BlackRock Frontiers Investment Trust NAV returned +18.6%, outperforming its benchmark


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

All information is at 30 November 2020 and unaudited.

You can discover more about the trust at

Performance at month end with net income reinvested.

Share price14.317.4-9.7-23.530.955.8
Net asset value14.915.7-5.3-11.332.467.2
Benchmark (NR)**9.27.8-7.9-4.838.648.1
MSCI Frontiers Index (NR)0.86.3-3.0-
MSCI Emerging Markets Index (NR)5.810.014.717.187.661.0
US Dollars:
Share price18.017.6-6.8-24.516.233.9
Net asset value18.615.9-2.3-12.417.643.5
Benchmark (NR)**12.77.5-5.0-6.122.927.8
MSCI Frontiers Index (NR)
MSCI Emerging Markets Index (NR)9.29.718.415.566.437.8

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:152.39c
Net asset value – cum income:155.33c
Net asset value – capital only:114.14p
Net asset value – cum income:116.35p
Share price:110.50p
Total assets (including income):£280.6m
Discount to cum-income NAV:5.0%
Gearing range (as a % of gross assets):0-20%
Net yield*:5.2%
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 5.2% and includes the 2019 final dividend of 4.75 cents per share declared on 06 December 2019 with a pay date of 07 February 2020. 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.

Gross market value as a % of net assets*Country
Gross market value as a % of net assets*
Consumer Discretionary18.8Saudi Arabia12.3
Consumer Staples6.1Egypt6.3
Real Estate5.3Chile5.3
Communication Services3.2Greece5.1
Health Care2.5Malaysia4.5
Information Technology2.1Poland4.1
Short positions0.0Panama2.2
Pan-Emerging Europe1.8
United Arab Emirates1.6
Czech Republic1.1
Short positions0.0

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

Market Exposure

Short 1.0 1.1 3.8 2.5 2.6 2.5 1.5 1.1 0.0 0.0 0.0 0.0

Ten Largest Investments

CompanyCountry of RiskGross market value as a % of net assets
Indocement Tunggal PrakarsaIndonesia3.1
Mobile WorldVietnam2.8
PTT Exploration & Production PublicThailand2.7
Astra InternationalIndonesia2.7
United International TransportSaudi Arabia2.5
LT GroupPhilippines2.5
JSC KaspiKazakhstan2.5
National Commercial BankSaudi Arabia2.4
Quimica Y Minera – ADRChile2.3
CP All PCLThailand2.3

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

The Company’s NAV returned +18.6% versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which returned +12.7% in November. For reference, the MSCI Emerging Markets Index ended the month +9.2% and the MSCI Frontier Markets Index +4.1% over the same period (all performance figures are on a US Dollar basis with net income reinvested).

November was a fantastic month for the Company. As we have discussed extensively over the last 7 months, the Company is positioned for a normalizing economic environment and a return of emerging market growth as COVID-19 pressures ease. News flow around various vaccines point to significantly higher than expected efficacy and has given investors confidence that we can see normalisation come through in 2021. On the back of this, we saw strong returns to our positioning, as domestic financials and industrials rallied strongly.

South East Asian countries led performance this month. In the Philippines, casino operator Bloomberry (+27%) rose as operations resumed and conglomerate GT capital (+36%) benefited from auto sales rising 3x quarter over quarter from Q2 to Q3. Our stock selection in Malaysia was particularly strong led by newly listed company Mr DIY (+55%) which reported a better than expected set of maiden results with net profit up 54% year on year for the quarter. In Indonesia, clothing retailer, Mitra Adiperkasa (27%) and Indocement (+21%) joined the rally as their results showed ongoing sequential improvement.

Eastern European financials were another top contributor to returns. National bank of Greece (+74%), Erste bank (+42%) and Banca Transilvania (19%) joined the global rally that we saw in this sector. Particularly in this region, we are expecting that the current market expectations around the costs of bad loans that banks will have to bear will prove too conservative given the extensive support that governments have given direct to their citizens through this crisis.

Another industry that saw strong anticipation of normalization was the airline industry. Panamanian operator, Copa Airlines (+62%) should find itself in a better competitive position post versus prior to the pandemic given the difficulties that some of its competitors with weaker balance sheets have found themselves in.

We have also seen good performance from SQM in Chile, a Lithium producer geared to the electric vehicle demand trends that we continue to see throughout the world and in particular within China.

In a highly unusual state of affairs, the fund held only two positions which were actually down this month. Hub Power company in Pakistan fell 3% and recently listed Saudi retailer Bindawood fell 5% after a very strong performance on listing in October.

In terms of relative performance, our underweight to Thailand was the most costly, as the market rallied strongly on anticipation of a normalization of tourism arrivals next year. Despite this positive driver, we continue to find better opportunities elsewhere, finding the long-term growth opportunities and valuations offered in Thailand unattractive.

As markets have rallied, we have locked some profits on stocks that have shown very strong performance, such as LT Group in the Philippines, and Bank Mandiri in Indonesia. However, in aggregate we have traded little, choosing to maintain current portfolio positioning.

We continue to be positioned for a strong 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.


1BlackRock as at 30 November 2020

2MSCI as at 30 November 2020

17 December 2020

You can discover more about the BlackRock Frontiers Investment Trust at

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