Portfolio Update

The information contained in this release was correct as at 31 January 2022.  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. 

On 4 January 2022, the Board of BlackRock Latin American Investment Trust plc announced that it  would make a tender offer to shareholders for 24.99 per cent. of the issued share capital.  More details can be found at https://www.londonstockexchange.com/news-article/BRLA/tender-offer/15274199

BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI - UK9OG5Q0CYUDFGRX4151 )

All information is at 31 January 2022 and unaudited.
 

Performance at month end with net income reinvested
 

	One month %	Three months %	One  year %	Three years %	Five years %
Sterling:
Net asset value^	9.2	14.2	3.7	-19.3	-0.5
Share price	6.7	12.5	2.2	-10.5	8.5
MSCI EM Latin America (Net Return)^^	8.4	12.8	8.3	-14.8	0.7
US Dollars:
Net asset value^	8.2	11.7	1.3	-17.7	6.1
Share price	5.7	10.1	-0.2	-8.7	15.7
MSCI EM Latin America (Net Return)^^	7.4	10.4	5.8	-13.1	7.4

^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:	392.49p
Net asset value - including income:	395.32p
Share price:	358.50p
Total assets#:	£167.5m
Discount (share price to cum income NAV):	9.3%
Average discount* over the month – cum income:	7.8%
Net gearing at month end**:	8.6%
Gearing range (as a % of net assets):	0-25%
Net yield##:	5.7%
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 5.7% is calculated based on total dividends declared in the last 12 months as at the date of this announcement as set out below (totalling 27.56 cents per share) and using a share price of 480.95 US cents per share (equivalent to the sterling price of 358.50 pence per share translated in to US cents at the rate prevailing at 31 January 2022 of $1.3416 dollars to £1.00).

2021 Q1 interim dividend of 6.97 cents per share (paid on 10 May 2021).
2021 Q2 interim dividend of 7.82 cents per share (paid on 6 August 2021).
2021 Q3 interim dividend of 6.56 cents per share (paid on 8 November 2021).
2021 Q4 Final dividend of 6.21 cents per share (payable on 08 February 2022).

*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 2021.

Geographic Exposure	% of Total Assets	% of Equity Portfolio *	MSCI EM Latin America Index
Brazil	60.4	60.0	62.3
Mexico	26.6	26.5	26.6
Chile	6.1	6.0	5.7
Peru	3.9	3.9	3.0
Panama	2.0	2.0	0.0
Argentina	1.6	1.6	0.0
Colombia	0.0	0.0	2.4
Net current liabilites (inc. fixed interest)	-0.6	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 liabilities 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*
Financials	28.1	24.4
Materials	20.7	22.5
Consumer Staples	10.2	14.9
Industrials	8.9	6.6
Communication Services	8.3	8.1
Energy	7.6	11.8
Health Care	6.1	2.7
Consumer Discretionary	3.6	4.0
Real Estate	3.4	0.6
Information Technology	1.6	0.5
Utilities	1.5	3.9
	-----	-----
Total	100.0	100.0
	=====	=====

*excluding net current liabilities & fixed interest

Company	Country of Risk	% of Equity Portfolio	% of Benchmark
Vale – ADS	Brazil	7.7	11.0
Petrobrás – ADR:	Brazil
Equity		4.3	4.3
Preference Shares		3.3	5.1
Banco Bradesco – ADR	Brazil	6.3	4.6
B3	Brazil	5.9	3.0
América Movil – ADR	Mexico	5.3	5.7
Grupo Financiero Banorte	Mexico	4.1	2.9
Walmart de México y Centroamérica	Mexico	3.9	3.1
Credicorp	Peru	3.9	1.7
Notre Dame Intermedica Participaçes	Brazil	3.2	1.2
Cemex – ADR	Mexico	3.1	1.6

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

For the month of January 2022, the Company’s NAV returned 9.2%¹ with the share price moving 6.7%¹. The Company’s benchmark, the MSCI EM Latin America Index, returned 8.4%¹ on a net basis (all performance figures are in sterling terms with dividends reinvested).

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

Security selection in Brazil contributed the most to relative performance over the period while allocation in Argentina detracted most from relative returns. An overweight position in Brazilian stock exchange, B3, was a top contributor in the month as the stock rallied on the back of increased Brazilian equity market issuance over the month. An overweight position in Brazilian bank, Banco Bradesco, also benefitted the Company as the stock has been performing well following a boost to financials from rising interest rates and low valuations. On the other hand, an off-benchmark holding in Globant, an Argentinian IT and software development company, detracted most from relative performance during the period. Globant’s investment theme remains strong, in our opinion, and after a strong stock performance in 2021, we believe the underperformance seen during the month is due to a rotation out of recent outperformers.  An overweight position in Mexican cement company,  Cemex, also weighed on relative returns as rising energy costs could pressure profitability in the near term.

Over the month we added to our holding of Brazilian car rental company, Movida Participacoes, as we continue to like the car rental space given strong demand and a rise in prices. We reduced exposure to Brazilian petroleum company, Petrobras, as signals from China raise concerns over the economy’s ability to sustain growth and demand for oil. The portfolio ended the period being overweight to Brazil and Panama, whilst being underweight to Colombia. At the sector level, the portfolio is overweight financials and health care, and underweight consumer staples and energy.

It has been a tough period for Latin America, with many countries hit hard by the COVID-19 crisis. However, we believe there are arguments to be made for better times ahead for the region as the world rebuilds after the pandemic and Latin America could be considered as a beneficiary of recovery in the global economy. As the region rebuilds, the LatAm countries will have some important tailwinds. Perhaps the most significant are high commodity prices. Vast stimulus in the US and economic recovery across the world has pushed up demand for commodities after a period of tight supply. Global governments have ambitious, commodity-heavy infrastructure plans, particularly for green energy development. Latin America is one of the most abundant regions in the world for lithium, iron ore and copper with some of the longest-life reserves at a low cost in Brazil, Chile, and Peru. Despite this positive external backdrop, there are also broader risk factors that could weigh on regional economic growth. Across Latin America, a growing middle class is seeing domestic consumption pressured from rising inflation and increasing domestic interest rates. Latin American economies were boosted throughout the pandemic for the most part by expansionary monetary and fiscal policies. This has led to a rapid near-term rebound in demand given the reopening of economies at a time where rising energy costs, low inventories and supply chain issues have led to inflation exceeding expectations across the region. Central banks have aggressively reacted by hiking domestic interest rates to tame rising inflation. The impact of rising domestic rates will weigh on growth prospects, at the margin, but could be offset by continued loose fiscal policy. Over the next 12 months we will see presidential elections in Colombia and Brazil and one of the biggest debates is the amount of government spending to continue to support development. The outcome of these debates will have profound impact on growth going forward.  Against this challenging backdrop, we see Latin American equities as already pricing in a great deal of risk factors as a number of stocks and country indices are already trading at discounted valuations in both absolute and relative terms.

23 February 2022

¹Source: BlackRock, as of 31 January 2022.

ENDS

Latest information is available by typing www.blackrock.com/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.