BlackRock Frontiers Investment Trust plc (LON:BRFI) has announced its half yearly financial report for the six months ended 31 March 2025.
Performance record
The Company’s financial statements are presented in US Dollars. The Company’s shares are listed on the London Stock Exchange and quoted in British Pound Sterling. The British Pound Sterling amounts for performance returns shown below are presented for convenience. The difference in performance returns measured in US Dollars and in British Pound Sterling reflects the change in the value of British Pound Sterling versus the US Dollar over the period.
| As at 31 March 2025 | As at 30 September 2024 | |
| US Dollar | ||
| Net assets (US$’000)1 | 395,700 | 406,243 |
| Net asset value per ordinary share (cents) | 209.07 | 214.57 |
| Ordinary share price (mid-market) (cents)2 | 189.74 | 194.50 |
| ————— | ————— | |
| British Pound Sterling | ||
| Net assets (£’000)1,2 | 306,566 | 302,850 |
| Net asset value per ordinary share (pence)2 | 161.98 | 159.96 |
| Ordinary share price (mid-market) (pence) | 147.00 | 145.00 |
| Discount3 | 9.2% | 9.4% |
| ========= | ========= |
Performance | For the six months ended 31 March 2025 % | For the year ended 30 September 2024 % | Since inception4 % |
| US Dollar | |||
| Net asset value per share (with dividends reinvested)3 | +0.3 | +16.5 | +133.5 |
| Benchmark Index5,6 | -2.5 | +15.7 | +60.4 |
| MSCI Frontier Markets Index6 | +6.7 | +15.1 | +63.0 |
| MSCI Emerging Markets Index6 | -5.3 | +26.1 | +40.1 |
| Ordinary share price (with dividends reinvested)3 | +0.5 | +15.8 | +110.8 |
| ————— | ————— | ————— | |
| British Pound Sterling | |||
| Net asset value per share (with dividends reinvested)3 | +4.2 | +6.0 | +181.0 |
| Benchmark Index5,6 | +1.3 | +5.3 | +92.2 |
| MSCI Frontier Markets Index6 | +10.9 | +4.7 | +96.9 |
| MSCI Emerging Markets Index6 | -1.6 | +14.7 | +69.2 |
| Ordinary share price (with dividends reinvested)3 | +4.4 | +5.4 | +153.3 |
| ========= | ========= | ========= |
1 The change in net assets reflects dividends paid and portfolio movements during the period.
2 Based on an exchange rate of US$1.2908 to £1 at 31 March 2025 and US$1.3414 to £1 at 30 September 2024.
3 Alternative Performance Measures, see Glossary in the half yearly report and financial statements.
4 The Company was incorporated on 15 October 2010 and its shares were admitted to trading on the London Stock Exchange on 17 December 2010.
5 With effect from 1 April 2018, the Benchmark Index changed to the MSCI Emerging Markets Index ex Selected Countries + MSCI Frontier Markets Index. Prior to 1 April 2018, the Benchmark Index was the MSCI Frontier Markets Index. The performance returns of the Benchmark Index since inception have been blended to reflect this change.
6 Total return indices calculate the reinvestment of dividends net of withholding taxes.
Sources: BlackRock and LSEG Datastream.
You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi
Chair’s statement
Dear Shareholder,
I am pleased to present the Company’s Half Yearly Financial Report for the six months to 31 March 2025.
Period highlights
– NAV total return of +0.3%, ahead of the Benchmark Index return of -2.5% (in US Dollar terms with dividends reinvested);
– Share price total return of +0.5% (in US Dollar terms with dividends reinvested);
– Share price total return of +4.4% (in British Pound Sterling terms with dividends reinvested);
– Declared interim dividend of 3.65 cents per share; and
– Yield of 5.1% (based on the share price as at 31 March 2025, interim dividend for 2025 and final dividend for 2024).
Performance and overview
The portfolio managers’ unique strategy and investment process have once again enabled the Company to perform well during the period, comfortably beating our Benchmark Index. This means the Company has outperformed its benchmark in five of the past six six-month periods. The portfolio managers’ ability to identify and expose the portfolio to exciting and uncorrelated ideas is, we believe, a key competitive advantage and differentiator.
During the six months to 31 March 2025, the Company achieved a NAV total return in US Dollars of +0.3%, outperforming its Benchmark Index which returned -2.5%. Over the same period, the Company’s share price total return in US Dollar terms with dividends reinvested was a similar +0.5%, reflecting a stable relationship between the Company’s NAV and share price. Since inception in December 2010, the Company’s NAV has returned +133.5%, compared with +60.4% for its Benchmark Index. For reference, the MSCI Emerging Markets Index and the MSCI Frontier Markets Index have returned +40.1% and +63.0%, respectively. As well as outperforming these indices by a significant margin, the Company’s NAV has also materially outperformed the AIC Global Emerging Markets peer group, which has returned approximately 80.4% since the Company’s inception (all percentages in US Dollar terms with dividends reinvested).
Subsequent to the end of the period and, as at 23 May 2025, the NAV per share of the Company of 219.77 cents has increased by 5.1%. For comparison, the Company’s Benchmark Index has increased by 4.4%.
As you will read in the Investment Manager’s Report which follows, our portfolio managers describe an improving macroeconomic backdrop for many countries across Frontier Markets. The implementation of more orthodox fiscal policy, relatively low interest rates and greater political stability, are combining to provide a fertile environment for growth, in sharp contrast to the turmoil provoked by President Trump’s unpredictable foreign policy throughout much of the world. The implementation of reciprocal tariffs by the US on its key trade partners China, Canada, Mexico and the EU resulted in significant equity market volatility, a sell-off of US treasuries and associated concerns about the resilience of the US Dollar as a reserve currency. Investors sought safe haven assets such as gold and reduced their exposure to US equities. Although a trade truce with China appears to have been reached, the upheaval caused may have longer-term impact as companies seek to de-risk their supply chains. By contrast, the portfolio is exposed to a broad range of fast-growing companies across Latin America, Central Eastern Europe, the Middle East and the ASEAN region and our portfolio managers continue to add exposure selectively where they see the greatest opportunity, evolving the portfolio judiciously through economic and market cycles.
We believe exposure to an opportunity set within which uncorrelated markets offer strong growth potential against an ever more challenging macroeconomic backdrop globally, continues to represent a compelling investment opportunity. In addition, the Company provides shareholders with an attractive yield. At the time of writing the Company’s yield is 4.6%, the highest in our AIC Global Emerging Markets peer group.
Our portfolio managers provide a detailed description of the key contributors to and detractors from performance during the period, portfolio activity and their views on the outlook for the second half of the financial year in their report which follows.
Revenue return and dividends
The Company’s revenue return per share for the six months ended 31 March 2025 amounted to 1.90 cents (six months ended 31 March 2024: 3.30 cents) a decrease of 42.4% over the prior year interim period. This decline is primarily due to timing, with many dividend payments from portfolio companies being made in April instead of March this year. Hence revenue per share for the seven months to 30 April 2025 amounted to 4.99 cents per share compared to 4.03 cents per share for the seven months to 30 April 2024, an uplift of 23.8%.
Recognising the importance of yield to shareholders and the significant uplift in dividend income in April 2025, the Board is pleased to declare an interim dividend of 3.65 cents per share, an increase of 4.3% compared to the 2024 interim dividend of 3.50 cents per share. The interim dividend is payable on 24 June 2025 to shareholders on the Company’s register on 6 June 2025. The shares will go ex-dividend on 5 June 2025.
During the period, the final dividend of 6.00 cents per share for the year ended 30 September 2024, which was declared on 5 December 2024, was paid to shareholders on 14 February 2025.
Fees and charges
As a result of the outperformance of the Benchmark Index during the period as at 31 March 2025 a performance fee of US$1,627,000 has been accrued but not paid. Should this outperformance continue to the end of the financial year, the Investment Manager will earn a performance fee.
During the period, the Board conducted a comprehensive review of the Company’s investment management and performance fee arrangements, which included seeking a formal opinion on all aspects of the fee structure from an independent third party.
As previously announced, a tiered fee structure has been introduced. With effect from 1 October 2024, our management fee of 1.1% per annum is levied on the Company’s net assets up to US$650 million, reducing to 1% per annum on net assets above this amount. The Board believes the current fee structure is appropriate and will continue to keep the Company’s costs and charges under regular review. Further details of the Company’s costs and charges can be found in note 4 below and in the Glossary in the half yearly report and financial statements.
Share capital
For the period under review, the Company’s ordinary shares traded at an average discount to NAV of -8.1%, and this had widened to -9.2% on a cum-income basis at 31 March 2025. By comparison, the weighted average discount of the AIC Global Emerging Markets peer group during the period under review was -8.47%.
The Directors have the authority to buy back shares in the market equivalent to 14.99% of the Company’s issued share capital and also to issue new shares equivalent to 10% of the Company’s issued share capital (excluding any shares held in treasury).
The Directors believe that it is in shareholders’ interests that the Company’s share price does not trade at a significant or volatile discount or premium to its underlying NAV. Accordingly, the Directors, in conjunction with the Company’s broker, monitor the relationship between the share price and NAV closely and will consider the issue of ordinary shares at a premium or repurchase at a discount to help balance demand and supply in the market if they believe it is in shareholders’ interests to do so. In determining the merits, the Directors review a range of factors, including the ongoing attractiveness of the investment offering, the prevailing market conditions and the discount level in absolute terms and relative to that of the peer group. Based on the Directors’ assessment of the reasons behind the Company’s discount and its lack of volatility, it was only considered necessary to buy back 55,500 shares. The shares were repurchased for a total consideration of US$107,000 during the six months to 31 March 2025. The Board continues to evaluate other levers by which it can stimulate demand for the Company’s shares. It is currently undertaking a full-scale review of its marketing and communications strategy with the help of external advisors to ensure that the attractions of the Company are conveyed as effectively and widely as possible.
As at 23 May 2025, the discount stood at -4.19% (compared to a weighted average discount for the peer group of -4.88%). This tightening reflects a combination of favourable currency movements between the US Dollar and Sterling during the period and the natural pull to NAV ahead of the Company’s five-yearly exit opportunity as discussed below.
Periodic opportunity for the return of capital
When the Company was launched in late 2010, the Board made a commitment that before the Company’s fifth AGM and at five-yearly intervals thereafter, it would formulate and submit to shareholders proposals to provide them with an opportunity to realise the value of their ordinary shares at the applicable NAV per ordinary share less costs. This would usually be effected by way of a 100% Tender Offer as was the case in 2021 when this last took place. The Directors believe that shareholders value the five yearly exit opportunity and therefore intend to continue to provide it at five yearly intervals, in line with the investment horizon of the underlying strategy. The next event will take place around the time of the Company’s AGM in February 2026. Detailed proposals will be issued to shareholders by way of a shareholder Circular in early 2026.
Gearing
One of the advantages of the investment trust structure is that the Company can use gearing with the objective of increasing portfolio returns over the longer term. The Company generated leverage in the portfolio through its contracts for difference (CFD) exposure during the period. As at 31 March 2025, net gearing stood at 14.3%, compared to 4.0% at 30 September 2024, reflecting our portfolio managers’ positive views on the outlook and opportunities in Frontier markets.
Board composition
As at 31 March 2025, the Board consisted of five independent non-executive Directors. As part of its succession planning, the Board regularly considers its composition to ensure that a suitable balance of skills, knowledge, experience, independence and diversity is achieved to enable the Board to discharge its duties most effectively. Following due consideration, the Board has commenced a search and selection process to identify a successor to our audit chair, Stephen White, who, following nine years of diligent service on the Board, will step down at the conclusion of the AGM in February 2026. The Board will announce the appointment of a new non-executive Director in the coming months. In order to facilitate an orderly transition, there may be a short period of overlap as Stephen hands over the leadership of the Company’s Audit & Management Engagement Committee, an important and complex role which he has discharged with great skill during his tenure.
The Directors submit themselves for re-election annually and therefore all Directors will stand for either election or re-election at the forthcoming AGM. The Board is compliant with the recommendations of the Parker Review and the FTSE Women Leaders Review and, at the date of this report, we have a 60:40 female to male gender ratio. In accordance with the Listing Rules, we have also disclosed the ethnicity of the Board and our policy on matters of diversity in our annual report.
Portfolio Management Arrangements
Following changes to BlackRock’s Global Emerging Markets team structure, which were designed to enhance investment focus and alignment of expertise and portfolio management responsibilities, Sudaif Niaz stepped down as Co-Portfolio Manager on 16 April 2025. No changes are being made to the way the Company’s portfolio is managed on a day-to-day basis as a result of this change. The Board would like to thank Sudaif for his contribution to the management of the Company’s investment portfolio and wishes him well.
Outlook
Markets are currently grappling with heightened geopolitical volatility and unprecedented macroeconomic shifts that have global ramifications. The impact of yoyo-ing US tariffs on global trading relationships is a key concern for markets, with economists downgrading growth forecasts and interest rate expectations turning more dovish. The outcome of the tariff negotiations is still unknown. Since ‘Liberation Day’ on 2 April, the US dollar has been notably weak, but this could reverse if the Trump administration’s policies exert upward pressure on US inflation, which may have a knock-on negative impact on emerging markets. The outcome of Trump’s unpredictable foreign policy is highly uncertain and our portfolio managers expect to see continued volatility as we move through the second half of the financial year. Although not immune to the geopolitical turmoil created by Trump’s desire to reshape global trade relationships, our portfolio managers believe the markets in which they invest will continue to be driven to a significant extent by local factors and by domestic investor flows, thereby potentially offering investors diversification benefits. In addition, several of our markets may become beneficiaries of the rewiring of global supply chains, in particular the shifting of manufacturing away from China as existing US/China tensions are exacerbated by the imposition of trade tariffs and inevitable retaliation by trade partners. Indeed, our unique mandate should become increasingly attractive to investors seeking diversified ex-China exposure as they finally pivot away from the US.
Another positive trend within our investment universe is the marked increase in intra-emerging markets trade. Whilst the developed markets are concerned with the impact of the trade tensions and protectionist policy, the emerging markets have recently seen an increase in intra-country trade, in Asia in particular. For example, countries such as Vietnam and Indonesia, to which our portfolio is well exposed, have benefited from their ability to act as regional trade hubs. This trend is set to continue, driven by increasing domestic demand, regional free trade agreements, and robust economic growth.
The frontier markets comprise a large and diverse range of countries which are under-researched, generally have relatively low levels of foreign debt, higher yields and superior demographics compared with more developed economies. In many cases they trade at significant valuation discounts relative to both developed markets and their own history. Our portfolio managers view this as a fertile hunting ground and one which presents exceptional opportunity. Through BlackRock’s scale and reach, they are afforded unrivalled access and have the expertise and resources to effectively navigate these markets, seeking out the best and brightest companies this dynamic region can offer.
Whilst we may be in uncharted territory with respect to global trade and the increasing polarisation of the major economic powers, our frontier universe continues to provide shareholders with capital growth through a diversified portfolio of fast growing, exciting companies that are uncorrelated to both each other and the developed markets. In an environment of uncertainty and instability, the Board believes our unique offering represents an ever more compelling addition to the discerning investor’s portfolio.
KATRINA HART
Chair
28 May 2025
You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi
Investment Manager’s report
Market review
Over the past six months, the global economic landscape has been shaped by persistent geopolitical uncertainty, impacting both developed and emerging markets. In our view, the re-election of President Donald Trump has further entrenched a narrative of a world increasingly divided between the East and the West. Against this backdrop, the countries in which we invest—those navigating a political middle ground—continue to stand out as well-positioned.
Beyond the global headlines, several encouraging developments have emerged within our investment universe, many of which have received limited international attention. Several smaller economies, such as Pakistan, Bangladesh and Turkey have made notable strides in political and economic reform, embracing a more orthodox approach to fiscal and monetary policy. These moves have enhanced their appeal to investors. Meanwhile, the Gulf Co-operation Council (GCC) region has continued to experience population growth and attract new business, capturing a greater share of global financial flows. Following the end of the reporting period, we observed a significant increase in tensions between India and Pakistan, triggered by a terrorist attack in Pahalgam, Indian-administered Kashmir. Although the region has been embroiled in conflict for the past 40 years, this recent flare-up marked a notable escalation in hostilities between the two nations. To date the ceasefire agreement agreed on May 10th has held and there has been a de-escalation of tensions.
Our investment universe remains characterised by low correlations—both among its constituent countries and with more developed markets. Despite this, it continues to trade at significantly lower valuations than both developed and broader emerging markets, with the current discount among the widest since the Company’s inception. As ongoing volatility across the developed world appears all but certain in 2025, the case for a diversified asset class like ours becomes increasingly compelling.
In terms of performance, a variety of different markets within our investment universe have done well. Pakistan (+43.9%) was the best-performing market in our investment universe over the period, driven by sharp interest rate cuts and continued inflow of International Monetary Fund (IMF) loans as the government takes steps to reduce its fiscal deficit, including tax reform. This has supported a recovery in activity, visible in cement dispatches and car sales.
Across Asia, Sri Lanka (+33.7%) performed well. Similarly to Pakistan, the government enacted an economic reform agenda supported by the IMF. On the negative side, performance in Association of South East Asian (ASEAN) markets faced challenges as the region grappled with political changes at home, while the re-election of President Donald Trump made the external environment more difficult. Indonesia (-25.6%) lagged due to concerns about the extent to which the policy direction under the new government will remain market-friendly. Thailand (-22.4%) has continued to experience political instability since the banning of the largest opposition party last August. Vietnam (-3.3%) has yet to see growth re-accelerate following the government-led corruption clampdown of the past few years.
In Europe, performance was characterised by similar levels of dispersion. The Czech Republic (+29.9%) was the best-performing market in the region amid interest rate cuts and increasing domestic demand supported by a rebound in real wage growth. Additionally, the market is typically defensive within the region. The Central and Eastern European countries also experienced a significant uplift from the talk of a potential Russia-Ukraine ceasefire, with Poland (+16.5%) seeing an uptick in consumer confidence. By contrast, Turkey (-11.9%) lagged the rest of the region as Turkish equities fell on the day the police detained the mayor of Istanbul, Ekrem İmamoğlu, the primary opposition candidate expected in the 2028 presidential elections.
The Middle East posted solid returns as Financials and Real Estate companies in Kuwait (+12.7%) and the United Arab Emirates (UAE) (+14.3%) benefitted from increased foreign investment, with the UAE being one of the biggest beneficiaries of rising geopolitical tensions.
In Latin America, country performance showed notable variation. One standout performer was Colombia (+33.1%) where the market continued its positive momentum, underpinned by expectations of higher real incomes and lower borrowing costs. Although Argentina posted record returns in 2024, its performance has since moderated as concerns remain on the size of the foreign exchange imbalance.
From the road
In times of elevated market volatility, travelling and visiting the companies in our investment universe becomes even more important to ensure that we accurately gauge the sentiment on the ground and understand how our portfolio companies are adapting to a world we believe will be characterised by increasing uncertainty going forward. Over the past six months, we have visited a number of countries within our universe. These visits provide valuable insights that help us make informed investment decisions and ultimately deliver alpha for our clients.
One market that has experienced elevated volatility over the period is Turkey. We travelled to the country in March, following the arrest of Istanbul’s mayor and main opposition leader. The arrest triggered a sharp sell-off due to fears that Turkey was moving in a more autocratic direction. However, our on-the-ground checks suggest that we haven’t seen a meaningful change, and we walked away fairly positive about the market prospects over a two-year period. The locals’ confidence in continued economic orthodoxy by the current regime, evidenced by the limited dollarisation following the recent political event, keeps us optimistic. Valuations are cheap, currently at low single-digit price to earnings for many of the banks, making this a market worth paying close attention to.
Another country we visited was Georgia. We travelled there in the weeks leading up to the general election in October 2024, noting a certain degree of polarisation within the population. We believe the elections were seen by many as a choice between aligning more closely with Russia or moving towards greater integration with the European Union, but the reality on the ground is more nuanced. While the political situation in the country continues to evolve, the economic backdrop remains solid. Representatives from government bodies spoke about strong exports and an increase in tourism. The country has also seen an influx of migrants, particularly from Ukraine and Russia, which has helped boost domestic consumption and gross domestic product (GDP) growth. We note that there are several interesting bottom-up stock ideas, particularly in the Financials space. We believe the market should perform well in 2025, supported by strong GDP growth, a benign inflation picture and attractive real rates.
We recently visited Poland and met with several companies. Poland has notably ramped up its defense spending, allocating 4.7% of GDP for 2025 — a move expected to result in a sizeable fiscal deficit for the year. Despite this, the country continues to offer higher interest rates and stronger economic growth than many of its EU neighbours. This dynamic has historically attracted substantial capital flows from the rest of Europe. Looking ahead, we anticipate that both fiscal spending and European capital inflows will remain elevated, supporting our view that the Polish market looks relatively attractive.
We also visited the UAE, a market the team has been investing in for almost twenty years. The focus for our recent travels was to assess whether the significant growth witnessed in the real estate sector is vulnerable to turning into a bubble. However, we returned with the view that the UAE is still likely far from a cyclical peak as population growth remains strong. Dubai, in particular, has done well to position itself as a global hub, not just a regional one, with attractive incentives for new businesses.
Portfolio review
In the six months to 31 March 2025, the Company’s NAV returned +0.3%, outperforming its Benchmark Index which returned -2.5%. Over the same period the MSCI Emerging Markets Index fell by -5.3% and the MSCI Frontier Markets Index rose by +6.7%. Since inception, the Company’s NAV has returned +133.5%, compared with +60.4% for its Benchmark Index. For reference, the MSCI Emerging Markets Index and the MSCI Frontier Markets Index returned +40.1% and +63.0%, respectively (all percentages in US Dollar terms with dividends reinvested).
Contributing stocks over the past six months were from a diverse set of markets. Emaar Properties (+52.9%), the UAE-based property developer, was the biggest contributor to relative returns over the period. The stock price rose due to strong third quarter 2024 results and a higher-than-expected dividend announcement later in the year. An off-benchmark position in Lucky Cement (+67.8%), a Pakistani conglomerate involved in local cement production, chemicals, passenger vehicle assembly, power generation and international cement operations in the Middle East and Africa, also performed well. The stock benefitted from expectations of improved activity as interest rates significantly decreased in Pakistan. Our position in DigiPlus Interactive Corp (+78.8%), a Philippines-based gaming conglomerate, contributed to returns, driven by strong activity indicators and plans to expand into other gaming verticals and new markets. Additionally, a collection of names exposed to a potential resolution in the war between Ukraine and Russia performed well, including Bank of Georgia (+43.2%), Hungarian OTP Bank (+27.8%) and Polish clothing retailer LPP (+14.6%).
On the flipside, select ASEAN exposures detracted from performance. Indonesia and the Philippines saw their stock markets fall by -25.6% and -14.4%, respectively. The biggest detractor over the period was Bloomberry (-64.0%), a Philippines-based resort and casino operator. In addition to earnings being cannibalised by new physical and virtual gaming capacity, the stock traded down with the broader Philippine market. Ciputra Development (-48.7%) and Ayala Land (-37.5%), property developers in Indonesia and Philippines, respectively, also detracted from performance; in Indonesia, news flow on fiscal policy remained precarious, while the Philippines property market is still recovering from excess capacity. Despite these challenges, we maintain our conviction in these stocks over the medium term. Elsewhere, Information Technology (IT) services company EPAM Systems (-15.3%) also detracted. The stock sold off sharply following weaker-than-expected forecasted earnings per share and revenue growth for the first quarter of 2025.
Over the past six months, we made some changes to the portfolio. We increased our exposure to Turkey, reflecting our view of the positive long-term outlook for the country. We expressed this optimism primarily through initiating a position in Turkish bank Akbank. Additionally, we began rebuilding our Eastern European exposure at the end of 2024. One example is LPP in Poland, which we believe has the right ingredients to expand its footprint across the region. Another example is Raiffeisen Bank International, which has a significant portion of its profitability stuck in Russia that was effectively written off to zero by the market following Russia’s invasion of Ukraine. Any steps towards an amicable resolution here should be significantly positive for the bank.
Elsewhere, we rotated our bank exposure within Indonesia from Bank Central Asia to Bank Mandiri due to the latter’s attractive valuation and a sequentially better liquidity environment for the banking sector. We also initiated a position in technology services company Endava, reflecting our positive view on the IT services sector and its potential as a beneficiary of the global artificial intelligence capital expenditure spend. The stock is trading at an attractive valuation and is expected to be further supported by a US$100m buyback expected throughout the year.
Outlook
The six-month period leading up to 31 March 2025 has reinforced our view that accelerated geopolitical polarisation will lead to increased competition among the world’s largest economies. This evolving geopolitical environment signifies a period of potential market volatility, as evidenced by the tariff-induced market turmoil experienced in April, but also presents unique opportunities across a variety of sectors, industries and geographies within our investment universe.
We think that investing in markets that are largely underrepresented in global portfolios and receive less sell-side attention offers significant alpha potential. These frontier and smaller emerging markets generally trade at lower valuations compared to developed markets and display lower correlation among themselves. This provides an opportunity to diversify risk and reduce overall volatility, something which we believe to be particularly important in times of elevated market uncertainty.
In summary, we remain positive on the outlook for small emerging and frontier markets compared to developed markets. We find significant value in currencies and equity markets across our opportunity set. Our investment universe, both in absolute and relative terms, remains under-researched and we believe this should enable compelling alpha opportunities.
SAM VECHT AND EMILY FLETCHER
BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED
28 May 2025
You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi
