BLACKROCK FRONTIERS INVESTMENT TRUST PLC
BLACKROCK FRONTIERS INVESTMENT TRUST PLC
All information is at 31 December 2016 and unaudited.
Performance of ordinary share portfolio at month end with net income
reinvested.
One Three One Three Five Since
month months year years years Launch*
% % % % % %
Sterling:
Share price -1.3 0.8 31.4 24.6 110.4 55.2
Net asset value 2.6 3.0 28.6 31.1 101.3 61.7
MSCI Frontiers Index (NR) 3.9 5.6 22.5 25.8 61.7 34.1
MSCI Emerging Markets Index (NR) 1.3 0.7 32.6 24.0 34.0 13.6
US Dollars:
Share price -2.4 -4.1 10.2 -6.9 67.7 23.4
Net asset value 1.5 -2.0 7.8 -2.0 60.3 28.4
MSCI Frontiers Index (NR) 2.7 0.5 2.7 -6.2 28.6 6.3
MSCI Emerging Markets Index (NR) 0.2 -4.2 11.2 -7.5 6.5 -9.9
Sources: BlackRock and Standard & Poor's Micropal
* 17 December 2010.
At month end
Ordinary Shares
US Dollar
Net asset value - capital only: 159.99c
Net asset value - cum income: 164.74c
Sterling:
Net asset value - capital only: 129.48p
Net asset value - cum income: 133.32p
Share price: 130.00p
Total assets (including income): £219.1m
Discount to cum-income NAV: 2.5%
Gearing: nil
Gearing range (as a % of gross assets): 0-20%
Net yield*: 4.1%
Ordinary shares in issue: 164,333,108
Ongoing charges**: 1.4%
Ongoing charges plus taxation and performance fee: 2.4%
*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 2016
final dividend of 4.00 cents per share declared on 22 November 2016, payable to
shareholders on 17 February 2017 and the 2016 interim dividend of 2.60 cents
per share announced on 16 May 2016 and paid to shareholders on 1 July 2016.
**Calculated as a percentage of average net assets and using expenses,
excluding performance fees and interest costs for the year ended 30 September
2016.
The following relates specifically to the ordinary share portfolio.
Sector Analysis Gross assets(%)* Country Analysis Gross assets(%)*
Financials 37.9 Argentina 15.0
Consumer Staples 15.4 Romania 10.9
Telecommunication Services 15.1 Bangladesh 9.0
Health Care 7.8 Pakistan 8.9
Energy 7.5 Kazakhstan 8.1
Materials 6.2 Vietnam 7.6
Information Technology 5.9 Sri Lanka 6.7
Utilities 5.9 Kuwait 6.6
Industrials 3.3 Morocco 6.2
Real Estate 2.0 Ukraine 6.0
Consumer Discretionary 1.4 Kenya 5.5
----- Egypt 3.7
Total 108.4 Nigeria 3.4
----- Colombia 2.1
Short positions 0.0 Estonia 2.0
===== Caribbean 1.9
Slovenia 1.8
Turkey 1.8
Philippines 1.2
-----
Total 108.4
-----
Short positions 0.0
=====
*reflects gross market exposure from contracts for difference (CFDs).
Market Exposure
31.01 29.02 31.03 30.04 31.05 30.06 31.07 31.08 30.09 31.10 30.11 31.12
2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016
% % % % % % % % % % % %
Long 102.5 102.2 108.1 109.2 108.8 110.5 103.4 105.7 104.0 106.4 102.3 108.4
Short 1.4 1.1 1.2 1.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Gross 103.9 103.3 109.3 110.5 108.8 110.5 103.4 105.7 104.0 106.4 102.3 108.4
Net 101.1 101.1 106.9 107.9 108.8 110.5 103.4 105.7 104.0 106.4 102.3 108.4
Ten Largest Equity Investments
Company Country of Risk % of gross assets
MCB Bank Pakistan 5.2
Mobile Telecommunications Kuwait 4.5
Grupo Financiero Galicia Argentina 4.1
Maroc Telecom Morocco 3.8
Banco Macro Argentina 3.7
Square Pharmaceuticals Bangladesh 3.5
BRD Groupe Societe Generale Romania 3.3
Halyk Savings Bank Kazakhstan 3.2
Pampa Energia Argentina 3.2
Luxoft Ukraine 3.0
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the
Investment Manager noted:
In December, the Company's NAV rose by 1.5% lagging the MSCI Frontier benchmark
by -1.2%. The Company ended the year up 7.8% outperforming its benchmark by
5.1%. The MSCI Emerging Markets Index returned 0.2% and 11.2% over the same
periods (all performance figures are on a US Dollar basis with net income
reinvested).
Performance drivers from the previous month carried over into December, with
contribution being spread out across countries, sectors, and names.
Off-benchmark Egyptian positioning was among the larger contributors. Cleopatra
Hospital performed well gaining 36% during the month amid increasing confidence
over their ability to pass-through pricing impacts from November's devaluation
of the Egyptian Pound. Similarly, gold miner, Centamin, rose by 19% as currency
depreciation lowered cash costs. An underweight to Argentina benefited the fund
as the market struggled amid weak economic activity, the unexpected resignation
of Finance Minister Prat-Gay, and the subsequent split of the Finance Ministry
into two separate arms. We used this weakness to add to our positions in the
country. Our decision to not hold Vietnamese consumer staple, Vietnam Dairy,
was the largest individual contributor to relative performance for the period.
The stock fell by 9% due to a combination of uncertainty surrounding how the
country's export-focused economy will be impacted by trade shocks due to
President-Elect Trump's potentially protectionist policies, as well as a missed
target for the firm's secondary offering amid highly restrictive investment
caps.
On the other hand our short oil positioning, specifically through longstanding
underweights to the Middle East region detracted on a relative basis, as
announcements for further production cuts by both OPEC and non-OPEC members
caused oil prices to rally up to $55 per barrel. Specifically, the decision to
hold a substantial underweight in Kuwait and Oman, were among the largest
detractors. Similarly, although our Pakistani positions MCB Bank and DG Khan
Cement were among the month's strongest performers, gaining 10% and 17%
respectively, our underweight and more specifically, our decision to limit
exposure to the country's energy names hurt the Trust's performance in
aggregate. Broad selection within Morocco also weighed on returns, while a
position in Caribbean wholesale market operator, Pricesmart, was the largest
individual detractor.
Despite the year-end volatility stemming from US elections, Frontier Markets
continue to exhibit strong GDP growth and 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.
19 January 2017
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.
Blackrock Frontiers Inv Tst : INVESTMENT TRUST PLC - Portfolio Update
January 19, 2017 at 11:59 am EST
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© PRNewswire - 2017
