Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 28 February 2019 and unaudited.

Performance at month end with net income reinvested.

	One  month	Three months	One  year	Three  years	Five  years	Since  Launch*
Sterling:
Share price	1.5	0.8	-12.1	45.7	35.4	80.6
Net asset value	1.3	0.0	-13.1	40.5	42.7	79.1
Benchmark (NR)**	-2.0	1.5	0.0	47.8	50.2	64.0
MSCI Frontiers Index (NR)	-0.3	-1.7	-12.2	29.8	31.9	45.0
MSCI Emerging Markets Index (NR)	-0.9	1.8	-6.7	59.5	54.3	35.0
US Dollars:
Share price	2.6	5.2	-15.1	39.2	7.8	54.7
Net asset value	2.4	4.4	-16.0	34.2	13.5	53.2
Benchmark (NR)**	-0.9	5.8	-3.5	41.1	19.2	41.0
MSCI Frontiers Index (NR)	0.8	2.5	-15.3	23.9	4.7	23.7
MSCI Emerging Markets Index (NR)	0.2	6.1	-9.9	52.2	22.4	15.1

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 Ordinary Shares
US Dollar
Net asset value - capital only:	176.50c
Net asset value - cum income:	177.21c
Sterling:
Net asset value - capital only:	132.70p
Net asset value - cum income:	133.22p
Share price:	137.00p
Total assets (including income):	£320.6m
Premium to cum-income NAV:	2.8%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	4.7%
Ordinary shares in issue:	240,672,801
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 4.1% and includes the 2018 final dividend of 4.40 cents per share and special dividend of 1.00 cent per share, both of which were declared on 11 December 2018 and were paid to shareholders on 7 February 2019. Also included is the 2018 interim dividend of 3.00 cents per share announced on 17 May 2018 and paid to shareholders on 29 June 2018.
**Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 September 2018.

Sector Analysis	Gross market value as a % of net assets		Country Analysis	Gross market value as a % of net assets
Financials	31.7		Indonesia	13.5
Real Estate	16.4		Malaysia	9.2
Consumer Discretionary	14.1		Egypt	8.5
Consumer Staples	10.1		United Arab Emirates	8.4
Industrials	8.5		Vietnam	8.3
Materials	8.4		Argentina	8.1
Health Care	8.1		Kazakhstan	7.3
Energy	7.5		Thailand	6.3
Communication Services	5.9		Romania	5.8
Information Technology	1.1		Nigeria	5.6
Utilities	1.1		Greece	4.9
	------		Turkey	3.2
	112.9		Philippines	2.9
Short positions	-----		Kuwait	2.7
	-6.7		Hungary	2.7
	=====		Poland	2.6
			Ukraine	2.6
			PAN-Africa	2.3
			Qatar	2.3
			Saudi Arabia	2.1
			Kenya	1.9
			PAN-Asian	0.9
			Morocco	0.8
				-----
			Total	112.9
				-----
			Short positions	-6.7
				=====

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

Market Exposure
 

	31.03  2018     %	30.04  2018     %	31.05  2018     %	30.06  2018     %	31.07  2018     %	31.08  2018     %	30.09  2018     %	31.10  2018     %	30.11  2018     %	31.12  2018     %	31.01  2019     %	28.02  2019     %
Long	97.0	113.2	119.5	116.2	113.9	107.7	107.7	107.8	108.1	109.3	115.1	112.9
Short	2.9	3.8	4.2	4.7	5.1	6.4	7.7	6.8	8.6	8.6	7.3	6.7
Gross	99.9	117.0	123.7	120.9	119.0	114.1	115.4	114.6	116.7	117.9	122.4	119.6
Net	94.1	109.4	115.3	111.5	108.8	101.3	100.0	101.0	99.5	100.7	107.8	106.2

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Banco Macro	Argentina	3.6
Zenith Bank	Nigeria	3.2
National Bank of Greece	Greece	3.0
Bk Rakyat	Indonesia	3.0
Emaar Properties	United Arab Emirates	2.9
LT Group	Philippines	2.9
Kaz Minerals	Kazakhstan	2.8
Gedeon Richter	Hungary	2.7
Thai Beverage Plc	Thailand	2.7
Halyk Savings Bank	Kazakhstan	2.7

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

MSCI Emerging Markets Index took a pause in February, +0.2%², after a +8.7%² rally in January. In contrast, after a muted January, several frontier markets played catch up, witnessing a strong February.  The Company returned +2.6%² in February, outperforming its benchmark, the MSCI New Frontiers benchmark, which was down by -0.9%². The Company’s NAV returned +2.4%¹ (on a US Dollar basis with net income reinvested) versus its benchmark which fell -0.9%². For reference, its previous benchmark (the MSCI Frontiers Index) was +0.8%² and the MSCI Emerging Markets Index was +0.2%² on a US Dollar basis, over the same period.

Greece was the strongest contributor to performance in February driven by our holdings in financials, National Bank of Greece and Alpha Bank, which rallied +61% and +41% respectively on the back of improved expectations of an agreed solution for the reduction of outstanding non-performing loans and a sovereign debt upgrade.  Under current proposals, the banks would be able to offload between Eur15bn and Eur40bn of NPEs (non-performing exposure), allowing them to finally return to a position where they could consider loan growth again.  Our holdings in Romanian banks were additional contributors after banking tax proposals look to have been watered down.  UAE property company, Emaar Properties (+13%) rebounded from multi-year lows.  Whilst the outlook for the Dubai property market remains muted, we feel that investors have overly discounted this for what remains the country’s most prestigious developer and we think the stock looks too cheap. 

Our Argentine positions were the largest detractor from returns over the month as Banco Macro (-13%), cement company Loma Negra (-13%) and Energy company YPF (-14%) all sold off on concerns of prolonged higher than expected inflation, despite weak economic activity after the January CPI print was much higher than expected.  Our position in a Hungarian listed pharma company was an additional detractor after the company reported weaker than expected results for the year. 

In terms of positioning, we reduced some exposure to Greek financials post their strong rally, as well as trimming some Argentina earlier in the month.  We returned from Egypt with strong conviction in the market given a marked improvement in the economy’s fiscal health, inflation that looks to have peaked and a more sustainable current account deficit, which is setting up a strong backdrop for the equity market in our view.  Elsewhere we rotated holdings within Thailand, adding a position in mobile operator, Total Access Communications, as we think that the strength of their balance sheet relative to competition will allow the company to take market share.

We continue to position for a positive environment for emerging and frontier markets in aggregate, supported by a lower rate environment.  In aggregate the wide subset of countries that make up our investible universe continue to exhibit strong GDP (gross domestic product) growth, have 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.

Sources:
¹BlackRock as at 28 February 2019
²MSCI as at 28 February 2019

27 March 2019

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 Kazakhstan