REG-BlackRock Latin American Investment Trust Plc: Portfolio Update
27/03/2025 17:30
The information contained in this release was correct as at 28 February
2025. Information on the Company’s up to date net asset values can be
found on the London Stock Exchange Website at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI - UK9OG5Q0CYUDFGRX4151)
All information is at 28 February 2025 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five
month months year years years
% % % % %
Sterling:
Net asset value^ -4.6 -0.3 -24.8 -4.1 -7.7
Share price 0.7 6.9 -17.7 -1.1 0.8
MSCI EM Latin America -3.1 1.9 -16.3 8.3 10.8
(Net Return)^^
US Dollars:
Net asset value^ -3.3 -1.2 -25.2 -10.0 -9.0
Share price 2.0 5.9 -18.1 -7.2 -0.6
MSCI EM Latin America -1.8 0.9 -16.7 1.6 9.2
(Net Return)^^
^cum income
^^The Company’s performance benchmark (the MSCI EM Latin America Index) may
be calculated on either a Gross or a Net return basis. Net return (NR) indices
calculate the reinvestment of dividends net of withholding taxes using the tax
rates applicable to non-resident institutional investors, and hence give a
lower total return than indices where calculations are on a Gross basis (which
assumes that no withholding tax is suffered). As the Company is subject to
withholding tax rates for the majority of countries in which it invests, the
NR basis is felt to be the most accurate, appropriate, consistent and fair
comparison for the Company.
Sources: BlackRock, Standard & Poor’s Micropal
At month end
Net asset value - capital only: 327.97p
Net asset value - including income: 330.51p
Share price: 307.00p
Total assets#: £105.3m
Discount (share price to cum income NAV): 7.1%
Average discount* over the month – cum income: 11.0%
Net Gearing at month end**: 8.0%
Gearing range (as a % of net assets): 0-25%
Net yield##: 6.4%
Ordinary shares in issue(excluding 2,181,662 shares held in treasury): 29,448,641
Ongoing charges***: 1.13%
#Total assets include current year revenue.
##The yield of 6.4% is calculated based on total dividends declared in the
last 12 months as at the date of this announcement as set out below (totalling
24.70 cents per share) and using a share price of 386.56 US cents per share
(equivalent to the sterling price of 307.00 pence per share translated in to
US cents at the rate prevailing at 28 February 2025 of $1.2592 dollars to
£1.00).
2024 Q1 Interim dividend of 7.39 cents per share (Paid on 13 May 2024)
2024 Q2 Interim dividend of 6.13 cents per share (Paid on 08 August 2024)
2024 Q3 Interim dividend of 6.26 cents per share (Paid 08 November 2024)
2024 Q4 Interim dividend of 4.92 cents per share (Paid on 07 February 2025)
*The discount is calculated using the cum income NAV (expressed in sterling
terms).
**Net cash/net gearing is calculated using debt at par, less cash and cash
equivalents and fixed interest investments as a percentage of net assets.
*** The Company’s ongoing charges are calculated as a percentage of average
daily net assets and using the management fee and all other operating expenses
excluding finance costs, direct transaction costs, custody transaction
charges, VAT recovered, taxation and certain non-recurring items for the year
ended 31 December 2023.
Geographic Exposure % of Total Assets % of Equity Portfolio * MSCI EM Latin America Index
Brazil 58.3 58.4 61.0
Mexico 33.8 33.9 26.5
Multi-Country 3.5 3.5 0.0
Chile 2.3 2.3 6.6
Argentina 1.9 1.9 0.0
Colombia 0.0 0.0 1.8
Peru 0.0 0.0 4.1
Net current assets (inc. fixed interest) 0.2 0.0 0.0
----- ----- -----
Total 100.0 100.0 100.0
===== ===== =====
^Total assets for the purposes of these calculations exclude bank overdrafts,
and the net current assets figure shown in the table above therefore excludes
bank overdrafts equivalent to 8.2% of the Company’s net asset value.
Sector % of Equity Portfolio* % of Benchmark*
Materials 23.4 16.7
Financials 21.7 32.0
Consumer Discretionary 12.8 1.7
Consumer Staples 12.3 13.9
Industrials 7.7 10.7
Energy 7.2 11.2
Health Care 6.5 1.2
Real Estate 5.1 1.2
Information Technology 1.9 0.6
Utilities 1.4 7.2
Communication Services 0.0 3.6
----- -----
Total 100.0 100.0
===== =====
*excluding net current assets & fixed interest
Company Country of Risk % of % of
Equity Portfolio Benchmark
Vale: Brazil
ADS 7.5
Equity 1.2 5.9
Petrobrás: Brazil
Equity 1.2
Equity ADR 3.4 4.6
Preference Shares ADR 2.6 5.1
Grupo México Mexico 5.8 2.7
FEMSA: Mexico
ADR 1.0
Equity 3.8 3.0
Grupo Financiero Banorte Mexico 4.7 3.4
Walmart de México y Centroamérica Mexico 4.6 2.6
XP Brazil 4.1 1.0
Rede D'or Sao Luiz Brazil 4.0 0.7
B3 Brazil 3.9 1.8
Cyrela Brazil Realty Brazil 3.3 0.0
Commenting on the markets, Sam Vecht and Christoph Brinkmann, representing the
Investment Manager noted;
The Company’s NAV fell by -4.6% in February, underperforming the benchmark,
MSCI Emerging Markets Latin America Index, which returned -3.1% on a net basis
over the same period. All performance figures are in sterling terms with
dividends reinvested.1
While Emerging Markets (+0.5%) outperformed Developed Markets ( -0.7%) in
February, Latin America lagged. Latin America's underperformance was driven by
weakness in Brazil (-4.8%). Most other markets ended the month in positive
territory but their relative size in the region was not enough to offset
declines in Brazil; Colombia (+7.7%), Chile (+4.0%), Mexico (+3.2%).
At the portfolio level, an underweight position to Chile and security
selection in Mexico were the largest detractors to performance during the
month. On the other hand, security selection in Brazil helped on the margin.
From a security lens, an underweight to Brazilian digital banking platform
provider, NU Holdings, was the biggest contributor to relative returns after
releasing a disappointing set of earnings. No exposure to Brazilian electric
equipment firm, WEG, was another relative contributor. The stock fell after
their latest earnings report showed a deceleration in both year over year
margins and returns on invested capital. Our overweight position to Mexican
convenience store operator, FEMSA, also helped after the company reported an
acceleration in same store sales growth at their core convenience store Oxxo.
Fibra Uno, a Mexican real estate company, was another contributor. The company
announced that they would be spinning off their industrial real estate assets,
aiding the company's de-leveraging efforts.
On the flipside, our overweight position in Azzas 2154, the Brazilian footwear
retailer, was the largest detractor. Lojas Renner, the Brazilian retailer,
also hurt performance amidst broker downgrades and after their latest earnings
showed a miss on margins versus consensus. Brazilian healthcare operator,
Hapvida, also weighed on returns in February following a regulatory hearing
about proposed changes by the National Regulatory Agency for Private Health
Insurance and Plans (ANS), which could impact the entire healthcare sector.
We made few changes to the portfolio. During February we increased our
exposure to copper by adding to Grupo Mexico, a Mexican mining and transport
conglomerate. We also increased our exposure to Ero Copper, which is a
Canadian listed miner with their main operations in Brazil. Copper stocks have
lagged the copper price year to date, but we ultimately believe these stocks
will catch up over time. Following a sharp sell-off we re-initiated a
position in Globant, an IT services company. Elsewhere, we exited CCU, the
Chilean brewer.
Mexico is the largest portfolio overweight as of February end, while the
largest underweight is Peru.
Outlook
In Brazil and Mexico, many stocks trade on single-digit multiples while paying
double-digit dividend yields This is true for companies as diverse as Mexican
bank Banorte, Brazilian natural resource companies Vale and Petrobras as well
as real estate developer, Cyrela. The latter, for example, trades on 4x
price-to-earnings ratios and pays an 11% dividend yield (consensus
estimates).
Meanwhile, at a macroeconomic level the Brazilian real, which declined by
more than 20% in 2024, making Brazilian broad-range of exports much more
competitive. This together with higher interest rates might lead to a decline
in economic activity, less pressure on inflation and thus lower interest rates
down the line. This in turn should lift the multiples of equities.
Due to the volatility that Mexico has faced in 2024, the Mexican central bank
has been relatively more cautious in reducing rates, finishing the year with
its benchmark rate still at 10%, even though inflation has receded to around
4%. We therefore see scope for rate cuts to accelerate in 2025 and support
asset price performance. Furthermore, despite the claims of the media, we do
not see a major change in the secular trend of nearshoring of supply chains,
as Mexico will remain a much cheaper location to manufacture than the United
States. Mexico therefore remains our biggest overweight in the fund.
The portfolio is underweight the rest of Latin America to fund these high
conviction positions in Brazil and Mexico.
1Source: BlackRock, as of 28 February 2025.
27 March 2025
ENDS
Latest information is available by typing www.blackrock.com/uk/brla on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3
(ICV terminal). Neither the contents of the Manager’s website nor the
contents of any website accessible from hyperlinks on the Manager’s website
(or any other website) is incorporated into, or forms part of, this
announcement.
Copyright (c) 2025 PR Newswire Association,LLC. All Rights ReservedRecent news on Blackrock Latin American Investment Trust
See all newsREG-BlackRock Latin American Investment Trust Plc: Net Asset Value(s)
AnnouncementREG-BlackRock Latin American Investment Trust Plc: Total Voting Rights
AnnouncementREG-BlackRock Latin American Investment Trust Plc: Disclosure of Portfolio Holdings
AnnouncementREG-BlackRock Latin American Investment Trust Plc: Net Asset Value(s)
AnnouncementREG-BlackRock Latin American Investment Trust Plc: Net Asset Value(s)
Announcement