Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 31 March 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	-20.8	-36.7	-34.6	-36.1	-9.7	14.7
Net asset value	-23.4	-32.1	-33.8	-33.1	-11.0	19.8
Benchmark (NR)**	-17.0	-25.3	-26.6	-14.6	0.1	22.4
MSCI Frontiers Index (NR)	-19.6	-21.6	-14.8	-11.6	3.6	27.6
MSCI Emerging Markets Index (NR)	-12.9	-18.4	-13.5	-4.0	17.5	20.2
US Dollars:
Share price	-23.1	-40.8	-37.8	-36.6	-24.5	-8.4
Net asset value	-25.6	-36.5	-37.1	-33.6	-25.5	-4.5
Benchmark (NR)**	-19.4	-30.1	-30.2	-15.3	-16.4	-1.9
MSCI Frontiers Index (NR)	-22.0	-26.6	-19.0	-12.3	-13.5	1.5
MSCI Emerging Markets Index (NR)	-15.4	-23.6	-17.7	-4.8	-1.8	-4.4

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:	103.84c
Net asset value - cum income:	105.56c
Sterling:
Net asset value - capital only:	83.74p
Net asset value - cum income:	85.13p
Share price:	83.20p
Total assets (including income):	£205.9m
Discount to cum-income NAV:	2.3%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	7.2%
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 7.2% 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	23.2		Indonesia	12.1
Consumer Staples	17.6		Thailand	10.5
Industrials	13.5		Egypt	10.3
Consumer Discretionary	13.4		Philippines	10.0
Real Estate	10.6		Saudi Arabia	9.8
Energy	8.2		Vietnam	9.2
Materials	8.2		Kazakhstan	5.7
Communication Services	5.9		Malaysia	4.5
Health Care	2.3		United Arab Emirates	4.5
Information Technology	1.9		Pakistan	4.4
Utilities	1.6		Greece	3.0
	-----		Poland	3.0
	106.4		Chile	2.8
	-----		Qatar	2.7
Short positions	-2.5		Turkey	2.7
	=====		Ukraine	2.4
			Romania	2.2
			PAN-Africa	1.8
			Hungary	1.6
			Kenya	1.5
			Pan-Emerging Europe	1.2
			Colombia	0.4
			Nigeria	0.1
				-----
			Total	106.4
				-----
			Short positions	-2.5
				=====

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

Market Exposure
 

	30.04  2019   %	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   %
Long	116.0	111.0	114.1	117.0	111.5	110.1	108.0	107.8	108.0	113.0	107.1	106.4
Short	6.6	8.8	8.1	5.1	4.2	4.1	2.2	1.7	1.0	1.1	3.8	2.5
Gross	122.6	119.8	122.2	122.1	115.7	114.2	110.2	109.5	109.0	114.1	110.9	108.9
Net	109.4	102.2	106.0	111.9	107.3	106.0	105.8	106.1	107.0	111.9	103.3	103.9

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
United International Transport	Saudi Arabia	3.6
LT Group	Philippines	3.4
Eastern Tobacco	Egypt	3.3
Bank Mandiri	Indonesia	3.3
Bank of the Philippine Islands	Philippines	3.1
Almarai	Saudi Arabia	3.1
Astra International	Indonesia	2.9
Orascom Construction	Egypt	2.9
MCB Bank	Pakistan	2.9
PTT Exploration & Production Public	Thailand	2.8

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

The Company’s NAV returned -25.6%¹ versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which returned -19.4% in March².  For reference, the MSCI Emerging Markets Index ended the month -15.4% and MSCI Frontier Markets Index -22.0%² over the same period (all performance figures are on a US Dollar basis with net income reinvested).

March marked the global progression of Covid-19, leaving a tragic death toll and resulted in societies around the world implementing social distancing policies.  The overall impact on economies and markets remains uncertain.  At the same time the oil price plunged amid Russia/Saudi tensions and all risky assets sold off. Only US treasuries and US Dollar showed positive performance this month.

In response to the acceleration of the spread of the virus outside of China we had been de-risking the portfolio in February and early March as we did not think markets had moved to sufficiently price in the risk of a global recession. We reduced the net position of the Company from 112% at the end of January to below 96% mid-March, before adding back some exposure mid-month. However, this was sadly insufficient to protect the Company against the extent of market moves. 

There were positive contributors during the month. Chile was the largest contributor to returns in March driven by our position in pulp and paper company CMPC(+6.7%). Adding to low-cost Eastern European airline Wizz Air (+9.5%) during the month which is trading at very low valuations was another contributor to returns. Our holding in uranium producer Kazatoprom (+2.9%) also contributed.

A few countries were hit exceptionally hard during the month, notably Indonesia(-29%, Egypt(-27%)and Vietnam(-23%), whilst Saudi substantially outperformed, falling only 14%, despite the huge move in the oil price. The largest stock detractors from returns this month were our holdings in Indonesia particularly automotive company Astra International (-37.9%), retailer Mitra Adiperkasa (-48.2%) and real estate developer Pakuwon Jati(-48.9%). Our position in Vietnam also detracted driven by our holdings in retailer Mobile World (-45.7%) and mall operator Vincom retail (-33.9%). United Arab Emirates property stocks EMAAR development (-40.0%) and EMAAR properties (-36.6%) also detracted.

As markets sold off significantly, we have seen large scale fiscal responses approved across the developed markets as well as the very material provision of liquidity to the credit markets by the Federal Reserve. Broadly we believe that the world will get Covid-19 under control; with virus cases peaking in Europe,  we believe support will be given to markets amid hope that other countries can follow. Many emerging and frontier markets have gone into this crisis in a much better position than previous crises with lower levels US dollar debt and with economies which were at fairly early points in their economic cycles and hence without significant growth in credit extension in recent years. We think that countries which have low levels of debt/GDP, benefit from a lower oil price with cheap currencies and will return to high levels of GDP growth and are in a relatively better position. As a result have moderately added to our positions in Indonesia and the Philippines.

Sources:

¹BlackRock as at 31 March 2020

²MSCI as at 31 March 2020

22 April 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.