BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI:
UK9OG5Q0CYUDFGRX4151)
All information is at 31 December
2018 and unaudited.
Performance at month end with net income
reinvested
|
One
month
% |
Three
months
% |
One
year
% |
Three
years
% |
Five
years
% |
Sterling: |
|
|
|
|
|
Net asset value^ |
-0.1 |
7.3 |
0.6 |
77.3 |
24.7 |
Share price |
2.9 |
8.9 |
-1.0 |
73.1 |
22.0 |
MSCI EM Latin
America
(Gross Return)^^ |
-0.6 |
2.9 |
-0.4 |
77.1 |
21.1 |
MSCI EM Latin
America
(Net Return)^^ |
-0.6 |
2.8 |
-0.8 |
75.3 |
19.2 |
US Dollars: |
|
|
|
|
|
Net asset value^ |
-0.3 |
4.7 |
-5.4 |
53.0 |
-4.1 |
Share price |
2.8 |
6.3 |
-6.9 |
49.4 |
-6.3 |
MSCI EM Latin
America
(Gross Return)^^ |
-0.7 |
0.5 |
-6.2 |
53.1 |
-6.9 |
MSCI EM Latin
America
(Net Return)^^ |
-0.8 |
0.4 |
-6.6 |
51.5 |
-8.4 |
^cum income
^^The Company’s performance benchmark (the MSCI EM Latin America
Index) may be calculated on either a Gross or a Net return basis.
Net return (NR) indices calculate the reinvestment of dividends net
of withholding taxes using the tax rates applicable to non-resident
institutional investors, and hence give a lower total return than
indices where calculations are on a Gross basis (which assumes that
no withholding tax is suffered). As the Company is subject to
withholding tax rates for the majority of countries in which it
invests, the NR basis is felt to be the most accurate, appropriate,
consistent and fair comparison for the Company. Historically the
benchmark data for the Company has always been stated on a Gross
basis. However, as disclosed in the Company’s Interim Report for
the six months ended 30 June 2018, it
is the Board’s intention to monitor the Company’s performance with
reference to the NR version of the benchmark. For transparency both
sets of benchmark data have been provided.
Sources: BlackRock, Standard & Poor’s Micropal
At month
end |
|
Net asset value –
capital only: |
507.77p |
Net asset value – cum
income: |
510.62p |
Share price: |
437.50p |
Total Assets#: |
220.5m |
Discount (share price
to cum income NAV): |
14.3% |
Average discount* over
the month – cum income: |
15.9% |
Net gearing at month
end**: |
8.8% |
Gearing range (as a %
of net assets): |
0-25% |
Net yield##: |
5.4% |
Ordinary shares in
issue (excluding 2,181,662 shares held in treasury): |
39,259,620 |
Ongoing
charges***: |
1.1% |
#Total assets include current year revenue.
##Calculated using total dividends declared in the last 12
months as at the date of this announcement (comprising, the 2017
final dividend of 7.00 cents per
share, the first interim dividend under the new policy of
7.57 cents per share paid on
23 August 2018, the second interim
dividend under the new policy of 7.85
cents per share paid on 9 November
2018 and the third interim dividend under the new policy of
8.13 cents per share declared on
2 January 2019 and payable on
8 February 2019) as a percentage of
month end share price. As previously announced, the Board of the
BlackRock Latin American Investment Trust plc have introduced a new
dividend policy whereby the Company will pay regular quarterly
dividends equivalent to 1.25% of the Company’s US Dollar cum income
NAV on the last working day of December, March, June and September
each year, with the dividends being paid in February, May, August
and November each year respectively. The yield on the
Company’s shares projecting future quarterly dividends forward
based on the August and October 2018
paid dividends and 2 quarters being paid at the same rate as the
declared January 2019 dividend, based
on the Company’s share price at 31 December
2018 converted to US dollars at the exchange rate on
31 December 2018, would be 5.69%.
*The discount is calculated using the cum income NAV (expressed
in sterling terms).
**Net cash/net gearing is calculated using debt at par, less
cash and cash equivalents and fixed interest investments as a
percentage of net assets.
*** Calculated as a percentage of average net assets and using
expenses, excluding interest costs for the year ended 31 December 2017.
Geographic Exposure
|
% of
Total Assets |
% of
Equity
Portfolio * |
|
MSCI
EM Latin
America Index |
|
|
|
|
|
Brazil |
72.4 |
73.1 |
|
61.5 |
Mexico |
21.2 |
21.5 |
|
22.8 |
Chile |
3.1 |
3.2 |
|
8.9 |
Colombia |
1.4 |
1.4 |
|
3.3 |
Argentina |
0.8 |
0.8 |
|
0.0 |
Peru |
0.0 |
0.0 |
|
3.5 |
Net current
liabilities (inc. fixed interest) |
1.1 |
0.0 |
|
0.0 |
|
----- |
----- |
|
----- |
Total |
100.0 |
100.0 |
|
100.0 |
|
----- |
----- |
|
----- |
Sector |
% of
Equity Portfolio * |
% of
Benchmark |
|
|
|
Financials |
32.9 |
33.6 |
Materials |
17.1 |
16.4 |
Consumer
Discretionary |
11.1 |
5.2 |
Consumer Staples |
9.2 |
14.6 |
Energy |
9.0 |
9.8 |
Industrials |
8.7 |
6.2 |
Communication
Services |
6.0 |
6.9 |
Utilities |
2.9 |
4.9 |
Information
Technology |
2.2 |
0.5 |
Health Care |
0.8 |
0.5 |
Real Estate |
0.1 |
1.4 |
|
----- |
----- |
Total |
100.0 |
100.0 |
|
----- |
----- |
*excluding net current assets & fixed interest
Ten Largest Equity Investments (in percentage order)
Company |
Country of
Risk |
%
of
Equity Portfolio |
%
of
Benchmark |
|
|
|
|
Banco Bradesco |
Brazil |
9.2 |
7.2 |
Itau Unibanco |
Brazil |
9.0 |
7.6 |
Petrobras |
Brazil |
9.0 |
7.2 |
Vale |
Brazil |
8.7 |
7.1 |
America Movil |
Mexico |
4.8 |
4.1 |
Femsa |
Mexico |
3.6 |
2.8 |
Lojas Renner |
Brazil |
3.1 |
1.3 |
Grupo Financiero
Banorte |
Mexico |
3.1 |
2.2 |
B3 |
Brazil |
3.0 |
2.4 |
Walmart de Mexico y
Centroamerica |
Mexico |
2.8 |
2.3 |
Commenting on the markets,
Ed Kuczma and Sam Vecht, representing the Investment Manager
noted;
For the month of December 2018,
the Company’s NAV returned -0.1%1 with the share price
rising by 2.9%1. The Company’s benchmark, the MSCI EM
Latin America Index, fell by 0.6% (on both a net and
gross basis)2 (all performance figures are in sterling
terms with dividends reinvested).
Our overweight positions and selections within Brazil were the primary drivers of returns
during the month and performance remained resilient supported by
stable economic activity. Consumption oriented names such as
payment name, Linx, and retailers, Renner and B2W, performed well
with B2W demonstrating its ability to maintain sales growth. A lack
of positioning in beverage company, Ambev, was the largest
individual contributor in December. On the other hand our holdings
in Mexico weighed on performance
in aggregate. Energy-related names, Petrobras and Ultrapar, were
among the worst performers falling alongside declines in the oil
price. Similarly, Vale and steel producer Gerdau, detracted from
performance on commodity price weakness.
During the month we trimmed some Brazilian exposure following
strong relative performance in the region. On the other hand we
added to Mexico as the market
remained weak on what we believed to be overly negative sentiment.
This positioning was rewarded on the back of a responsible budget
proposal for 2019. Broadly, we have been active in taking profits
across our positions and redeploying capital on market dips. More
recently we have also trimmed exposure across the resource sectors.
The portfolio ended the period being overweight Brazil, while being underweight Chile, Peru
and Colombia, and maintaining a
relatively neutral stance on Mexico. We continue to maintain an
off-benchmark allocation to Argentina through software exporter, Globant.
At the sector level, we are overweight the domestic consumer, while
being underweight staples and utilities.
Brazil remains our largest
overweight, given our positive expectations for the incoming
administration. So far President-elect, Jair Bolsonaro, has
delivered on his campaign promises, looking to reduce the size of
the government by initially reducing the number of ministries,
naming sector/subject experts to lead cabinets, and pointing to a
continuation of the reform process initiated two years ago.
Meanwhile, the outlook for upcoming corporate results point to a
continuation in the economic recovery, providing strong momentum
for growth into 2019. Elsewhere, the cancellation of NAIM
(New Mexico International Airport)
reminded markets of the concerns regarding increasing populism for
the incoming administration in Mexico, reinforcing our cautious view on
Mexican equities. We remain underweight the Andean region due to a
combination of unattractive valuation and disappointing growth.
Finally, the dramatic sell off in Argentina in 2018 leaves the stocks trading at
attractive valuations while interest rates and the currency have
mostly stabilized providing a foundation for the economy to rebound
from recent downturn.
Sources:
1BlackRock as at 31 December
2018
2Datastream as at 31 December
2018
18 January 2019
ENDS
Latest information is available by typing
www.blackrock.co.uk/brla 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 the Manager’s website (or
any other website) is incorporated into, or forms part of, this
announcement.