Portfolio Update

The information contained in this release was correct as at 31 March 2021.  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 March 2021 and unaudited.
 

Performance at month end with net income reinvested
 

	One month %	Three months %	One  year %	Three years %	Five years %
Sterling:
Net asset value^	5.0	-6.3	43.0	-16.4	32.2
Share price	4.1	-8.1	35.7	-10.1	41.4
MSCI EM Latin America (Net Return)^^	6.0	-6.2	34.9	-15.7	27.0
US Dollars:
Net asset value^	3.7	-5.4	59.2	-17.8	26.8
Share price	2.7	-7.2	51.0	-11.7	35.6
MSCI EM Latin America (Net Return)^^	4.6	-5.3	50.1	-17.1	21.9

^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. Historically the benchmark data for the Company has always been stated on a Gross basis. However, as disclosed in the Company’s Interim Report for the six months ended 30 June 2018, it is the Board’s intention to monitor the Company’s performance with reference to the NR version of the benchmark. For transparency both sets of benchmark data have been provided.

Sources: BlackRock, Standard & Poor’s Micropal

At month end

Net asset value - capital only:	401.35p
Net asset value - including income:	403.86p
Share price:	367.00p
Total assets#:	£171.1m
Discount (share price to cum income NAV):	9.1%
Average discount* over the month – cum income:	9.0%
Net gearing at month end**:	8.9%
Gearing range (as a % of net assets):	0-25%
Net yield##:	5.0%
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 5.0% is calculated based on total dividends declared in the last 12 months as at the date of this announcement as set out below (totalling 25.44 cents per share) and using a share price of 506.35 US cents per share (equivalent to the sterling price of 367.00 pence per share translated in to US cents at the rate prevailing at 31 March 2021 of $1.3793 dollars to £1.00).

2020 Q2 interim dividend of 5.57 cents per share (paid on 11 August 2020).
2020 Q3 interim dividend of 5.45 cents per share (paid 09 November 2020).
2020 Q4 Final dividend of 7.45 cents per share (paid on 08 February 2021).
2021 Q1 interim dividend of 6.97 cents per share (payable on 10 May 2021).

*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 2020.

Geographic Exposure	% of Total Assets	% of Equity Portfolio *	MSCI EM Latin America Index
Brazil	56.7	56.2	61.3
Mexico	27.5	27.3	24.0
Chile	12.5	12.4	8.0
Argentina	4.2	4.1	1.6
Peru	0.0	0.0	2.8
Colombia	0.0	0.0	2.3
Net current liabilities (inc. fixed interest)	-0.9	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 7.9% of the Company’s net asset value.

Sector	% of Equity Portfolio*	% of Benchmark*
Materials	29.8	24.0
Financials	22.2	24.4
Consumer Discretionary	8.9	5.6
Industrials	8.4	6.1
Energy	6.0	8.8
Consumer Staples	5.3	14.7
Information Technology	5.2	1.8
Communication Services	5.1	6.2
Health Care	4.2	2.1
Real Estate	4.0	0.8
Utilities	0.9	5.5
	-----	-----
Total	100.0	100.0
	=====	=====

*excluding net current assets & fixed interest

Company	Country of Risk	% of Equity Portfolio	% of Benchmark
Vale – ADS	Brazil	8.9	11.0
Banco Bradesco – ADR	Brazil	7.6	4.5
Petrobrás – ADR:	Brazil
Equity		3.8	2.7
Preference Shares		2.2	3.5
América Movil – ADR	Mexico	5.1	4.0
Walmart de México y Centroamérica	Mexico	4.0	2.8
Cemex – ADR	Mexico	3.9	1.8
B3	Brazil	3.8	3.4
Suzano	Brazil	3.7	1.6
Grupo Financiero Banorte	Mexico	3.6	2.5
Quimica Y Minera – ADR	Chile	3.3	1.2

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

For the month of March 2021, the Company’s NAV returned 5.0%¹ with the share price moving 4.1%¹. The Company’s benchmark, the MSCI EM Latin America Index, returned 6.0%¹ on a net basis (all performance figures are in sterling terms with dividends reinvested).

Latin American (LatAm) equities posted positive performance over the month with Mexico and Chile leading the rise.

Allocation in Peru contributed the most to relative performance over the period while stock selection in Brazil detracted most from relative returns. Not holding a position in Brazilian retail company, Magazine Luiza, contributed most to relative performance as e-commerce players values dropped as people took profits from the growth stemmed from the pandemic and online shopping adoption. An off-benchmark holding in Ternium, the Argentinian flat steel and long steel manufacturer, also benefitted the portfolio as recent environmental restrictions to steel output in China remain supportive for global steel prices. An off-benchmark holding in Afya, a Brazilian medical education group, detracted most from relative returns during the month, following peers in the sector lower, as the Brazilian education sector is facing weakened demand. We feel Afya remains impervious to such pressures as 80% of Afya’s revenue comes from a focus in medical education, a segment where demand remains resilient.  An off-benchmark holding of Locaweb also weighed on relative performance due to weaker than expected margins given recent acquisitions.

Over the month we added to Chilean department stores company, Falabella, given the company’s position to benefit from gradual economic reopening and improving consumption trends. We initiated a position in Mexican beverage and retail company, Fomento Economico, to gain exposure to reopening trade as recent launch of digital loyalty and payment programs should help improve customer engagement. We reduced exposure to Petrobras, a major Brazilian petroleum company, given concerns about asset sales and corporate governance risk. We sold holding of Mexican mass media company, Televisa, given continued underperformance of the stock. The portfolio ended the period being overweight to Mexico and Chile, whilst being underweight to Peru and Columbia. At the sector level, we are overweight materials and consumer discretionary, and underweight consumer staples and utilities.

COVID-19 has devastated the global economy in 2020, with LatAm hit especially hard. As we look ahead to 2021 we are optimistic that global growth will rebound on the back of increased vaccine distribution as catalysts for a reflation trade.  Despite LatAm equities strong fourth quarter performance, the region remains cheaper than developed markets and emerging markets on both a forward P/E (price to earnings) basis and trailing P/BV (price to book value) basis. We are optimistic on returns for LatAm equities going forward given an economic recovery in 2021 and the strong commodity prices as a tailwind for many commodity rich nations in the region. Furthermore, LatAm equities have benefited from a recent global value rotation in the market, which we expect to continue into the second half of the year. Higher raw material prices should also provide a tailwind for Latin America given the high level of commodity exports across major economies in the region.

¹Source: BlackRock, as of 31 March 2021.

26 April 2021

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.