REG-BlackRock Latin American Investment Trust Plc: Portfolio Update
13/05/2025 16:00
The information contained in this release was correct as at 30 April 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 30 April 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^ 5.9 5.3 -14.4 1.6 52.9
Share price 3.7 4.1 -12.9 -6.3 49.8
MSCI EM Latin America 3.3 2.4 -10.3 8.8 65.9
(Net Return)^^
US Dollars:
Net asset value^ 9.6 13.2 -8.6 8.1 62.0
Share price 7.4 11.9 -7.1 -0.2 58.8
MSCI EM Latin America 6.9 10.0 -4.3 15.8 75.7
(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: 358.48p
Net asset value - including income: 359.92p
Share price: 313.00p
Total assets#: £116.1m
Discount (share price to cum income NAV): 13.0%
Average discount* over the month – cum income: 11.7%
Net Gearing at month end**: 7.0%
Gearing range (as a % of net assets): 0-25%
Net yield##: 5.5%
Ordinary shares in issue(excluding 2,181,662 shares held in treasury): 29,448,641
Ongoing charges***: 1.23%
#Total assets include current year revenue.
##The yield of 5.5% is calculated based on total dividends declared in the
last 12 months as at the date of this announcement as set out below (totalling
22.86 cents per share) and using a share price of 418.07 US cents per share
(equivalent to the sterling price of 313.00 pence per share translated in to
US cents at the rate prevailing at 30 April 2025 of $1.3357 dollars to
£1.00).
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)
2025 Q1 Interim dividend of 5.55 cents per share (Payable on 15 May 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 2024.
Geographic Exposure % of Total Assets % of Equity Portfolio * MSCI EM Latin America Index
Brazil 57.3 58.6 60.4
Mexico 32.6 33.4 27.6
Multi-Country 3.5 3.5 0.0
Argentina 2.6 2.7 0.0
Chile 1.8 1.8 6.3
Peru 0.0 0.0 4.0
Columbia 0.0 0.0 1.7
Net current assets (inc. fixed interest) 2.2 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 9.5% of the Company’s net asset value.
Sector % of Equity Portfolio* % of Benchmark*
Financials 24.5 34.8
Materials 18.3 15.5
Consumer Discretionary 13.9 1.5
Consumer Staples 13.0 15.2
Industrials 8.2 10.3
Health Care 6.8 0.8
Real Estate 5.7 1.2
Energy 5.4 8.7
Information Technology 2.7 0.5
Utilities 1.5 7.7
Communication Services 0.0 3.8
----- -----
Total 100.0 100.0
===== =====
*excluding net current assets & fixed interest
Company Country of Risk % of % of
Equity Portfolio Benchmark
Vale: Brazil
ADS 6.4
Equity 1.1 5.7
Petrobrás: Brazil
Equity 0.9
Equity ADR 2.5 3.5
Preference Shares ADR 2.0 4.0
Grupo México Mexico 5.2 2.7
Grupo Financiero Banorte Mexico 5.0 3.7
Walmart de México y Centroamérica Mexico 4.8 2.8
FEMSA: Mexico
ADR 1.0
Equity 3.7 3.1
Rede D'or Sao Luiz Brazil 4.2 0.8
XP Brazil 4.1 1.0
Nu Holdings Ltd Brazil 3.7 6.6
B3 Brazil 3.4 2.2
Commenting on the markets, Sam Vecht and Gordon Fraser, representing the
Investment Manager noted;
The Company’s NAV rose by +5.9% in April, outperforming the benchmark, the
MSCI Emerging Markets Latin America Index, which returned +3.3% on a net basis
over the same period. All performance figures are in sterling terms with
dividends reinvested.1
Emerging Markets had another positive month in April, gaining +1.0%, and once
again outperforming US and Developed Markets equities despite heightened trade
policy uncertainty. Latin America (+6.3%) was the best performing region.
Mexico led the way with a +12.3% gain, driven by a relatively low 7%-8%
accumulated tariff compared to around 28% in Asia and 20% in Europe. The
market was also bolstered by strong exports in the manufacturing sector in the
first quarter, as companies front-loaded ahead of tariffs. Meanwhile,
Brazil’s market saw a +4.3% increase in April.
At the portfolio level, security selection in Brazil and an overweight
position to Mexico were the largest contributors. On the other hand, security
selection in Chile hurt.
From a security lens, an overweight position to Brazilian footwear retailer,
Azzas 2154, was the largest contributor, rebounding from March lows. Another
stock that did well was financial technology and software solutions provider,
StoneCo. An underweight position to Brazilian state-owned oil producer,
Petrobras, was another relative contributor. The oil price experienced a sharp
drop amidst Donald Trump’s tariff threats and concerns around their
potential impact on global growth. Lojas Renner, the Brazilian retailer, was
also additive to relative returns after a broker upgrade.
On the flipside, the biggest detractor over the month was our overweight
position in Brazilian real estate developer, EZ Tec. Whilst the first quarter
operational data was decent, the number fell short of buy-side expectations.
Brazilian iron ore producer, Vale, was another detractor as the stock fell on
the back of a 1Q production miss following heavy rainfall.
Portfolio positioning remained largely unchanged in April. We took profits in
B3 and Bradesco, as the stocks have delivered strong relative returns over the
past two months while we topped up our position in NU Holdings, which has
lagged. We continued to add to our holding in IT services company Globant, on
the view that the stock looked oversold ahead of the US tariff announcement.
Mexico remains the largest portfolio overweight as of April end, while Chile
is the largest underweight.
Outlook
With Donald Trump securing a second term, there is potential for an
acceleration in the already shifting geopolitical landscape. The President has
been clear on his “America First” policy since his inauguration, which in
our view is supportive of our “World in 3” narrative where we see a world
splitting into three groups: those aligned with China, those aligned with the
US and the rest (neutrals). Markets have entered a new regime where there is
greater division of geopolitical ideology. Trade lines and supply chains are
being redrawn, and ‘neutral’ countries, many of which are in Latin
America, stand to benefit from this economic fragmentation.
Year-to-date, Latin America has outperformed broader MSCI Emerging Markets
Index by as much as 16%, and the MSCI World Index by 20%, proving to be an
unlikely defensive candidate amid an increasingly volatile world. Despite this
run, Latin American equities are still cheap - notably, the MSCI Emerging
Market Latin America Index is currently trading at a discount to both broader
Emering Markets and the US. Yet, the region is still broadly out of favour.
We see interesting bottom-up opportunities particularly in Mexico and Brazil.
In Mexico, 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. Sheinbaum's pragmatic approach to trade negotiations
underscores this view.
In Brazil, we favour companies with lower leverage and stronger earnings
outlook. Given cheap valuations, we also see the potential for share
buybacks supporting the market in 2025.
1Source: BlackRock, as of 30 April 2025.
13 May 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.
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