BlackRock Frontiers Portfolio Update

 
TIDMBRFI 
 
BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706) 
 
All information is at 30 September 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                            -0.6     -3.6    -0.9     15.0     23.4      77.1 
 
Net asset value                         0.1     -3.1     4.1     17.7     31.5      84.7 
 
Benchmark (NR)**                       -1.4     -2.9     5.8     35.3     29.2      70.6 
 
MSCI Frontiers Index (NR)              -3.1      2.1    12.0     29.2     23.4      64.0 
 
MSCI Emerging Markets Index (NR)        0.7     -1.1     3.7     25.5     47.6      41.5 
 
US Dollars: 
 
Share price                             0.6     -6.7    -6.3      9.2     -6.0      40.6 
 
Net asset value                         1.2     -6.2    -1.6     11.7      0.2      46.4 
 
Benchmark (NR)**                       -0.2     -6.0     0.0     28.4     -1.8      35.9 
 
MSCI Frontiers Index (NR)              -2.0     -1.1     5.9     22.6     -6.2      29.6 
 
MSCI Emerging Markets Index (NR)        1.9     -4.2    -2.0     19.0     12.2      11.8 
 
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 
 
US Dollar 
 
Net asset value - capital only:                                                161.17c 
 
Net asset value - cum income:                                                  166.41c 
 
Sterling: 
 
Net asset value - capital only:                                                130.79p 
 
Net asset value - cum income:                                                  135.04p 
 
Share price:                                                                   132.00p 
 
Total assets (including income):                                               GBP325.0m 
 
Discount to cum-income NAV:                                                       2.3% 
 
Gearing:                                                                           nil 
 
Gearing range (as a % of gross assets):                                          0-20% 
 
Net yield*:                                                                       5.0% 
 
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 5.0% and includes the 2018 
final dividend of 4.40 cents per share and special dividend of 1.0 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 2019 interim dividend of 
3.00 cents per share announced on 30 May 2019 and paid to shareholders on 28 
June 2019. 
 
**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                              23.0    Indonesia                               13.1 
 
Consumer Staples                        14.2    Thailand                                12.1 
 
Industrials                             13.6    Egypt                                   10.2 
 
Consumer Discretionary                  13.3    Vietnam                                  9.9 
 
Real Estate                             13.3    United Arab Emirates                     9.1 
 
Energy                                  10.0    Malaysia                                 5.8 
 
Materials                                9.9    Philippines                              5.6 
 
Health Care                              5.2    Kazakhstan                               5.2 
 
Communication Services                   4.0    Turkey                                   5.2 
 
Utilities                                1.8    Saudi Arabia                             4.6 
 
Information Technology                   1.8    Romania                                  4.1 
 
                                       -----    Pakistan                                 3.9 
 
                                       110.1    Nigeria                                  3.7 
 
Short positions                        -----    Greece                                   3.0 
 
                                        -4.1    Colombia                                 2.3 
 
                                       =====    PAN-Africa                               2.3 
 
                                                Ukraine                                  2.2 
 
                                                Qatar                                    2.2 
 
                                                Chile                                    1.9 
 
                                                Argentina                                1.7 
 
                                                Kenya                                    1.1 
 
                                                Poland                                   0.7 
 
                                                Morocco                                  0.2 
 
                                                                                       ----- 
 
                                                Total                                  110.1 
 
                                                                                       ----- 
 
                                                Short positions                         -4.1 
 
                                                                                       ===== 
 
 
*reflects gross market exposure from contracts for difference (CFDs). 
 
Market Exposure 
 
 
        31.10  30.11  31.12  31.01  28.02  31.03  30.04  31.05  30.06  31.07  31.08  30.09 
         2018   2018   2018   2019   2019   2019   2019   2019   2019   2019   2019   2019 
            %      %      %      %      %      %      %      %      %      %      %      % 
 
Long    107.8  108.1  109.3  115.1  112.9  113.1  116.0  111.0  114.1  117.0  111.5  110.1 
 
Short     6.8    8.6    8.6    7.3    6.7    6.6    6.6    8.8    8.1    5.1    4.2    4.1 
 
Gross   114.6  116.7  117.9  122.4  119.6  119.7  122.6  119.8  122.2  122.1  115.7  114.2 
 
Net     101.0   99.5  100.7  107.8  106.2  106.5  109.4  102.2  106.0  111.9  107.3  106.0 
 
Ten Largest Investments 
 
Company                                 Country of Risk        Gross market value as a 
                                                                       % of net assets 
 
Astra International                     Indonesia                                  3.5 
 
Charoen Pokphand Food                   Thailand                                   3.2 
 
Vincom Retail                           Vietnam                                    3.1 
 
PTT Global Chemical                     Thailand                                   3.1 
 
Eastern Tobacco                         Egypt                                      3.0 
 
LT Group                                Philippines                                2.9 
 
Mobile World                            Vietnam                                    2.7 
 
Emaar Development                       United Arab Emirates                       2.6 
 
Orascom Construction                    Egypt                                      2.6 
 
Bank of the Philippine Islands          Philippines                                2.5 
 
 
Commenting on the markets, Sam Vecht and Emily Fletcher, representing the 
Investment Manager noted: 
 
 
 
The Company's NAV returned +1.2%1 versus its benchmark the MSCI Emerging ex 
Selected Countries + Frontier Markets + Saudi Arabia Index ("Benchmark Index"), 
which was down 0.2% in August2.  For reference, the MSCI Frontiers Index was 
down 2.0%2, and the MSCI Emerging Markets Index was up 1.9% over the same 
period (all performance figures are on a US Dollar basis with net income 
reinvested). 
 
Stock selection in Chile, Egypt and UAE (United Arab Emirates), were among the 
largest contributors to Company's returns in September. Chilean airline, LatAm 
Airlines (+33%), was the month's top performer, benefitting from regional 
competitor Avianca's bankruptcy, and a recent bid from Delta to acquire a 20% 
stake of the company. Egypt saw a re-rating, supported by falling inflation 
which has allowed the central bank to cut rates. Positions in tobacco, namely 
Eastern Co. (+13%), and construction firm, Orascom Construction (+15%), 
contributed positively, the latter of which posted strong half yearly results 
and continues to see a build-up in their order book. UAE hospital operator, NMC 
(+10%), performed well on the back of positive half yearly results, which show 
better cash flow conversion and improvements in corporate governance. 
 
On the other hand, Thai, Kazakh, and Indonesian positioning detracted the most 
over the month. Thai staple name, CP Foods (-11%), detracted amid weak chicken 
prices. Indonesian cement producer, Semen Indonesia (-9%), fell back from 
recent highs. Kazakh uranium miner, Kazatamprom (-12%), also weighed on returns 
as the parent company announced a placing of shares in the market. 
 
The first half of September brought a significant style rotation in equity 

markets, most stark in the US with a multiple standard deviation move over a 
matter of days. The move in Emerging Markets, though more muted, was notable. 
Positioning remained relatively unchanged, however, we did make some notable 
stock specific trades through September. In Poland, we exited exiting copper 
miner, KGHM, on concerns of global growth deterioration and also sold our 
position in Alior Bank, as corporate asset quality issues persist.  On the 
other hand, we rotated capital into Thai petrochemical company, PTT Global 
Chemical where we think valuation has hit trough levels and the dividend yield 
remains attractive.  We added a new position in the Philippines, Bloomberry 
Resorts, an integrated casino, entertainment and hotel complex. The Philippines 
is one of our preferred countries from a macro perspective where we think that 
economic growth will be supported by recent rate cuts and RRR (reserve 
requirement ratio) cuts by the BSP (The Bangko Sentral) and a number of stocks 
look attractively valued. 
 
We see significant value in the smaller emerging and frontier markets and see 
the markets well supported by the lower rate environment. We note that a lot of 
stocks in our universe are trading at extreme valuations, which we view as an 
opportunity to invest in a wide subset of countries which exhibit good growth, 
have low government debt levels, and are home to companies with strong cash 
flow and high dividend yields, trading on some of the lowest valuations in the 
world. 
 
Sources: 
 
1BlackRock as at 30 September 2019 
 
2MSCI as at 30 September 2019 
 
21 October 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. 
 
 
 
END 
 

(END) Dow Jones Newswires

October 21, 2019 06:42 ET (10:42 GMT)