Portfolio Update

The information contained in this release was correct as at 31 October 2021.  Information on the Company’s up to date net asset values can be found on the London Stock Exchange Website at

https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 31 October 2021 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	4.9	10.3	38.5	7.8	16.3	88.8
Net asset value	2.9	13.0	46.2	22.4	28.0	112.7
Benchmark (NR)**	1.7	10.7	25.6	7.8	27.5	70.4
MSCI Frontiers Index (NR)	2.3	9.4	28.4	36.8	46.6	97.2
MSCI Emerging Markets Index (NR)	-0.7	0.9	10.3	32.0	39.5	67.9
US Dollars:
Share price	6.6	8.7	46.9	15.6	30.7	66.7
Net asset value	4.6	11.4	55.0	31.3	43.9	87.6
Benchmark (NR)**	3.4	9.1	33.2	15.7	43.2	51.0
MSCI Frontiers Index (NR)	4.0	7.9	36.1	46.8	64.6	73.4
MSCI Emerging Markets Index (NR)	1.0	-0.5	17.0	41.6	56.7	47.6

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:	189.83c
Net asset value - cum income:	194.88c
Sterling:
Net asset value - capital only:	138.48p
Net asset value - cum income:	142.17p
Share price:	128.50p
Total assets (including income):	£269.2m
Discount to cum-income NAV:	9.6%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	3.2%
Ordinary shares in issue**:	189,325,748
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 3.2% and includes the 2020 final dividend of 4.25 cents per share declared on 11 December 2020 which paid on 12 February 2021. Also included is the 2021 interim dividend of 2.75 cents per share, announced on 01 June 2021 and paid to shareholders on 25 June 2021.

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

***Calculated as a percentage of average net assets and using expenses, excluding Performance fees and interest costs for the year ended 30 September 2021.

Sector Analysis	Gross market value as a % of net assets		Country Analysis	Gross market value as a % of net assets
Financials	37.6		Saudi Arabia	18.5
Consumer Discretionary	17.3		Indonesia	13.7
Industrials	13.8		Vietnam	8.9
Materials	10.1		Greece	7.7
Energy	9.9		Thailand	7.6
Consumer Staples	6.4		Kazakhstan	6.9
Information Technology	5.0		United Arab Emirates	6.0
Real Estate	4.1		Hungary	5.7
Health Care	3.9		Malaysia	5.5
Utilities	1.3		Egypt	5.3
Communication Services	1.2		Philippines	3.9
	-----		Poland	3.9
	110.6		Qatar	3.3
	-----		Chile	2.5
Short positions	-0.4		Peru	2.2
	=====		United States	2.0
			Kenya	2.0
			Romania	1.8
			Pakistan	1.5
			Panama	1.3
			Nigeria	0.4
				-----
			Total	110.6
				-----
			Short positions	-0.4
				=====

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

Market Exposure
 

	30.11  2020   %	31.12  2020   %	31.01  2021   %	28.02  2021   %	31.03  2021   %	30.04  2021   %	31.05  2021   %	30.06  2021   %	31.07  2021   %	31.08  2021   %	30.09  2021   %	31.10  2021   %
Long	107.3	107.9	110.5	114.0	105.7	108.5	105.3	106.8	107.1	104.2	108.1	110.6
Short	0.0	1.1	1.1	4.5	3.4	2.5	2.3	4.6	2.3	0.6	0.4	0.4
Gross	107.3	109.0	111.6	118.5	109.1	111.0	107.6	111.4	109.4	104.8	108.5	111.0
Net	107.3	106.8	109.4	109.5	102.3	106.0	103.0	102.2	104.8	103.6	107.7	110.2

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Saudi National Bank	Saudi Arabia	4.9
Bank Rakyat	Indonesia	4.0
Mobile World	Vietnam	3.7
JSC Kaspi	Kazakhstan	3.5
Saudi British Bank	Saudi Arabia	3.1
FPT	Vietnam	3.1
United International Transport	Saudi Arabia	3.0
Emaar Properties	United Arab Emirates	3.0
OTP Bank	Hungary	3.0
MOL Group	Hungary	2.8

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

The Company’s NAV returned +4.6% versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which returned +3.4% in October. For reference, the MSCI Emerging Markets Index ended the month +1.0% and the MSCI Frontier Markets Index +4.0% over the same period (all performance figures are on a US Dollar basis with net income reinvested).

October saw our benchmark extend its YTD outperformance over Emerging Markets.  Many frontier and smaller emerging countries are now starting to see an acceleration in economic activity, as inoculation rates tick up and borders start to reopen. This is particularly prominent in Indonesia, Thailand, Philippines. 

Most countries in the universe performed strongly in October; Egypt (+15.2%), Peru (+13.4%) and Indonesia (+8.3%) were among the notable top performers. Chile (-7.3%) was the worst performer, as concerns around the November presidential election dominated news flow. 

In terms of contributors to performance over the month, Kaspi (+36.5%), Kazakh e-commerce and fintech platform, was the largest driver after delivering strong quarterly results, showing continued earnings growth. Kazakh uranium producer Kazatomprom (+22.4%) was another significant contributor as higher uranium prices drove the stock. Recent high gas and carbon prices have raised expectation that nuclear could play a significant part in the decarbonization of electricity.  Indonesian cement producer, Indocement (+13.8%), also did well, on expectations of economic recovery.

Primary detractors from performance in October were our holding in Chilean e-commerce stock Falabella (-20.7%), which fell with the Chilean markets despite showing good operating trends. Latin American airline, Copa Holdings (-9.1%), also detracted, as regional travel is yet to normalize. Banca Transilvania (-6.7%), Romanian bank, was the third largest detractor. We still like this stock for its attractive yield at a compelling valuation. The Romanian market has been under pressure following a new peak in COVID cases and a low vaccinate rate of only 30%.

We made a few changes to the portfolio in October, in particular reweighting towards south-east Asia which we believe has lagged the post COVID market recovery that we have seen globally and increasing exposure to the Middle East, where we believe that regional economic growth is underestimated by analysts.

We upped our position in Philippines-based port management company ICT. We bought Astra International, an Indonesian auto conglomerate given promising trends in monthly car sales and a broader reopening theme. We participated in the IPO of Fertiglobe, urea and ammonia exporter based in the UAE, which we feel is well positioned to scale up a clean hydrogen business. We bought Qatar National Bank expecting a re-acceleration of loan growth. The stock has been a relative laggard in Qatar and compared to other financials in the region,

On the other hand, we exited Ukrainian metals player, Ferrexpo, as the stock had performed very strongly on rising iron ore prices, which we believe have peaked.  We trimmed a number of holdings on strength, including Mobile World (Vietnamese electronics retailer), Kaspi and Kruk (Polish debt collection).

Overall, for countries that have stable macro environments and have made timely progress in vaccination rollouts, we believe the global macro recovery provides a favourable backdrop to recover lost economic productivity. Valuations in a lot of the frontier end emerging markets remain attractive relative to their own history and also relative to the more evolved markets. We believe our opportunity set is a compelling universe to generate alpha.

Sources:

¹BlackRock as at 31 October 2021

²MSCI as at 31 October 2021

18 November 2021

ENDS

Latest information is available by typing www.blackrock.com/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.