BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
The information contained in this release was correct as at 30 June 2021. 
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 AMERICAN INVESTMENT TRUST PLC (LEI - UK9OG5Q0CYUDFGRX4151) 
 
All information is at 30 June 2021 and unaudited. 
 
 
Performance at month end with net income reinvested 
 
 
                                  One      Three       One     Three      Five 
                                month     months      year     years     years 
                                    %          %         %         %         % 
 
Sterling: 
 
Net asset value^                  6.4       13.4      31.5      14.0      30.6 
 
Share price                       9.1       13.0      27.2      23.5      40.8 
 
MSCI EM Latin America             5.7       14.9      29.6      10.8      28.8 
(Net Return)^^ 
 
US Dollars: 
 
Net asset value^                  3.7       13.6      47.1      19.3      34.8 
 
Share price                       6.3       13.1      42.3      29.3      45.4 
 
MSCI EM Latin America             2.7       15.0      44.9      15.9      33.1 
(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. 
 
Sources: BlackRock, Standard & Poor's Micropal 
 
At month end 
 
Net asset value - capital only:                                                 448.93p 
 
Net asset value - including income:                                             452.67p 
 
Share price:                                                                    409.00p 
 
Total assets#:                                                                  £197.7m 
 
Discount (share price to cum income NAV):                                          9.6% 
 
Average discount* over the month - cum income:                                    12.6% 
 
Net gearing at month end**:                                                       11.4% 
 
Gearing range (as a % of net assets):                                             0-25% 
 
Net yield##:                                                                       4.9% 
 
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 4.9% is calculated based on total dividends declared in the last 
12 months as at the date of this announcement as set out below (totalling 27.69 
cents per share) and using a share price of 565.01 US cents per share 
(equivalent to the sterling price of 409.00 pence per share translated in to US 
cents at the rate prevailing at 30 June 2021 of $1.3814 dollars to £1.00). 
 
2020 Q3 interim dividend of 5.45 cents per share (paid 09 November 2020). 
2020 Q4 Final dividend of 7.45 cents per share (paid on 08 February 2021). 
2021 Q1 interim dividend of 6.97 cents per share (paid on 10 May 2021). 
2021 Q2 interim dividend of 7. 82 cents per share (payable on 6 August 2021). 
 
*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 2020. 
 
Geographic                            % of    % of Equity      MSCI EM Latin 
Exposure                      Total Assets    Portfolio *      America Index 
 
Brazil                                62.5           62.4               66.5 
 
Mexico                                23.0           23.0               22.2 
 
Chile                                  9.1            9.1                5.6 
 
Argentina                              2.8            2.8                1.6 
 
Peru                                   1.7            1.7                2.3 
 
Panama                                 1.0            1.0                0.0 
 
Colombia                               0.0            0.0                1.8 
 
Net current liabilities               -0.1            0.0                0.0 
(inc. 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 11.2% of the Company's net asset value. 
 
Sector                        % of Equity Portfolio        % of Benchmark* 
                                                  * 
 
Materials                                      25.1                   25.1 
 
Financials                                     22.4                   23.4 
 
Industrials                                     9.0                    5.7 
 
Consumer Discretionary                          8.9                    6.0 
 
Energy                                          7.4                    9.8 
 
Consumer Staples                                7.0                   14.5 
 
Health Care                                     5.7                    2.7 
 
Communication Services                          5.5                    6.1 
 
Information Technology                          4.2                    1.8 
 
Real Estate                                     2.9                    0.6 
 
Utilities                                       1.9                    4.3 
 
                                              -----                  ----- 
 
Total                                         100.0                  100.0 
 
                                              =====                  ===== 
 
*excluding net current assets & fixed interest 
 
                                         Country         % of          % of 
Company                                  of Risk       Equity     Benchmark 
                                                    Portfolio 
 
Vale - ADS                               Brazil          10.1          13.3 
 
Petrobrás - ADR:                         Brazil 
 
  - Equity                                                4.8           3.3 
 
  - Preference Shares                                     2.6           4.1 
 
Banco Bradesco - ADR                     Brazil           7.3           4.7 
 
América Movil - ADR                      Mexico           4.9           3.8 
 
B3                                       Brazil           4.0           3.1 
 
Grupo Financiero Banorte                 Mexico           3.4           2.5 
 
Walmart de México y Centroamérica        Mexico           3.1           2.5 
 
Notre Dame Intermedica Participações     Brazil           3.1           1.3 
 
Cemex - ADR                              Mexico           3.0           1.9 
 
Via Varejo                               Brazil           2.7           0.6 
 
Commenting on the markets, Ed Kuczma and Sam Vecht, representing the Investment 
Manager noted; 
 
For the month of June 2021, the Company's NAV returned 6.4%1 with the share 
price moving 9.1%1. The Company's benchmark, the MSCI EM Latin America Index, 
returned 5.7%1 on a net basis (all performance figures are in sterling terms 
with dividends reinvested). 
 
Latin American (LatAm) equities posted positive performance over the month with 
Colombia and Brazil leading the rise. 
 
Stock selection in Brazil contributed the most to relative performance over the 
period while stock selection in Mexico detracted most from relative returns. An 
overweight position in Brazilian retail company, Via Varejo, was the top 
contributor on a relative basis as the company's management has been supportive 
of turnaround narrative for the company. A position in Brazilian mining 
company, Vale, also benefitted the Company on the back of increased demand 
driving an increase in  iron-ore prices.  On the other hand, an off-benchmark 
holding in Cielo, a Brazilian payment system company, detracted most from 
relative performance during the period. Tougher competition has emerged 
recently in the Brazilian payment space, challenging Cielo's dominant position 
in the industry. An overweight position in Fibra Uno, a Mexican real estate 
investment trust company, also weighed on relative returns as the stock 
underperformed in the midst of Mexican midterm election uncertainty. 
 
Over the month we added to Credicorp, a Peruvian financial services company, on 
the view that political uncertainty is creating opportunity for long-term alpha 
generation. The country was in the midst of a tightly contested Presidential 
election which created a great deal of uncertainty and caused a sharp 
depreciation of the currency, despite favourable external conditions from high 
metal prices. We believe fears of radical changes to the favorable 
institutional framework of the company are overdone and are looking to add 
exposure on the back of price volatility driven by political uncertainty.  We 
initiated a position in Copa Holdings, a Panamanian airline company, on the 
view that the company is well positioned for return of demand to underserved 
markets with limited substitutions for air travel. We reduced exposure to 

Brazilian retail chain company, Lojas Americanas, given low conviction on the 
stock as the company continues to lag behind peers in operational metrics and 
corporate governance issues. We sold our holding in Santos Brasil, a Brazilian 
logistics company, to take profits following the stock's outperformance driven 
by strength in import and export of commodities. The portfolio ended the period 
being overweight to Chile and Mexico, whilst being underweight to Colombia and 
Peru. At the sector level, we are overweight industrials and consumer 
discretionary, and underweight consumer staples and utilities. 
 
While the recovery gains traction, a more nuanced picture emerges among LatAm 
countries. Dealing with a prolonged shock is proving to be a challenge, and 
while the cyclical rebound somewhat levels the short-term narratives, prospects 
beyond 2021 reveal a more nuanced picture. Our country positioning favours 
countries with better fundamentals, which display a healthier sovereign credit 
profile and are better placed to benefit from the strong rebound in the US and 
in China. We see Chile and Mexico meeting these criteria, while more indebted 
and less open economies, such as Argentina, Brazil and Colombia may struggle to 
sustain above-trend growth. The COVID-19 crisis led to a jump in public sector 
debt. Economies with a weak starting point on debt metrics saw debt-to-GDP 
(Gross Domestic Product) ratios soar, with Brazil and Argentina reaching a 
threshold where debt dynamics turn into a real concern, in our view. These 
countries now have limited room for any additional fiscal policy support, and 
we could argue the same about Colombia, despite lower debt levels. In Chile and 
Mexico, debt is at less worrisome levels and the current fiscal outlook point 
to manageable debt-to-GDP ratios over the coming years. The external 
environment remains supportive for Latin America. The continuation of the 
global V-shaped recovery should be led by a robust capex (capital expenditure) 
cycle going forward, meaning continued support for currently high commodity 
prices. This is key to the growth performance for the region but especially 
beneficial for Mexico and is likely to help Chile to sustain above-average 
expansion. Commodity champions, such as Argentina, Brazil and Colombia will 
also benefit from this external push, but the traction generated for these less 
open and domestic-driven economies is a fraction of the positive impact 
expected for more open economies. In spite of the current rebound, important 
idiosyncratic risks remain. These risks mainly relate to the growing strength 
of unorthodox policy ideas in a region historically marked by significant 
inequality. The political calendar concentrates a number of key electoral 
events from now to the end of 2022, and it is reasonable to expect a growing 
debate around proposals which would increase state intervention and government 
spending. Whether these proposals and the candidacies backing them will get 
rewarded by voters is hard to say, but in the aftermath of the COVID-19 shock, 
this may prove the key question for Latin America going forward. 
 
1Source: BlackRock, as of 30 June 2021. 
 
23 July 2021 
 
ENDS 
 
Latest information is available by typing www.blackrock.com/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 26, 2021 02:00 ET (06:00 GMT)