BLACKROCK FRONTIERS INVESTMENT TRUST PLC BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)
All information is at 31 October 2020 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 | 3.6 | 7.0 | -20.2 | -29.5 | 15.5 | 36.3 |
| Net asset value | 3.2 | 4.4 | -18.1 | -22.8 | 14.4 | 45.5 |
| Benchmark (NR)** | -1.2 | -1.7 | -16.6 | -13.4 | 24.5 | 35.6 |
| MSCI Frontiers Index (NR) | 1.0 | 11.9 | -2.4 | -2.6 | 40.0 | 53.6 |
| MSCI Emerging Markets Index (NR) | 2.0 | 4.2 | 8.3 | 8.8 | 74.8 | 52.2 |
| US Dollars: | ||||||
| Share price | 3.7 | 5.4 | -20.2 | -31.3 | -3.2 | 13.5 |
| Net asset value | 3.2 | 2.8 | -18.2 | -24.8 | -4.1 | 21.0 |
| Benchmark (NR)** | -1.2 | -3.1 | -16.7 | -15.7 | 4.2 | 13.4 |
| MSCI Frontiers Index (NR) | 1.0 | 10.2 | -2.5 | -5.2 | 17.3 | 27.4 |
| MSCI Emerging Markets Index (NR) | 2.1 | 2.6 | 8.3 | 5.9 | 46.4 | 26.2 |
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: | 128.45c |
| Net asset value - cum income: | 130.94c |
| Sterling: | |
| Net asset value - capital only: | 99.35p |
| Net asset value - cum income: | 101.27p |
| Share price: | 96.70p |
| Total assets (including income): | £244.3m |
| Discount to cum-income NAV: | 4.5% |
| Gearing: | nil |
| Gearing range (as a % of gross assets): | 0-20% |
| Net yield*: | 6.0% |
| Ordinary shares in issue**: | 241,210,518 |
| 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 6.0% and includes the 2019 final dividend of 4.75 cents per share declared on 06 December 2019 with a pay date of 07 February 2020. Also included is the 2020 interim dividend of 2.75 cents per share, announced on 28 May 2020 and paid to shareholders on 26 June 2020.
** Excluding 612,283 ordinary shares held in treasury.
***Calculated as a percentage of average net assets and using expenses, excluding Performance fees and interest costs for the year ended 30 September 2019.
| Sector Analysis | Gross market value as a % of net assets* | Country Analysis | Gross market value as a % of net assets* | ||
| Financials | 28.4 | Indonesia | 14.0 | ||
| Consumer Discretionary | 19.4 | Saudi Arabia | 11.0 | ||
| Industrials | 13.8 | Philippines | 9.6 | ||
| Materials | 12.7 | Vietnam | 9.1 | ||
| Consumer Staples | 8.3 | Egypt | 7.0 | ||
| Energy | 5.4 | Thailand | 6.8 | ||
| Real Estate | 5.3 | Kazakhstan | 5.7 | ||
| Utilities | 5.1 | Chile | 5.3 | ||
| Communication Services | 3.5 | Malaysia | 4.9 | ||
| Health Care | 2.8 | Greece | 4.6 | ||
| Information Technology | 2.2 | Poland | 4.3 | ||
| ----- | Pakistan | 3.7 | |||
| 106.9 | Romania | 3.5 | |||
| ----- | Qatar | 3.3 | |||
| Short positions | 0.0 | Ukraine | 1.9 | ||
| ===== | Czech Republic | 1.9 | |||
| PAN-Africa | 1.7 | ||||
| Panama | 1.6 | ||||
| United Arab Emirates | 1.5 | ||||
| Peru | 1.5 | ||||
| Pan-Emerging Europe | 1.5 | ||||
| Kenya | 1.2 | ||||
| Hungary | 0.7 | ||||
| Nigeria | 0.6 | ||||
| ----- | |||||
| Total | 106.9 | ||||
| ----- | |||||
| Short positions | 0.0 | ||||
| ===== |
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
| 30.11 2019 % |
31.12 2019 % |
31.01 2020 % |
29.02 2020 % |
31.03 2020 % |
30.04 2020 % |
31.05 2020 % |
30.06 2020 % |
31.07 2020 % |
31.08 2020 % |
30.09 2020 % |
31.10 2020 % | |
| Long | 107.8 | 108.0 | 113.0 | 107.1 | 106.4 | 105.9 | 109.6 | 109.8 | 110.3 | 110.2 | 107.8 | 106.9 |
| Short | 1.7 | 1.0 | 1.1 | 3.8 | 2.5 | 2.6 | 2.5 | 1.5 | 1.1 | 0.0 | 0.0 | 0.0 |
| Gross | 109.5 | 109.0 | 114.1 | 110.9 | 108.9 | 108.5 | 112.1 | 111.3 | 111.4 | 110.2 | 107.8 | 106.9 |
| Net | 106.1 | 107.0 | 111.9 | 103.3 | 103.9 | 103.3 | 107.1 | 108.3 | 109.2 | 110.2 | 107.8 | 106.9 |
Ten Largest Investments
| Company | Country of Risk | Gross market value as a % of net assets |
| Astra International | Indonesia | 3.2 |
| Indocement Tunggal Prakarsa | Indonesia | 3.1 |
| Mobile World | Vietnam | 2.9 |
| LT Group | Philippines | 2.8 |
| Eastern Tobacco | Egypt | 2.6 |
| United International Transport | Saudi Arabia | 2.6 |
| PTT Exploration & Production Public | Thailand | 2.5 |
| JSC Kaspi | Kazakhstan | 2.5 |
| MCB Bank | Pakistan | 2.3 |
| CP All PCL | Thailand | 2.3 |
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the Investment Manager noted:
The Company’s NAV returned +3.2% versus the Company’s benchmark (the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”)), which returned -1.2% in October. For reference, the MSCI Emerging Markets Index ended the month +2.1% and the MSCI Frontier Markets Index +1.0% over the same period (all performance figures are on a US Dollar basis with net income reinvested).
South East Asian countries led performance this month as they saw the first signs of economic normalization. Stocks in Indonesia performed especially well following signs of economic recovery. Indocement rose 20% after reporting better than expected results showing a recovery in cement volumes to only -5% year-on-year, and up 43% quarter-on-quarter. Similarly, conglomerate Astra International rose 24% after reporting a recovery in auto sales volumes in Q3. With the Indonesian market still down 31% from its January peak as at the end of October, we continue to hold our positions and believe that the market has further to rally.
Similarly, we saw strong returns to holdings in the Philippines. Long term holding LT Group, rose 31% during the month. Whilst the stock rallied from an excessively cheap level, there was no obvious catalyst for it to do so. We continue to think that the company is very undervalued. Bank of the Philippine Islands was also a positive contributor rising 16% after reporting better than expected results, particularly around asset quality.
Having seen very few for an extended period, there was a sudden rush of initial public offerings which closed in October and the fund participated in a few. Polish e-commerce company Allegro closed the month 87% higher than its IPO price and Kazakh e-commerce and fintech platform Kaspi rose 27%.
On the other hand, our positions in Vietnam were the main detractors this month as the market took a pause after a strong run recently. We continue to like the macro dynamics of this market as the strong export numbers the country is enjoying are not offset by Imports in this cycle, benefiting the country trade balance dynamics.
We have reduced exposure in our portfolio a small amount into month end after a strong run, locking profits on our winners. We exited low cost airline Wizz Air after a strong rebound and reduced our two largest Indonesian positions post the strong rally in this market.
While smaller emerging and frontier markets are vulnerable to health and economic fall-out from covid-19, data thus far on infection rate and fatalities gives some hope that the damage to life and economy will not be as pervasive as originally feared. We are broadly positioned for a normalisation in global economic activity on a one-year basis, preferring cyclicals to growth stocks. We remain positive on prospects of select economies, where policy makers have taken upfront, prudent measures to contain COVID-19, where the foreign exchange debt situation is relatively manageable, that will benefit from lower oil prices and whose currencies are not over-valued. More broadly, many of our markets continue to look very compelling at current valuation, trading at sub 9x trailing price-to-earnings and in some cases close to global financial crisis levels. Despite the bounce, the portfolio is still around the lowest valuation levels that we have seen in the last 10 years
Sources:
1BlackRock as at 31 October 2020
2MSCI as at 31 October 2020
16 November 2020
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.
