Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC

All information is at 31 December 2016 and unaudited.

Performance of ordinary share portfolio at month end with net income reinvested.

	One month	Three months	One year	Three years	Five years	Since  Launch*
Sterling:
Share price	-1.3	0.8	31.4	24.6	110.4	55.2
Net asset value	2.6	3.0	28.6	31.1	101.3	61.7
MSCI Frontiers Index (NR)	3.9	5.6	22.5	25.8	61.7	34.1
MSCI Emerging Markets Index (NR)	1.3	0.7	32.6	24.0	34.0	13.6
US Dollars:
Share price	-2.4	-4.1	10.2	-6.9	67.7	23.4
Net asset value	1.5	-2.0	7.8	-2.0	60.3	28.4
MSCI Frontiers Index (NR)	2.7	0.5	2.7	-6.2	28.6	6.3
MSCI Emerging Markets Index (NR)	0.2	-4.2	11.2	-7.5	6.5	-9.9

Sources: BlackRock and Standard & Poor’s Micropal

* 17 December 2010.

At month end Ordinary Shares
US Dollar
Net asset value - capital only:	159.99c
Net asset value - cum income:	164.74c
Sterling:
Net asset value - capital only:	129.48p
Net asset value - cum income:	133.32p
Share price:	130.00p
Total assets (including income):	£219.1m
Discount to cum-income NAV:	2.5%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	4.1%
Ordinary shares in issue:	164,333,108
Ongoing charges**:	1.4%
Ongoing charges plus taxation and performance fee:	2.4%

*The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 4.1% and includes the 2016 final dividend of 4.00 cents per share declared on 22 November 2016, payable to shareholders on 17 February 2017 and the 2016 interim dividend of 2.60 cents per share announced on 16 May 2016 and paid to shareholders on 1 July 2016.

**Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 September 2016.

The following relates specifically to the ordinary share portfolio.
 

Sector Analysis	Gross assets(%)*		Country Analysis	Gross assets(%)*
Financials	37.9		Argentina	15.0
Consumer Staples	15.4		Romania	10.9
Telecommunication Services	15.1		Bangladesh	9.0
Health Care	7.8		Pakistan	8.9
Energy	7.5		Kazakhstan	8.1
Materials	6.2		Vietnam	7.6
Information Technology	5.9		Sri Lanka	6.7
Utilities	5.9		Kuwait	6.6
Industrials	3.3		Morocco	6.2
Real Estate	2.0		Ukraine	6.0
Consumer Discretionary	1.4		Kenya	5.5
	-----		Egypt	3.7
Total	108.4		Nigeria	3.4
	-----		Colombia	2.1
Short positions	0.0		Estonia	2.0
	=====		Caribbean	1.9
			Slovenia	1.8
			Turkey	1.8
			Philippines	1.2
				-----
			Total	108.4
				-----
			Short positions	0.0
				=====

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

Market Exposure
 

	31.01  2016     %	29.02  2016 %	31.03  2016     %	30.04  2016     %	31.05  2016     %	30.06  2016     %	31.07  2016     %	31.08  2016     %	30.09  2016     %	31.10  2016     %	30.11  2016     %	31.12  2016     %
Long	102.5	102.2	108.1	109.2	108.8	110.5	103.4	105.7	104.0	106.4	102.3	108.4
Short	1.4	1.1	1.2	1.3	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Gross	103.9	103.3	109.3	110.5	108.8	110.5	103.4	105.7	104.0	106.4	102.3	108.4
Net	101.1	101.1	106.9	107.9	108.8	110.5	103.4	105.7	104.0	106.4	102.3	108.4

Ten Largest Equity Investments

Company	Country of Risk	% of gross assets
MCB Bank	Pakistan	5.2
Mobile Telecommunications	Kuwait	4.5
Grupo Financiero Galicia	Argentina	4.1
Maroc Telecom	Morocco	3.8
Banco Macro	Argentina	3.7
Square Pharmaceuticals	Bangladesh	3.5
BRD Groupe Societe Generale	Romania	3.3
Halyk Savings Bank	Kazakhstan	3.2
Pampa Energia	Argentina	3.2
Luxoft	Ukraine	3.0

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

In December, the Company’s NAV rose by 1.5% lagging the MSCI Frontier benchmark by -1.2%. The Company ended the year up 7.8% outperforming its benchmark by 5.1%. The MSCI Emerging Markets Index returned 0.2% and 11.2% over the same periods (all performance figures are on a US Dollar basis with net income reinvested).

Performance drivers from the previous month carried over into December, with contribution being spread out across countries, sectors, and names. Off-benchmark Egyptian positioning was among the larger contributors. Cleopatra Hospital performed well gaining 36% during the month amid increasing confidence over their ability to pass-through pricing impacts from November’s devaluation of the Egyptian Pound. Similarly, gold miner, Centamin, rose by 19% as currency depreciation lowered cash costs. An underweight to Argentina benefited the fund as the market struggled amid weak economic activity, the unexpected resignation of Finance Minister Prat-Gay, and the subsequent split of the Finance Ministry into two separate arms. We used this weakness to add to our positions in the country. Our decision to not hold Vietnamese consumer staple, Vietnam Dairy, was the largest individual contributor to relative performance for the period. The stock fell by 9% due to a combination of uncertainty surrounding how the country’s export-focused economy will be impacted by trade shocks due to President-Elect Trump’s potentially protectionist policies, as well as a missed target for the firm’s secondary offering amid highly restrictive investment caps.

On the other hand our short oil positioning, specifically through longstanding underweights to the Middle East region detracted on a relative basis, as announcements for further production cuts by both OPEC and non-OPEC members caused oil prices to rally up to $55 per barrel. Specifically, the decision to hold a substantial underweight in Kuwait and Oman, were among the largest detractors. Similarly, although our Pakistani positions MCB Bank and DG Khan Cement were among the month’s strongest performers, gaining 10% and 17% respectively, our underweight and more specifically, our decision to limit exposure to the country’s energy names hurt the Trust’s performance in aggregate. Broad selection within Morocco also weighed on returns, while a position in Caribbean wholesale market operator, Pricesmart, was the largest individual detractor.

Despite the year-end volatility stemming from US elections, Frontier Markets continue to exhibit strong GDP growth and low government debt levels, and represent an opportunity to invest in companies with strong cash flow and high dividend yields, on some of the lowest valuations in the world.

19 January 2017

ENDS

Latest information is available by typing www.blackrock.co.uk/brfi 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 BlackRock’s website (or any other website) is incorporated into, or forms part of, this announcement.