BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
The information contained in this release was correct as at 30 September 2020. 
Information on the Company's up to date net asset values can be found on the 
London Stock Exchange Website at 
 
https://www.londonstockexchange.com/exchange/news/market-news/ 
market-news-home.html. 
 
BLACKROCK LATIN AMERICA INVESTMENT TRUST PLC (LEI - UK9OG5Q0CYUDFGRX4151) 
 
All information is at 30 September 2020 and unaudited. 
 
 
Performance at month end with net income reinvested 
 
 
                                  One      Three       One     Three      Five 
                                month     months      year     years     years 
                                    %          %         %         %         % 
 
Sterling: 
 
Net asset value^                 -5.3       -5.4     -32.1     -29.6      26.4 
 
Share price                      -1.0       -7.8     -29.4     -26.0      37.2 
 
MSCI EM Latin America            -1.7       -5.7     -32.7     -28.9      29.7 
(Net Return)^^ 
 
US Dollars: 
 
Net asset value^                 -8.1       -1.0     -28.7     -32.2       7.8 
 
Share price                      -4.0       -3.5     -25.8     -28.7      17.0 
 
MSCI EM Latin America            -5.1       -1.3     -29.4     -31.5      10.7 
(Net Return)^^ 
 
^cum income 
 
^^The Company's performance benchmark (the MSCI EM Latin America Index) may be 
calculated on either a Gross or a Net return basis. Net return (NR) indices 
calculate the reinvestment of dividends net of withholding taxes using the tax 
rates applicable to non-resident institutional investors, and hence give a 
lower total return than indices where calculations are on a Gross basis (which 
assumes that no withholding tax is suffered). As the Company is subject to 
withholding tax rates for the majority of countries in which it invests, the NR 
basis is felt to be the most accurate, appropriate, consistent and fair 
comparison for the Company. Historically the benchmark data for the Company has 
always been stated on a Gross basis. However, as disclosed in the Company's 
Interim Report for the six months ended 30 June 2018, it is the Board's 
intention to monitor the Company's performance with reference to the NR version 
of the benchmark. For transparency both sets of benchmark data have been 
provided. 
 
Sources: BlackRock, Standard & Poor's Micropal 
 
At month end 
 
Net asset value - capital only:                                                 330.01p 
 
Net asset value - including income:                                             337.55p 
 
Share price:                                                                    308.50p 
 
Total assets#:                                                                  GBP143.6m 
 
Discount (share price to cum income NAV):                                          8.6% 
 
Average discount* over the month - cum income:                                    12.6% 
 
Net gearing at month end**:                                                        9.9% 
 
Gearing range (as a % of net assets):                                             0-25% 
 
Net yield##:                                                                       6.2% 
 
Ordinary shares in issue(excluding 2,181,662 shares held in treasury):       39,259,620 
 
Ongoing charges***:                                                                1.1% 
 
#Total assets include current year revenue. 
 
##The yield of 6.2% is calculated based on total dividends declared in the last 
12 months as at the date of this announcement as set out below (totalling 24.76 
cents per share) and using a share price of 398.83 US cents per share 
(equivalent to the sterling price of 308.50 pence per share translated in to US 
cents at the rate prevailing at 30 September 2020 of $1.2928 dollars to GBP1.00). 
 
2019 Q4 Final dividend of 9.15 cents per share (paid on 06 February 2020). 
 
2020 Q1 interim dividend of 4.59 cents per share (paid on 20 May 2020). 2020 Q2 
interim dividend of 5.57 cents per share (paid on 11 August 2020). 
 
2020 Q3 interim dividend of 5.45 cents per share (pay date 09 November 2020). 
 
*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. 
 
*** Calculated as a percentage of average net assets and using expenses, 
excluding interest costs for the year ended 31 December 2019. 
 
Geographic Exposure             % of Total    % of Equity      MSCI EM Latin 
                                    Assets    Portfolio *      America Index 
 
Brazil                                61.7           62.1               63.1 
 
Mexico                                26.6           26.7               22.6 
 
Chile                                  7.6            7.7                7.0 
 
Argentina                              3.5            3.5                1.7 
 
Peru                                   0.0            0.0                3.2 
 
Colombia                               0.0            0.0                2.4 
 
Net current assets (inc.               0.6            0.0                0.0 
fixed interest) 
 
                                     -----          -----              ----- 
 
Total                                100.0          100.0              100.0 
 
                                     =====          =====              ===== 
 
^Total assets for the purposes of these calculations exclude bank overdrafts, 
and the net current assets figure shown in the table above therefore excludes 
bank overdrafts equivalent to 10.5% of the Company's net asset value. 
 
Sector                                   % of Equity Portfolio        % of Benchmark* 
                                                             * 
 
Materials                                                 22.8                   18.1 
 
Financials                                                20.3                   25.0 
 
Consumer Discretionary                                    17.9                    7.8 
 
Consumer Staples                                           8.3                   15.5 
 
Energy                                                     7.4                    8.7 
 
Industrials                                                7.0                    7.1 
 
Communication Services                                     5.7                    6.9 
 
Utilities                                                  5.4                    6.2 
 
Real Estate                                                3.7                    0.9 
 
Health Care                                                1.5                    2.2 
 
Information                                                0.0                    1.6 
Technology 
 
                                                         -----                  ----- 
 
Total                                                    100.0                  100.0 
 
                                                         =====                  ===== 
 
*excluding net current assets & fixed interest 
 
                                 Country of Risk         % of            % of 
Company                                                Equity       Benchmark 
                                                    Portfolio 
 
Vale - ADS                       Brazil                   8.2             8.4 
 
Petrobras - ADR                  Brazil                   7.4             6.4 
 
Banco Bradesco - ADR             Brazil                   6.1             4.2 
 
America Movil - ADR              Mexico                   5.7             4.6 
 
B3                               Brazil                   4.6             4.4 
 
Walmart de Mexico y              Mexico                   4.0             2.7 
Centroamerica 
 
Afya                             Brazil                   3.7             0.0 
 
Ternium                          Argentina                3.5             0.0 
 
Grupo Mexico                     Mexico                   3.4             1.7 
 
Grupo Financiero Banorte         Mexico                   3.3             2.0 
 
 
Commenting on the markets, Ed Kuczma and Sam Vecht, representing the Investment 
Manager noted; 
 
For the month of September 2020, the Company's NAV returned -5.3%1 with the 
share price moving -1.0%1. The Company's benchmark, the MSCI EM Latin America 
Index, returned -1.7%1 on a net basis (all performance figures are in sterling 
terms with dividends reinvested). 
 
The Latin American region posted a negative performance over the month. All 
Latin American countries, with the exception of Mexico, posted weak 
performance, with Colombia and Brazil leading the declines. 
 
Our overweight position in Mexico contributed most to relative performance 
during the month, while stock selection in Brazil detracted most over the same 
period. An off-benchmark holding in Afya, a leading medical education group in 
Brazil, was the top contributor on a relative basis as the company has been 
dealing well with the COVID-19 crisis and took advantage by accelerating 
acquisitions. An off-benchmark position in Ternium, the leading steel company 
in Latin America, also added to relative performance as the stock benefitted 
from rising steel prices in North America. On the other hand, an overweight 
position in B2W Companhia Digital, an online retail company, detracted most 
from relative performance as the stock gave up some of its previously strong 
gains. An overweight position in Brazilian bank, Banco Bradesco, also weighed 
on returns due to concerns of rising fiscal spending by the Brazilian 
government in an effort to stimulate the economy in the wake of the pandemic. 
Despite this, we added to Banco Bradesco during the month, on the back of 
attractive valuations and an expectation of upward revisions in their 2021 
earnings as economy recovering faster than expected. 
 
We initiated a position in Walmart de Mexico, the Mexican retailer, as we see 
stable growth and expect a higher return on capital. We reduced exposure to 

Vale, the Brazilian metals and mining company, as most of the positives, such 
as the peak in iron ore prices and resumption of their dividend, were priced in 
the stock. We sold our holding in Mexican miner, Southern Copper taking profits 
in the recent outperformer. The portfolio ended the month being overweight to 
Mexico, Brazil, Argentina and Chile, while being underweight to Peru and 
Colombia. At the sector level, we are overweight to consumer discretionary and 
materials and underweight to consumer staples and financials. 
 
The coronavirus and associated COVID-19 disease have spread throughout the 
world, prompting "social distancing" and often strict government control 
measures throughout the developed and emerging markets, Latin America included. 
While China has been gradually easing restrictions since late February, most 
other emerging economies are still passing through the "peak lockdown" phase. 
Policy responses have been considerable, but many markets in Latin America, 
notably those reliant on foreign capital flows, face constraints in the scale 
of their response, in addition to questions about the robustness of their 
health systems. We saw lockdowns easing modestly by June and expect more 
significant easing measures in the second half of the year. Most governments 
plan to do so on this timeframe, though it should be noted that almost 
everywhere, government control measures have been kept in place longer than 
originally envisaged. Activity in the industrial sector and in parts of 
services where "social distancing" is less of a concern should rebound 
relatively quickly. Still, we do not expect most economies to return to their 
pre-crisis level of GDP (Gross Domestic Product) until 2021. The extent to 
which policy action now limits business bankruptcies and a breakdown in the 
labour market will be an important differentiator of the speed of recovery. 
 
1Source: BlackRock, as of 30 September 2020. 
 
21 October 2020 
 
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

October 21, 2020 04:18 ET (08:18 GMT)