BlackRock Frontiers Portfolio Update

 
TIDMBRFI 
 
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):                                                 GBP219.1m 
 
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. 
 
 
 
END 
 

(END) Dow Jones Newswires

January 19, 2017 11:58 ET (16:58 GMT)