REG-BlackRock Latin American Investment Trust Plc: Portfolio Update

Blackrock Latin American Investment TrustAnnouncement

18/06/2025 16:30

The information contained in this release was correct as at 31 May 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 31 May 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^        6.1       17.1       -5.0     2.2       49.0      
 Share price             9.9       13.6       -1.2     -3.8      51.5      
 MSCI EM Latin America   0.6       6.3        -5.2     1.6       53.8      
  (Net Return)^^                                                           
 US Dollars:                                                               
 Net asset value^        7.1       25.4       0.7      9.5       62.6      
 Share price             11.0      21.7       4.7      3.1       65.4      
 MSCI EM Latin America   1.6       13.9       0.4      8.7       67.7      
  (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:                                         378.48p     
 Net asset value - including income:                                     381.94p     
 Share price:                                                            344.00p     
 Total assets#:                                                          £119.0m     
 Discount (share price to cum income NAV):                               9.9%        
 Average discount* over the month – cum income:                          11.2%       
 Net Gearing at month end**:                                             3.8%        
 Gearing range (as a % of net assets):                                   0-25%       
 Net yield##:                                                            4.9%        
 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 5.2% 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 463.90 US cents per share
(equivalent to the sterling price of 344.00 pence per share translated in to
US cents at the rate prevailing at 31 May 2025 of $1.3486 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 (Paid 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               58.4                     59.8                         
 Mexico                                    34.6               35.3                     28.2                         
 Multi-Country                             2.6                2.6                      0.0                          
 Argentina                                 2.1                2.1                      0.0                          
 Chile                                     1.6                1.6                      6.3                          
 Peru                                      0.0                0.0                      4.1                          
 Columbia                                  0.0                0.0                      1.6                          
 Net current assets (inc. fixed interest)  1.8                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 5.8% of the Company’s net asset value.

 

 Sector                  % of Equity Portfolio*  % of Benchmark*  
 Financials              23.0                    34.9             
 Materials               18.2                    15.5             
 Consumer Staples        15.0                    14.8             
 Consumer Discretionary  12.8                    1.5              
 Industrials             11.1                    10.3             
 Health Care             6.6                     0.9              
 Real Estate             5.9                     1.3              
 Energy                  5.3                     8.8              
 Information Technology  2.1                     0.7              
 Utilities               0.0                     7.6              
 Communication Services  0.0                     3.7              
                         -----                   -----            
 Total                   100.0                   100.0            
                         =====                   =====            

 

*excluding net current assets & fixed interest


 Company                              Country of Risk  % of                % of         
                                                        Equity Portfolio    Benchmark   
 Vale:                                Brazil                                            
 ADS                                                   6.5                              
 Equity                                                1.0                 5.5          
 Petrobrás:                           Brazil                                            
 Equity                                                0.9                              
 Equity ADR                                            2.5                 3.5          
 Preference Shares ADR                                 1.9                 4.0          
 Grupo México                         Mexico           5.3                 2.8          
 Grupo Financiero Banorte             Mexico           4.9                 3.8          
 Walmart de México y Centroamérica    Mexico           4.7                 2.9          
 FEMSA:                               Mexico                                            
 ADR                                                   0.9                              
 Equity                                                3.7                 3.1          
 XP                                   Brazil           3.8                 1.2          
 Rede D'or Sao Luiz                   Brazil           3.6                 0.9          
 Grupo Aeroportuario del Sureste      Mexico           3.4                 1.0          
 B3                                   Brazil           3.4                 2.2          

 

Commenting on the markets, Sam Vecht and Christoph Brinkmann, representing the
Investment Manager noted;

 

The Company’s NAV rose by +6.1% in May, significantly outperforming the
benchmark, the MSCI Emering Markets Latin America Index, which returned +0.6%
on a net basis over the same period. All performance figures are in sterling
terms with dividends reinvested. 

 

Emerging Markets had yet another positive month in May (+4.3%), but
underperformed Developed Markets (+6.0%) after three months of outperformance.
The gains were driven largely by the potential de-escalation of trade
tensions. Latin American performance was more muted, returning 1.6% in US
Dollar terms, where Peru was the best performing market, up +7.6%.

 

At the portfolio level, security selection in Brazil and Mexico were the
largest contributors to performance during the month. On the other hand, an
overweight exposure to an IT services name in Argentina detracted from
performance.

 

From a security lens, an overweight position to a collection of Brazilian
consumer names did well, with Azzas 2154, Lojas Renner and Alpargatas all
contributing to performance after delivering strong Q1 earnings. XP, the
Brazilian investment management platform, also did well on the back of decent
results. An overweight position in Brazilian Health Care names, Hapvida and
Rede D'or, also aided performance during the month. Hapvida reported a decline
in net new judicial deposits, which was seen as a positive for the sector
overall.

 

On the flipside, the biggest detractor over the month was our overweight
position in IT services company, Globant. The stock pulled back on a poor set
of earnings and weaker than expected guidance. Not owning Peruvian bank
Credicorp was another relative detractor.

 

Whilst portfolio positioning remained largely unchanged in May, we did take
advantage of the strong performance in Brazil year-to-date to take some
profits on domestic names like Azzas 2154 and Rede D'or. We also sold out of
Brazilian electric utility company, Energisa and added to Brazilian car rental
company, Localiza, as we see greater upside for the latter.

 

Mexico remains the largest portfolio overweight as at the end of May, while
Chile is the largest underweight. 

 

Outlook

 

Latin American equities have re-bounded sharply in 2025, and have outperformed
both broader MSCI Emerging Markets and MSCI World indices proving to be an
unlikely defensive candidate amid an increasingly volatile world. Within Latin
America, inflation has surprised to the downside in some countries, interest
rate expectations are falling, and earnings across several sectors are beating
forecasts. Despite this, valuations remain attractive.

 

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. President Sheinbaum's pragmatic approach to trade
negotiations underscores this view.

 

Whilst we have recently taken some profits on our domestic Brazil exposure, we
remain positive on the country on a 12-18 month view and believe there is
still room for significant upside. 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 31 May 2025.

 

18 June 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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