BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151) 
All information is at 30 June 2018 and unaudited. 
 
Performance at month end with net income reinvested 
 
                                One      Three       One     Three      Five 
                              month     months      year     years     years 
                                  %          %         %         %         % 
 
Sterling: 
 
Net asset value^               -3.9      -16.8      -1.9      25.4       1.5 
 
Share price                    -4.4      -17.8      -2.4      24.3       0.8 
 
MSCI EM Latin America          -2.3      -12.5      -1.4      27.7       3.4 
 
US Dollars: 
 
Net asset value^               -4.6      -21.7      -0.3       5.3     -11.6 
 
Share price                    -5.2      -22.7      -0.8       4.3     -12.2 
 
MSCI EM Latin America          -3.0      -17.7       0.2       7.2     -10.0 
 
^cum income 
 
Sources: BlackRock, Standard & Poor's Micropal 
 
At month end 
 
Net asset value - capital only:                                         453.20p 
 
Net asset value - cum income:                                           458.63p 
 
Share price:                                                            390.00p 
 
Total Assets#:                                                          GBP195.1m 
 
Discount (share price to cum income NAV):                                 15.0% 
 
Average discount* over the month - cum income:                            14.9% 
 
Net gearing at month end**:                                                9.0% 
 
Gearing range (as a % of net assets):                                     0-25% 
 
Net yield##:                                                               4.0% 
 
Ordinary shares in issue***:                                         39,259,620 
 
Ongoing charges****:                                                       1.1% 
 
#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. As 
previously announced, the Board of the BlackRock Latin American Investment 
Trust plc have introduced a new dividend policy whereby the Company will pay 
regular quarterly dividends equivalent to 1.25% of the Company's US Dollar cum 
income NAV on the last working day of December, March, June and September each 
year, with the dividends being paid in November, February, May and August each 
year respectively. The first quarterly dividend under this new policy of 7.57 
cents was declared on 3 July 2018 and is payable on 23 August 2018.  The yield 
on the Company's shares projecting future quarterly dividends forward based on 
four quarters being paid at the same rate as the July dividend, and based on 
the Company's share price at 30 June 2018 converted to US dollars at the 
exchange rate on 30 June 2018, would be 5.8%. 
*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 2,181,662 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 
2017. 
 
Geographic Exposure 
 
                             % of Total      % of Equity           MSCI EM Latin 
                                 Assets      Portfolio *           America Index 
 
Brazil                             64.4             64.0                    54.2 
 
Mexico                             27.7             27.6                    27.2 
 
Chile                               4.4              4.3                    10.4 
 
Argentina                           2.9              2.9                     0.0 
 
Colombia                            1.2              1.2                     4.4 
 
Peru                                0.0              0.0                     3.8 
 
Net current assets/                -0.6              0.0                     0.0 
liabilities (inc. fixed 
interest) 
 
                                  -----            -----                   ----- 
 
Total                             100.0            100.0                   100.0 
 
                                  -----            -----                   ----- 
 
 
 
Sector                        % of Equity Portfolio              % of Benchmark 
                                                  * 
 
Financials                                     28.5                        29.5 
 
Materials                                      21.5                        19.0 
 
Consumer Staples                               11.4                        16.0 
 
Consumer Discretionary                         11.1                         6.2 
 
Energy                                          7.9                         8.8 
 
Telecommunication Services                      7.8                         6.7 
 
Industrials                                     7.0                         6.2 
 
Utilities                                       1.5                         4.6 
 
Information Technology                          1.2                         0.9 
 
Health Care                                     1.1                         0.6 
 
Real Estate                                     1.0                         1.5 
 
                                              -----                       ----- 
 
Total                                         100.0                       100.0 
 
                                              -----                       ----- 
 
*excluding net current assets & fixed interest 
 
Ten Largest Equity Investments (in percentage order) 
 
                             Country of Risk                % of             % of 
Company                                         Equity Portfolio        Benchmark 
 
Vale                         Brazil                          9.4              7.2 
 
Itau Unibanco                Brazil                          7.3              6.0 
 
Banco Bradesco               Brazil                          7.3              5.3 
 
Petrobras                    Brazil                          6.7              5.8 
 
America Movil                Mexico                          6.0              5.0 
 
Femsa                        Mexico                          4.2              3.1 
 
Grupo Financiero Banorte     Mexico                          4.0              2.6 
 
Walmart de Mexico            Mexico                          3.5              2.5 
 
B3                           Brazil                          3.1              1.9 
 
Cemex SAB                    Mexico                          2.8              1.7 
 
Commenting on the markets, Will Landers, representing the Investment Manager 
noted; 
 
For the month of June 2018, the Company's NAV fell by 3.9%* with the share 
price falling by 4.4%*. The Company's benchmark, the MSCI EM Latin America 
Index, fell by 2.3%* (all performance figures are in sterling terms with income 
reinvested). 
 
The Portfolio's underweight exposure to Chile was the month's top contributor 
to relative outperformance as the market broadly underperformed the region with 
the Chilean Peso depreciating further against the US Dollar. Brazilian stock 
selection also contributed positively although our heavy overweight position 
detracted. Off-benchmark positions such as digital retailer B2W and medical 
service provider Fleury, showed some resilience, ending the month in positive 
territory. Given that it was the best performing country in June, our light 
overweight to Mexico benefitted performance as markets and the Mexican Peso 
rallied given the easing of concerns regarding the election of Andres Manuel 
Lopes Obrador ("AMLO"). Defensive staples WalMart de Mexico and Arca 
Continental both performed well on strong execution and resiliency through this 
period of macro uncertainty. Cement manufacturer, GCC, was the month's top 
contributor. On the other hand our off-benchmark position in Argentina 
continued to weigh on performance despite a US$50 billion stand-by arrangement 
with the IMF (International Monetary Fund) to help support the currency and 
MSCI's decision to reclassify the country to Emerging Market status. Brazilian 
banks, Banco Bradesco and Itau Unibanco, were among the largest detractors amid 
pressure on the Real and increasing volatility on the back of approaching 
presidential elections. 
 
Most recently we increased the portfolio's overweight exposure to Brazil, while 
also shifting positioning within the country. Specifically, we added to 
underperforming SOEs (State Owned Enterprises) in Brazil given significant 
underperformance, attractive valuation, and our continued belief that the 
October election will elect a government committed to the current economic 
reform process.   We notably took profits from Rumo and Magazine Luiza amid 
strong performance, while adding to Petrobras and Banco do Brasil on weakness. 
On the other hand, we increased exposure across Mexico, moving the country 
exposure from underweight to neutral, on the expectation that an eventual AMLO 
administration would initially adopt market friendly policies. We also 
initiated a position in Colombia, while trimming some exposure to off-benchmark 
Argentina as tough fiscal and CPI (Consumer Price Index) targets associated 
with the IMF Stand-By Agreement are likely to result in lower growth. The 
portfolio ended the month being overweight Brazil while being underweight 
Chile, Peru and Colombia and neutral in Mexico. We also maintain an 
off-benchmark allocation to Argentina. At the sector level, we are overweight 
the domestic consumer and real estate, while being underweight utilities and 
financials. 
 
While Brazilian risk assets are likely to remain volatile through the election, 
we will look to take opportunities while markets are down.  Meanwhile, after a 

landslide victory for both the presidency and in congress, all eyes remain on 
how much of AMLO's campaign rhetoric will flow through into practice. Our 
sentiment towards Brazil has improved as we expect a less controversial 
administration in year one with a more tempered agenda. We continue to maintain 
underweight portfolio exposure to Chile due to rich valuations and lack of 
free-float liquidity, and have become more cautious on Peru given disappointing 
growth figures. We are keeping a close eye on Argentine inflation and the 
effectiveness of government measures to stabilize the currency, however at this 
point we remain comfortable with our exposure and have initiated a position in 
Colombia given higher oil prices, which in turn should ease fiscal concerns 
 
Sources: 
*BlackRock as at 30 June 2018 
**Datastream as at 30 June 2018 
 
17 July 2018 
 
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. 
 
 
 
END 
 

(END) Dow Jones Newswires

July 17, 2018 11:20 ET (15:20 GMT)