Portfolio Update

The information contained in this release was correct as at 30 April 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 April 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^	-9.4	8.1	8.5	-6.9	6.8
Share price	-7.0	14.7	14.4	-0.4	22.9
MSCI EM Latin America (Net Return)^^	-8.7	10.2	14.3	-1.2	9.6
US Dollars:
Net asset value^	-13.7	1.1	-1.7	-10.3	3.6
Share price	-11.3	7.3	3.7	-4.1	19.1
MSCI EM Latin America (Net Return)^^	-13.0	3.1	3.7	-4.9	6.3

^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:	417.04p
Net asset value - including income:	421.51p
Share price:	405.50p
Total assets#:	£183.9m
Discount (share price to cum income NAV):	3.8%
Average discount* over the month – cum income:	6.5%
Net gearing at month end**:	9.2%
Gearing range (as a % of net assets):	0-25%
Net yield##:	5.6%
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 5.6% is calculated based on total dividends declared in the last 12 months as at the date of this announcement as set out below (totalling 28.35 cents per share) and using a share price of 509.10 US cents per share (equivalent to the sterling price of 405.50 pence per share translated in to US cents at the rate prevailing at 30 April 2022 of $1.2555 dollars to £1.00).

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 (paid on 08 February 2022).

2022 Q1 Interim dividend of 7.76 cents per share (payable on 16 May 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	62.7	63.8	62.8
Mexico	25.0	25.4	26.2
Chile	5.1	5.2	5.6
Peru	2.0	2.0	2.9
Argentina	1.8	1.8	0.0
Panama	1.7	1.8	0.0
Colombia	0.0	0.0	2.5
Net current assets (inc. fixed interest)	1.7	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 11.1% of the Company’s net asset value.

Sector	% of Equity Portfolio*	% of Benchmark*
Financials	25.8	24.0
Materials	21.7	23.4
Consumer Staples	15.2	14.6
Industrials	9.0	6.8
Energy	7.7	12.3
Communication Services	5.4	7.7
Consumer Discretionary	3.9	3.3
Real Estate	3.8	0.6
Health Care	3.8	2.3
Utilities	1.9	4.4
Information Technology	1.8	0.6
	-----	-----
Total	100.0	100.0
	=====	=====

*excluding net current assets & fixed interest

Company	Country of Risk	% of Equity Portfolio	% of Benchmark
Vale – ADS	Brazil	8.6	12.0
Petrobrás – ADR:	Brazil
Equity		4.4	4.4
Preference Shares		3.3	5.0
Banco Bradesco – ADR	Brazil	5.8	4.2
Itaú Unibanco – ADR	Brazil	5.4	4.0
Grupo Financiero Banorte	Mexico	4.2	3.0
Walmart de México y Centroamérica	Mexico	4.0	3.2
FEMSA - ADR	Mexico	4.0	2.5
B3	Brazil	4.0	2.9
AmBev – ADR	Brazil	3.8	2.4
Gerdau – Preference Shares	Brazil	3.2	1.1

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

For the month of April 2022, the Company’s NAV returned -9.4%¹ with the share price moving -7.0%¹. The Company’s benchmark, the MSCI EM Latin America Index, returned -8.7%¹ on a net basis (all performance figures are in sterling terms with dividends reinvested).

Latin American (LatAm) equities posted a negative performance over the month with Peru and Brazil leading the decline.

Security selection in Brazil contributed the most to relative performance over the period while allocation in Argentina detracted most from relative returns. An off-benchmark position in Brazilian’s car rental company, Movida, was the top contributor given strong demand and the rise in prices. An off-benchmark position in Brazilian medical group, Afya, also benefitted the Company as growth prospects are high as existing infrastructure has ample room to mature. Pricing power remains strong given strong demand and controlled supply of medical education seats. On the other hand, an overweight position in Brazil’s largest hospital chain, Rede D’Or, detracted most from relative performance as investors are concerned about rising inflation in Brazil and the impact it could have on margins for the hospital group. An overweight holding in Brazilian healthcare company, Hapvida, also detracted from relative performance as the stock has underperformed. We continue to have strong conviction in the stock as Hapvida recently merged with Intermedica, another healthcare company. This leads to some more “growth” stock opportunities, like Intermedica, the market share leader in the very fragmented Brazilian private healthcare sector.

Over the month we added to Brazilian logistics company, Santos Brasil, as we see the port operator as well positioned in terms of available capacity in one of the largest and most congested seaports in Brazil, which should lead the company to grow volumes above those of the market, despite the ongoing global logistics bottlenecks.  We reduced exposure to Peruvian holding company, Credicorp, to take profits following stock outperformance. The portfolio ended the period being overweight to Brazil and Argentina, whilst being underweight to Colombia. At the sector level, we are overweight financials and real estate, and underweight energy and communication services.

Latin American equities are bouncing back 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. LatAm 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 Mexico and Colombia have both surprised markets with steep hikes this year in preparation for Federal Reserve tightening. Meanwhile, Brazilian policy makers have increased borrowing costs to the highest levels in almost five years. 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. Having been one of the worst performing Emerging Market currencies last year, the Brazilian Real has shown robust appreciation this year with the currency strengthening on the back of higher interest rates while rises in commodity prices have certainly played a role. The prices of oil, soybeans and iron ore (Brazil’s main commodity exports) have increased since the start of the year. What’s more, high interest rates are making local assets more attractive. There is no clear hint that the underlying force behind the rally is fading. Latin America’s high yields compared with peers and relatively cheap local stock markets continue to attract foreign account inflows. Global rotation from growth stocks into value stocks continue to boost performance for Latin American equities and considering the Federal Reserve’s pace of interest rate rises, this may keep investors away from growth stocks for now. We would argue that for many reasons LatAm 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 April 2022.

27 May 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.