BlackRock Frontiers Investment Trust NAV returned +3.2% outperforming its benchmark


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

All information is at 30 April 2021 and unaudited.

You can discover more about the BlackRock Frontiers Investment Trust at

Performance at month end with net income reinvested.

Share price-1.03.647.2-13.737.979.0
Net asset value2.96.341.2-7.944.587.1
Benchmark (NR)**2.24.317.6-5.939.355.6
MSCI Frontiers Index (NR)6.56.427.05.351.270.1
MSCI Emerging Markets Index (NR)2.10.935.523.690.774.7
US Dollars:
Share price-0.74.461.6-13.230.559.6
Net asset value3.27.255.0-7.336.766.6
Benchmark (NR)**
MSCI Frontiers Index (NR)6.87.339.45.842.951.0
MSCI Emerging Markets Index (NR)2.51.748.724.380.255.1

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:172.88c
Net asset value – cum income:175.75c
Net asset value – capital only:124.87p
Net asset value – cum income:126.94p
Share price:123.75p
Total assets (including income):£240.3m
Discount to cum-income NAV:2.5%
Gearing range (as a % of gross assets):0-20%
Net yield*:4.3%
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 4.3% 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 2020 interim dividend of 2.75 cents per share, announced on 28 May 2020 and paid to shareholders on 26 June 2020.

** 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
Financials36.7Saudi Arabia18.2
Consumer Discretionary14.5Greece10.0
Consumer Staples6.4Kazakhstan6.5
Real Estate4.3Egypt6.0
Information Technology3.4Chile5.7
Health Care2.5Philippines5.1
Utilities1.6United Arab Emirates4.5
Communication Services1.3Malaysia4.2
Short positions-2.5Peru1.9
Pan-Emerging Europe1.6
Pan Africa0.1
Short positions-2.5

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

Market Exposure

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

Ten Largest Investments

CompanyCountry of RiskGross market value as a % of net assets
Saudi National BankSaudi Arabia3.6
Mobile WorldVietnam3.6
Emaar PropertiesUnited Arab Emirates3.1
CP AllThailand3.1
PTT Exploration & ProductionThailand2.9
Yanbu National PetrochemicalSaudi Arabia2.7
National Bank of GreeceGreece2.7
Bank RakyatIndonesia2.7

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

The Company’s NAV returned +3.2%1 versus the Company’s benchmark (the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”)), which returned +2.5% in April2. For reference, the MSCI Emerging Markets Index ended the month +2.5% and the MSCI Frontier Markets Index +6.8%2 over the same period (all performance figures are on a US Dollar basis with net income reinvested).

Frontier and emerging markets did well in April, helped in part by some US Dollar weakness as US yields retraced some of their earlier moves higher. In addition, commodity prices had a strong month with prices of several materials across oil, metals and agriculture up high single to low double digits. While markets in aggregate continue to look through the worsening Covid-19 situation in many emerging markets, headlines were dominated by rapidly rising cases in many of our markets across South East Asia and Latin America. The vaccine availability and rollout in most of these markets remains slow. We continue to believe the coming months will remain challenged by Covid-19 related news flow while our base case for broad based economic normalization in H2 2021 remains unchanged. We believe frontier assets remain very attractively valued in this context. 

Many Central and Eastern European countries performed best in April, with the MSCI Poland up 9.4%, the MSCI Greece up 7.2% and the MSCI Kazakhstan up 14.8%.  Most of our Latin American markets were the laggards in April amid political uncertainty and renewed Covid-19 cases and lockdowns (MSCI Peru -6.4%, MSCI Colombia -7.0% and MSCI Chile -9.3%).

Our positions in Greece and Kazakhstan contributed the most in April. All of our financial holdings in Greece, particularly National Bank of Greece (+6.4%) and Eurobank (+11%) contributed strongly. Our conviction in these positions remains strong given our belief that post Piraeus’s capital raise, in which we participated, these three banks now have enough capital to reduce the non-performing loan exposure that built up during the Global Financial Crisis. For the sector to perform further we need to see the return of loan growth and continued cost reductions and we have confidence in management to execute. Furthermore, on a per capita basis, Greece is set to be the biggest beneficiary of the European Union’s recovery fund which is much needed having seen no investment for the past decade. In Kazakhstan both our holdings in fintech company Kaspi (+19.7%) and Energy company Kazatomprom (+10.4%) did well.

Our holdings in Chile and Pakistan were the biggest detractors over the month.  Chilean Pulp and paper company Empresas CMPC fell by 14.1% as its earnings release came in below market expectations, despite a significant rise in the pulp price.  Our holding in Pakistan financial MCB (-6.4%) was an additional detractor.

We made a few changes to the portfolio in April. Alongside the comments on Greek banks we note that we are seeing positive trends at financials across emerging markets. We have been adding to the sector in aggregate, including in Saudi where the banks are beneficiaries of strong domestic loan growth and rising US yields.  Elsewhere in the Middle East we are starting to see the property market bottoming in the UAE. While property prices are still down year over year, we see signs of improvement in mortgage activity and believe we are seeing inventory clean out with very little new supply coming online. In Latin America we initiated a position in Chilean retailer Falabella in April where our earnings estimates are ahead of consensus, driven by conviction in our widening profit margins as they stave off competition. This enables the company to maintain its high market share and use its cash flow to pay down debt. We took profits on our holding in Chilean bank Santander Chile preferring Falabella for domestic Chile exposure. We added to our position in Credicorp as the bank sold off aggressively after polls showed left wing candidate, Pedro Castillo, ahead of Keiko Fujimori in the Presidential race. 

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 30 April 2021

2MSCI as at 30 April 2021

You can discover more about the BlackRock Frontiers Investment Trust at

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