BlackRock Frontiers Investment Trust benefited from its exposure to Eastern Europe in October

BlackRock Frontiers Investment Trust plc (LON:BRFI) has provided its latest portfolio update.

All information is at 31 October 2022 and unaudited.

You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi

Performance at month end with net income reinvested.

One
month
%
Three
months
%
One
 year
%
Three
 years
%
Five
 years
%
Since 
Launch*
%
Sterling:
Share price-0.81.42.813.70.394.1
Net asset value-0.42.74.324.817.7121.8
Benchmark (NR)**0.12.810.215.519.987.8
MSCI Frontiers Index (NR)-7.2-6.6-18.12.62.461.6
MSCI Emerging Markets Index (NR)-6.1-9.2-17.9-1.9-1.437.8
US Dollars:
Share price2.3-4.1-13.71.1-12.943.9
Net asset value2.8-2.9-12.411.12.164.2
Benchmark (NR)**3.3-2.7-7.42.73.939.7
MSCI Frontiers Index (NR)-4.3-11.6-31.2-8.7-11.219.3
MSCI Emerging Markets Index (NR)-3.1-14.1-31.0-12.7-14.51.8

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:160.12c
Net asset value – cum income:164.28c
Sterling:
Net asset value – capital only:139.06p
Net asset value – cum income:142.68p
Share price:126.75p
Total assets (including income):£270.1m
Discount to cum-income NAV:11.2%
Gearing:nil
Gearing range (as a % of gross assets):0-20%
Net yield*:4.2%
Ordinary shares in issue**:189,325,748
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 4.2% and includes the 2021 final dividend of 4.25 cents per share, declared on 1 December 2021, and paid to shareholders on 11 February 2022. Also included is the 2022 interim dividend of 2.75 cents per share, declared on 26 May 2022, and paid to shareholders on 24 June 2022.

** Excluding 52,497,053 ordinary shares held in treasury.

***The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses excluding performance fees, finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for Year ended 30 September 2022.

**** The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses and including performance fees but excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for Year ended 30 September 2022.

Sector
Analysis
Gross market value as a % of net assetsCountry
Analysis
Gross market value as a % of net assets
Financials42.1Saudi Arabia23.5
Energy10.9Indonesia13.8
Consumer Discretionary9.9Malaysia7.9
Materials9.3Kazakhstan7.4
Industrials9.0United Arab Emirates6.7
Consumer Staples8.0Thailand6.2
Communication Services5.8Vietnam5.7
Real Estate4.7Greece4.7
Information Technology4.6Hungary4.6
Health Care1.6Qatar4.5
Utilities1.5Poland3.7
—–Chile3.6
107.4Romania2.2
—–Panama2.1
Short positions-5.3Philippines1.9
=====Peru1.8
Kuwait1.5
Colombia1.5
Argentina1.4
Egypt1.4
Kenya0.9
Ukraine0.4
        —–
Total107.4
—–
Short positions-5.3
=====

*reflects gross market exposure from contracts for difference (CFDs).

Market Exposure 

30.11
 2021
    %
31.12
 2021
    %
31.01
 2022
    %
28.02
 2022
    %
31.03
 2022
    %
30.04
 2022
    %
31.05
 2022
    %
30.06
 2022
    %
31.07
 2022
    %
31.08
 2022
    %
30.09
 2022
    %
31.10
 2022
    %
Long106.3104.3108.4110.7111.1110.6107.9106.1107.3107.3106.2107.4
Short 0.4 1.0 1.9 3.3 2.3 1.8 4.7 4.6 6.2 5.3 5.2 5.3
Gross106.7105.3110.3114.0113.4112.4112.6110.7113.5112.6111.4112.7
Net105.9103.3106.5107.4108.8108.8103.2101.5101.1102.0101.0102.1

Ten Largest Investments

CompanyCountry of RiskGross market value as a % of net assets
Bank RakyatIndonesia5.0
Emaar PropertiesUnited Arab Emirates4.7
Saudi National BankSaudi Arabia4.2
PKO Bank PolskiPoland3.7
JSC KaspiKazakhstan3.4
Qatar Gas TransportQatar3.1
Saudi TelecomSaudi Arabia3.1
Astra InternationalIndonesia3.0
Abdullah Al Othaim MarketsSaudi Arabia2.9
Saudi British BankSaudi Arabia2.9

Commenting on the markets, Sam Vecht and Emily Fletcher, representing the   Investment Manager noted:

The Company’s NAV returned +2.8% versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which was up by 3.3% in October. For reference, the MSCI Emerging Markets Index ended the month down by 3.1% and the MSCI Frontier Markets Index fell by 4.1% over the same period (all performance figures are on a US Dollar basis with net income reinvested).

Eastern Europe was the strongest performing region this month with Turkey (+23%), followed by Poland (+16%), Hungary (+15%) and Greece (+14%). These markets performed strongly as European gas prices rolled over from storage capacity filling up and also the European winter was off to an unusually warm start. Elsewhere, the Middle East performed positive as oil exporters UAE (+4%) and Saudi Arabia (+3%) were buoyed by oil price surge following OPEC+’s production cuts. On other end, Vietnam (-14%), was one of the worst performing markets driven by the government’s crackdown on the property financing market.

The Company benefited from its exposure to Eastern Europe. Polish bank PKO (+24%) did well as net interest margins and loan growth continued to tick up. The news flow on regulatory measures also seems to have peaked in Poland. National Bank of Greece (+22%) was another strong contributor, benefitting from better macro prospects and repricing from interest rates. Greek renewable power utility Terna (+15%) rallied on rumours of a buyout by Australian investment group First Sentier. Outside of Eastern Europe. Kaspi (+13%), a fintech super-app in Kazakhstan posted strong earnings results across all three verticals: payments, marketplace and banking. Meanwhile, the Company’s exposure to Vietnam was the key detractor, with both Vietnam Technological and Commercial Bank (-28%) and IT services operator FPT Corp (-10%) selling off with the broader Vietnamese equity market. Saudi grocery store operator Abdullah Al Othaim (-8%) reversed some of its recent gains.

We made a few changes to the portfolio in October. We added to our Indonesian holdings, Bank Rakyat and conglomerate Astra International. The medium-term prospects for Indonesia look promising; prior concerns about monetary policy were appeased by recent central bank hikes, and Indonesia is evolving from a primarily upstream extractive economy into a more value additive one given government incentives to process abundant natural resources for export. We also added to oil and gas refiner MOL in Hungary which trades on an attractive valuation. More generally, with the Hungarian central bank raising rates to 18% in mid-October, the country looks well positioned for global carry investors. We initiated a position in energy company Vista, which owns assets in the famous Vaca Muerta shale formation in Argentina. The company should benefit from higher hydrocarbon prices and an increase in export volumes. We reduced positions in Indocement, a cement producer in Indonesia, as the post-COVID rebound in volumes has disappointed. We also booked profits in Chilean lithium producer Albemarle.

We see marked contrast in the monetary and fiscal policy decisions that have been taken in small emerging/frontier and developed markets during 2022 and find significant value in currencies and equity markets across these smaller countries. We are optimistic over the long-term in our under-researched investment universe which should allow for compelling alpha opportunities. 

Sources:

1BlackRock as at 31 October 2022

2MSCI as at 31 October 2022

You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi

Click to view all articles for the EPIC:
Or click to view the full company profile:
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Black Rock investment trust

More articles like this

Black Rock investment trust

BlackRock Frontiers Investment Trust optimistic over the long-term

BlackRock Frontiers Investment Trust plc (LON:BRFI) has provided its latest portfolio update. All information is at 30 September 2022 and unaudited. You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi Performance at month end with net income reinvested.

Black Rock investment trust

BlackRock Frontiers Investment Trust NAV returned 2.7% in August

BlackRock Frontiers Investment Trust plc (LON:BRFI) has provided its latest portfolio update. All information is at 31 August 2022 and unaudited. You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi Performance at month end with net income reinvested.

Black Rock investment trust

BlackRock Frontiers Investment Trust NAV outperforms benchmark for July

BlackRock Frontiers Investment Trust plc (LON:BRFI) has provided its latest portfolio update. All information is at 31 July 2022 and unaudited. You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi Performance at month end with net income reinvested.

Black Rock investment trust

BlackRock Frontiers Investment Trust NAV outperforms its benchmark in June

BlackRock Frontiers Investment Trust plc (LON:BRFI) has provided its latest portfolio update. All information is at 30 June 2022 and unaudited. You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi Performance at month end with net income reinvested.

Black Rock investment trust

Stock picking in the forgotten 40

The world’s smallest markets are widely neglected by investors. Emily Fletcher, Co-Manager of the BlackRock Frontiers Investment Trust plc (LON:BRFI), asks whether a change of market environment might bring about a new era for these unloved gems. Capital

Black Rock investment trust

BlackRock Frontiers Investment Trust NAV returns +2.6% in December

BlackRock Frontiers Investment Trust plc (LON:BRFI) has provided its latest portfolio update. All information is at 31 December 2021 and unaudited. You can discover more about the BlackRock Frontiers Investment Trust at blackrock.com/uk/brfi Performance at month end with net income reinvested.

No more posts to show