Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 31 August 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	-1.0	8.7	12.4	74.2	26.3	131.0
Net asset value	0.5	7.2	9.4	75.8	39.3	153.9
Benchmark (NR)**	-1.6	2.2	-7.4	31.0	11.2	79.8
MSCI Frontiers Index (NR)	0.6	6.0	-7.8	16.5	15.5	69.8
MSCI Emerging Markets Index (NR)	-4.7	1.2	-7.0	1.3	7.7	48.3
US Dollars:
Share price	-2.5	11.1	22.5	65.7	23.3	88.7
Net asset value	-1.1	9.6	19.2	67.2	36.0	107.1
Benchmark (NR)**	-3.1	4.5	0.8	23.9	8.4	47.3
MSCI Frontiers Index (NR)	-0.9	8.4	0.4	10.3	12.6	38.0
MSCI Emerging Markets Index (NR)	-6.2	3.5	1.3	-4.1	5.0	20.5

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:	194.32c
Net asset value - cum income:	198.86c
Sterling:
Net asset value - capital only:	153.35p
Net asset value - cum income:	156.94p
Share price:	144.50p
Total assets (including income):	£297.1m
Discount to cum-income NAV:	7.9%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	4.1%
Ordinary shares in issue**:	189,325,748
Ongoing charges***:	1.36%
Ongoing charges plus taxation and performance fee****:	1.36%

*The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 4.1% 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 paid 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	40.6		Indonesia	14.3
Energy	12.8		Saudi Arabia	14.2
Industrials	12.3		Thailand	11.1
Materials	12.2		Kazakhstan	8.3
Consumer Staples	11.3		United Arab Emirates	8.2
Information Technology	7.7		Hungary	6.8
Consumer Discretionary	6.1		Vietnam	6.5
Communication Services	4.5		Philippines	5.9
Real Estate	4.0		Chile	5.3
Health Care	1.8		Qatar	4.2
	-----		Poland	3.7
	113.3		Malaysia	3.5
	-----		Colombia	3.2
Short positions	-3.0		Multi-International	2.2
	=====		Czech Republic	2.1
			Argentina	2.0
			Georgia	1.9
			Greece	1.8
			Peru	1.4
			Turkey	1.3
			Romania	1.1
			Kuwait	1.1
			Cambodia	1.1
			Egypt	0.9
			Ukraine	0.6
			Kenya	0.5
			Bangladesh	0.1
				-----
			Total	113.3
				-----
			Short positions	-3.0
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*reflects gross market exposure from contracts for difference (CFDs).

Market Exposure
 

	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    %	30.06 2023    %	31.07 2023    %	31.08 2023    %
Long	106.2	107.4	106.2	110.7	112.4	111.9	106.3	108.5	112.9	116.9	113.0	113.3
Short	5.2	5.3	4.8	4.9	5.1	3.9	3.9	3.8	3.6	4.0	3.0	3.0
Gross	111.4	112.7	111.0	115.6	117.5	115.8	110.2	112.3	116.5	120.9	116.0	116.3
Net	101.0	102.1	101.4	105.8	107.3	108.0	102.4	104.7	109.3	112.9	110.0	110.3

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Bank Central Asia	Indonesia	4.6
FPT	Vietnam	3.5
JSC Kaspi	Kazakhstan	3.2
CP All	Thailand	3.1
Bank Mandiri	Indonesia	3.1
OTP Bank	Hungary	3.1
Bangkok Bank	Thailand	2.9
Halyk Savings Bank	Kazakhstan	2.9
Saudi National Bank	Saudi Arabia	2.9
PKO Bank Polski	Poland	2.9

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

The Company’s NAV fell by 1.1% in August, outperforming its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”) which fell by 3.1%. For reference, the MSCI Emerging Markets Index was down 6.2% while the MSCI Frontier Markets Index was down by -0.9% over the same period. All performance figures are on a US Dollar basis with net income reinvested.

Performance was challenged for several of the markets in our universe in August as risk sentiment weakened, putting pressure on equities. In Latin America, Colombia was down by 15.4%, erasing the gains from July, as growth continues to decelerate resulting in lower forward expectations for 2023/2024. In Asia, the Philippines was the region's worst performer. The economy contracted resulting in GDP growth materially undershooting expectations amid weak domestic demand. In EMEA, performance was more mixed. Poland fell by 9.5% on the back of a larger-than-expected rate cut from the Polish central bank. On the other hand, Kazakhstan (+11.6%) and Hungary (+5.4%) were among the universe bright spots over the period.

Several stock picks in the Middle East benefitted the Company in August. Gulf International Services (+27.1%), the Qatar-based holding company, was the top contributor. The company's Q2 earnings surprised on the upside and the share price was also helped by the company successfully concluding a debt restructuring deal at favourable terms with lenders. In Saudi Arabia, ELM continued its strong run (+26.8%). In UAE, Air Arabia (9.7%), the Emirati low-cost airline, also performed well. Elsewhere in our universe, Hungary's OTP Bank (+11.9%) contributed positively after releasing strong results. As for detractors over the course of August, PKO Bank Polski (-10.9%) fell along with the Polish market more broadly and was the month's largest drag on performance. Chilean brewer CCU (-11.6%) also fell. While the company reported strong EBITDA numbers ahead of consensus, the stock was impacted by weak Chile macro as the market was down -9.4%.

We made some changes to the portfolio in August. We continued adding to our holding in the Czech bank Komerční banka as we expect the country's central bank to be one of the first to cut rates. In Asia, we increased our exposure to the Philippines by initiating a position in Metropolitan Bank. We exited Titan Cement, the Greek cement and building materials producer as our investment view has played out. Elsewhere, we took profits in Kaspi, the Kazakh payments and e-commerce company and in Advanced Info Systems, the Thai telecom services provider, following strong performance.

We believe global markets are still adjusting to a significantly higher cost of capital and remain vulnerable to unexpected hiccups such as the liquidity crisis in the regional banking space in the US. However, 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 we believe this can enable compelling alpha opportunities.

Sources:

¹BlackRock as at 31 August 2023

²MSCI as at 31 August 2023

27 September 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.

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Release

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