Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 30 November 2022 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	3.6	-2.2	5.2	16.6	-1.3	101.0
Net asset value	3.0	-1.6	8.7	29.4	21.2	128.5
Benchmark (NR)**	-0.4	-3.8	11.3	16.3	20.3	87.0
MSCI Frontiers Index (NR)	1.7	-10.8	-15.7	2.9	5.0	64.3
MSCI Emerging Markets Index (NR)	11.0	-4.0	-8.3	9.1	11.3	53.0
US Dollars:
Share price	7.1	0.1	-5.3	7.3	-13.1	54.1
Net asset value	6.5	0.7	-2.2	19.1	6.8	75.0
Benchmark (NR)**	3.0	-1.5	0.2	7.0	5.8	43.9
MSCI Frontiers Index (NR)	5.2	-8.7	-24.1	-5.3	-7.7	25.5
MSCI Emerging Markets Index (NR)	14.8	-1.8	-17.4	0.4	-2.1	16.9

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:	170.41c
Net asset value - cum income:	175.03c
Sterling:
Net asset value - capital only:	143.10p
Net asset value - cum income:	146.97p
Share price:	131.25p
Total assets (including income):	£278.3m
Discount to cum-income NAV:	10.7%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	4.1%
Ordinary shares in issue**:	189,325,748
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 4.2% and includes the 2021 final dividend of 4.25 cents per share, declared on 1 December 2021, and paid to shareholders on 11 February 2022. Also included is the 2022 interim dividend of 2.75 cents per share, declared on 26 May 2022, and paid to shareholders on 24 June 2022.

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

***The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses excluding performance fees, finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for Year ended 30 September 2022.

**** The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses and including performance fees but excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for Year ended 30 September 2022.

Sector Analysis	Gross market value as a % of net assets		Country Analysis	Gross market value as a % of net assets
Financials	40.1		Saudi Arabia	19.9
Energy	11.1		Indonesia	14.9
Consumer Discretionary	10.7		Kazakhstan	8.2
Industrials	10.2		United Arab Emirates	8.1
Materials	9.6		Thailand	7.0
Consumer Staples	7.7		Hungary	6.2
Communication Services	5.9		Vietnam	5.9
Information Technology	4.7		Malaysia	4.6
Real Estate	4.5		Qatar	4.2
Health Care	1.7		Poland	4.0
	-----		Chile	3.6
	106.2		Greece	3.5
	-----		Romania	2.4
Short positions	-4.8		Panama	2.3
	=====		Peru	2.1
			Philippines	2.0
			Argentina	1.7
			Egypt	1.4
			Kuwait	1.4
			Colombia	1.4
			Kenya	0.8
			Ukraine	0.6
				-----
			Total	106.2
				-----
			Short positions	-4.8
				=====

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

Market Exposure
 

	31.12  2021   %	31.01  2022   %	28.02  2022   %	31.03  2022    %	30.04  2022   %	31.05  2022   %	30.06  2022   %	31.07  2022   %	31.08  2022   %	30.09  2022    %	31.10  2022   %	30.11  2022   %
Long	104.3	108.4	110.7	111.1	110.6	107.9	106.1	107.3	107.3	106.2	107.4	106.2
Short	1.0	1.9	3.3	2.3	1.8	4.7	4.6	6.2	5.3	5.2	5.3	4.8
Gross	105.3	110.3	114.0	113.4	112.4	112.6	110.7	113.5	112.6	111.4	112.7	111.0
Net	103.3	106.5	107.4	108.8	108.8	103.2	101.5	101.1	102.0	101.0	102.1	101.4

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Bank Central Asia	Indonesia	5.2
Emaar Properties	United Arab Emirates	4.5
PKO Bank Polski	Poland	4.0
JSC Kaspi	Kazakhstan	3.5
Saudi National Bank	Saudi Arabia	3.5
Genting Malaysia	Malaysia	3.0
Bank Mandiri	Indonesia	3.0
Astra International	Indonesia	2.9
Qatar Gas Transport	Qatar	2.8
Abdullah Al Othaim Markets	Saudi Arabia	2.7

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

The Company’s NAV returned 6.4% versus it’s benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which was up by 3.0% in November. For reference, the MSCI Emerging Markets Index ended the month up by 14.8% and the MSCI Frontier Markets Index was up by 5.2% over the same period (all performance figures are on a US Dollar basis with net income reinvested).

Emerging markets rallied in November led by Chinese equities on news regarding government’s support for the property sector and potential re-opening of the economy post Covid-19. Meanwhile equity markets in the developed markets also did well as softer-than-expected US CPI fuelled hopes of a slowdown in the scale of Federal Reserve (Fed) rate hikes. In our universe, Turkey (+23%) was the best performing market for the second month in a row followed by Egypt (+20%), Poland (+19%), and Hungary (+18%). Eastern European economies were expected to benefit from sequentially softer energy prices, easing some concerns around severity of the expected recession. In the Middle Eastern markets performance was weak led primarily by weaker oil prices – Saudi Arabia (-7%), Qatar (-3%).

The Company performed well this month. This was driven by our stock selection in Saudi Arabia as well as positioning in Eastern Europe. Hungarian low-cost air carrier Wizz Air (+34%) posted strong financial results and guidance driven by improving passenger traffic. Romanian bank BRD (+22%) also did well on back of results. Kazakh super-app KASPI (+18%) was another key contributor. Elsewhere, Frontken Malaysia, a tech firm that supports the semi-conductor value chain, rebounded in line with recovery in share prices of global semi-conductor companies. In terms of detractors, the Indonesian conglomerate Astra International (-10%) hurt returns. However, the underlying fundamentals of Astra’s vehicle and financing business remain strong despite concerns around pressure on consumer from higher fuel prices and expiring government tax schemes. Saudi petrochemicals player Yanbu National (-7%) also impacted performance led by concerns on chemicals pricing from imminent recession.

We made a few changes to the portfolio in November. We rotated our Indonesian financials exposure from retail banks to corporate, swapping Bank Rakyat into Bank Central Asia and adding to Bank Mandiri, as we see better potential for margin expansion. We reduced our exposure to Malaysian banks as we’ve likely seen the peak macro environment there and post general election economic policy may be constrained by the broad-based coalition. In Eastern Europe, we reduced exposure to Romanian bank BRD, while adding to Hungarian bank OTP to express our preference for Hungarian assets in the current environment given the decisive monetary measures taken by the central bank there, ahead of the rest of Eastern Europe. We also trimmed Kaspi to book some profits and topped up positions in Kazakh name Halyk Bank given its attractive dividend yield. In Thailand, we added to mobile phone operator Advance Information Systems which has underperformed on regulatory concerns in the sector.

We see marked contrast in the monetary and fiscal policy decisions taken in small emerging/frontier and developed markets during 2022 and find significant value in currencies and equity markets across our investment opportunity set. We are optimistic over the long-term in our under-researched investment universe which should enable compelling alpha opportunities.

Sources:

¹BlackRock as at 30 November 2022

²MSCI as at 30 November 2022

21 December 2022

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.