BlackRock Frontiers Investment Trust Plc - Portfolio Update
PR Newswire
London, February 15
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 January 2023 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 | 8.2 | 10.1 | 11.8 | 33.7 | 2.1 | 113.7 |
| Net asset value | 3.2 | 3.6 | 6.7 | 36.4 | 12.2 | 129.9 |
| Benchmark (NR)** | 0.4 | -2.7 | 3.7 | 15.7 | 13.2 | 82.7 |
| MSCI Frontiers Index (NR) | 2.1 | 1.3 | -13.0 | 0.2 | 0.7 | 63.7 |
| MSCI Emerging Markets Index (NR) | 5.4 | 14.2 | -4.2 | 11.6 | 7.2 | 57.5 |
| US Dollars: | ||||||
| Share price | 10.8 | 17.9 | 2.7 | 24.9 | -11.5 | 69.6 |
| Net asset value | 5.7 | 10.9 | -2.0 | 27.5 | -2.8 | 82.1 |
| Benchmark (NR)** | 2.7 | 4.0 | -4.9 | 8.0 | -2.0 | 45.3 |
| MSCI Frontiers Index (NR) | 4.5 | 8.3 | -20.2 | -6.5 | -12.8 | 29.2 |
| MSCI Emerging Markets Index (NR) | 7.9 | 22.2 | -12.1 | 4.3 | -7.2 | 24.3 |
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: | 176.55c |
| Net asset value - cum income: | 177.76c |
| Sterling: | |
| Net asset value - capital only: | 143.41p |
| Net asset value - cum income: | 144.40p |
| Share price: | 136.00p |
| Total assets (including income): | £273.4m |
| Discount to cum-income NAV: | 5.8% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 4.1% |
| Ordinary shares in issue**: | 189,325,748 |
| Ongoing charges***: | 1.4% |
| 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 4.1% and includes the 2022 interim dividend of 2.75 cents per share, declared on 26 May 2022, and paid to shareholders on 24 June 2022 and the 2022 final dividend of 4.25 cents per share, declared on 8 December 2022, and paid to shareholders on 19 January 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 | 43.1 | Saudi Arabia | 16.9 | |
| Energy | 12.5 | Indonesia | 16.2 | |
| Consumer Discretionary | 11.4 | Vietnam | 9.1 | |
| Industrials | 11.1 | Thailand | 7.9 | |
| Consumer Staples | 9.4 | Kazakhstan | 7.4 | |
| Materials | 8.5 | Hungary | 6.9 | |
| Communication Services | 6.3 | United Arab Emirates | 6.5 | |
| Information Technology | 5.3 | Chile | 5.9 | |
| Real Estate | 3.1 | Malaysia | 5.0 | |
| Health Care | 1.7 | Poland | 4.6 | |
| ----- | Greece | 4.6 | ||
| 112.4 | Egypt | 2.8 | ||
| ----- | Qatar | 2.7 | ||
| Short positions | -5.1 | Panama | 2.3 | |
| ===== | Argentina | 2.2 | ||
| Philippines | 2.1 | |||
| Peru | 1.8 | |||
| Colombia | 1.6 | |||
| Georgia | 1.6 | |||
| Romania | 1.5 | |||
| Kuwait | 1.3 | |||
| Kenya | 0.8 | |||
| Ukraine | 0.7 | |||
| ----- | ||||
| Total | 112.4 | |||
| ----- | ||||
| Short positions | -5.1 | |||
| ===== |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 28.02 2022 % | 31.03 2022 % | 30.04 2022 % | 31.05 2022 % | 30.06 2022 % | 31.07 2022 % | 31.08 2022 % | 30.09 2022 % | 31.10 2022 % | 30.11 2022 % | 31.12 2022 % | 31.01 2023 % | |
| Long | 110.7 | 111.1 | 110.6 | 107.9 | 106.1 | 107.3 | 107.3 | 106.2 | 107.4 | 106.2 | 110.7 | 112.4 |
| Short | 3.3 | 2.3 | 1.8 | 4.7 | 4.6 | 6.2 | 5.3 | 5.2 | 5.3 | 4.8 | 4.9 | 5.1 |
| Gross | 114.0 | 113.4 | 112.4 | 112.6 | 110.7 | 113.5 | 112.6 | 111.4 | 112.7 | 111.0 | 115.6 | 117.5 |
| Net | 107.4 | 108.8 | 108.8 | 103.2 | 101.5 | 101.1 | 102.0 | 101.0 | 102.1 | 101.4 | 105.8 | 107.3 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| Bank Central Asia | Indonesia | 4.9 |
| PKO Bank Polski | Poland | 4.6 |
| Astra International | Indonesia | 3.5 |
| Genting Malaysia | Malaysia | 3.3 |
| Saudi National Bank | Saudi Arabia | 3.1 |
| OTP Bank | Hungary | 3.1 |
| Emaar Properties | United Arab Emirates | 3.1 |
| FPT | Vietnam | 3.0 |
| Bank Mandiri | Indonesia | 2.9 |
| JSC Kaspi | Kazakhstan | 2.9 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:
The Company's NAV returned 5.7% versus it's benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index ("Benchmark Index"), which was up by 2.7% in January. For reference, the MSCI Emerging Markets Index ended the month up by 7.9% and the MSCI Frontier Markets Index was up by 4.5% over the same period (all performance figures are on a US Dollar basis with net income reinvested).
MSCI Emerging Markets index was supported by the North Asian markets (China, Taiwan, Korea), given the faster than expected reopening of the Chinese economy. In Frontier Markets, Eastern Europe continued its strong run of late with Czech Republic (+17%), Greece (+12%), Hungary (+8%) and Poland (+7%) all contributing. Elsewhere, Vietnam (+11%) was another standout performer, bouncing back from a challenged 2022. The Middle East was more mixed with Saudi Arabia (+2%), Qatar (+2%) finishing in the green while UAE was down by 3%.
In terms of portfolio performance, Hungarian low-cost airline Wizz Air (+43%) was the top contributor. The company has continued to deliver strong operating results given strong tourism/travel demand across the continent and profitability was further supported by jet fuel hedges rolling off. Chilean beverage producer Cervercerias Unidas (+17%) was another top performer given recent market share gains and the strength of the Chilean peso. In the Middle East, UAE real estate developer, Emaar Properties (-5%) gave back some of the recent gains. The Dubai real estate sector continues to benefit from regional population inflows. Halyk Bank (-6%), Kazakhstan's leading financial services firm, also detracted from performance.
We made a few changes to the portfolio in January. We increased our exposure to Thailand given the benefit of the Chinese reopening to tourism into Thailand. We initiated a new position in Bangkok Bank as we believe it is better positioned within the banking sector relative its peers. We also added to our existing position in telecom operator Advanced Info Services. We added to our position in Hungarian bank OTP as the macro setup remains compelling in the country. We trimmed some exposure in Emaar Properties and exited Thai energy company PTT as we search for differentiated oil exposures elsewhere.
Our team sees a marked contrast in the monetary and fiscal policy decisions taken in small emerging/frontier versus developed markets in the post pandemic years and find significant value in currencies and equity markets across our investment opportunity set. We are optimistic over the long-term in our under-researched investment universe which should enable compelling alpha opportunities.
Sources:
1BlackRock as at 31 January 2023
2MSCI as at 31 January 2023
16 February 2023
ENDS
Latest information is available by typing www.blackrock.com/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.
