BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151) 
All information is at 31 August 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^              7.5      16.1     24.5      7.8      17.5     102.2 
 
Share price                   8.1      15.6     25.7      9.1      16.1      89.6 
 
MSCI EM Latin America         7.1      14.3     25.1     10.0      16.1     119.9 
 
US Dollars: 
 
Net asset value^              5.0      15.8     22.4    -16.4      -4.5      50.5 
 
Share price                   5.7      15.4     23.6    -15.3      -5.7      41.0 
 
MSCI EM Latin America         4.6      14.1     23.1    -14.6      -5.8      63.4 
 
^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:                                         543.04p 
 
Net asset value - cum income:                                           549.41p 
 
Share price:                                                            480.00p 
 
Total Assets#:                                                          GBP232.6m 
 
Discount (share price to cum income NAV):                                 12.6% 
 
Average discount* over the month - cum income:                            14.1% 
 
Net gearing at month end**:                                                7.1% 
 
Gearing range (as a % of net assets):                                     0-25% 
 
Net yield##:                                                               2.5% 
 
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                             63.1             63.4                    56.2 
 
Mexico                             25.8             25.9                    27.8 
 
Argentina                           4.2              4.3                     0.0 
 
Peru                                3.7              3.7                     3.0 
 
Chile                               1.9              1.9                     9.6 
 
Panama                              0.5              0.4                     0.0 
 
Colombia                            0.4              0.4                     3.4 
 
Net current assets                  0.4              0.0                     0.0 
(inc.Fixed interest) 
 
                                  -----            -----                   ----- 
 
Total                             100.0            100.0                   100.0 
 
                                  -----            -----                   ----- 
 
 
 
Sector                        % of Equity Portfolio              % of Benchmark 
                                                  * 
 
Financials                                     31.9                        30.5 
 
Consumer Staples                               17.7                        16.6 
 
Materials                                      14.1                        15.7 
 
Consumer Discretionary                         10.2                         6.4 
 
Energy                                          9.1                         7.5 
 
Telecommunication Services                      6.0                         6.6 
 
Industrials                                     5.9                         6.3 
 
Real Estate                                     1.5                         1.6 
 
Utilities                                       1.5                         6.3 
 
Information Technology                          1.1                         1.4 
 
Health Care                                     1.0                         1.1 
 
                                              -----                       ----- 
 
Total                                         100.0                       100.0 
 
                                              -----                       ----- 
 
*excluding net current liabilities & fixed interest 
 
Ten Largest Equity Investments (in percentage order) 
 
                             Country of                     % of             % of 
Company                      Risk               Equity Portfolio        Benchmark 
 
Itau Unibanco                Brazil                          7.4              6.4 
 
Banco Bradesco               Brazil                          7.0              6.3 
 
Petrobras                    Brazil                          6.8              4.6 
 
Vale                         Brazil                          6.0              5.3 
 
Ambev                        Brazil                          5.0              4.6 
 
America Movil                Mexico                          4.1              4.8 
 
Femsa                        Mexico                          3.8              3.0 
 
Grupo Financiero Banorte     Mexico                          3.3              2.6 
 
B3 (formerly BM&F Bovespa)   Brazil                          3.1              2.2 
 
Credicorp                    Peru                            2.7              2.1 
 
Commenting on the markets, Will Landers, representing the Investment Manager 
noted; 
 
For the month of August 2017, the Company's NAV rose by 7.5% with the share 
price rising by 8.1%. The Company's benchmark, the MSCI EM Latin America Index, 
rose by 7.1% (all performance figures are in sterling terms with income 
reinvested and are net of ongoing charges). 
 
Our selection within Mexico was the primary contributor in August, despite 
marginal Peso weakness and higher inflation both contributing to broad 
underperformance relative to the other Latin American markets. Our lack of 
positioning in the media name, Televisa, greatly benefitted the portfolio as 
the company has experienced falling advertising revenues and a drop in 
licensing and syndication as client growth declines. Similarly, the decision to 
not hold positions in airport operators GAP and ASUR, and to exit the low-cost 
airline, Volaris, last month also contributed to relative performance as 
traffic volumes continue to decelerate from the first half of the year. 
Portfolio declines were largely driven by stock specific factors. Cemex was 
among the top detractors from performance in August as Hurricane Harvey may 
have a negative impact on the company's Texas-based operations. Our overweight 
holding in the Brazilian rail logistics company, Rumo, was the largest 
individual detractor for the period. 
 
During the month broad positioning remained relatively unchanged, though we 
shifted some Mexican exposure. Specifically, we sold down our Grupo Bimbo 
position, using the proceeds to buy Gruma on the back of better growth and 
value dynamics. We also exited our position in tequila producer Becle given 
weaker than expected performance post its IPO (Initial Public Offering). In 
Brazil, we took profits from BM&F Bovespa and Hypermarcas, while adding 
exposure to more domestic consumption-oriented names such as retailers Lojas 
Americanas and Lojas Renner. The Company ended the month being overweight 
Brazil and Peru while being underweight Chile and Colombia. We also maintain an 
off-benchmark allocation to Argentina. At the sector level, we are overweight 
energy and select consumer names, while being underweight utilities and 
telecoms. 
 
As we enter September, our positioning and outlook remain relatively unchanged. 
We continue to be overweight in Brazil, and off-benchmark in Argentina, while 
being underweight in Chile, Colombia and Mexico.  Concerns regarding another 
potential overhang in Brazil's presidency have abated, allowing the 
administration to pivot back towards their economic agenda.  With increased 
stability from the political front, the primary drivers for Brazilian equities 
should remain the same: a) the continued easing cycle by the Central Bank which 
should help to bring forward the needed economic recovery (the Central Bank cut 
rates another 100 bps in September to 8.25% - 600 basis points of easing so far 
during the current cycle); and b) continued progress on the reform agenda, 
especially pension reform, which should help to bring stability to government 
accounts in the medium term.   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 position in the country - uncertainties 
regarding next year's presidential cycle add to our conviction on such 
positioning. We continue to be underweight in Chile due to rich valuations and 
lack of free-float liquidity, and despite slower than expected progress on the 
infrastructure front, we continue to favour Peru among its Andean neighbours. 
Argentina remains another top region for the strategy as fundamentals persist, 
with October mid-term elections expected to give a boost to President Macri's 
reform agenda. 
 
20 September 2017S 
 

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. 
 
 
 
END 
 

(END) Dow Jones Newswires

September 20, 2017 12:01 ET (16:01 GMT)