BlackRock Frontiers Investment Trust NAV returned +0.1%, outperforming its benchmark

BlackRock

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

The information contained in this release was correct as at 31 January 2021.  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 FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 31 January 2021 and unaudited.

Performance at month end with net income reinvested.

One
 month
%
Three
months
%
One
 year
%
Three
 years
%
Five
 years
%
Since 
Launch*
%
Sterling:
Share price0.826.88.1-17.448.672.9
Net asset value-0.421.04.4-14.143.776.0
Benchmark (NR)**-1.110.0-5.5-7.541.749.2
MSCI Frontiers Index (NR)-0.14.0-2.2-1.750.759.8
MSCI Emerging Markets Index (NR)2.613.822.817.9108.073.2
US Dollars:
Share price1.334.712.6-20.244.052.9
Net asset value0.128.58.8-17.039.255.4
Benchmark (NR)**-0.716.9-1.6-10.737.232.5
MSCI Frontiers Index (NR)0.410.51.9-5.045.940.7
MSCI Emerging Markets Index (NR)3.120.927.913.9101.452.5

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:162.83c
Net asset value – cum income:163.97c
Sterling:
Net asset value – capital only:118.57p
Net asset value – cum income:119.40p
Share price:119.50p
Total assets (including income):£288.0m
Premium to cum-income NAV:0.1%
Gearing:nil
Gearing range (as a % of gross assets):0-20%
Net yield*:4.4%
Ordinary shares in issue**:241,210,518
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 4.4% and includes the 2020 final dividend of 4.25 cents per share declared on 11 December 2020 with a pay date of 12 February 2021. Also included is the 2020 interim dividend of 2.75 cents per share, announced on 28 May 2020 and paid to shareholders on 26 June 2020.

** Excluding 612,283 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.

Sector
Analysis
Gross market value as a % of net assets*Country
Analysis
Gross market value as a % of net assets*
Financials31.1Indonesia12.6
Consumer Discretionary15.9Saudi Arabia11.8
Materials15.1Vietnam8.6
Industrials13.5Philippines7.8
Energy9.8Kazakhstan7.3
Consumer Staples8.2Egypt7.1
Real Estate5.9Thailand6.8
Utilities3.3Greece6.5
Communication Services3.0Chile5.1
Health Care2.4Malaysia4.5
Information Technology2.2Poland4.1
—–Turkey3.8
110.4Pakistan3.6
—–United Arab Emirates3.3
Short positions-1.1Qatar3.2
=====Romania2.1
Hungary1.9
Peru1.6
Colombia1.5
Pan Africa1.5
Pan-Emerging Europe1.4
Ukraine1.4
Panama1.4
Kenya1.2
Nigeria0.3
        —–
Total110.4
—–
Short positions-1.1
=====

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

Market Exposure

29.02
 2020
    %
31.03
 2020
    %
30.04
 2020
    %
31.05
 2020
    %
30.06
 2020
    %
31.07
 2020
    %
31.08
 2020
    %
30.09
 2020
    %
31.10
 2020
    %
30.11
 2020
    %
31.12
 2020
    %
31.01
 2021
    %
Long107.1106.4105.9109.6109.8110.3110.2107.8106.9107.3107.9110.4
Short 3.8 2.5 2.6 2.5 1.5 1.1 0.0 0.0 0.0 0.0 1.1 1.1
Gross110.9108.9108.5112.1111.3111.4110.2107.8106.9107.3109.0111.6
Net103.3103.9103.3107.1108.3109.2110.2107.8106.9107.3106.8109.4

Ten Largest Investments

CompanyCountry of RiskGross market value as a % of net assets*
Mobile WorldVietnam2.9
JSC KaspiKazakhstan2.9
PTT Exploration & Production PublicThailand2.8
Emaar PropertiesUnited Arab Emirates2.8
Indocement Tunggal PrakarsaIndonesia2.8
CP All PCLThailand2.6
Eastern TobaccoEgypt2.5
LT GroupPhilippines2.4
United International TransportSaudi Arabia2.4
National Commercial BankSaudi Arabia2.3
*These percentages reflect portfolio exposure gained from both the equity holdings and exposure through contracts for differences where relevant.

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

BlackRock Frontiers Investment Trust’s NAV returned +0.1%1 versus the Company’s benchmark (the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”)), which returned -0.7% in January2. For reference, the MSCI Emerging Markets Index ended the month +3.1% and the MSCI Frontier Markets Index +0.4%2 over the same period (all performance figures are on a US Dollar basis with net income reinvested).

January saw mixed news. Many emerging economies continued to see a rebound in activity, whilst those in the western world were mainly plunged into further lock downs following a second wave of Covid-19. Concerns that emerged mid-month around new Covid-19 variants tempered the very strong market moves that we had seen in the first half of the month.

Smaller markets tended to fare better in January, catching up with the strong performance we had seen in larger markets at the end of last year, notably UAE (+12%), Egypt (+8%) and Pakistan (+5%).

Having seen fairly muted returns to our Egyptian positions in 2020, our patience has finally seen some reward. Eastern Tobacco rose 15% after reporting results that beat expectations with the company showing strong cost control. Orascom Construction rose 14% after signing a Memorandum of Understanding with the Egyptian government to develop the first high speed rail line system in the country, an order value of $3bn.

Positions in Vietnam also performed well. Our long standing holding in Mobile World Group reached a new all-time high after reporting better than expected results showing that it’s grocery division had grown to reach 20% of total sales. Tech company, FPT (+6%) also reported better than expected results on the back of a number of contract wins in their software outsourcing division.

On the opposite side of the ledger, increased Covid-19 restrictions have had a negative impact on a number of positions. Saudi Arabian gym operator, Leejam fell 8% as they were forced to close all their gyms for 10 days and the National Bank of Greece fell 14% giving up some of the 150% rally it had seen over the previous 2 months as lockdown restrictions were extended through January.

Over the month we rotated the portfolio somewhat, taking some profits in stocks which have recovered exceptionally well such as Ukrainian miner Ferrexpo and Panamanian airline Copa, whilst also adding new positions in stocks that are yet to see such a recovery such as Colombian Financial Bancolombia and Emirati real estate developer, Emaar Properties.

We continue to be positioned for a rebound in global economic activity which we expect to see over the next six months. We believe that the combination of strong liquidity, easy financial conditions and high levels of disposable income is a very powerful mix for earnings growth, a factor that has been scarce in emerging markets for an extended period. Even now, despite the strong bounce, we believe that frontier and small emerging markets contain some of the best valued companies globally with a number of markets still trading significantly below their average 10 year price to book valuations.

Sources:

1BlackRock as at 31 January 2021

2MSCI as at 31 January 2021

18 February 2020

You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi

Find more news, interviews, share price & company profile here for:
BlackRock Frontiers Investment Trust plc

Good news travels fast (but only if you make that happen):

Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on facebook
Facebook
Share on email
Email
Share on whatsapp
WhatsApp
Find more news, interviews, share price & company profile here for:
BlackRock Frontiers Investment Trust plc

AIM All Share Index