Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 30 April 2020 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	6.0	-24.0	-33.6	-32.1	-5.4	21.6
Net asset value	10.6	-21.4	-27.3	-23.6	-4.5	32.5
Benchmark (NR)**	8.2	-16.2	-22.0	-5.6	8.0	32.4
MSCI Frontiers Index (NR)	4.9	-18.1	-10.7	-5.1	8.5	33.9
MSCI Emerging Markets Index (NR)	7.3	-8.6	-9.0	4.3	21.2	29.0
US Dollars:
Share price	7.8	-27.2	-35.8	-33.7	-22.2	-1.2
Net asset value	12.5	-24.8	-29.7	-25.4	-21.5	7.5
Benchmark (NR)**	10.0	-19.8	-24.5	-7.9	-11.4	7.9
MSCI Frontiers Index (NR)	6.7	-21.6	-13.6	-7.5	-11.0	8.3
MSCI Emerging Markets Index (NR)	9.2	-12.5	-12.0	1.7	-0.5	4.3

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:	116.46c
Net asset value - cum income:	118.78c
Sterling:
Net asset value - capital only:	92.33p
Net asset value - cum income:	94.17p
Share price:	88.20p
Total assets (including income):	£227.7m
Discount to cum-income NAV:	6.3%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	6.8%
Ordinary shares in issue:	241,822,801
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 6.8% and includes the 2019 final dividend of 4.75 cents per share declared on 06 December 2019 with a pay date of 07 February 2020. Also included is the 2019 interim dividend of 3.00 cents per share announced on 30 May 2019 and paid to shareholders on 28 June 2019.

**Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 30 September 2019.

Sector Analysis	Gross market value as a % of net assets*		Country Analysis	Gross market value as a % of net assets*
Financials	26.1		Indonesia	13.7
Consumer Discretionary	15.0		Thailand	11.1
Consumer Staples	14.7		Vietnam	9.6
Industrials	14.3		Egypt	9.2
Real Estate	10.9		Philippines	9.0
Energy	7.4		Saudi Arabia	7.6
Communication Services	5.8		Kazakhstan	5.2
Materials	5.7		United Arab Emirates	4.8
Information Technology	2.1		Pakistan	4.7
Health Care	2.0		Malaysia	4.5
Utilities	1.9		Chile	3.8
	-----		Qatar	3.7
	105.9		Poland	3.0
	-----		Greece	2.7
Short positions	-2.6		Romania	2.2
	=====		Ukraine	2.1
			PAN-Africa	1.9
			Hungary	1.8
			Peru	1.6
			Kenya	1.5
			Pan-Emerging Europe	1.3
			Colombia	0.5
			Nigeria	0.4
				-----
			Total	105.9
				-----
			Short positions	-2.6
				=====

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

Market Exposure
 

	31.05  2019   %	30.06  2019   %	31.07  2019   %	31.08  2019   %	30.09  2019   %	31.10  2019   %	30.11  2019   %	31.12  2019   %	31.01  2020   %	29.02  2020   %	31.03  2020   %	30.04  2020   %
Long	111.0	114.1	117.0	111.5	110.1	108.0	107.8	108.0	113.0	107.1	106.4	105.9
Short	8.8	8.1	5.1	4.2	4.1	2.2	1.7	1.0	1.1	3.8	2.5	2.6
Gross	119.8	122.2	122.1	115.7	114.2	110.2	109.5	109.0	114.1	110.9	108.9	108.5
Net	102.2	106.0	111.9	107.3	106.0	105.8	106.1	107.0	111.9	103.3	103.9	103.3

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Bank Mandiri	Indonesia	3.5
Astra International	Indonesia	3.4
United International Transport	Saudi Arabia	3.3
PTT Exploration & Production Public	Thailand	3.1
MCB Bank	Pakistan	2.9
Eastern Tobacco	Egypt	2.9
Vincom Retail	Vietnam	2.9
LT Group	Philippines	2.8
Ooredoo	Qatar	2.7
Mobile World	Vietnam	2.4

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

The Company’s NAV returned +12.5%¹  versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which returned +10.0% in April². For reference, the MSCI Emerging Markets Index ended the month +9.2% and the MSCI Frontier Markets Index +6.7%² over the same period (all performance figures are on a US Dollar basis with net income reinvested).

April saw markets rebound in anticipation of some recovery in economic activity post Covid-19 lockdowns across the world. Several of our markets posted double digit positive returns over the month, such as Pakistan (+18%), Thailand, Chile and Vietnam all over 16%. The oil markets suffered a from a breakdown in the Organisation of the Petroleum Exporting Countries (‘OPEC’) supply agreements and oil futures prices turned negative for the first time in history, driven by concerns on limitations of storage capacity and the need to roll forward short-term futures contracts underlying oil ETFs. However, there has been a recovery in global oil prices since led by a renewed agreement between OPEC.

The biggest contributors to performance in April were our positions in Vietnam, Indonesia and Thailand. In Vietnam, the biggest contributor was Mobile World which reported strong Q1 results showing a huge expansion of sales in their supermarket format, driven by customers stocking for Covid-19. Vincom Retail also rebounded strongly from the lows, rising 22%. Our Indonesian positions rebounded this month, particularly retailer Mitra Adiperkasa (+52.2%), real estate developer Pakuwon Jati (+34.6%) and Unilever Indonesia (+25.2%). In Thailand, our positions also saw a strong rebound with AEON (+33.2%) and PTTEP (+25.2%). In Pakistan our positions in MCB Bank (13.5%) and Hub Power (27.8%) were the main contributors and we retain a cautiously positive view post the large currency adjustment as the country now grapples with Covid-19.

The largest detractor in April was our significant position in the Philippines. Our holdings in the tobacco conglomerate LT Group (-5.8%), Bank of the Philippines (-4.6%) and casino operator Bloomberry Resorts (-5.8%) were the main detractors. We retain our positive view on Philippines and believe that it will be well positioned versus other countries as the world normalises post Covid-19 and growth rebounds. The second biggest detractor in April was our under-weight in Saudi Arabia, particularly the banks, where we saw a decoupling of the equity market with the oil price; this break-down was largely unexplained.

While smaller emerging and frontier markets are vulnerable to health and economic fall-out from Covid-19, data thus far on infection rate and fatalities gives some hope that the damage to life and economy will not be as pervasive as originally feared. We remain positive on prospects of select economies, where policy makers have taken upfront, prudent measures to contain Covid-19. Where the foreign exchange debt situation is relatively manageable, countries will benefit from a lower oil price whose currencies are not over-valued. More broadly, many of our markets look very compelling at current valuation, trading at sub 8x trailing price to earnings and in some cases close to Global Financial Crisis levels. Despite the bounce, the portfolio is still around the lowest valuation levels that we have seen in the last 10 years.

Sources:

¹BlackRock as at 30 April 2020

²MSCI as at 30 April 2020

29 May 2020

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.