any performance fees
are capped at 1% of net assets in years where the NAV per share has fallen or
2.5% of net assets in years where the NAV per share has increased. Therefore,
the Board has concluded that even in exceptionally stressed operating
conditions, the Company would comfortably be able to meet its ongoing
operating costs as they fall due.
However, investment companies may face other challenges, such as regulatory
changes and the tax treatment of investment trusts, or a significant decrease
in size due to substantial share buy-back activity or market falls, which may
result in the Company no longer being of sufficient market capitalisation to
represent a viable investment proposition or no longer being able to continue
in operation.
The Board has determined that the factors considered are applicable to the
period up to the AGM in 2031 and beyond.
Based on the results of their analysis, the Directors have a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the period of their assessment.
The Board’s assessment of the Company’s ability to operate in the
foreseeable future is included in the Going Concern Statement which can be
found in the Directors’ Report in the Company’s Annual Report for the year
ended 30 September 2025.
Section 172 Statement: Promoting the success of BlackRock Frontiers Investment
Trust Plc
The Companies (Miscellaneous Reporting) Regulations 2018 require
directors to explain more fully how they have discharged their duties under
Section 172(1) of the Companies Act 2006 in promoting the success of their
companies for the benefit of members as a whole. This
enhanced disclosure covers how the Board has engaged with and understands the
views of stakeholders and how stakeholders’ needs have been taken into
account, the outcome of this engagement and the impact that it has had on the
Board’s decisions.
As the Company is an externally managed investment company and does not have
any employees or customers, the Board considers the main stakeholders in the
Company to be the shareholders, key service providers (being the Manager and
Investment Manager, the Custodian, Depositary, Registrar and Broker) and
investee companies.
A summary of the principal areas of engagement undertaken by the Board with
its key stakeholders in the year under review and how Directors have acted
upon this to promote the long-term success of the Company is set out in the
tables below.
Stakeholders
Shareholders
Shareholder support and engagement are critical to the existence of
the Company and the successful delivery of its long-term strategy. The Board
is focused on fostering good relationships with shareholders and on
understanding the views of shareholders in order to incorporate them into the
Company’s strategy and objectives. Additional details are given in the
Company’s Annual Report for the year ended 30 September 2025.
Manager and Investment Manager
The Board’s main working relationship are with the Manager and the
Investment Manager, who between them are responsible for the Company’s
portfolio management (including asset allocation, stock and sector selection)
and risk management, as well as ancillary functions such as administration,
secretarial, accounting and marketing services. The Manager has sub-delegated
portfolio management to the Investment Manager. Successful management of
shareholders’ assets by the Investment Manager is critical for the Company
to successfully deliver its investment strategy and meet its objective. The
Company is also reliant on the Manager as AIFM to provide
support in meeting relevant regulatory obligations under the AIFMD and other
relevant legislation.
Other key service providers
In order for the Company to function as an investment trust with a
listing on the main market of the London Stock Exchange, the Board relies on a
range of advisors for support in meeting relevant obligations and safeguarding
the Company’s assets. For this reason, the Board considers the Company’s
Custodian, Depositary, Registrar and Broker to be stakeholders. The Board
maintains regular contact with its key external providers and receives regular
reporting from them through the Board and committee meetings, as well as
outside of the regular meeting cycle.
Investee companies
Portfolio holdings are ultimately shareholders’ assets, and the
Board recognises the importance of good stewardship and communication with
investee companies in meeting the Company’s investment objective and
strategy. The Board monitors the Manager’s stewardship activities and
receives regular feedback from the Manager in respect of meetings with the
management of portfolio companies.
A summary of the key areas of engagement undertaken by the Board with its key
stakeholders in the year under review and how Directors have acted upon this
to promote the long-term success of the Company is set out in the table below.
Area of Engagement
Responsible investing
Issue
The Board is committed to promoting the role and success of the
Company in delivering on its investment mandate to shareholders over the long
term. However, the Board recognises that securities within the Company’s
investment remit may involve additional risk due to the political volatility
and environmental, social and governance concerns facing many of the countries
in the Company’s investment universe. While the Company does not have a
sustainable investment objective or exclude investments based only on ESG
criteria, these ethical and sustainability issues should be a consideration of
our Manager’s research. More than ever, consideration of sustainable
investment is a key part of the investment process and should be factored in
when making investment decisions. The Board also has responsibility to
shareholders to ensure that the Company’s portfolio of assets is invested in
line with the stated investment objective and in a way that ensures an
appropriate balance between spread of risk and portfolio returns.
Engagement
The Board believes that responsible investment and sustainability
are important to the longer-term delivery of value and has worked closely with
the Manager throughout the year to regularly review the Company’s
performance and investment strategy and to understand how ESG considerations
are integrated into the investment process.
The Manager’s approach to the consideration of ESG factors in respect of the
Company’s portfolio, as well as its engagement with investee companies to
encourage the adoption of sustainable business practices which support
long-term value creation, are kept under review by the Board. The Manager
reports to the Board in respect of its consideration of ESG factors and how
these are integrated into the investment process; a summary of BlackRock’s
approach to ESG and sustainability is set out in the Company’s Annual Report
for the year ended 30 September 2025. The Investment Manager’s engagement
and voting policy is detailed in the Company’s Annual Report for the year
ended 30 September 2025 and on the BlackRock website.
Impact
The Board and the Manager believe there is a positive long-term
correlation between strong ESG practices and investment performance. Details
regarding the Company’s NAV and share price performance can be found in the
Chair’s Statement above. The portfolio activities undertaken by the Manager
can be found in the Investment Manager’s Report above.
Share Capital Management
Issue
The Board believes that the Company’s unique investment offering,
strong performance and attractive dividend yield enhances demand for the
Company’s shares, which should help to maintain the Company’s share price
at as close to the underlying NAV as possible. However,
wider market issues such as the level of interest rates and investor sentiment
may lead to divergence.
Engagement
The Manager reports total return performance statistics to the Board
on a regular basis, along with the portfolio yield and the impact of dividends
paid on brought forward distributable reserves.
The Board reviews the Company’s discount/premium to NAV on a regular basis
and holds frequent discussions with the Manager and the Company’s broker
regarding the discount/premium level and the factors effecting it.
The Board seeks shareholder authority each year to buy back up to 14.99% of
the Company’s issued share capital for cancellation or to be held in
treasury for potential re-issue. Buying back the Company’s shares can, in
certain circumstances, help to narrow the discount and/or reduce the
volatility in the share rating.
The Company has also put in place a five yearly mechanism which provides
shareholders with a periodic opportunity to tender their shares at NAV less
costs. This last occurred in March 2021, with the next opportunity to take
place in February 2026.
Impact
The average discount for the year to 30 September 2025 was 6.4%.
During the year the Company’s share price traded at a maximum discount of
11.2% and a minimum discount of 1.8%. This range compares favourably with the
peer group and wider investment company sector.
Service levels of third party providers
Issue
The Board acknowledges the importance of ensuring that the
Company’s principal suppliers are providing a suitable level of service,
including the Manager in respect of investment performance; the Custodian and
Depositary in respect of their duties towards safeguarding the Company’s
assets; the Registrar in its maintenance of the Company’s share register and
dealing with investor queries; and the Company’s Broker in respect of the
provision of advice and acting as a market maker for the Company’s shares.
Engagement
The Manager reports to the Board on the Company’s performance on a
regular basis. The Board carries out a robust annual evaluation of the
Manager’s performance, their commitment and available resources.
The Board performs an annual review of the service levels of all third party
service providers and concludes on their suitability to continue in their
role.
The Board receives regular updates from the AIFM, Depositary, Registrar and
Brokers on an ongoing basis.
The Board works closely with the Manager to gain comfort that relevant
business continuity plans are operating effectively for all of the Company’s
service providers.
Impact
All performance evaluations were performed on a timely basis and the
Board concluded that all third-party service providers, including the Manager,
Custodian, Depositary and Fund Accountant, Registrar and Broker were operating
effectively and providing a good level of service.
The Board has received updates in respect of business continuity planning from
the Company’s Manager, Custodian, Depositary, Fund Accountant, Broker,
Registrar and printer, and is confident that arrangements are in place to
ensure that a good level of service will continue to be provided.
Board composition
Issue
The Board is committed to ensuring that its own composition brings
an appropriate balance of knowledge, experience and skills, and that it is
compliant with best corporate governance practice under the UK Code, including
guidance on tenure and the composition of the Board’s
committees.
Engagement
As it does each year, the Board, discharging the duties of a
Nomination Committee, considers the composition of the Board to ensure that it
is suitably aligned with the activities and needs of the Company. Over the
year ended 30 September 2025, a comprehensive search and selection process was
conducted to identify a new non-executive Director. Following this thorough
process, Mr Christopher Casey was appointed on 1 October 2025.
The Board will continue to keep its composition under regular review. If it is
determined that a new appointment to the Board is required, it will agree the
selection criteria, which will take into account the need to maintain a
suitable balance of skills, knowledge, independence and
diversity.
All Directors are subject to a formal evaluation process on an annual basis
(more details and the conclusions in respect of the 2025 evaluation process
are given in the Company’s Annual Report for the year ended 30 September
2025). All eligible Directors stand for re-election by shareholders annually.
Shareholders may attend the AGM and raise any queries in respect of Board
composition or individual Directors in person or may contact the Company
Secretary or the Chair using the details provided in the Company’s Annual
Report for the year ended 30 September 2025 if they wish to raise any issues.
Impact
The Directors are not aware of any issues that have been raised
directly by shareholders in respect of Board composition in 2025. Details for
the proxy voting results in favour and against individual Directors’
re-election at the 2024 AGM are given on the Company’s website at
www.blackrock.com/uk/brfi .
Shareholders
Issue
Shareholder support and engagement are critical to the continued
existence of the Company and the successful delivery of its long-term
strategy.
Engagement
The Board is committed to maintaining open channels of communication
and engaging with shareholders. The Company welcomes and encourages attendance
and participation from shareholders at its Annual General Meetings and
shareholders have the opportunity to meet the Directors and Investment Manager
and to address questions to them directly.
The Annual Report and Half Yearly Financial Report are available on the
BlackRock website and are also circulated to shareholders either in printed
copy or via electronic communications. In addition, regular updates on
performance, monthly factsheets, the daily NAV and other information are
published on the website at www.blackrock.com/uk/brfi
.
The Board works closely with the Manager to develop the Company’s marketing
strategy, with the aim of ensuring effective communication with shareholders
in respect of the investment mandate and objective. Unlike trading companies,
one-to-one shareholder meetings usually take the form of a meeting with the
Investment Manager as opposed to members of the Board. As well as attending
regular investor meetings the Investment Manager holds regular discussions
with wealth management desks and offices to build on the case for, and
understanding of, long-term investment opportunities in frontier markets.
The Manager coordinates public relations activity, including meetings between
the Investment Manager and relevant industry publications to set out their
vision for the portfolio strategy and outlook for the region.
The Manager releases monthly portfolio updates to the market to ensure that
investors are kept up to date in respect of performance and other portfolio
developments and maintains a website on behalf of the Company that contains
relevant information in respect of the Company’s investment mandate and
objective.
If shareholders wish to raise issues or concerns with the Board, they are
welcome to do so at any time. The Chair is available to meet directly with
shareholders periodically to understand their views on governance and the
Company’s performance where they wish to do so. We
offer meetings with the Chair to main shareholders at least annually. She may
be contacted by emailing chairbrfi@blackrock.com.
Impact
The Board values any feedback and questions from shareholders ahead
of and during Annual General Meetings in order to gain an understanding of
their views and will take action when and as appropriate. Feedback and
questions will also help the Company evolve its reporting, aiming to make it
more transparent and understandable.
Feedback from all substantive meetings between the Investment Manager and
shareholders is shared with the Board. The Directors also receive updates from
the Company’s Broker and the Investment Manager on any feedback from
shareholders, as well as share trading activity and share price performance.
The Company’s approach to ESG
Environmental, social and governance (ESG) issues can present both
opportunities and risks to long-term investment performance. Whilst the
Company does not exclude investment in stocks purely on ESG criteria, material
ESG analytics are integrated into the investment process when weighing up the
risks and rewards of investment decisions. The Board believes that
communication and engagement with portfolio companies is important and can
lead to better outcomes for shareholders and the environment than merely
excluding investment in certain areas.
More information on BlackRock’s global approach to ESG integration, as well
as activity specific to the BlackRock Frontiers Investment Trust plc
portfolio, is set out below. BlackRock has defined ESG integration as the
practice of incorporating financially material E, S and/or G data and
information and consideration of sustainability risks into investment
decisions with the objective of enhancing risk-adjusted returns. ESG
integration does not change the Company’s investment objective.
More information on sustainability risks may be found in the AIFMD Fund
Disclosures document of the Company available on the Company’s website at
www.blackrock.com/uk/brfi.
BlackRock’s approach to ESG integration
BlackRock’s clients have a wide range of perspectives on a variety
of issues and investment themes, including sustainable and low-carbon
transition investing. Given the wide range of unique and varied investment
objectives sought by its clients, BlackRock’s investment teams have a range
of approaches to considering financially material E, S, and/or G factors. As
with other investment risks and opportunities, the financial materiality of E,
S and/or G considerations may vary by issuer, sector, product, mandate, and
time horizon. Depending on the investment approach, this financially material
E, S and/or G data or information may help inform due diligence, portfolio or
index construction, and/or monitoring processes of client portfolios, as well
as BlackRock’s approach to risk management.
BlackRock’s ESG integration framework is built upon its history as a firm
founded on the principle of thorough and thoughtful risk management. Aladdin,
BlackRock’s core risk management and investment technology platform, allows
investors to leverage financially material E, S and/or G data or information
as well as the combined experience of BlackRock’s investment teams to
effectively identify investment opportunities and investment risks.
BlackRock’s heritage in risk management combined with the strength of the
Aladdin platform enables BlackRock’s approach to ESG integration.
BlackRock’s ESG Integration Statement can be found at
https://www.blackrock.com/corporate/literature/publication/blk-esginvestment-statement-web.pdf
.
Investment stewardship policies
The benchmark investment stewardship policies, which include the
BlackRock Investment Stewardship (BIS) team’s Global Principles, regional
voting guidelines and Engagement Priorities, and the BlackRock Active
Investment Stewardship (BAIS) team’s Global Engagement and Voting
Guidelines, set out the core elements of corporate governance that guide the
investment stewardship teams’ efforts. Each team takes a globally consistent
approach, while recognising the unique markets and sectors in which companies
operate.
These benchmark policies are reviewed annually to reflect changes in market
standards, regulations, and feedback from clients and companies.
BlackRock is committed to transparency in terms of disclosure of its
stewardship activities on behalf of clients. The investment stewardship teams
publish their voting policies to help BlackRock’s clients understand their
work to advance clients’ interests as investors in public companies.
BlackRock’s stewardship policies and reporting are available at
www.blackrock.com/corporate/insights/investment-stewardship
.
By order of the Board
LUCY DINA
For and on behalf of
Blackrock Investment Management (UK) Limited
Company Secretary
10 December 2025
Related Party Transactions
BlackRock Fund Managers Limited (BFM) provides management and administration
services to the Company under a contract which is terminable on six months’
notice. BFM has (with the Company’s consent) delegated certain portfolio and
risk management services, and other ancillary services, to BlackRock
Investment Management (UK) Limited (BIM (UK)). Further details of the
investment management contract are disclosed in the Directors’ Report in the
Company’s Annual Report for the year ended 30 September 2025.
The investment management fee due for the year ended 30 September 2025
amounted to US$4,522,000 (2024: US$4,204,000). The performance fee payable for
the year ended 30 September 2025 amounted to US$5,980,000 (2024:
US$3,510,000).
At the year end, US$2,330,000 (2024: US$3,204,000) was outstanding in respect
of management fees and US$9,490,000 (2024: US$3,510,000) was outstanding in
respect of performance fees.
In addition to the above services, BIM (UK) has provided the Company with
marketing services. The total fees paid or payable for these services for the
year ended 30 September 2025 amounted to US$81,000 (2024: US$211,000)
excluding VAT. Marketing fees of US$147,000 (US$344,000) excluding VAT were
outstanding at the year end.
The Company has an investment in the BlackRock Institutional Cash Series plc
– US Dollar Liquid Environmentally Aware Fund of US$53,075,000 (2024:
US$68,559,000) at the year end, which is a fund managed by a company within
the BlackRock Group. The Company’s investment in the Cash Fund is held in a
share class on which no management fees are paid to BlackRock to avoid double
dipping.
Disclosures of the Directors’ interests in the ordinary shares of the
Company and fees and expenses payable to the Directors are set out in the
Directors’ Remuneration Report in the Company’s Annual Report for the year
ended 30 September 2025. At 30 September 2025, US$20,000 (£15,000) (2024:
US$20,000 (£15,000)) was outstanding in respect of Directors’ fees.
Statement of Directors’ responsibilities in respect of the Annual Report and
Financial Statements
The Directors are responsible for preparing the Annual Report, the
Directors’ Remuneration Report and the financial statements in accordance
with applicable United Kingdom law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors are required to prepare the
financial statements in accordance with UK-adopted International Accounting
Standards (IAS). Under Company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or loss of the
Company for that period.
In preparing these financial statements, the Directors are required to:
- present fairly the financial position, financial
performance and cash flows of the Company;
- select suitable accounting policies in accordance with
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then
apply them consistently;
- present information, including accounting policies, in
a manner that provides relevant, reliable, comparable and understandable
information;
- make judgements and estimates that are reasonable and
prudent;
- state whether the financial statements have been
prepared in accordance with IAS, subject to any material departures disclosed
and explained in the financial statements;
- provide additional disclosures when compliance with the
specific requirements in IAS is insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the
Company’s financial position and financial performance; and
- prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities. The Directors are also responsible for preparing the
Strategic Report, the Directors’ Report, the Directors’ Remuneration
Report, Corporate Governance Statement and the Report of the Audit and
Management Engagement Committee in accordance with the Companies Act 2006 and
applicable regulations, including the requirements of the Listing Rules and
the Disclosure Guidance and Transparency Rules. The Directors have delegated
responsibility to the Investment Manager and the AIFM for the maintenance and
integrity of the Company’s corporate and financial information included on
BlackRock’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Each of the Directors, who were appointed as at the date of the Annual Report,
confirms to the best of their knowledge that:
- the financial statements, which have been prepared in
accordance with IAS, give a true and fair view of the assets, liabilities,
financial position and profit of the Company; and
- the Strategic Report contained in the Annual Report and
Financial Statements includes a fair review of the development and performance
of the business and the position of the Company, together with a description
of the principal risks and uncertainties that it faces.
The 2018 UK Corporate Governance Code also requires Directors to ensure that
the Annual Report and Financial Statements are fair, balanced and
understandable. In order to reach a conclusion on this matter, the Board has
requested that the Audit and Management Engagement Committee advise on whether
it considers that the Annual Report and Financial Statements fulfil these
requirements. The process by which the Committee has reached these conclusions
is set out in the Audit and Management Engagement Committee’s report in the
Company’s Annual Report for the year ended 30 September 2025. As a result,
the Board has concluded that the Annual Report and Financial Statements for
the year ended 30 September 2025, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to
assess the Company’s position and performance, business model and strategy.
For and on behalf of the Board
KATRINA HART
Chair
10 December 2025
Statement of comprehensive income for the year ended 30 September 2025
2025 2024
Notes Revenue Capital Total Revenue Capital Total
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Income from investments held at fair value through profit or loss 3 19,995 305 20,300 20,656 – 20,656
Net income from derivatives 3 4,041 – 4,041 2,425 – 2,425
Other income 3 131 – 131 209 – 209
--------------- --------------- --------------- --------------- --------------- ---------------
Total income 24,167 305 24,472 23,290 – 23,290
========= ========= ========= ========= ========= =========
Net profit on investments held at fair value through profit or loss – 49,852 49,852 – 54,953 54,953
Net loss on foreign exchange – (93) (93) – (1,197) (1,197)
Net loss from derivatives – (1,577) (1,577) – (7,902) (7,902)
--------------- --------------- --------------- --------------- --------------- ---------------
Total income and net profit on investments 24,167 48,487 72,654 23,290 45,854 69,144
========= ========= ========= ========= ========= =========
Expenses
Investment management and performance fees 4 (904) (9,598) (10,502) (841) (6,873) (7,714)
Other operating expenses 5 (1,317) (71) (1,388) (1,162) (92) (1,254)
--------------- --------------- --------------- --------------- --------------- ---------------
Total operating expenses (2,221) (9,669) (11,890) (2,003) (6,965) (8,968)
========= ========= ========= ========= ========= =========
Net profit before finance costs and taxation 21,946 38,818 60,764 21,287 38,889 60,176
Finance costs (12) (50) (62) (23) (92) (115)
--------------- --------------- --------------- --------------- --------------- ---------------
Net profit before taxation 21,934 38,768 60,702 21,264 38,797 60,061
========= ========= ========= ========= ========= =========
Taxation (charge)/credit (2,729) 894 (1,835) (2,380) 867 (1,513)
--------------- --------------- --------------- --------------- --------------- ---------------
Profit for the year 19,205 39,662 58,867 18,884 39,664 58,548
========= ========= ========= ========= ========= =========
Earnings per ordinary share (cents) 7 10.15 20.95 31.10 9.97 20.95 30.92
========= ========= ========= ========= ========= =========
The total columns of this statement represent the Company’s Statement of
Comprehensive Income, prepared in accordance with UK-adopted International
Accounting Standards (IAS). The supplementary revenue and capital accounts are
both prepared under guidance published by the Association of Investment
Companies (AIC). All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the year. All
income is attributable to the equity holders of the Company.
The Company does not have any other comprehensive income (2024: US$nil). The
net profit for the year disclosed above represents the Company’s total
comprehensive income.
Statement of changes in equity for the year ended 30 September 2025
Notes Called Capital Special Capital Revenue Total
up share redemption reserve reserve reserve US$’000
capital reserve US$’000 US$’000 US$’000
US$’000 US$’000
For the year ended 30 September 2025
At 30 September 2024 2,418 5,798 308,804 75,817 13,406 406,243
Total comprehensive income:
Net profit for the year – – – 39,662 19,205 58,867
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – – (106) – – (106)
Share repurchase costs – – (1) – – (1)
Dividends paid 1 6 – – – – (18,265) (18,265)
--------------- --------------- --------------- --------------- --------------- ---------------
At 30 September 2025 2,418 5,798 308,697 115,479 14,346 446,738
========= ========= ========= ========= ========= =========
For the year ended 30 September 2024
At 30 September 2023 2,418 5,798 308,804 36,153 10,425 363,598
Total comprehensive income:
Net profit for the year – – – 39,664 18,884 58,548
Transactions with owners, recorded directly to equity:
Dividends paid 2 6 – – – – (15,903) (15,903)
--------------- --------------- --------------- --------------- --------------- ---------------
At 30 September 2024 2,418 5,798 308,804 75,817 13,406 406,243
========= ========= ========= ========= ========= =========
1 Final dividend of 6.00 cents per share for the year
ended 30 September 2024, declared on 5 December 2024 and paid on 14 February
2025 and an interim dividend of 3.65 cents per share for the year ended 30
September 2025, declared on 29 May 2025 and paid on 24 June 2025.
2 Final dividend of 4.90 cents per share for the year
ended 30 September 2023, declared on 30 November 2023 and paid on 14 February
2024 and an interim dividend of 3.50 cents per share for the year ended 30
September 2024, declared on 31 May 2024 and paid on 2 July 2024.
For information on the Company’s distributable reserves please
refer to note 9 below.
Statement of financial position as at 30 September 2025
Notes 2025 2024
US$’000 US$’000
Non-current assets
Investments held at fair value through profit or loss 454,153 412,308
Current assets
Current tax asset 734 803
Other receivables 3,837 3,934
Derivative financial assets held at fair value through profit or loss – contracts for difference 5,872 2,756
Cash and cash equivalents – cash at bank 745 2,284
Cash collateral pledged with brokers 940 1,305
--------------- ---------------
Total current assets 12,128 11,082
========= =========
Total assets 466,281 423,390
========= =========
Current liabilities
Other payables (14,400) (12,667)
Derivative financial liabilities held at fair value through profit or loss – contracts for difference (1,509) (1,561)
Liability for cash collateral received (3,615) (2,900)
--------------- ---------------
Total current liabilities (19,524) (17,128)
========= =========
Total assets less current liabilities 446,757 406,262
========= =========
Non-current liabilities
Management shares of £1.00 each (one quarter paid up) (19) (19)
--------------- ---------------
Net assets 446,738 406,243
========= =========
Equity attributable to equity holders
Called up share capital 8 2,418 2,418
Capital redemption reserve 9 5,798 5,798
Special reserve 9 308,697 308,804
Capital reserves 9 115,479 75,817
Revenue reserve 9 14,346 13,406
--------------- ---------------
Total equity 446,738 406,243
========= =========
Net asset value per ordinary share (cents) 7 236.03 214.57
========= =========
Cash flow statement for the year ended 30 September 2025
2025 2024
US$’000 US$’000
Operating activities
Net profit before taxation 1 60,702 60,061
Changes in working capital items:
Increase in other receivables (excluding amounts due from brokers) (696) (489)
Increase/(decrease) in other payables (excluding amounts due to brokers) 5,069 (4,210)
Decrease in amounts due from brokers 793 1,640
Decrease in amounts due to brokers (3,336) (3,138)
Decrease in cash collateral pledged with brokers 365 1,130
Decrease in cash collateral received from brokers 715 600
Other adjustments:
Finance costs 62 115
Net profit on investments held at fair value through profit or loss (49,852) (54,953)
Net loss from derivatives 1,577 7,902
Net financing costs on derivatives (3,527) (4,835)
Net loss on foreign exchange 93 1,197
Sales of investments held at fair value through profit or loss 192,884 236,900
Purchases of investments held at fair value through profit or loss (200,348) (216,098)
Sales of Cash Fund 2 175,042 161,427
Purchases of Cash Fund 2 (159,571) (165,067)
Amounts paid for losses on closure of derivatives (32,784) (47,584)
Amounts received on profit on closure of derivatives 31,566 41,490
Taxation paid (1,766) (1,872)
--------------- ---------------
Net cash inflow from operating activities 16,988 14,216
========= =========
Financing activities
Interest paid (62) (115)
Ordinary shares repurchased into treasury (106) –
Share repurchase costs (1) –
Dividends paid (18,265) (15,903)
--------------- ---------------
Net cash outflow from financing activities (18,434) (16,018)
========= =========
Decrease in cash and cash equivalents (1,446) (1,802)
Effect of foreign exchange rate changes (93) (1,197)
--------------- ---------------
Change in cash and cash equivalents (1,539) (2,999)
Cash and cash equivalents at the start of year 2,284 5,283
--------------- ---------------
Cash and cash equivalents at the end of the year 745 2,284
========= =========
Comprised of:
Cash at bank 745 2,284
--------------- ---------------
745 2,284
========= =========
1 Dividends and interest received in cash during the year
amounted to US$15,653,000 and US$2,059,000 respectively (2024: US$15,293,000
and US$2,964,000).
2 Cash Fund represents investment in the BlackRock
Institutional Cash Series plc – US Dollar Liquid Environmentally Aware Fund.
Notes to the financial statements for the year ended 30 September 2025
1. Principal activity
The principal activity of the Company is that of an investment trust
company within the meaning of Section 1158 of the Corporation Tax Act 2010.
The Company was incorporated on 15 October 2010, and this is the fourteenth
Annual Report.
2. Accounting policies
The principal accounting policies adopted by the Company have been
applied consistently, other than where new policies have been adopted and are
set out below.
(a) Basis of preparation
The financial statements have been prepared under the historic cost
convention modified by the revaluation of certain financial assets and
financial liabilities held at fair value through profit or loss and in
accordance with UK-adopted IAS. All of the Company’s operations are of a
continuing nature.
Insofar as the Statement of Recommended Practice (SORP) for investment trust
companies and venture capital trusts, issued by the Association of Investment
Companies (AIC) in October 2019 and updated in July 2022, is compatible with
UK-adopted IAS, the financial statements have been prepared in accordance with
the guidance set out in the SORP.
Substantially, all of the assets of the Company consist of securities that are
readily realisable and, accordingly, the Directors are satisfied that the
Company has adequate resources to continue in operational existence for the
foreseeable future for the period to 30 September 2027, being a period of at
least twelve months from the date of approval of the financial statements, and
therefore consider the going concern assumption to be appropriate. The
Directors have reviewed the income and expense projections, the potential
impact of cash exit tender offer to shareholders in February 2026 and the
liquidity of the investment portfolio in making their assessment.
The Directors have considered the impact of climate change on the value of the
investments included in the Financial Statements and have concluded that there
was no further impact of climate change to be considered as the investments
are valued based on market pricing as required by IFRS 13.
None of the Company’s other assets and liabilities were considered to be
potentially impacted by climate change.
The Company’s financial statements are presented in US Dollars, which is the
functional currency of the Company and the currency of the primary economic
environment in which the Company operates. All values are rounded to the
nearest thousand dollars (US$’000) except where otherwise indicated.
Adoption of relevant new and amended International Accounting Standards and
interpretations:
IAS 1 – Classification of liabilities as current or
non-current and non-current liabilities with covenants
(effective 1 January 2024). The IASB has amended IAS 1 Presentation of
Financial Statements to clarify its requirement for the presentation of
liabilities depending on the rights that exist at the end of the reporting
period. The amendment requires liabilities to be classified as non-current if
the entity has a substantive right to defer settlement for at least 12 months
at the end of the reporting period. The amendment no longer refers to
unconditional rights. The IASB has also introduced additional disclosures for
liabilities with covenants within 12 months of the reporting period. The
additional disclosures include the nature of covenants, when the entity is
required to comply with covenants, the carrying amount of related liabilities
and circumstances that may indicate that the entity will have difficulty
complying with the covenants.
The amendment of this standard did not have any significant impact on the
Company.
IAS 21 – Lack of exchangeability (effective 1 January
2025 – early adopted from 1 October 2024). The IASB issued amendments to IAS
21 The Effects of Changes in Foreign Exchange Rates to specify how an entity
should assess whether a currency is exchangeable and how it should determine a
spot exchange rate when exchangeability is lacking. The amendments also
require disclosure of information that enables users of its financial
statements to understand how the currency not being exchangeable into the
other currency affects, or is expected to affect, the entity’s financial
performance, financial position and cash flows.
The amendment of this standard did not have any significant impact on the
Company’s operations as IAS 21 better reflects the practical considerations
of establishing fair values for the Company’s foreign currency assets.
Relevant International Accounting Standards that have yet to be adopted:
IFRS 18 – Presentation and disclosure in financial
statements (effective 1 January 2027). The IASB issued
IFRS 18, which replaces IAS 1 Presentation of Financial Statements. IFRS 18
introduces new requirements for presentation within the statement of profit or
loss, including specified totals and subtotals. Furthermore, entities are
required to classify all income and expenses within the statement of profit or
loss into one of five categories: operating, investing, financing, income
taxes and discontinued operations, whereof the first three are new. It also
requires disclosure of newly defined management-defined performance measures,
subtotals of income and expenses, and includes new requirements for
aggregation and disaggregation of financial information based on the
identified ‘roles’ of the primary financial statements and the notes.
The amendment of this standard is expected to have an impact on the disclosure
and presentation of the Statement of Comprehensive Income but will not have
any impact on the accounting or financial results.
(b) Presentation of the Statement of Comprehensive Income
In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the AIC, supplementary
information which analyses the Statement of Comprehensive Income between items
of a revenue and a capital nature has been presented alongside the Statement
of Comprehensive Income.
(c) Segmental reporting
The Directors are of the opinion that the Company is engaged in a
single segment of business being investment business.
(d) Income
Dividends receivable on equity shares are recognised as revenue for
the year on an ex-dividend basis. Where no ex-dividend date is available,
dividends receivable on or before the year end are treated as revenue for the
year. Provision is made for any dividends and interest income not expected to
be received. Special dividends, if any, are treated as a capital or a revenue
receipt depending on the facts or circumstances of each particular case. The
return on a debt security is recognised on a time apportionment basis so as to
reflect the effective yield on the debt security. Interest income and deposit
interest are accounted for on an accruals basis.
Where the Company has elected to receive its dividends in the form of
additional shares rather than in cash, the cash equivalent of the dividend is
recognised as income. Any excess in the value of the shares received over the
amount of the cash dividend is recognised in capital.
(e) Expenses
All expenses, including finance costs, are accounted for on an
accruals basis. Expenses have been charged wholly to the revenue account of
the Statement of Comprehensive Income, except as follows:
- expenses which are incidental to the acquisition or
sale of an investment are charged to the capital account of the Statement of
Comprehensive Income. Details of transaction costs on the purchases and sales
of investments are disclosed within note 10 to the financial statements in the
Company’s Annual Report for the year ended 30 September 2025;
- expenses are treated as capital where a connection with
the maintenance or enhancement of the value of the investments can be
demonstrated;
- the investment management fee and finance costs have
been allocated 20% to the revenue account and 80% to the capital account of
the Statement of Comprehensive Income in line with the Board’s expected
long-term split of returns, in the form of capital gains and income,
respectively, from the investment portfolio; and
- performance fees are allocated 100% to the capital
account of the Statement of Comprehensive Income as fees are generated in
connection with enhancing the value of the investment portfolio.
(f) Taxation
The tax expense represents the sum of the tax currently payable and
deferred tax. The tax currently payable is based on the taxable profit for the
year. Taxable profit differs from net profit as reported in the Statement of
Comprehensive Income because it excludes items of income or expenses that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Company’s liability for current tax is
calculated using tax rates that were applicable at the balance sheet date.
Where expenses are allocated between capital and revenue accounts, any tax
relief in respect of the expenses is allocated between capital and revenue
returns on the marginal basis using the Company’s effective rate of
corporation tax for the accounting period.
Deferred taxation is recognised in respect of all temporary differences that
have originated but not reversed at the financial reporting date, where
transactions or events that result in an obligation to pay more taxation in
the future or right to pay less taxation in the future have occurred at the
financial reporting date. This is subject to deferred taxation assets only
being recognised if it is considered more likely than not that there will be
suitable profits from which the future reversal of the temporary differences
can be deducted. Deferred taxation assets and liabilities are measured at the
rates applicable to the legal jurisdictions in which they arise.
(g) Investments held at fair value through profit or loss
In accordance with IFRS 9, the Company classifies its investments at
initial recognition as held at fair value through profit or loss and are
managed and evaluated on a fair value basis in accordance with its investment
strategy and business model.
All investments are measured initially and subsequently at fair value through
profit or loss. Purchases of investments are recognised on a trade date basis.
Sales of investments are recognised at the trade date of the disposal.
The fair value of the financial investments is based on their quoted bid price
at the financial reporting date, without deduction for the estimated future
selling costs. This policy applies to all current and non-current asset
investments held by the Company. The fair value of the P -
Notes are, when held, based on the quoted bid price of the underlying equity
to which they relate.
Changes in the value of investments held at fair value through profit or loss
and gains and losses on disposal are recognised in the Statement of
Comprehensive Income as “Net profit/(loss) on investments held at fair value
through profit or loss”. Also included within the heading are transaction
costs in relation to the purchase or sale of investments.
For all financial instruments not traded in an active market, the fair value
is determined by using various valuation techniques. Valuation techniques
include market approach (i.e., using recent arm’s length market transactions
adjusted as necessary and reference to the current market value of another
instrument that is substantially the same) and the income approach (i.e.,
discounted cash flow analysis and option pricing models making as much use of
available and supportable market data where possible). See note 2(o) below.
(h) Derivatives
The Company can hold long and short positions in contracts for
difference (CFDs) which are held at fair value based on the bid prices of the
underlying securities in respect of long positions, and the offer prices of
the underlying securities in respect of short positions.
Profits and losses on derivative transactions are recognised in the Statement
of Comprehensive Income. They are shown in the capital account of the
Statement of Comprehensive Income if they are of a capital nature and are
shown in the revenue account of the Statement of Comprehensive Income if they
are of a revenue nature. To the extent that any profits or losses are of a
mixed revenue and capital nature, they are apportioned between revenue and
capital accordingly.
(i) Other receivables and other payables
Other receivables and other payables do not carry any interest and
are short term in nature and are accordingly stated on an amortised cost
basis.
(j) Dividends payable
Under IAS, final dividends should not be accrued in the financial
statements unless they have been approved by shareholders before the financial
reporting date. Interim dividends should not be recognised in the financial
statements unless they have been paid.
Dividends payable to equity shareholders are recognised in the Statement of
Changes in Equity.
(k) Foreign currency translation
Transactions involving foreign currencies are converted at the rate
ruling at the date of the transaction. Foreign currency monetary assets and
liabilities and non-monetary assets held at fair value are translated into US
Dollars at the rate ruling on the financial reporting date. Foreign exchange
differences arising on translation are recognised in the Statement of
Comprehensive Income as a revenue or capital item depending on the income or
expense to which they relate. For investment transactions and investments held
at the year end, denominated in a foreign currency, the resulting gains or
losses are included in the profit/(loss) on investments held at fair value
through profit or loss in the Statement of Comprehensive Income.
(l) Cash and cash equivalents
Cash comprises cash in hand, bank overdrafts and on demand deposits.
Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and that are subject to an insignificant
risk of changes in value.
The Company’s investment in the Cash Fund is managed as part of the
Company’s investment policy (see note 2(g) above) and, accordingly, this
investment along with purchases and sales of this investment has been
classified in the Statement of Financial Position as an investment and not as
a cash equivalent as defined under IAS 7.
(m) Bank borrowings
Bank overdrafts and loans are recorded as the proceeds received.
Finance charges, including any premium payable on settlement or redemption and
direct issue costs, are accounted for on an accruals basis in the Statement of
Comprehensive Income using the effective interest rate method and are added to
the carrying amount of the instrument.
(n) Share repurchases and share reissues
Shares repurchased and subsequently cancelled – share capital is
reduced by the nominal value of the shares repurchased and the capital
redemption reserve is correspondingly increased in accordance with Section 733
of the Companies Act 2006. The full cost of the repurchase is charged to the
special reserve.
Shares repurchased and held in treasury – the full cost of the repurchase is
charged to the special reserve.
Where treasury shares are subsequently re-issued:
- amounts received to the extent of the repurchase price
are credited to the special reserve and capital reserves based on a weighted
average basis of amounts utilised from these reserves on repurchases; and
- any surplus received in excess of the repurchase price
is taken to the share premium account.
Where new shares are issued, amounts received to the extent of any surplus
received in excess of the par value are taken to the share premium account.
Share issue costs are charged to the share premium account. Costs on share
reissues are charged to the special reserve and capital reserves.
(o) Critical accounting estimates and judgements
The Company makes estimates and assumptions concerning the future.
The resulting accounting estimates and assumptions will, by definition, seldom
equal the related actual results. Estimates and judgements are regularly
evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances. The Directors do not believe that any accounting judgements or
estimates have a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities within the next financial year.
3. Income
2025 2024
US$’000 US$’000
Investment income:
UK dividends 462 576
Overseas dividends 17,607 16,276
Overseas special dividends 85 913
Interest from Cash Fund 1,841 2,891
--------------- ---------------
Total investment income 19,995 20,656
========= =========
Net income from contracts for difference (note 11) 4,041 2,425
--------------- ---------------
Total income from derivatives 4,041 2,425
========= =========
Other income:
Interest received on cash collateral 69 135
Deposit interest 62 74
--------------- ---------------
Total other income 131 209
========= =========
Total 24,167 23,290
========= =========
Dividends and interest received in cash during the year amounted to
US$15,653,000 and US$2,059,000 respectively (2024: US$15,293,000 and
US$2,964,000).
Special dividends from equity investments of US$305,000 have been recognised
in capital for the year ended 30 September 2025 (2024: US$nil).
No special dividends from long contracts for difference have been recognised
in capital for the year ended 30 September 2025 (2024: US$nil).
4. Investment management and performance fees
2025 2024
Revenue Capital Total Revenue Capital Total
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Investment management fee 904 3,618 4,522 841 3,363 4,204
Performance fee – 5,980 5,980 – 3,510 3,510
--------------- --------------- --------------- --------------- --------------- ---------------
Total 904 9,598 10,502 841 6,873 7,714
========= ========= ========= ========= ========= =========
Up to 30 September 2024, the investment management fee equivalent to 1.10% per
annum of the Company’s gross assets (defined as the aggregate net assets of
the long only equity and CFD portfolios (long and short) of the Company) was
payable to the Manager.
From 1 October 2024, the investment management fee is levied quarterly on a
tiered basis: 1.10% per annum of the Company’s daily net asset value (NAV)
up to and including US$650 million and 1.0% per annum of the Company’s daily
NAV above US$650 million.
In addition, the Manager is entitled to receive a performance fee at a rate of
10% of any increase in the NAV at the end of a performance period over and
above what would have been achieved had the NAV since launch increased in line
with the Benchmark Index, which, since 1 April 2018, is a
composite of the MSCI Frontier + Emerging ex Selected Countries Index. Prior
to 1 April 2018, the Benchmark Index was the MSCI Frontier Markets Index.
For the purposes of the calculation of the performance fee, the performance of
the NAV total return since launch (including the reinvestment of dividends and
before the deduction of management and performance fees) has been measured
against the performance of the Benchmark Index on a blended basis.
For the year ended 30 September 2025, the Company’s NAV outperformed the
Benchmark Index by 4.5% (2024: 0.8%) resulting in a cumulative outperformance
since launch of 86.2% (2024: 68.5%); therefore, a performance fee of
US$5,980,000 has been accrued (2024: US$3,510,000). Any accrued performance
fee is included within other payables in the Statement of Financial Position.
The performance fee payable in any year is capped at 2.5% of the NAV of the
Company if there is an increase in the NAV per share, or 1.0% of the NAV of
the Company if there is a decrease in the NAV per share, at the end of the
relevant performance period. Any outperformance in excess of the cap for a
period may be carried forward for the next two performance periods, subject to
the then applicable annual cap. The performance fee is also subject to a high
watermark such that any performance fee is only payable to the extent that the
cumulative outperformance of the NAV relative to the Benchmark Index is
greater than what would have been achieved had the NAV increased in line with
the Benchmark Index since the last date in relation to which a performance fee
had been paid. This mechanism requires the Manager to catch up any cumulative
underperformance against the Benchmark Index since launch before a performance
fee can be generated.
The investment management fee is allocated 20% to the revenue account and 80%
to the capital account and the performance fee is wholly allocated to the
capital account of the Statement of Comprehensive Income. There is no
additional fee for company secretarial and administration services.
5. Other operating expenses
2025 2024
US$’000 US$’000
Allocated to revenue:
Custody fee 1 411 276
Auditor’s remuneration:
– audit services 65 61
– other assurance services 2 9 10
Registrar’s fee 42 38
Directors’ emoluments 3 257 258
Broker fees 61 40
Depositary fees 4 42 38
Marketing fees 157 211
AIC fees 29 25
FCA fees 29 23
Printing and postage fees 67 47
Employer NI contributions 24 25
Stock exchange listings 20 17
Legal and professional fees 20 24
Director search fees 29 25
Write back of prior year expenses 5 (1) (17)
Other administrative costs 56 61
--------------- ---------------
Total revenue expenses 1,317 1,162
========= =========
Allocated to capital:
Custody transaction charges 6 71 92
--------------- ---------------
Total capital expenses 71 92
========= =========
Total 1,388 1,254
========= =========
2025 2024
% %
Ongoing charges (excluding performance fees) 7 1.42 1.41
Ongoing charges (including performance fees) 8 2.87 2.33
========= =========
1 No fees were payable in 2025 or 2024 in relation to
investing in new markets.
2 Fees for other assurance services of £7,100 (US$9,000)
(2024: £7,100 (US$10,000)) relate to the review of the interim financial
statements.
3 Further information on Directors’ emoluments can be
found in the Directors’ Remuneration Report in the Company’s Annual Report
for the year ended 30 September 2025. The Company has no employees.
4 All expenses other than depositary fees are paid in
Pound Sterling and are therefore subject to exchange rate fluctuations.
5 Relates to miscellaneous fees written back during the
year (2024: Director search fees, miscellaneous fees and legal fees).
6 For the year ended 30 September 2025, expenses of
£53,000 (US$71,000) (2024: £69,000 (US$92,000)) were charged to the capital
account of the Statement of Comprehensive Income. These relate to transaction
costs charged by the Custodian on sale and purchase trades.
7 The Company’s ongoing charges (excluding performance
fees) calculated as a percentage of average daily net assets and using the
management fee and all other operating expenses, excluding performance fees,
finance costs, direct transaction costs, custody transaction charges, VAT
recovered, taxation, prior year expenses written back and certain
non-recurring items. Alternative Performance Measure, see Glossary in the
Company’s Annual Report for the year ended 30 September 2025.
8 The Company’s ongoing charges (including performance
fees) calculated as a percentage of average daily net assets and using the
management fee and all other operating expenses and including performance fees
but excluding finance costs, direct transaction costs, custody transaction
charges, VAT recovered, taxation, prior year expenses written back and certain
non-recurring items. Alternative Performance Measure, see Glossary in the
Company’s Annual Report for the year ended 30 September 2025.
6. Dividends
Dividends paid on equity shares Record date Payment date 2025 2024
US$’000 US$’000
2024 final of 6.00 cents (2023: 4.90 cents) per ordinary share 10 January 2025 14 February 2025 11,356 9,277
2025 interim of 3.65 cents (2024: 3.50 cents) per ordinary share 6 June 2025 24 June 2025 6,909 6,626
--------------- ---------------
Accounted for in the financial statements 18,265 15,903
========= =========
The total dividends payable in respect of the year ended 30 September 2025
which form the basis of Section 1158 of the Corporation Tax Act 2010 and
Section 833 of the Companies Act 2006, and the amounts proposed, meet the
relevant requirements as set out in this legislation.
Dividends paid, proposed or declared on equity shares 2025 2024
US$’000 US$’000
Interim dividend of 3.65 cents per ordinary share (2024: 3.50 cents) 6,909 6,626
Final proposed dividend of 6.35 cents per ordinary share (2024: 6.00 cents) 1 12,019 11,358
--------------- ---------------
Total for the year 18,928 17,984
========= =========
1 Based on 189,270,248 ordinary shares in issue on 10
December 2025.
7. Earnings and net asset value per ordinary share
Revenue earnings, capital earnings and net asset value per ordinary
share are shown below and have been calculated using the following:
Year ended Year ended
30 September 30 September
2025 2024
Net revenue profit attributable to ordinary shareholders (US$’000) 19,205 18,884
Net capital profit attributable to ordinary shareholders (US$’000) 39,662 39,664
--------------- ---------------
Total profit attributable to ordinary shareholders (US$'000) 58,867 58,548
========= =========
Equity shareholders’ funds (US$’000) 446,738 406,243
========= =========
The weighted average number of ordinary shares in issue during the year on which the earnings per ordinary share was calculated was: 189,279,453 189,325,748
The actual number of ordinary shares in issue at the end of the year on which the net asset value was calculated was: 189,270,248 189,325,748
Earnings per ordinary share
Revenue earnings per share (cents) – basic and diluted 10.15 9.97
Capital earnings per share (cents) – basic and diluted 20.95 20.95
--------------- ---------------
Total earnings per share (cents) – basic and diluted 31.10 30.92
========= =========
As at As at
30 September 30 September
2025 2024
Net asset value per ordinary share (cents) 236.03 214.57
Ordinary share price (cents) 1 226.17 194.50
Net asset value per ordinary share (pence) 1 175.32 159.96
Ordinary share price (pence) 168.00 145.00
========= =========
1 Based on an exchange rate of US$1.3463 to £1 at 30
September 2025 (2024: US$1.3414 to £1).
8. Called up share capital
Ordinary Treasury Total Nominal
shares shares shares value
in issue number number US$’000
number
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 1 cent each:
At 30 September 2023 189,325,748 52,497,053 241,822,801 2,418
At 30 September 2024 189,325,748 52,497,053 241,822,801 2,418
Ordinary shares repurchased into treasury (55,500) 55,500 – –
--------------- --------------- --------------- ---------------
At 30 September 2025 189,270,248 52,552,553 241,822,801 2,418
========= ========= ========= =========
During the year ended 30 September 2025, the Company repurchased 55,500
ordinary shares (2024: none) for a total consideration of US$107,000 (2024:
US$nil).
Since the year end and up to 8 December 2025, no ordinary shares have been
repurchased. No shares were issued during the year under review or post year
end from 1 October 2025 up to the date of this report.
9. Reserves
For the year ended 30 September 2025
Distributable reserves
Capital Special Capital Capital Revenue
redemption reserve reserve reserve reserve
reserve US$’000 arising on arising on US$’000
US$’000 investments revaluation of
sold investments
US$’000 held
US$’000
At 30 September 2023 5,798 308,804 31,765 4,388 10,425
Movement during the year:
Total comprehensive income:
Net profit for the year – – 4,000 35,664 18,884
Transactions with owners, recorded directly to equity:
Dividends paid – – – – (15,903)
--------------- --------------- --------------- --------------- ---------------
At 30 September 2024 5,798 308,804 35,765 40,052 13,406
========= ========= ========= ========= =========
Movement during the year:
Total comprehensive income:
Net profit for the year – – 7,933 31,762 19,205
Transactions with owners, recorded directly to equity:
Ordinary shares repurchased into treasury – (106) – – –
Share repurchase costs – (1) – – –
Dividends paid – – – – (18,265)
--------------- --------------- --------------- --------------- ---------------
At 30 September 2025 5,798 308,697 43,698 71,781 14,346
========= ========= ========= ========= =========
The capital redemption reserve of US$5,798,000 (2024: US$5,798,000) is not a
distributable reserve under the Companies Act 2006. In accordance with ICAEW
Technical Release 02/17BL on Guidance on Realised and Distributable Profits
under the Companies Act 2006, the special reserve and capital reserves may be
used as distributable reserves for all purposes and, in particular, the
repurchase by the Company of its ordinary shares and for payments such as
dividends. In accordance with the Company’s Articles of Association, the
special reserve of US$308,697,000 (2024: US$308,804,000), capital reserves of
US$115,479,000 (2024: US$75,817,000) and the revenue reserve of US$14,346,000
(2024: US$13,406,000) may be distributed by way of dividend. The gain on the
capital reserve arising on the revaluation of investments of US$71,781,000
(2024: US$40,052,000) is subject to fair value movements and may not be
readily realisable at short notice, as such it may not be entirely
distributable. The investments are subject to financial risks, as such capital
reserves (arising on investments sold) and the revenue reserve may not be
entirely distributable if a loss occurred during the realisation of these
investments.
As at 30 September 2025, the Company’s distributable reserves excluding
capital reserves on the revaluation of investments amounted to US$366,741,000
(2024: US$357,975,000).
In June 2011, the Company cancelled its share premium account pursuant to
shareholders’ approval of a special resolution and Court approval on 17 June
2011. The share premium account, which totalled US$142,704,000 was transferred
to a special reserve.
In November 2013, the Company cancelled its share premium account pursuant to
shareholders’ approval of a special resolution and Court approval on 6
November 2013. The share premium account, which totalled US$88,326,000 was
transferred to a special reserve.
In March 2021, the Company cancelled its share premium account pursuant to
shareholders’ approval of a special resolution and Court approval on 11
March 2021. The share premium account, which totalled US$165,984,000 was
transferred to a special reserve.
10. Valuation of financial instruments
Financial assets and financial liabilities are either carried in the
Statement of Financial Position at their fair value (investments and
derivatives) or at an amount which is a reasonable approximation of fair value
(due from brokers, dividends and interest receivable, due to brokers,
accruals, cash at bank and bank overdrafts). IFRS 13 requires the Company to
classify fair value measurements using a fair value hierarchy that reflects
the significance of inputs used in making the measurements. The valuation
techniques used by the Company are explained in the accounting policies note
2(g) to the Financial Statements below.
Categorisation within the hierarchy has been determined on the basis of the
lowest level of input that is significant to the fair value measurement of the
relevant asset or liability.
The fair value hierarchy has the following levels:
Level 1 – Quoted market price for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if
quoted prices are readily available from an exchange, dealer, broker, industry
group, pricing service or regulatory agency and those prices represent actual
and regularly occurring market transactions on an arm’s length basis. The
Company does not adjust the quoted price for these instruments.
Level 2 – Valuation techniques using observable inputs
This category includes instruments valued using quoted prices for
similar instruments in markets that are considered less than active, or other
valuation techniques where all significant inputs are directly or indirectly
observable from market data.
Valuation techniques used for non-standardised financial instruments such as
options, currency swaps and other over-the-counter derivatives include the use
of comparable recent arm’s length transactions, reference to other
instruments that are substantially the same, discounted cash flow analysis,
option pricing models and other valuation techniques commonly used by market
participants making the maximum use of market inputs and relying as little as
possible on entity specific inputs.
As at the year end, the CFDs were valued using the underlying equity bid price
and the inputs to the valuation were the exchange rates used to convert the
CFD valuation from the relevant local currency in which the underlying equity
was priced to US Dollars at the year-end date. There have been no changes to
the valuation technique since the previous year or as at the date of this
report.
Contracts for difference have been classified as Level 2 investments as their
valuation has been based on market observable inputs represented by the market
prices of the underlying quoted securities and exchange rates to which these
contracts expose the Company.
Level 3 – Valuation techniques using significant unobservable inputs
This category includes all instruments where the valuation technique
includes inputs not based on market data and these inputs could have a
significant impact on the instrument’s valuation.
This category also includes instruments that are valued based on quoted prices
for similar instruments where significant entity determined adjustments or
assumptions are required to reflect differences between the instruments and
instruments for which there is no active market. The Investment Manager
considers observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not proprietary,
and provided by independent sources that are actively involved in the relevant
market.
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
input that is significant to the fair value measurement. If a fair value
measurement uses observable inputs that require significant adjustment based
on unobservable inputs, that measurement is a Level 3 measurement.
Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset
or liability including an assessment of the relevant risks including but not
limited to credit risk, market risk, liquidity risk, business risk and
sustainability risk. The determination of what constitutes ‘observable’
inputs requires significant judgement by the Investment Manager and these
risks are adequately captured in the assumptions and inputs used in
measurement of Level 3 assets or liabilities.
Fair values of financial assets and financial liabilities
For exchange listed equity investments, the quoted price is the bid
price. Substantially, all investments are valued based on unadjusted quoted
market prices. Where such quoted prices are readily available in an active
market, such prices are not required to be assessed or adjusted for any
business risks, including climate risk, in accordance with the fair value
related requirements of the Company’s financial reporting framework.
The table below sets out fair value measurements using IFRS 13 fair value
hierarchy.
Financial assets/(liabilities) at fair value through profit or loss Level 1 Level 2 Level 3 Total
at 30 September 2025 US$’000 US$’000 US$’000 US$’000
Assets:
Equity investments 401,078 – – 401,078
Cash Fund 53,075 – – 53,075
Contracts for difference – 5,872 – 5,872
Liabilities:
Contracts for difference – (1,509) – (1,509)
--------------- --------------- --------------- ---------------
Total 454,153 4,363 – 458,516
========= ========= ========= =========
Financial assets/(liabilities) at fair value through profit or loss Level 1 Level 2 Level 3 Total
at 30 September 2024 US$’000 US$’000 US$’000 US$’000
Assets:
Equity investments 343,749 – – 343,749
Cash Fund 68,559 – – 68,559
Contracts for difference – 2,756 – 2,756
Liabilities:
Contracts for difference – (1,561) – (1,561)
--------------- --------------- --------------- ---------------
Total 412,308 1,195 – 413,503
========= ========= ========= =========
There were no transfers between levels of financial assets and financial
liabilities during the year ended 30 September 2025.
The Company held no Level 3 assets or liabilities during the year ended 30
September 2025 (2024: nil).
11. Related party disclosure
Directors’ emoluments
At the date of this report, the Board consists of six non-executive
Directors, all of whom are considered to be independent of the Manager by the
Board.
Disclosures of the Directors’ interests in the ordinary shares of the
Company and fees and expenses payable to the Directors are set out in the
Directors’ Remuneration Report in the Company’s Annual
Report for the year ended 30 September 2025. At 30 September 2025, US$20,000
(£15,000) (2024: US$20,000 (£15,000)) was outstanding in respect of
Directors’ fees.
Significant holdings
The following investors are:
a. funds managed by the BlackRock Group or are affiliates
of BlackRock Inc. (Related BlackRock Funds); or
b. investors (other than those listed in (a) above) who
held more than 20% of the voting shares in issue in the Company and are as a
result, considered to be related parties to the Company (Significant
Investors).
Total % of shares Total % of shares held by Number of
held by Related Significant Investors who are Significant Investors who are
BlackRock Funds not affiliates of not affiliates of
BlackRock Group BlackRock Group or
or BlackRock, Inc. BlackRock, Inc.
As at 30 September 2025 3.3 n/a n/a
As at 30 September 2024 4.0 n/a n/a
========= ========= =========
12. Transactions with the Investment Manager and AIFM
BlackRock Fund Managers Limited (BFM) provides management and
administration services to the Company under a contract which is terminable on
six months’ notice. BFM has (with the Company’s consent) delegated certain
portfolio and risk management services, and other ancillary services, to
BlackRock Investment Management (UK) Limited (BIM (UK)). Further details of
the investment management contract are disclosed in the Directors’ Report in
the Company’s Annual Report for the year ended 30 September 2025.
The investment management fee due for the year ended 30 September 2025
amounted to US$4,522,000 (2024: US$4,204,000). The performance fee payable for
the year ended 30 September 2025 amounted to US$5,980,000 (2024:
US$3,510,000).
At the year end, US$2,330,000 (2024: US$3,204,000) was outstanding in respect
of management fees and US$9,490,000 (2024: US$3,510,000) was outstanding in
respect of performance fees.
In addition to the above services, BIM (UK) has provided the Company with
marketing services. The total fees paid or payable for these services for the
year ended 30 September 2025 amounted to US$81,000 (2024: US$211,000)
excluding VAT. Marketing fees of US$147,000 (US$344,000) excluding VAT were
outstanding at the year end.
The Company has an investment in the BlackRock Institutional Cash Series plc
– US Dollar Liquid Environmentally Aware Fund of US$53,075,000 (2024:
US$68,559,000) at the year end, which is a fund managed by a company within
the BlackRock Group. The Company’s investment in the Cash Fund is held in a
share class on which no management fees are paid to BlackRock to avoid double
dipping.
The ultimate holding company of the Manager and the Investment Manager is
BlackRock, Inc., a company incorporated in Delaware, USA.
13. Contingent liabilities
There were no contingent liabilities at 30 September 2025 (2024:
nil).
14. Publication of non-statutory accounts
The financial information contained in this announcement does not
constitute statutory accounts as defined in the Companies Act 2006. The 2025
Annual Report and Financial Statements will be filed with the Registrar of
Companies shortly.
The report of the Auditor for the year ended 30 September 2025 contains no
qualification or statement under Section 498(2) or (3) of the Companies Act
2006.
The comparative figures are extracts from the audited financial statements of
BlackRock Frontiers Investment Trust plc for the year ended 30 September 2024,
which have been filed with the Registrar of Companies.
The report of the Auditor on those financial statements contained no
qualification or statement under Section 498 of the Companies Act.
This announcement was approved by the Board of Directors on 10 December 2025.
15. Annual Report
Copies of the annual report will be sent to members shortly and will
be available from the registered office, c/o The Company Secretary, BlackRock
Frontiers Investment Trust plc, 12 Throgmorton Avenue, London EC2N 2DL.
16. Annual General Meeting
The Annual General Meeting of the Company will be held at 12
Throgmorton Avenue, London EC2N 2DL on Monday, 23 February 2026 at 1:00 p.m.
The Annual Report will also be available on the BlackRock website at
blackrock.com/uk/brfi. 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.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Sarah Beynsberger, Director, Investment Trusts, BlackRock Investment
Management (UK) Limited
Tel: 020 7743 3000
Press enquiries:
Lansons Communications
Email:
BlackRockInvestmentTrusts@lansons.com
Tel: 020 7490 8828
10 December 2025
12 Throgmorton Avenue
London EC2N 2DL
END
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