BlackRock Latin Am Portfolio Update

 
TIDMBRLA 
 
The information contained in this release was correct as at 31 May 2022. 
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 31 May 2022 and unaudited. 
 
 
Performance at month end with net income reinvested 
 
 
                                  One      Three       One     Three      Five 
                                month     months      year     years     years 
                                    %          %         %         %         % 
 
Sterling: 
 
Net asset value^                  5.4        9.9      10.1      -3.6      16.2 
 
Share price                       7.0       16.7      22.4      11.2      32.9 
 
MSCI EM Latin America             7.8       13.3      17.1       5.1      20.7 
(Net Return)^^ 
 
US Dollars: 
 
Net asset value^                  5.8        3.2      -2.2      -3.6      13.4 
 
Share price                       7.4        9.6       8.8      11.2      29.6 
 
MSCI EM Latin America             8.2        6.4       3.8       5.1      17.8 
(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:                                                 430.92p 
 
Net asset value - including income:                                             444.44p 
 
Share price:                                                                    434.00p 
 
Total assets#:                                                                  £144.9m 
 
Discount (share price to cum income NAV):                                          2.4% 
 
Average discount* over the month - cum income:                                     4.4% 
 
Net gearing at month end**:                                                       10.2% 
 
Gearing range (as a % of net assets):                                             0-25% 
 
Net yield##:                                                                       5.2% 
 
Ordinary shares in issue(excluding 2,181,662 shares held in treasury):       29,448,641 
 
Ongoing charges***:                                                                1.1% 
 
#Total assets include current year revenue. 
 
##The yield of 5.2% is calculated based on total dividends declared in the last 
12 months as at the date of this announcement as set out below (totalling 28.35 
cents per share) and using a share price of 546.94 US cents per share 
(equivalent to the sterling price of 434.00 pence per share translated in to US 
cents at the rate prevailing at 31 May 2022 of $1.2602 US Dollars to £1.00). 
 
2021 Q2 interim dividend of 7.82 cents per share (paid on 6 August 2021). 
 
2021 Q3 interim dividend of 6.56 cents per share (paid on 8 November 2021). 
 
2021 Q4 Final dividend of 6.21 cents per share (paid on 08 February 2022). 
 
2022 Q1 Interim dividend of 7.76 cents per share (paid on 16 May 2022). 
 
*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 2021. 
 
Geographic Exposure             % of Total    % of Equity      MSCI EM Latin 
                                    Assets    Portfolio *      America Index 
 
Brazil                                62.6           62.9               62.7 
 
Mexico                                25.7           25.8               25.8 
 
Chile                                  5.7            5.7                6.2 
 
Argentina                              2.0            2.0                0.0 
 
Peru                                   1.9            2.0                2.7 
 
Panama                                 1.6            1.6                0.0 
 
Colombia                               0.0            0.0                2.6 
 
Net current assets (inc.               0.5            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 10.7% of the Company's net asset value. 
 
Sector                        % of Equity Portfolio        % of Benchmark* 
                                                  * 
 
Financials                                     27.3                   24.8 
 
Materials                                      22.0                   24.3 
 
Consumer Staples                               13.4                   14.0 
 
Industrials                                     8.9                    6.5 
 
Energy                                          7.6                   12.2 
 
Communication Services                          5.7                    7.8 
 
Real Estate                                     4.2                    0.5 
 
Health Care                                     4.2                    2.0 
 
Consumer Discretionary                          3.8                    3.1 
 
Information Technology                          2.0                    0.5 
 
Utilities                                       0.9                    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           8.7          12.2 
 
Petrobrás - ADR:                         Brazil 
 
   Equity                                                 4.3           4.3 
 
   Preference Shares                                      3.3           4.9 
 
Banco Bradesco - ADR                     Brazil           6.6           4.7 
 
Itaú Unibanco - ADR                      Brazil           5.9           4.4 
 
Grupo Financiero Banorte                 Mexico           4.2           2.7 
 
B3                                       Brazil           4.2           2.7 
 
Walmart de México y Centroamérica        Mexico           4.1           3.1 
 
FEMSA - ADR                              Mexico           3.9           2.4 
 
AmBev - ADR                              Brazil           3.7           2.3 
 
Gerdau - Preference Shares               Brazil           3.4           1.1 
 
Commenting on the markets, Ed Kuczma and Sam Vecht, representing the Investment 
Manager noted; 
 
For the month of May 2022, the Company's NAV returned 5.4%1, with the share 
price moving 7.0%1. The Company's benchmark, the MSCI EM Latin America Index, 
returned 7.8%1 on a net basis (all performance figures are in sterling terms 
with dividends reinvested). 
 
Latin American (LatAm) equities posted a positive performance over the month 
with Chile and Colombia leading the rise. 
 
Security selection in Peru contributed the most to relative performance over 
the period while security selection in Brazil detracted most from relative 
returns. An absence in the portfolio  of the Brazilian electric engineering 
company, Weg, was the top contributor to performance during the month; our view 
remains that the stock is expensive and rising input costs are likely to weigh 
on near term profits. An overweight position in Chilean pulp and paper company, 
Empresas CMPC, also benefitted the portfolio as the company is performing well 
on the back of current elevated pulp prices stemming from supply constraints. 
On the other hand, the lack of any holding in Chilean chemical company, 
Sociedad Quimica y Minera de Chile, detracted most from relative performance as 
the company's main product, lithium, benefitted from the rising price 
environment given strong expected demand from electronic vehicle producers. An 
overweight position in Brazilian healthcare company, Hapvida, also detracted 
from relative performance as the stock has been impacted this year following 
COVID related spikes in healthcare costs which have been eating into the 
company's profitability. We continue to have strong conviction in the stock 
given the recent merger with Intermedica (another healthcare company). The 
combined entity will have greater scale which should translate in to better 
procurement terms in the future. As such, we have added to our position in the 
stock as we see the name trading at attractive fundamentals following its 
recent underperformance. 
 
We reduced our exposure to Brazilian bank, Banco Bradesco, to take profits 
following stock outperformance. We sold our holding in Brazilian food 
processing company, Marfrig, as we see signs of the cattle cycle turning for 

next few years leading to downside to margin expectations. The portfolio ended 
the period being overweight to Brazil and Mexico, whilst being underweight to 
Colombia and Peru. At the sector level, we are overweight financials and real 
estate, and underweight energy and utilities. 
 
Latin American equities are bouncing back from a challenging 2021 as investors 
learn to live with the region's political risk and focus instead on soaring 
local interest rates and commodity prices. LatAm currency  remains relatively 
cheap at current levels as the combination of rising interest rates and low 
valuations has been attracting investors to increase regional exposure. Latin 
American central banks were the first to raise rates last year and policy 
makers in Mexico and Colombia have both surprised markets with steep hikes this 
year in preparation for Federal Reserve tightening. Meanwhile, Brazilian policy 
makers have increased borrowing costs to the highest levels in almost five 
years. Latin America has been proactive in hiking rates and is considered to be 
ahead of the curve from a monetary policy standpoint relative to developed 
markets. Having been one of the worst performing Emerging Market currencies 
last year, the Brazilian Real has shown robust appreciation this year with the 
currency strengthening on the back of higher interest rates while rises in 
commodity prices have certainly played a role. The prices of oil, soybeans and 
iron ore (Brazil's main commodity exports) have increased since the start of 
the year. What's more, high interest rates are making local assets more 
attractive. Latin America's high yields compared with peers and relatively 
cheap local stock markets continue to attract foreign account inflows. Global 
rotation from growth stocks into value stocks continue to boost performance 
Latin America and considering the Federal Reserve's pace of interest rate 
rises, this may keep investors away from growth stocks for now. We would argue 
that for many reasons LatAm would seem well-positioned ahead of rising 
geopolitical tensions as the region provides:  i)  geographic and economic 
insulation from the recent conflict; ii) long and wide commodities exposure; 
iii) cheap currencies; iv) attractive valuation entry points; and v) proactive 
monetary policy stances. 
 
1Source: BlackRock, as of 31 May 2022. 
 
22 June 2022 
 
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

June 22, 2022 08:08 ET (12:08 GMT)