BlackRock Frontiers Investment Trust benchmark extend its YTD outperformance over Emerging Markets


BlackRock Frontiers Investment Trust plc (LON:BRFI) has announced its latest portfolio update.

All information is at 30 September 2021 and unaudited.

You can discover more about the BlackRock Frontiers Investment Trust at

Performance at month end with net income reinvested.

Share price-1.61.736.90.716.980.0
Net asset value2.17.446.716.531.7106.8
Benchmark (NR)**0.96.322.13.932.867.5
MSCI Frontiers Index (NR)3.35.926.831.651.892.8
MSCI Emerging Markets Index (NR)-2.0-5.813.323.849.869.0
US Dollars:
Share price-3.6-0.842.84.221.456.3
Net asset value0.04.853.020.536.879.3
Benchmark (NR)**-1.13.727.37.437.946.0
MSCI Frontiers Index (NR)1.23.432.236.157.666.7
MSCI Emerging Markets Index (NR)-4.0-

Sources: BlackRock and Standard & Poor’s Micropal

* 17 December 2010.

** The Company’s benchmark changed from MSCI Frontier Markets Index to MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (net total return, USD) effective 1/4/2018.

At month end
US Dollar
Net asset value – capital only:181.23c
Net asset value – cum income:186.32c
Net asset value – capital only:134.40p
Net asset value – cum income:138.17p
Share price:122.50p
Total assets (including income):£261.6m
Discount to cum-income NAV:11.3%
Gearing range (as a % of gross assets):0-20%
Net yield*:3.4%
Ordinary shares in issue**:189,325,748
Ongoing charges***:1.4%
Ongoing charges plus taxation and performance fee:1.4%

*The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 3.4% and includes the 2020 final dividend of 4.25 cents per share declared on 11 December 2020 which paid on 12 February 2021. Also included is the 2021 interim dividend of 2.75 cents per share, announced on 01 June 2021 and paid to shareholders on 25 June 2021.

** Excluding 52,497,053 ordinary shares held in treasury.

***Calculated as a percentage of average net assets and using expenses, excluding Performance fees and interest costs for the year ended 30 September 2020.

Gross market value as a % of net assetsCountry
Gross market value as a % of net assets
Financials36.3Saudi Arabia18.2
Consumer Discretionary15.5Indonesia11.1
Consumer Staples6.8Kazakhstan6.5
Information Technology5.3Hungary5.8
Real Estate4.3Malaysia5.6
Health Care4.0Egypt5.6
Communication Services1.4United Arab Emirates5.1
Short positions-0.4Kenya2.1
United States1.9
Short positions-0.4

*reflects gross market exposure from contracts for difference (CFDs).

Market Exposure

Short 0.0 0.0 1.1 1.1 4.5 3.4 2.5 2.3 4.6 2.3 0.6 0.4

Ten Largest Investments

CompanyCountry of RiskGross market value as a % of net assets
National Commercial BankSaudi Arabia4.8
Bank RakyatIndonesia3.8
Mobile WorldVietnam3.8
Saudi British BankSaudi Arabia3.2
Emaar PropertiesUnited Arab Emirates3.1
OTP BankHungary3.0
CP AllThailand2.7

Commenting on the markets, Sam Vecht and Emily Fletcher, representing the   Investment Manager noted:

The Company’s NAV returned 0.0% versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which returned -1.1% in September. For reference, the MSCI Emerging Markets Index ended the month -4.0% and the MSCI Frontier Markets Index +1.2% over the same period. Over the twelve months ended 30 September 2021, the Company returned +53.0%, while its Benchmark Index returned +27.3%. For reference, the MSCI Emerging Markets Index ended the period +18.2% while MSCI Frontier Markets was up 32.2% over this period (all performance figures are on a US Dollar basis with net income reinvested).

September saw our benchmark extend its YTD outperformance over Emerging Markets.  Given the delay in vaccination rollout, many frontier and emerging countries are now just starting to see the acceleration in economic activity which more developed countries have been enjoying through 2021. Continued high commodity prices are driving exports and helping to support trade balances in countries such as Chile, Saudi Arabia and Indonesia. Emerging markets have been hurt by a substantial negative contribution from China (-17% YTD), where increased government regulations in the internet, education and financial sectors coupled with a slowdown in economic activity have weighed on sentiment.

While more muted than August, many countries in the universe finished September well, led by Indonesia (+3.4%), Colombia (+3.2%) and Saudi Arabia (+2.8%) which benefited from rising oil prices. Turkey (-12.4%), Argentina (-12.1%), Egypt (-7.7%) and Thailand (-7.1%) were the worst performers. 

In terms of contributors to performance over the month, the largest driver was our stock selection in Vietnam, especially electronics retailer Mobile World (+15.2%).  We participated in the IPO of Arabian Internet and Communication Services, the technology solutions arm of Saudi Telecom which was additive with the stock up strongly after the IPO (+29.9%). Kazakh uranium producer Kazatomprom (+25.7%) was an additional contributor. An underweight position in Thailand also helped returns.

Primary detractors from performance in August were our holdings in Greece, particular in financials National Bank of Greece (-7.3%) and Eurobank (-1.5%).  While our holdings in Greece hurt returns this month, we remain confident in our holdings there. Our position in Ukraine via metals player Ferrexpo (-16.0%) hurt returns as the stock continued to come under pressure from a normalization in iron ore prices. Elsewhere our holdings in Chile through pulp and paper company CMPC (-12.4%) and retailer Falabella (-11.0%) were additional detractors amid volatility leading into the November presidential election.

We made a few changes to the portfolio in September. We initiated a position in Arabian Internet and Communication Services as part of its IPO. We see substantial upside for the stock to re-rate compared to peers trading on higher multiples. We upped our holdings in Indonesia given the underperformance of the region and our expectations of a COVID reopening rally as we have seen elsewhere. We added financial Rakyat which is being weighed down by concerns over its rights issue and asset quality. In our view their return on assets is high and we believe they can generate sufficient profitability to grow out of these problems and return to generating a higher ROE. Elsewhere in Asia we moved around our Thai holdings, swapping out Energy company PTT which had rallied with oil and into hospital operator BDMS which we think could benefit from the re-opening of tourism to the country. We trimmed a number of our holdings on strength including Saudi mining company Maaden, Kazakh Uranium producer Nak Kazatromprom and port management company International Container Terminal based in the Philippines. We also sold down Turkish airline Pegasus on macro policy concerns.

Overall, for countries that have stable macro environments and have made timely progress in vaccination rollouts, we believe the global macro recovery provides a favourable backdrop to recover lost economic productivity. Valuations in a lot of the frontier end emerging markets remain attractive relative to their own history and also relative to the more evolved markets. We believe our opportunity set is a compelling universe to generate alpha.


1BlackRock as at 30 September 2021

2MSCI as at 30 September 2021

18 October 2021

You can discover more about the BlackRock Frontiers Investment Trust at

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