Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 31 May 2023 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	0.2	-1.3	9.0	68.7	7.9	112.5
Net asset value	0.5	2.1	8.4	70.7	22.3	136.8
Benchmark (NR)**	-3.2	-2.7	-8.3	24.7	7.5	73.5
MSCI Frontiers Index (NR)	0.8	-1.3	-8.1	10.9	5.5	60.2
MSCI Emerging Markets Index (NR)	-0.3	-2.2	-6.9	10.5	3.8	46.5
US Dollars:
Share price	-1.2	1.1	7.3	69.3	0.6	69.8
Net asset value	-0.9	4.6	6.7	71.3	14.0	88.9
Benchmark (NR)**	-3.2	1.0	-8.6	26.7	1.5	40.9
MSCI Frontiers Index (NR)	-0.6	1.0	-9.6	11.2	-1.7	27.3
MSCI Emerging Markets Index (NR)	-1.7	0.2	-8.5	10.8	-3.3	16.5

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:	178.45c
Net asset value - cum income:	184.41c
Sterling:
Net asset value - capital only:	143.97p
Net asset value - cum income:	148.78p
Share price:	135.25p
Total assets (including income):	£281.7m
Discount to cum-income NAV:	9.1%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	4.4%
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 4.4% and includes the 2022 final dividend of 4.25 cents per share, declared on 8 December 2022, and paid to shareholders on 19 January 2023, and the 2023 interim dividend of 3.10 cents per share, declared on 6 June 2023, and payable to shareholders on 7 July 2023.

** 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	37.0		Indonesia	17.2
Materials	15.4		Saudi Arabia	15.4
Energy	15.2		Thailand	12.0
Industrials	13.0		Vietnam	8.2
Consumer Staples	12.0		United Arab Emirates	8.0
Consumer Discretionary	5.7		Kazakhstan	7.5
Information Technology	5.6		Hungary	7.1
Communication Services	4.5		Chile	6.7
Real Estate	2.7		Qatar	4.3
Health Care	1.8		Greece	3.8
	-----		Poland	3.5
	112.9		Colombia	2.5
	-----		Egypt	2.4
Short positions	-3.6		Argentina	1.9
	=====		Philippines	1.9
			Georgia	1.7
			Peru	1.6
			Malaysia	1.5
			Turkey	1.4
			Kuwait	1.2
			Cambodia	1.2
			Romania	1.0
			Kenya	0.6
			Ukraine	0.3
				-----
			Total	112.9
				-----
			Short positions	-3.6
				=====

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

Market Exposure
 

	30.06  2022     %	31.07  2022     %	31.08  2022     %	30.09  2022     %	31.10  2022     %	30.11  2022     %	31.12  2022     %	31.01  2023     %	28.02  2023     %	31.03  2023     %	30.04  2023     %	31.05  2023     %
Long	106.1	107.3	107.3	106.2	107.4	106.2	110.7	112.4	111.9	106.3	108.5	112.9
Short	4.6	6.2	5.3	5.2	5.3	4.8	4.9	5.1	3.9	3.9	3.8	3.6
Gross	110.7	113.5	112.6	111.4	112.7	111.0	115.6	117.5	115.8	110.2	112.3	116.5
Net	101.5	101.1	102.0	101.0	102.1	101.4	105.8	107.3	108.0	102.4	104.7	109.3

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Bank Central Asia	Indonesia	5.0
Astra International	Indonesia	3.7
PKO Bank Polski	Poland	3.5
Abdullah Al Othaim Markets	Saudi Arabia	3.1
Saudi Basic Industries Corp	Saudi Arabia	3.1
Bangkok Bank	Thailand	3.1
OTP Bank	Hungary	3.1
JSC Kaspi	Kazakhstan	3.0
FPT	Vietnam	2.9
Bank Mandiri	Indonesia	2.8

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

The Company’s NAV is down by 0.9% in May, strongly outperforming its benchmark, the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”) which fell by 3.2%. For reference, the MSCI Emerging Markets Index was down by 1.7% while the MSCI Frontier Markets Index was down by 0.6% over the same period. All performance figures are on a US Dollar basis with dividends reinvested.

Greece rallied 8.7% and was the best performing market. Financials led the surge, up by 15% in May and 42% YTD. Greece held general elections on 21 May, new democracy, led by Prime Minister Mitsotakis picked up 41% of the vote versus Syriza’s 20%, significantly ahead of polling expectations. It was an action-packed month in Frontier markets, with Thailand and Turkey also holding general elections. Thailand held elections on 14th May to elect 500 members of the House of Representatives. The pro-liberal opposition party, Move Forward (MF) won the most seats (151), followed by Pheu Thai (PT) (141). The military-backed incumbent party, Bhumjaithai, came in third with 68 seats. Uncertainty persists with regards to MF's ability to form a government, but if it materializes, we believe it could mark a positive turning point towards stronger long-term growth prospects for the Thai economy. The Thai market was fairly muted, down by 3% for the month. Further west, Turkey (-1.6%) held elections in mid-May, where President Erdogan, who has been in power for twenty years, secured another five-year term. We do not have any direct exposure to Turkey and will likely remain on the side-lines till the external imbalances have cleared up. However, we do have some exposure via our holding in Eldorado Gold Corporation. This is a Canadian gold mining firm with several operations in Turkey, and the position reflects our positive view on gold. Elsewhere, most countries in the Middle East and in Latin America also finished the month in the red.

The Company outperformed strongly over the month. Stock picks in Indonesia were the top contributor. Indonesian retailer Mitra Adiperkasa (+27%) rallied after a bout of short-term profit taking in April. Consumer confidence indicators in Indonesia remain robust. Kazakhstan's Halyk Bank (+13%) was also a big contributor. The bank recently reinstated significant dividend payouts after complying with new regulations; it trades on approximately 15% dividend yield today. National Bank of Greece (+18%) also did well. On the other side, Thai oil and gas company PTT (-15%) detracted from performance.

We made few changes to the portfolio in May. We increased our exposure to Thailand as we believe the election results can be a significant positive if MF forms the government, and the country should also continue to benefit from a recovery in tourism. We topped up holdings in Bangkok Bank, Airports of Thailand and hospital operator BDMS. We took profits in National Bank of Greece. We exited pan-American airline Copa as the stock reached out target price following a strong earnings release.

We believe global markets and economies are still adjusting to a significantly higher cost of capital. Through the last few years, we have observed a marked contrast in the monetary and fiscal policy decisions taken in small emerging/frontier markets versus developed markets and this keeps us optimistic on our opportunity set. Our investment universe, in absolute and relative terms, remains under-researched and this should enable compelling alpha opportunities.

Sources:

¹BlackRock as at 31 May 2023

²MSCI as at 31 May 2023

21 June 2023

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.