Portfolio Update

The information contained in this release was correct as at 30 September 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. 

BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI - UK9OG5Q0CYUDFGRX4151 )

All information is at 30 September 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^	1.6	16.8	18.0	-3.0	0.6
Share price	-0.7	8.0	15.5	-3.4	1.3
MSCI EM Latin America (Net Return)^^	0.8	12.7	21.1	-0.5	5.1
US Dollars:
Net asset value^	-2.5	7.4	-2.4	-12.1	-16.4
Share price	-4.7	-0.7	-4.4	-12.4	-15.8
MSCI EM Latin America (Net Return)^^	-3.3	3.6	0.2	-9.8	-12.5

^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:	413.72p
Net asset value - including income:	435.76p
Share price:	378.00p
Total assets#:	£137.4m
Discount (share price to cum income NAV):	13.3%
Average discount* over the month – cum income:	13.1%
Net gearing at month end**:	7.4%
Gearing range (as a % of net assets):	0-25%
Net yield##:	6.1%
Ordinary shares in issue(excluding 2,181,662 shares held in treasury):	29,448,641
Ongoing charges***:	1.14%

#Total assets include current year revenue.

##The yield of 6.1% is calculated based on total dividends declared in the last 12 months as at the date of this announcement as set out below (totalling 25.79 cents per share) and using a share price of 421.96 US cents per share (equivalent to the sterling price of 378.00 pence per share translated in to US cents at the rate prevailing at 30 September 2022 of $1.1163 dollars to £1.00).

2021 Q4 Final dividend of 6.21 cents per share (paid on 08 February 2022).

2022 Q1 Interim dividend of 7.76 cents per share (paid on 16 May 2022).

2022 Q2 Interim dividend of 5.74 cents per share (paid on 12 August 2022).

2022 Q3 Interim dividend of 6.08 cents per share (payable on 09 November 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.

*** 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 finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for the year ended 31 December 2021.

Geographic Exposure	% of Total Assets	% of Equity Portfolio *	MSCI EM Latin America Index
Brazil	65.5	65.3	64.1
Mexico	23.8	23.7	25.0
Chile	3.4	3.4	6.6
Argentina	3.0	3.0	0.0
Peru	2.5	2.5	2.7
Panama	2.1	2.1	0.0
Colombia	0.0	0.0	1.6
Net current Liabilities (inc. fixed interest)	-0.3	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 7.1% of the Company’s net asset value.

Sector	% of Equity Portfolio*	% of Benchmark*
Financials	30.7	25.4
Materials	18.0	21.2
Consumer Staples	12.7	14.7
Energy	9.9	12.2
Industrials	8.7	7.8
Real Estate	5.9	0.6
Health Care	4.7	2.4
Consumer Discretionary	4.4	2.9
Communication Services	2.6	6.4
Information Technology	1.6	0.5
Utilities	0.8	5.9
	-----	-----
Total	100.0	100.0
	=====	=====

*excluding net current assets & fixed interes

Company	Country of Risk	% of Equity Portfolio	% of Benchmark
Petrobrás – ADR:	Brazil
Equity		5.1	4.4
Preference Shares		3.4	5.1
Vale – ADS	Brazil	7.7	10.3
Banco Bradesco – ADR	Brazil	6.7	4.7
Itaú Unibanco – ADR	Brazil	6.6	4.9
Grupo Financiero Banorte	Mexico	5.0	3.2
AmBev – ADR	Brazil	4.4	2.6
B3	Brazil	4.4	2.9
FEMSA - ADR	Mexico	4.4	2.4
Hapvida Participacoes	Brazil	3.4	1.3
Suzano Papel e Celulose	Brazil	2.9	1.2

Commenting on the markets, Sam Vecht and Christoph Brinkmann, representing the Investment Manager noted;

For the month of September 2022, the Company’s NAV returned 1.6% with the share price moving -0.7%.¹ The Company’s benchmark, the MSCI EM Latin America Index, returned 0.8% on a net basis (all performance figures are in sterling terms with dividends reinvested).¹

Security selection in Brazil contributed most to relative performance over the month while allocation to Argentina detracted from performance. Our underweight position in Brazilian oil company, Petrobras, was a top contributor to the portfolio as the stock has underperformed given the political pressures amid Brazilian elections and oil volatility. An off-benchmark position in Brazilian real estate developer, MRV Engenharia, also benefitted the portfolio as the market is anticipating an end to the interest hike cycle and a renewed focus from the government regarding Brazil's low-income housing programs. On the other hand, our overweight position in Chilean pulp and paper company, Empresas CMPC, detracted most from relative performance as the stock has given back the gains it achieved on the back of the rejection of the constitutional referendum. The absence of any holding in Brazilian electric engineering company, Weg, also detracted from performance as the company has recently performed well on the back of strong demand and a recent broker upgrade.

Over the month we added to Chilean bank, Banco Santander, as the bank benefits from higher interest rates and also to manage the underweight to Chile. We initiated a position in Brazilian insurance company, IRB Brasil Resseguros, as we have conviction in the ability of the company’s new management to restore credibility and execute turnaround plans. We reduced exposure to Walmart de Mexico, to take profits following stock outperformance.

The fundamentals around Latin American equities have steadily improved from a challenging 2021 as investors learn to live with the region’s political risk and focus instead on soaring local interest rates and commodity prices. Latin American currency remains relatively cheap at current levels as the combination of rising interest rates and low valuations has been attracting investors to increase regional exposure. Latin American central banks were the first to raise rates last year and policy makers in the region have both surprised markets with steep hikes this year. For example, Brazilian policy makers have increased borrowing costs to the highest levels in almost five years. As a result, Latin America has been proactive in hiking rates and is considered to be ahead of the curve from a monetary policy standpoint relative to developed markets. From a positioning standpoint, we have been favoring domestic stocks that are more sensitive to interest rates in Brazil, on the view that the nation’s next president is likely to implement relatively orthodox macro policies and the Brazilian Central Bank should start an easing cycle in 2023. Although there are some uncertainties ahead of the October Brazilian Presidential election, global investors seem to be ready to put money to work in local Latin American equity markets as other emerging market nations such as China, Russia and India grapple with their own issues.  We would argue that for many reasons Latin America would seem well-positioned ahead of rising geopolitical tensions as the region provides:  i)  geographic and economic insulation from the recent conflict; ii) long and wide commodities exposure; iii) cheap currencies; iv) attractive valuation entry points; and v) proactive monetary policy stances.

¹Source: BlackRock, as of 30 September 2022.

25 October 20232

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.