BLACKROCK FRONTIERS INVESTMENT TRUST
PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 March
2019 and unaudited.
Performance at month end with net income reinvested.
|
One
month
% |
Three
months
% |
One
year
% |
Three
years
% |
Five
years
% |
Since
Launch*
% |
Sterling: |
|
|
|
|
|
|
Share price |
-2.9 |
0.2 |
-14.7 |
40.4 |
36.5 |
75.3 |
Net asset value |
1.1 |
3.7 |
-10.0 |
39.5 |
44.8 |
81.0 |
Benchmark (NR)** |
1.7 |
3.7 |
2.6 |
50.9 |
47.6 |
66.8 |
MSCI Frontiers Index
(NR) |
3.3 |
4.5 |
-8.5 |
34.7 |
31.7 |
49.8 |
MSCI Emerging Markets
Index (NR) |
2.9 |
7.4 |
-0.3 |
49.6 |
53.3 |
38.9 |
|
|
|
|
|
|
|
US Dollars: |
|
|
|
|
|
|
Share price |
-4.9 |
2.6 |
-20.7 |
27.5 |
7.0 |
47.2 |
Net asset value |
-1.0 |
6.2 |
-16.4 |
26.6 |
13.4 |
51.7 |
Benchmark (NR)** |
-0.4 |
6.1 |
-4.7 |
36.8 |
15.3 |
40.5 |
MSCI Frontiers Index
(NR) |
1.2 |
6.9 |
-15.0 |
22.1 |
2.9 |
25.2 |
MSCI Emerging Markets
Index (NR) |
0.8 |
9.9 |
-7.4 |
35.6 |
19.8 |
16.1 |
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
Ordinary Shares |
|
US Dollar |
|
Net asset value -
capital only: |
173.28c |
Net asset value - cum
income: |
175.48c |
Sterling: |
|
Net asset value -
capital only: |
132.97p |
Net asset value - cum
income: |
134.66p |
Share price: |
133.00p |
Total assets (including
income): |
£324.1m |
Discount to cum-income
NAV: |
1.2% |
Gearing: |
nil |
Gearing range (as a %
of gross assets): |
0-20% |
Net yield*: |
4.8% |
Ordinary shares in
issue: |
240,672,801 |
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 4.8%
and includes the 2018 final dividend of 4.40
cents per share and special dividend of 1.00 cents per share, both of which were declared
on 11 December 2018 and were paid to
shareholders on 7 February 2019. Also
included is the 2018 interim dividend of 3.00 cents per share announced on 17 May 2018 and paid to shareholders on
29 June 2018.
**Calculated as a percentage of average net assets and using
expenses, excluding performance fees and interest costs for the
year ended 30 September 2018.
Sector
Analysis |
Gross
market value as a % of net assets |
|
Country
Analysis |
Gross
market value as a % of net assets |
|
|
|
|
|
Financials |
31.0 |
|
Indonesia |
14.2 |
Real Estate |
16.8 |
|
Egypt |
9.4 |
Consumer
Discretionary |
13.7 |
|
United Arab
Emirates |
8.9 |
Consumer Staples |
10.5 |
|
Vietnam |
8.9 |
Industrials |
8.7 |
|
Malaysia |
8.8 |
Energy |
8.0 |
|
Argentina |
8.3 |
Materials |
7.7 |
|
Thailand |
7.6 |
Health Care |
7.6 |
|
Kazakhstan |
7.2 |
Communication
Services |
6.6 |
|
Romania |
5.4 |
Utilities |
1.3 |
|
Nigeria |
4.9 |
Information
Technology |
1.2 |
|
Greece |
4.3 |
|
----- |
|
Philippines |
3.1 |
|
113.1 |
|
Turkey |
2.8 |
Short positions |
----- |
|
Poland |
2.7 |
|
-6.6 |
|
Kuwait |
2.5 |
|
===== |
|
Ukraine |
2.5 |
|
|
|
PAN-Africa |
2.3 |
|
|
|
Qatar |
2.3 |
|
|
|
Saudi Arabia |
2.1 |
|
|
|
Kenya |
2.0 |
|
|
|
Hungary |
1.5 |
|
|
|
PAN-Asian |
0.8 |
|
|
|
Morocco |
0.6 |
|
|
|
|
----- |
|
|
|
Total |
113.1 |
|
|
|
|
----- |
|
|
|
Short positions |
-6.6 |
|
|
|
|
===== |
*reflects gross market exposure from contracts for difference
(CFDs).
Market Exposure
|
30.04
2018
% |
31.05
2018
% |
30.06
2018
% |
31.07
2018
% |
31.08
2018
% |
30.09
2018
% |
31.10
2018
% |
30.11
2018
% |
31.12
2018
% |
31.01
2019
% |
28.02
2019
% |
31.03
2019
% |
Long |
113.2 |
119.5 |
116.2 |
113.9 |
107.7 |
107.7 |
107.8 |
108.1 |
109.3 |
115.1 |
112.9 |
113.1 |
Short |
3.8 |
4.2 |
4.7 |
5.1 |
6.4 |
7.7 |
6.8 |
8.6 |
8.6 |
7.3 |
6.7 |
6.6 |
Gross |
117.0 |
123.7 |
120.9 |
119.0 |
114.1 |
115.4 |
114.6 |
116.7 |
117.9 |
122.4 |
119.6 |
119.7 |
Net |
109.4 |
115.3 |
111.5 |
108.8 |
101.3 |
100.0 |
101.0 |
99.5 |
100.7 |
107.8 |
106.2 |
106.5 |
Ten Largest Investments
Company |
Country of Risk |
Gross market value
as a % of net assets |
|
|
|
Banco Macro |
Argentina |
3.6 |
LT Group |
Philippines |
3.1 |
Vincom Retail |
Vietnam |
3.1 |
Eastern Tobacco |
Egypt |
2.9 |
Thai Beverage Plc |
Thailand |
2.8 |
Emaar Properties |
United Arab Emirates |
2.8 |
Halyk Savings Bank |
Kazakhstan |
2.8 |
Kaz Minerals |
Kazakhstan |
2.7 |
Astra International |
Indonesia |
2.7 |
Zenith Bank |
Nigeria |
2.7 |
Commenting on the markets, Sam
Vecht and Emily Fletcher,
representing the Investment Manager noted:
The Company’s NAV returned -1.0%1 versus its
benchmark, the MSCI New Frontier benchmark, which fell by
0.4%2. For reference, the MSCI Frontiers Index rose by
1.2%2, and the MSCI Emerging Markets Index rose by
0.8%2, over the same period (all performance figures are
on a US Dollar basis with net income reinvested). While the
aggregate indices were relatively flat for the month overall, the
numbers mask quite a bit of movement at the country and stock
level.
Stock selection in Indonesia,
Egypt and Kuwait were the largest contributors to
returns in March. Indonesia
was the strongest contributor to performance during the month
driven by our holdings across the market in real estate, energy and
financial sectors, which all posted double digit returns versus
+0.62% for MSCI Indonesia. Egyptian tobacco manufacturer,
Eastern Tobacco Company (+11%), drove performance in that market,
alongside diagnostics company, IDH (+7%). Our position in
National Bank of Kuwait (+12%) was
an additional contributor.
Our Argentine positions were the largest detractors from returns
over the month as our holdings in financial, Banco Macro (-9%),
commercial real estate company, IRSA (-20%) and electric utility,
Pampa Energia (-13%), all sold off. The Argentine market was
spooked by a selloff in Turkey as
well as increasing uncertainty around the country’s presidential
elections later in the year. Our holdings in Turkey detracted after policymakers chose to
try and control the currency ahead of municipal elections, causing
a squeeze in the offshore market and ultimately a sharp selloff in
both bonds and equities. Our holding in UAE hospital operator
NMC (-18%) was an additional detractor after reporting worse than
expected earnings results and corporate governance concerns.
In terms of positioning the portfolio, we returned from a trip
to Nigeria with a lower growth
outlook for the country and have trimmed our holdings there.
We have concerns about the future direction of state intervention
and see little hope of the needed investment in infrastructure or
measures to resolve the fiscal deficit. In Turkey, where elections appear to have
resulted in a surprise loss for the AK party despite heavy
campaigning, we are watching the actions of the central bank and
their actions to defend the currency, which run the risk of hurting
credibility with Turkey’s creditors. We also had elections in
Thailand towards the end of the
month although results won’t be declared until early May.
Both sides are claiming victory which in our view only leads to
further uncertainty and deteriorating hope of any pick up in
investment. The country continues to lose market share to
cheaper and better educated markets, while valuations remain
expensive and profitability depressed. Our team will be
travelling to the region this month to review the situation on the
ground and we will also be visiting Azerbaijan, Kazakhstan and Uzbekistan.
While emerging and frontier markets delivered a strong first
quarter return for 2019, indicators of market sentiment look far
from overstretched particularly in the smaller markets in which we
invest. We continue to position for a positive environment
for emerging and frontier markets in aggregate, supported by a
lower rate environment. Overall, the wide subset of countries
that make up our investible universe continue to exhibit strong GDP
(Gross Domestic Product) growth, have low government debt levels
and represent an opportunity to invest in companies with strong
cash flow and high dividend yields, on some of the lowest
valuations in the world.
12 April 2019
Sources:
1BlackRock as at 31 March
2019
2MSCI as at 31 March
2019
ENDS
Latest information is available by typing
www.blackrock.co.uk/brfi on the internet, "BLRKINDEX" on Reuters,
"BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal). Neither
the contents of the Manager’s website nor the contents of any
website accessible from hyperlinks on BlackRock’s website (or any
other website) is incorporated into, or forms part of, this
announcement Kazakhstan