# BlackRock Frontiers Investment Trust outperforms its benchmark for August

- Link: https://www.directorstalkinterviews.com/blackrock-frontiers-investment-trust-outperforms-its-benchmark-for-august/4121128474
- Published: 2023-09-28T08:31:59+01:00
- Author: Amilia Stone

**BlackRock Frontiers Investment Trust plc** ([LON:BRFI](https://www.directorstalkinterviews.com/company/blackrock-frontiers-investment-trust-plc/brfi.l))
has announced its latest portfolio update.

All information is at **31 August 2023** and unaudited.

**You can discover more about the BlackRock Frontiers Investment Trust at [blackrock.com/uk/brfi](https://www.blackrock.com/uk/individual/products/investment-trusts/our-range/blackrock-frontiers-investment-trust/trust-information?siteEntryPassthrough=true&cid=aff:investmenttrusts2020:brfi:directorstalk:link)**

**Performance at month end with net income reinvested.**

|  | One
 month% | Threemonths% | One year% | Three years% | Five years% | Since Launch*% | 
| Sterling: |  |  |  |  |  |  | 
| Share price | -1.0 | 8.7 | 12.4 | 74.2 | 26.3 | 131.0 | 
| Net asset value | 0.5 | 7.2 | 9.4 | 75.8 | 39.3 | 153.9 | 
| Benchmark (NR)** | -1.6 | 2.2 | -7.4 | 31.0 | 11.2 | 79.8 | 
| MSCI Frontiers Index (NR) | 0.6 | 6.0 | -7.8 | 16.5 | 15.5 | 69.8 | 
| MSCI Emerging Markets Index (NR) | -4.7 | 1.2 | -7.0 | 1.3 | 7.7 | 48.3 | 
|  |  |  |  |  |  |  | 
| US Dollars: |  |  |  |  |  |  | 
| Share price | -2.5 | 11.1 | 22.5 | 65.7 | 23.3 | 88.7 | 
| Net asset value | -1.1 | 9.6 | 19.2 | 67.2 | 36.0 | 107.1 | 
| Benchmark (NR)** | -3.1 | 4.5 | 0.8 | 23.9 | 8.4 | 47.3 | 
| MSCI Frontiers Index (NR) | -0.9 | 8.4 | 0.4 | 10.3 | 12.6 | 38.0 | 
| MSCI Emerging Markets Index (NR) | -6.2 | 3.5 | 1.3 | -4.1 | 5.0 | 20.5 |

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: | 194.32c | 
| Net asset value – cum income: | 198.86c | 
| Sterling: |  | 
| Net asset value – capital only: | 153.35p | 
| Net asset value – cum income: | 156.94p | 
| Share price: | 144.50p | 
| Total assets (including income): | £297.1m | 
| Discount to cum-income NAV: | 7.9% | 
| Gearing: | nil | 
| Gearing range (as a % of gross assets): | 0-20% | 
| Net yield*: | 4.1% | 
| Ordinary shares in issue**: | 189,325,748 | 
| Ongoing charges***: | 1.36% | 
| Ongoing charges plus taxation and performance fee****: | 1.36% |

*The Company’s yield based on dividends announced in the last 12 months as at the
date of the release of this announcement is 4.1% and includes the 2022 final dividend
of 4.25 cents per share, declared on 8 December 2022, and paid to shareholders on
19 January 2023, and the 2023 interim dividend of 3.10 cents per share, declared
on 6 June 2023, and paid to shareholders on 7 July 2023.

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

***The Company’s ongoing charges are calculated as a percentage of average daily
net assets and using the management fee and all other operating expenses excluding
performance fees, finance costs, direct transaction costs, custody transaction charges,
VAT recovered, taxation and certain non-recurring items for Year ended 30 September
2022.

**** The Company’s ongoing charges are calculated as a percentage of average daily
net assets and using the management fee and all other operating expenses and including
performance fees but excluding finance costs, direct transaction costs, custody 
transaction charges, VAT recovered, taxation and certain non-recurring items for
Year ended 30 September 2022.

| **Sector
Analysis
 | Gross market value as a % of net assets |  | Country
Analysis
 | Gross market value as a % of net assets | 
|  |  |  |  |  | 
| Financials | 40.6 |  | Indonesia | 14.3 | 
| Energy | 12.8 |  | Saudi Arabia | 14.2 | 
| Industrials | 12.3 |  | Thailand | 11.1 | 
| Materials | 12.2 |  | Kazakhstan | 8.3 | 
| Consumer Staples | 11.3 |  | United Arab Emirates | 8.2 | 
| Information Technology | 7.7 |  | Hungary | 6.8 | 
| Consumer Discretionary | 6.1 |  | Vietnam | 6.5 | 
| Communication Services | 4.5 |  | Philippines | 5.9 | 
| Real Estate | 4.0 |  | Chile | 5.3 | 
| Health Care | 1.8 |  | Qatar | 4.2 | 
|  | —– |  | Poland | 3.7 | 
|  | 113.3 |  | Malaysia | 3.5 | 
|  | —– |  | Colombia | 3.2 | 
| Short positions | -3.0 |  | Multi-International | 2.2 | 
|  | ===== |  | Czech Republic | 2.1 | 
|  |  |  | Argentina | 2.0 | 
|  |  |  | Georgia | 1.9 | 
|  |  |  | Greece | 1.8 | 
|  |  |  | Peru | 1.4 | 
|  |  |  | Turkey | 1.3 | 
|  |  |  | Romania | 1.1 | 
|  |  |  | Kuwait | 1.1 | 
|  |  |  | Cambodia | 1.1 | 
|  |  |  | Egypt | 0.9 | 
|  |  |  | Ukraine | 0.6 | 
|  |  |  | Kenya | 0.5 | 
|  |  |  | Bangladesh | 0.1 | 
|  |  |  |  |         —– | 
|  |  |  | Total | 113.3 | 
|  |  |  |  | —– | 
|  |  |  | Short positions | -3.0 | 
|  |  |  |  | ===== |

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

**Market Exposure**

|  | 30.09 2022    % | 31.10 2022    % | 30.11 2022    % | 31.12 2022    % | 31.01 2023    % | 28.02 2023    % | 31.03 2023    % | 30.04 2023    % | 31.05 2023    % | 30.06 2023    % | 31.07 2023    % | 31.08 2023    % | 
| Long | 106.2 | 107.4 | 106.2 | 110.7 | 112.4 | 111.9 | 106.3 | 108.5 | 112.9 | 116.9 | 113.0 | 113.3 | 
| Short |  5.2 |  5.3 | 4.8 | 4.9 | 5.1 | 3.9 | 3.9 | 3.8 | 3.6 | 4.0 | 3.0 | 3.0 | 
| Gross | 111.4 | 112.7 | 111.0 | 115.6 | 117.5 | 115.8 | 110.2 | 112.3 | 116.5 | 120.9 | 116.0 | 116.3 | 
| Net | 101.0 | 102.1 | 101.4 | 105.8 | 107.3 | 108.0 | 102.4 | 104.7 | 109.3 | 112.9 | 110.0 | 110.3 |

**Ten Largest Investments**

| **Company** | **Country of Risk** | **Gross market value as a % of net assets** | 
|  |  |  | 
| Bank Central Asia | Indonesia | 4.6 | 
| FPT | Vietnam | 3.5 | 
| JSC Kaspi | Kazakhstan | 3.2 | 
| CP All | Thailand | 3.1 | 
| Bank Mandiri | Indonesia | 3.1 | 
| OTP Bank | Hungary | 3.1 | 
| Bangkok Bank | Thailand | 2.9 | 
| Halyk Savings Bank | Kazakhstan | 2.9 | 
| Saudi National Bank | Saudi Arabia | 2.9 | 
| PKO Bank Polski | Poland | 2.9 |

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

The Company’s NAV fell by 1.1% in August, outperforming its benchmark the MSCI Emerging
ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”)
which fell by 3.1%. For reference, the MSCI Emerging Markets Index was down 6.2%
while the MSCI Frontier Markets Index was down by -0.9% over the same period. All
performance figures are on a US Dollar basis with net income reinvested.

Performance was challenged for several of the markets in our universe in August 
as risk sentiment weakened, putting pressure on equities. In Latin America, Colombia
was down by 15.4%, erasing the gains from July, as growth continues to decelerate
resulting in lower forward expectations for 2023/2024. In Asia, the Philippines 
was the region’s worst performer. The economy contracted resulting in GDP growth
materially undershooting expectations amid weak domestic demand. In EMEA, performance
was more mixed. Poland fell by 9.5% on the back of a larger-than-expected rate cut
from the Polish central bank. On the other hand, Kazakhstan (+11.6%) and Hungary(
+5.4%) were among the universe bright spots over the period.

Several stock picks in the Middle East benefitted the Company in August. Gulf International
Services (+27.1%), the Qatar-based holding company, was the top contributor. The
company’s Q2 earnings surprised on the upside and the share price was also helped
by the company successfully concluding a debt restructuring deal at favourable terms
with lenders. In Saudi Arabia, ELM continued its strong run (+26.8%). In UAE, Air
Arabia (9.7%), the Emirati low-cost airline, also performed well. Elsewhere in our
universe, Hungary’s OTP Bank (+11.9%) contributed positively after releasing strong
results. As for detractors over the course of August, PKO Bank Polski (-10.9%) fell
along with the Polish market more broadly and was the month’s largest drag on performance.
Chilean brewer CCU (-11.6%) also fell. While the company reported strong EBITDA 
numbers ahead of consensus, the stock was impacted by weak Chile macro as the market
was down -9.4%.

We made some changes to the portfolio in August. We continued adding to our holding
in the Czech bank Komerční banka as we expect the country’s central bank to be one
of the first to cut rates. In Asia, we increased our exposure to the Philippines
by initiating a position in Metropolitan Bank. We exited Titan Cement, the Greek
cement and building materials producer as our investment view has played out. Elsewhere,
we took profits in Kaspi, the Kazakh payments and e-commerce company and in Advanced
Info Systems, the Thai telecom services provider, following strong performance.

We believe global markets are still adjusting to a significantly higher cost of 
capital and remain vulnerable to unexpected hiccups such as the liquidity crisis
in the regional banking space in the US. However, through the last few years, we
have observed a marked contrast in the monetary and fiscal policy decisions taken
in small emerging/frontier markets versus developed markets and this keeps us optimistic
on our opportunity set. Our investment universe, in absolute and relative terms,
remains under-researched and we believe this can enable compelling alpha opportunities.

Sources:

^(1)BlackRock as at 31 August 2023

^(2)MSCI as at 31 August 2023

**You can discover more about the BlackRock Frontiers Investment Trust at [blackrock.com/uk/brfi](https://www.blackrock.com/uk/individual/products/investment-trusts/our-range/blackrock-frontiers-investment-trust/trust-information?siteEntryPassthrough=true&cid=aff:investmenttrusts2020:brfi:directorstalk:link)**

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