BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151)
All information is at 31 May 2017 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five ^^Since
month months year years years 31.03.06
% % % % % %
Sterling:
Net asset value^ -3.1 -5.7 39.5 7.1 4.0 74.2
Share price -1.1 -4.1 33.6 2.7 0.4 64.0
MSCI EM Latin America -2.1 -5.3 44.1 10.5 3.1 92.4
US Dollars:
Net asset value^ -3.3 -2.1 23.6 -17.5 -12.6 29.9
Share price -1.3 -0.4 18.4 -21.0 -15.7 22.2
MSCI EM Latin America -2.3 -1.7 27.8 -15.0 -13.6 43.2
^cum income
^^Date which BlackRock took over the investment management of the Company.
Sources: BlackRock, Standard & Poor's Micropal
At month end
Net asset value - capital only: 468.50p
Net asset value - cum income: 473.41p
Share price: 415.25p
Total Assets#: £193.4m
Discount (share price to cum income NAV): 12.3%
Average discount* over the month - cum income: 12.8%
Net gearing at month end**: 3.7%
Gearing range (as a % of net assets): 0-25%
Net yield##: 2.9%
Ordinary shares in issue***: 39,369,620
Ongoing charges****: 1.2%
#Total assets include current year revenue.
## calculated using total dividends declared in the last 12 months as at the
date of this announcement as a percentage of month end share price.
*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.
***Excluding 2,071,662 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 31 December
2016.
Geographic Exposure
% of Total % of Equity MSCI EM Latin
Assets Portfolio * American Index
Brazil 62.2 62.7 55.5
Mexico 26.1 26.3 28.6
Argentina 4.8 4.9 0.0
Peru 4.2 4.2 2.9
Chile 1.4 1.4 9.5
Colombia 0.5 0.5 3.5
Net current assets 0.8 0.0 0.0
(inc.Fixed interest)
----- ----- -----
Total 100.0 100.0 100.0
----- ----- -----
Sector % of Equity Portfolio % of Benchmark
*
Financials 30.1 29.5
Consumer Staples 21.1 18.1
Materials 14.5 14.8
Energy 10.3 8.0
Industrials 6.5 6.7
Telecommunication Services 5.7 6.6
Consumer Discretionary 5.7 6.0
Utilities 3.3 6.2
Real Estate 1.6 1.5
Information Technology 1.2 1.5
Health Care 0.0 1.1
----- -----
Total 100.0 100.0
----- -----
*excluding net current liabilities & fixed interest
Ten Largest Equity Investments (in percentage order)
Country of Risk % of % of
Company Equity Portfolio Benchmark
Itau Unibanco Brazil 7.9 6.2
Petrobras Brazil 6.5 5.0
Banco Bradesco Brazil 5.8 5.9
Vale Brazil 5.7 4.6
Femsa Mexico 4.3 3.0
AmBev Brazil 4.1 4.8
BM&F Bovespa Brazil 3.9 2.1
America Movil Mexico 3.6 4.7
Grupo Financiero Banorte Mexico 3.1 2.5
Kroton Educacional Brazil 2.9 1.1
Commenting on the markets, Will Landers, representing the Investment Manager
noted;
For the month of May 2017, the Company's NAV fell by 3.1%, and the share price
fell by 1.1%. The Company's benchmark, the MSCI EM Latin America Index, fell by
2.1% (all performance figures are in sterling terms).
Our off-benchmark allocation to Argentina remained a top contributor for the
period as investors expected MSCI to reclassify the country as an emerging
market. However, on 20 June 2017, MSCI announced the postponement of their
decision, citing the need to monitor the persistence of recently implemented
market accessibility improvements. Whilst this result may be a disappointment
to some market participants, we would remind investors of the substantial
positive macro-economic changes that Argentina has witnessed over recent years.
We believe it is still a compelling investment destination for long-term
investors and have been looking to selectively add exposure on weakness. Pampa
Energia and internet name, Mercadolibre, were among the top performers for the
month. Our overweight to Peru also contributed positively, despite the marginal
currency depreciation last month on the back of stronger than expected trade
surplus numbers and a March GDP growth print that was ahead of expectations. On
the other hand, our heavy overweight to Brazil earlier in the month detracted
as the market corrected sharply on news of another political scandal, putting
President Temer and his reform agenda in question. As a result Petrobras and
Bradesco were among the largest individual detractors in May. An underweight to
Mexican telecom, America Movil, also weighed on performance as the stock gained
on easing competitive and regulatory pressures.
During the month, we trimmed our Brazilian overweight following headlines
implicating President Temer in corruption wrongdoing, specifically reducing
exposure to Petrobras and Bradesco. We also reduced our underweight to America
Movil. The Company ended the period overweight Brazil and Peru, while being
underweight Chile, Mexico and Colombia. We also maintain off-benchmark
positions in Argentina.
We entered the second quarter of the year maintaining overweight positions in
Brazil, Peru and off-benchmark Argentina, while maintaining underweight
positions in Chile, Colombia and Mexico. In the near term, negative sentiment
concerning another potential presidential scandal has reversed the green shoots
seen over the last couple of months and has put President Temer's term and
reform agenda into question. Should we see continuity of government, the
primary drivers for Brazilian equities should remain the same: a) the continued
easing cycle (albeit at a slower pace) by the Central Bank which should help to
bring forward the needed economic recovery; and b) progress on the reform
agenda, especially pension reform, which should help to bring stability to
government accounts in the medium term. Once the latter passes, we believe
this will open the door for the Central Bank to bring the easing cycle further
forward and potentially bring rates lower than market expectations. Meanwhile,
despite a more conciliatory tone from the US government on the trade front, we
maintain our cautious view on Mexican growth, and therefore our underweight
(despite a PRI win in the gubernatorial election in the state of Mexico in
early June, results were not conclusive as to the likelihood of a MORENA
victory in next year's presidential elections). Despite slower than expected
progress on the infrastructure front, we continue to favour Peru among its
Andean neighbours, and see improving economic activity in Argentina as a
positive for that country's stock market.
22 June 2017
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.
BlackRock Latin American Inv Tst : Investment Trust Plc - Portfolio Update
June 22, 2017 at 11:02 am EDT
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© PRNewswire - 2017
