Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 30 September 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	-0.3	5.9	17.7	75.1	28.8	130.2
Net asset value	0.3	5.1	14.4	80.6	43.4	154.6
Benchmark (NR)**	0.2	2.7	-3.9	31.3	11.7	80.1
MSCI Frontiers Index (NR)	-0.1	6.2	-2.6	11.5	15.8	69.6
MSCI Emerging Markets Index (NR)	1.1	1.1	2.2	0.5	9.8	49.9
US Dollars:
Share price	-4.0	1.7	28.8	65.4	20.7	81.1
Net asset value	-3.4	0.9	25.1	70.6	34.4	100.0
Benchmark (NR)**	-3.5	-1.4	5.0	23.9	4.5	42.1
MSCI Frontiers Index (NR)	-3.8	2.0	6.5	5.3	8.4	32.8
MSCI Emerging Markets Index (NR)	-2.6	-2.9	11.7	-5.1	2.8	17.3

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:	186.72c
Net asset value - cum income:	192.06c
Sterling:
Net asset value - capital only:	152.98p
Net asset value - cum income:	157.35p
Share price:	144.00p
Total assets (including income):	£298.0m
Discount to cum-income NAV:	8.5%
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	39.1		Saudi Arabia	15.4
Industrials	15.2		Indonesia	14.3
Energy	13.7		United Arab Emirates	8.5
Materials	11.3		Thailand	8.4
Consumer Staples	10.6		Kazakhstan	7.6
Information Technology	7.3		Philippines	7.3
Communication Services	6.6		Hungary	5.9
Consumer Discretionary	6.0		Vietnam	5.8
Real Estate	4.7		Chile	5.5
Health Care	0.4		Malaysia	4.7
	-----		Qatar	4.7
	114.9		Poland	4.2
	-----		Colombia	3.3
Short positions	-3.0		Multi-International	2.6
	=====		Argentina	2.1
			Turkey	2.0
			Georgia	2.0
			Czech Republic	2.0
			Greece	1.5
			Peru	1.3
			Romania	1.2
			Kuwait	1.1
			Cambodia	1.0
			Egypt	1.0
			Ukraine	0.6
			Kenya	0.5
			Bangladesh	0.4
				-----
			Total	114.9
				-----
			Short positions	-3.0
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*reflects gross market exposure from contracts for difference (CFDs).

Market Exposure
 

	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    %	30.09 2023    %
Long	107.4	106.2	110.7	112.4	111.9	106.3	108.5	112.9	116.9	113.0	113.3	114.9
Short	5.3	4.8	4.9	5.1	3.9	3.9	3.8	3.6	4.0	3.0	3.0	3.0
Gross	112.7	111.0	115.6	117.5	115.8	110.2	112.3	116.5	120.9	116.0	116.3	117.9
Net	102.1	101.4	105.8	107.3	108.0	102.4	104.7	109.3	112.9	110.0	110.3	111.9

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Bank Central Asia	Indonesia	4.6
Saudi National Bank	Saudi Arabia	4.2
JSC Kaspi	Kazakhstan	3.2
Bank Mandiri	Indonesia	3.1
Astra International	Indonesia	3.0
Emaar Properties	United Arab Emirates	2.9
FPT	Vietnam	2.8
CP All	Thailand	2.8
Saudi Basic Industries Corporation	Saudi Arabia	2.8
Advanced Info Service	Thailand	2.8

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

The Company’s NAV fell by 3.4% in September, marginally outperforming its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”) which fell by 3.5%. For reference, the MSCI Emerging Markets Index was down by 2.6% while the MSCI Frontier Markets Index was down by 3.8% over the same period. All performance figures are on a US Dollar basis with net income reinvested.

Performance was weak for several of the markets in our universe in September. A strong rally in Oil was not able to lead emerging market equities into positive territory as September was mostly dominated by a risk-off sentiment. In Latin America, all countries posted negative returns except for Colombia (+4.5%). European markets also lagged with Poland and Greece down by 11.2% and 10.4% respectively. On the other hand, the United Arab Emirates (UAE) (+4.5%) was amongst the top performers over the month, buoyed by a booming property market.

Several stock picks did well in September. Nak Kazatomprom (41.7%), the Kazakh uranium producer, was the best performing stock. Uranium prices have surged over the past year as nuclear power re-emerges as an alternative energy source to fossil fuel. Gulf International Services (+11.4%), the Qatar-based oil services holding company, continued its strong run and was another contributor over the month. Elsewhere in our universe, Argentina exposure through energy company Vista (+13.6%) also helped performance. We are seeing an impressive growth in shale production and the company is expected to double production over the next few years. On the other hand, the Hungarian low-cost carrier Wizz Air (-18.3%) was the biggest detractor in September. Along with other airlines, they are impacted by the Pratt & Whitney engine issue headlines. We think the market is misunderstanding the impact of this on financials and the company has significant competitive advantages and is trading at cheap multiples.

We made some changes to the portfolio in September. We re-initiated a position in Bloomberry Resorts, a Philippines based resort and casino operator, on the view that strong volume growth will continue and that leverage is likely to fall from current levels. Elsewhere in Asia, we initiated a new position in Pentamaster which is positioned for strong growth from services it provides to silicon carbide chip manufacturers. We reduced our exposure to Thailand on the view that the new government is unlikely to implement any economic reform. In Europe, we took profits in Hungarian bank OTP.

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 could enable potentially compelling alpha opportunities.

Sources:

¹BlackRock as at 30 September 2023

²MSCI as at 30 September 2023

20 October 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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