BlackRock Frontiers Investment Trust NAV returned +3.0% versus its benchmark which returned +1.9% in May


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

All information is at 31 May 2021 and unaudited.

You can discover more about the BlackRock Frontiers Investment Trust at

Performance at month end with net income reinvested.

Share price-3.81.536.6-12.630.372.1
Net asset value0.65.535.6-2.941.588.1
Benchmark (NR)**-0.83.810.9-4.335.954.4
MSCI Frontiers Index (NR)1.39.619.313.550.672.3
MSCI Emerging Markets Index (NR)-1.20.730.222.394.372.6
US Dollars:
Share price-1.52.956.7-6.827.057.2
Net asset value3.
Benchmark (NR)**1.95.527.62.232.841.9
MSCI Frontiers Index (NR)4.011.537.221.347.157.1
MSCI Emerging Markets Index (NR)

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:177.80c
Net asset value – cum income:180.97c
Net asset value – capital only:125.40p
Net asset value – cum income:127.64p
Share price:119.00p
Total assets (including income):£241.7m
Discount to cum-income NAV:6.8%
Gearing range (as a % of gross assets):0-20%
Net yield*:4.2%
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 4.2% 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 due to pay 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
Financials35.9Saudi Arabia15.0
Consumer Discretionary13.9Indonesia10.2
Consumer Staples6.1Kazakhstan6.5
Real Estate4.4Egypt5.7
Information Technology3.1Chile5.6
Health Care2.5Philippines5.2
Communication Services1.3United Arab Emirates4.7
Short positions-2.3Peru2.2
Pan-Emerging Europe1.8
Short positions-2.3

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

Market Exposure

Short 1.5 1.1 0.0 0.0 0.0 0.0 1.1 1.1 4.5 3.4 2.5 2.3

Ten Largest Investments

CompanyCountry of RiskGross market value as a % of net assets
National Commercial BankSaudi Arabia3.3
Emaar PropertiesUnited Arab Emirates3.2
Mobile WorldVietnam3.1
Bank RakyatIndonesia3.0
CP AllThailand2.9
National Bank of GreeceGreece2.6
Saudi British BankSaudi Arabia2.5

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

The Company’s NAV returned +3.0%1 versus the Company’s benchmark (the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”)), which returned +1.9% in May2. For reference, the MSCI Emerging Markets Index ended the month +2.1% and the MSCI Frontier Markets Index +4.0%2 over the same period (all performance figures are on a US Dollar basis with net income reinvested).

Frontier and emerging markets ended the month well after a sell-off intra-month. MSCI Emerging Markets rose by 2.1% in May, outperforming Developed Markets (MSCI World). The first half of the month saw the markets under pressure, triggered by higher-than-expected inflation in the US, which revived concerns of tighter monetary policy worldwide. Rising COVID-19 cases across the Emerging Markets added to investor woes. As the month progressed, positive news regarding the global economic outlook accompanied by US Dollar weakness helped emerging and frontier markets stage a rebound to end the month in positive returns. We continue to believe the coming months will remain challenged by covid-related newsflow while our base case for broad based economic normalization in H2 2021 remains unchanged. We believe that frontier assets remain very attractively valued in this context.

Among regions, Emerging Latin America was the best performer (+7.3%) in May followed by EMEA (+5.3%) and Emerging Asia (+1.1%). Peru led in Latin America (+10.2%) against the backdrop of its Presidential election. Many Central and Eastern European countries also performed strongly over the month with the MSCI Hungary (+16.0%), MSCI Poland (+13.5%) and MSCI Czech Republic (+10.6%). Most were led by positive earnings revisions and foreign exchange strength. 

Our positions in Vietnam and Poland contributed the most to the portfolio in May.  Our holding in information technology (IT) services company FPT benefited from investor’s expectation that FPT could benefit from Indian IT companies impacted by the COVID-19 situation in India. We took some profit in the name on the back of strong performance. In Poland, collection agency Kruk (+46.6%) and apparel retailer LPP (+18.2%) contributed to returns after both reported strong Q1 earnings numbers. Our holding in Indonesia was the biggest detractor over the month, led by Indonesian retailer MAPI (-11.5%).

We made a few changes to the portfolio in May. We took profits in some of our holdings which have done well and where we think our investment view is now at least in part in the price. These included payments company Kaspi and Yansab where we view limited further upside from oil prices.  We switched up some ASEAN exposure. We sold down financial Aeon in Thailand taking profit as the stock has re-rated to reflect fair market value in our view. To keep Thailand exposure we initiated a position in petrochemical company IRPC which should benefit from current commodity spreads and rising margins. We added to Indonesia where the market looks cheap in context of the economy eventually reopening. The current account looks strong which should support domestic liquidity and growth should pick up as the economy reopens. We added to our position in Credicorp in Peru last month and had been monitoring the very close results in the presidential election of 6th June which leftish candidate Pedro Castillo won. This adds some uncertainty to what looks like an improving macro backdrop given Peru’s weak currency while the country’s terms of trade improved significantly with the rise in commodity prices. 

Globally the economy is recovering quickly and supported by a very accommodative policy mix in the developed world with extraordinary levels of both fiscal and monetary support. We believe this backdrop is likely to be inflationary given the broad spending plans across private and public spending, which are being reflected in rising commodity prices. While we see the potential for higher rates globally which could put global equity multiples under pressure we note that frontier markets are at a very different starting point given a number of markets still trading significantly below their average 10-year price to book valuations. We believe that frontier markets continue to look very attractive against this backdrop both on a relative and absolute basis.


1BlackRock as at 31 May 2021

2MSCI as at 31 May 2021

21 June 2021

You can discover more about the BlackRock Frontiers Investment Trust at

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