BlackRock Frontiers Portfolio Update

 
TIDMBRFI 
 
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706) 
 
All information is at 31 March 2019 and unaudited. 
 
Performance at month end with net income reinvested. 
 
 
                                        One    Three     One    Three     Five    Since 
                                      month   months    year    years    years   Launch* 
                                          %        %       %        %        %         % 
 
Sterling: 
 
Share price                            -2.9      0.2   -14.7     40.4     36.5      75.3 
 
Net asset value                         1.1      3.7   -10.0     39.5     44.8      81.0 
 
Benchmark (NR)**                        1.7      3.7     2.6     50.9     47.6      66.8 
 
MSCI Frontiers Index (NR)               3.3      4.5    -8.5     34.7     31.7      49.8 
 
MSCI Emerging Markets Index (NR)        2.9      7.4    -0.3     49.6     53.3      38.9 
 
US Dollars: 
 
Share price                            -4.9      2.6   -20.7     27.5      7.0      47.2 
 
Net asset value                        -1.0      6.2   -16.4     26.6     13.4      51.7 
 
Benchmark (NR)**                       -0.4      6.1    -4.7     36.8     15.3      40.5 
 
MSCI Frontiers Index (NR)               1.2      6.9   -15.0     22.1      2.9      25.2 
 
MSCI Emerging Markets Index (NR)        0.8      9.9    -7.4     35.6     19.8      16.1 
 
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 
Ordinary Shares 
 
US Dollar 
 
Net asset value - capital only:                                                173.28c 
 
Net asset value - cum income:                                                  175.48c 
 
Sterling: 
 
Net asset value - capital only:                                                132.97p 
 
Net asset value - cum income:                                                  134.66p 
 
Share price:                                                                   133.00p 
 
Total assets (including income):                                               GBP324.1m 
 
Discount to cum-income NAV:                                                       1.2% 
 
Gearing:                                                                           nil 
 
Gearing range (as a % of gross assets):                                          0-20% 
 
Net yield*:                                                                       4.8% 
 
Ordinary shares in issue:                                                  240,672,801 
 
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 4.8% and includes the 2018 
final dividend of 4.40 cents per share and special dividend of 1.00 cents per 
share, both of which were declared on 11 December 2018 and were paid to 
shareholders on 7 February 2019. Also included is the 2018 interim dividend of 
3.00 cents per share announced on 17 May 2018 and paid to shareholders on 29 
June 2018. 
 
**Calculated as a percentage of average net assets and using expenses, 
excluding performance fees and interest costs for the year ended 30 September 
2018. 
 
Sector                          Gross market    Country                Gross market value as 
Analysis                     value as a % of    Analysis                   a % of net assets 
                                  net assets 
 
Financials                              31.0    Indonesia                               14.2 
 
Real Estate                             16.8    Egypt                                    9.4 
 
Consumer Discretionary                  13.7    United Arab Emirates                     8.9 
 
Consumer Staples                        10.5    Vietnam                                  8.9 
 
Industrials                              8.7    Malaysia                                 8.8 
 
Energy                                   8.0    Argentina                                8.3 
 
Materials                                7.7    Thailand                                 7.6 
 
Health Care                              7.6    Kazakhstan                               7.2 
 
Communication Services                   6.6    Romania                                  5.4 
 
Utilities                                1.3    Nigeria                                  4.9 
 
Information Technology                   1.2    Greece                                   4.3 
 
                                       -----    Philippines                              3.1 
 
                                       113.1    Turkey                                   2.8 
 
Short positions                        -----    Poland                                   2.7 
 
                                        -6.6    Kuwait                                   2.5 
 
                                       =====    Ukraine                                  2.5 
 
                                                PAN-Africa                               2.3 
 
                                                Qatar                                    2.3 
 
                                                Saudi Arabia                             2.1 
 
                                                Kenya                                    2.0 
 
                                                Hungary                                  1.5 
 
                                                PAN-Asian                                0.8 
 
                                                Morocco                                  0.6 
 
                                                                                       ----- 
 
                                                Total                                  113.1 
 
                                                                                       ----- 
 
                                                Short positions                         -6.6 
 
                                                                                       ===== 
 
*reflects gross market exposure from contracts for difference (CFDs). 
 
Market Exposure 
 
 
        30.04  31.05  30.06  31.07  31.08  30.09  31.10  30.11  31.12  31.01  28.02  31.03 
         2018   2018   2018   2018   2018   2018   2018   2018   2018   2019   2019   2019 
            %      %      %      %      %      %      %      %      %      %      %      % 
 
Long    113.2  119.5  116.2  113.9  107.7  107.7  107.8  108.1  109.3  115.1  112.9  113.1 
 
Short     3.8    4.2    4.7    5.1    6.4    7.7    6.8    8.6    8.6    7.3    6.7    6.6 
 
Gross   117.0  123.7  120.9  119.0  114.1  115.4  114.6  116.7  117.9  122.4  119.6  119.7 
 
Net     109.4  115.3  111.5  108.8  101.3  100.0  101.0   99.5  100.7  107.8  106.2  106.5 
 
Ten Largest Investments 
 
Company                                 Country of Risk        Gross market value as a 
                                                                       % of net assets 
 
Banco Macro                             Argentina                                  3.6 
 
LT Group                                Philippines                                3.1 
 
Vincom Retail                           Vietnam                                    3.1 
 
Eastern Tobacco                         Egypt                                      2.9 
 
Thai Beverage Plc                       Thailand                                   2.8 
 
Emaar Properties                        United Arab Emirates                       2.8 
 
Halyk Savings Bank                      Kazakhstan                                 2.8 
 
Kaz Minerals                            Kazakhstan                                 2.7 
 
Astra International                     Indonesia                                  2.7 
 
Zenith Bank                             Nigeria                                    2.7 
 
 
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the 
Investment Manager noted: 
 
 
The Company's NAV returned -1.0%1 versus its benchmark, the MSCI New Frontier 
benchmark, which fell by 0.4%2. For reference, the MSCI Frontiers Index rose by 
1.2%2, and the MSCI Emerging Markets Index rose by 0.8%2, over the same period 
(all performance figures are on a US Dollar basis with net income reinvested). 
While the aggregate indices were relatively flat for the month overall, the 
numbers mask quite a bit of movement at the country and stock level. 
 
Stock selection in Indonesia, Egypt and Kuwait were the largest contributors to 
returns in March.  Indonesia was the strongest contributor to performance 
during the month driven by our holdings across the market in real estate, 
energy and financial sectors, which all posted double digit returns versus 
+0.62% for MSCI Indonesia.  Egyptian tobacco manufacturer, Eastern Tobacco 
Company (+11%), drove performance in that market, alongside diagnostics 
company, IDH (+7%).  Our position in National Bank of Kuwait (+12%) was an 
additional contributor. 
 
Our Argentine positions were the largest detractors from returns over the month 
as our holdings in financial, Banco Macro (-9%), commercial real estate 
company, IRSA (-20%) and electric utility, Pampa Energia (-13%), all sold off. 
The Argentine market was spooked by a selloff in Turkey as well as increasing 
uncertainty around the country's presidential elections later in the year.  Our 
holdings in Turkey detracted after policymakers chose to try and control the 
currency ahead of municipal elections, causing a squeeze in the offshore market 
and ultimately a sharp selloff in both bonds and equities.  Our holding in UAE 
hospital operator NMC (-18%) was an additional detractor after reporting worse 

than expected earnings results and corporate governance concerns. 
 
In terms of positioning the portfolio, we returned from a trip to Nigeria with 
a lower growth outlook for the country and have trimmed our holdings there.  We 
have concerns about the future direction of state intervention and see little 
hope of the needed investment in infrastructure or measures to resolve the 
fiscal deficit.  In Turkey, where elections appear to have resulted in a 
surprise loss for the AK party despite heavy campaigning, we are watching the 
actions of the central bank and their actions to defend the currency, which run 
the risk of hurting credibility with Turkey's creditors.  We also had elections 
in Thailand towards the end of the month although results won't be declared 
until early May.  Both sides are claiming victory which in our view only leads 
to further uncertainty and deteriorating hope of any pick up in investment. 
The country continues to lose market share to cheaper and better educated 
markets, while valuations remain expensive and profitability depressed.  Our 
team will be travelling to the region this month to review the situation on the 
ground and we will also be visiting Azerbaijan, Kazakhstan and Uzbekistan. 
 
While emerging and frontier markets delivered a strong first quarter return for 
2019, indicators of market sentiment look far from overstretched particularly 
in the smaller markets in which we invest.  We continue to position for a 
positive environment for emerging and frontier markets in aggregate, supported 
by a lower rate environment.  Overall, the wide subset of countries that make 
up our investible universe continue to exhibit strong GDP (Gross Domestic 
Product) growth, have 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. 
 
12 April 2019 
 
 
Sources: 
 
1BlackRock as at 31 March 2019 
 
2MSCI as at 31 March 2019 
 
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 Kazakhstan 
 
 
 
END 
 

(END) Dow Jones Newswires

April 16, 2019 11:32 ET (15:32 GMT)