Portfolio Update

The information contained in this release was correct as at 31 August 2020.  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 LATIN AMERICAN INVESTMENT TRUST PLC (LEI: UK9OG5Q0CYUDFGRX4151)
All information is at 31 August 2020 and unaudited.

Performance at month end with net income reinvested 

	One month %	Three months %	One  year %	Three years %	Five years %
Sterling:
Net asset value^	-4.1	7.0	-27.5	-26.5	24.1
Share price	-4.4	2.6	-26.5	-25.0	29.9
MSCI EM Latin America (Net Return)^^	-8.1	1.1	-30.5	-29.4	23.8
US Dollars:
Net asset value^	-2.6	15.4	-20.6	-23.9	7.8
Share price	-2.9	10.7	-19.4	-22.5	12.6
MSCI EM Latin America (Net Return)^^	-6.2	9.5	-23.6	-26.6	7.7

^cum income

^^The Company’s performance benchmark (the MSCI EM Latin America Index) may be calculated on either a Gross or a Net return basis. Net return (NR) indices calculate the reinvestment of dividends net of withholding taxes using the tax rates applicable to non-resident institutional investors, and hence give a lower total return than indices where calculations are on a Gross basis (which assumes that no withholding tax is suffered). As the Company is subject to withholding tax rates for the majority of countries in which it invests, the NR basis is felt to be the most accurate, appropriate, consistent and fair comparison for the Company.

Sources: BlackRock, Standard & Poor’s Micropal

At month end
Net asset value – capital only:	350.85p
Net asset value – cum income:	356.30p
Share price:	311.50p
Total Assets#:	£152.7m
Discount (share price to cum income NAV):	12.6%
Average discount* over the month – cum income:	13.2%
Net gearing at month end**:	8.2%
Gearing range (as a % of net assets):	0-25%
Net yield##:	6.8%
Ordinary shares in issue (excluding 2,181,662 shares held in treasury):	39,259,620
Ongoing charges***:	1.1%

#Total assets include current year revenue.
##The yield of 6.6% is calculated based on total dividends declared in the last 12 months as at the date of this announcement as set out below (totalling 27.34 cents per share) and using a share price of 415.28 US cents per share (equivalent to the sterling price of 311.50 pence per share translated in to US cents at the rate prevailing at 31 August 2020 of $1.3332 dollars to £1.00).

2019 Q3 interim dividend of 8.03 cents per share (paid on 8 November 2019).
2019 Q4 Final dividend of 9.15 cents per share (paid on 06 February 2020).
2020 Q1 interim dividend of 4.59 cents per share (paid on 20 May 2020).
2020 Q2 interim dividend of 5.57 cents per share (paid on 11 August 2020).

*The discount is calculated using the cum income NAV (expressed in sterling terms).
**Net cash/net gearing is calculated using debt at par, less cash and cash equivalents and fixed interest investments as a percentage of net assets.
*** Calculated as a percentage of average net assets and using expenses, excluding interest costs for the year ended 31 December 2019.

Geographic Exposure	% of Total Assets^	% of Equity Portfolio *		MSCI EM Latin America Index
Brazil	65.0	65.6		64.2
Mexico	21.5	21.7		21.4
Chile	5.1	5.1		7.0
Argentina	4.8	4.8		1.7
Peru	1.7	1.8		3.3
Panama	0.9	1.0		0.0
Colombia	0.0	0.0		2.4
Net current assets(inc. fixed interest)	1.0	0.0		0.0
	-----	-----		-----
Total	100.0	100.0		100.0
	-----	-----		-----

^Total assets for the purposes of these calculations exclude bank overdrafts, and the net current assets figure shown in the table above therefore excludes bank overdrafts equivalent to 9.2% of the Company’s net asset value.

Sector	% of Equity Portfolio *	% of Benchmark
Materials	23.5	17.6
Consumer Discretionary	19.1	7.4
Financials	17.9	25.7
Energy	9.1	9.5
Industrials	8.2	6.7
Utilities	6.0	6.4
Consumer Staples	5.5	15.0
Communication Services	5.4	6.6
Real Estate	3.4	1.1
Health Care	1.4	2.4
Information Technology	0.5	1.6
	-----	-----
Total	100.0	100.0
	-----	-----

*excluding net current assets & fixed interest
 

Ten Largest Equity Investments (in percentage order)

Company	Country of Risk	% of Equity Portfolio	% of Benchmark
Vale	Brazil	9.5	8.3
Petrobras - ADR	Brazil	8.2	7.1
America Movil	Mexico	5.4	4.2
B3	Brazil	4.9	4.6
Ternium	Argentina	4.0	0.0
Banco Bradesco	Brazil	3.9	4.4
Grupo Mexico	Mexico	3.8	1.7
Ayfa	Brazil	3.2	0.0
Group Financiero Banorte	Mexico	3.2	1.9
Lojas Americanas	Brazil	3.0	1.1

Commenting on the markets, Ed Kuczma and Sam Vecht, representing the Investment Manager noted;

For the month of August 2020, the Company’s NAV returned -4.1%¹ with the share price moving -4.4%¹. The Company’s benchmark, the MSCI EM Latin America Index, returned -8.1%¹ on a net basis (all performance figures are in sterling terms with dividends reinvested).

Latin American equities posted a negative performance during the month, led by Brazil and Chile, on the back of concerns over the fiscal costs related to combatting the impact that COVID-19 had had on each economy.

Stock selection in Argentina contributed most to relative performance, while a lack of exposure to Colombia detracted most on relative returns over the period. An off-benchmark holding of Ternium, the leading steel company in Latin America, was the top contributor on a relative basis as steel prices were up over the month. An overweight position in GAP, a Mexican airport, also benefited the portfolio as the company is seeing a better than expected recovery in passenger traffic across the group’s 14 airports. On the other hand, not holding Magazine Luiza, one of the largest Brazilian retail companies, detracted most from relative performance during the month as the company announced strong second quarter results. An overweight position in Vasta Platform, an educational technology provider in Brazil, also weighed on relative returns as the company reported weak second quarter results.

Over the month we added to Grupo Mexico, the largest mining company in Mexico and one of the largest copper producers in the world, to increase our exposure to copper. We initiated a position in Rumo, a Brazilian logistic company, as we see low competition risk for the company, an opportunity for market share gain and an increasing profitability which will help boost earnings growth. We reduced exposure to YPF, an Argentine energy company, taking advantage of recent outperformance following a deal with private bondholders, as we see the outlook for the company not being supportive for earnings or cash flow generation, as gas prices have been suppressed locally due to oversupply and an ongoing residential tariff freeze, coupled with a decline in demand due to COVID-19 lockdown restrictions and a weak economy. We sold our holding of Itau Unibanco, a Brazilian bank, given the low conviction in the name and the expectations of an earnings cut due to lower-for-longer interest rates and mounting pressure from new, technology focused entrants in to the banking sector.

The coronavirus and associated COVID-19 disease have spread throughout the world, prompting "social distancing" and often strict government control measures throughout developed and emerging markets, Latin America included. While China has been gradually easing restrictions since late February, most other emerging economies are still passing through the "peak lockdown" phase. Policy responses have been considerable, but many markets in Latin America, notably those reliant on foreign capital flows, face constraints in the scale of their response, in addition to questions about the robustness of their health systems. We saw lockdowns easing modestly by June and expect more significant easing measures in the second half of the year. Most governments plan to do so on this timeframe, though it should be noted that almost everywhere, government control measures have been kept in place longer than originally envisaged. Activity in the industrial sector and in parts of services where "social distancing" is less of a concern should rebound relatively quickly. Still, we do not expect most economies to return to their pre-crisis level of GDP until 2021. The extent to which policy action now limits business bankruptcies and a breakdown in the labour market will be an important differentiator of the speed of recovery.

¹Source: BlackRock, as of 31 August 2020.

21 September 2020

ENDS

Latest information is available by typing www.blackrock.co.uk/brla 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 the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.