Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 30 April 2023 and unaudited.

Performance at month end with net income reinvested.

	One  month %	Three months %	One  year %	Three  years %	Five  years %	Since  Launch* %
Sterling:
Share price	0.4	-0.7	4.0	74.5	2.3	112.1
Net asset value	2.5	2.6	2.1	78.0	16.1	135.8
Benchmark (NR)**	1.3	-1.9	-8.9	35.3	8.3	79.2
MSCI Frontiers Index (NR)	-1.1	-2.9	-14.9	18.7	-1.6	58.9
MSCI Emerging Markets Index (NR)	0.2	-3.9	-3.8	17.4	7.1	51.3
US Dollars:
Share price	2.0	1.3	4.2	74.0	-6.5	71.9
Net asset value	4.2	4.7	2.3	77.5	6.1	90.7
Benchmark (NR)**	3.0	0.1	-8.8	34.8	-1.2	45.5
MSCI Frontiers Index (NR)	0.5	-0.8	-14.8	18.3	-10.2	28.1
MSCI Emerging Markets Index (NR)	0.2	-3.5	-5.3	15.1	-3.8	20.0

Sources: BlackRock and Standard & Poor’s Micropal

* 17 December 2010.

** The Company’s benchmark changed from MSCI Frontier Markets Index to MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (net total return, USD) effective 1/4/2018.
 

At month end
US Dollar
Net asset value - capital only:	182.56c
Net asset value - cum income:	186.15c
Sterling:
Net asset value - capital only:	145.25p
Net asset value - cum income:	148.10p
Share price:	135.00p
Total assets (including income):	£280.4m
Discount to cum-income NAV:	8.8%
Gearing:	nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	4.2%
Ordinary shares in issue**:	189,325,748
Ongoing charges***:	1.4%
Ongoing charges plus taxation and performance fee****:	1.4%

*The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 4.2% and includes the 2022 interim dividend of 2.75 cents per share, declared on 26 May 2022, and paid to shareholders on 24 June 2022 and the 2022 final dividend of 4.25 cents per share, declared on 8 December 2022, and payable to shareholders on 19 January 2023.

** Excluding 52,497,053 ordinary shares held in treasury.

***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 performance fees, finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for Year ended 30 September 2022.

**** 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 and including performance fees but excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for Year ended 30 September 2022.

Sector Analysis	Gross market value as a % of net assets		Country Analysis	Gross market value as a % of net assets
Financials	38.5		Indonesia	17.4
Industrials	14.5		Saudi Arabia	15.5
Energy	14.5		United Arab Emirates	8.1
Materials	13.6		Kazakhstan	8.0
Consumer Staples	10.2		Vietnam	7.8
Information Technology	5.4		Thailand	7.4
Communication Services	4.4		Hungary	7.4
Consumer Discretionary	3.2		Chile	5.9
Real Estate	2.6		Greece	4.3
Health Care	1.6		Poland	3.5
	-----		Qatar	3.1
	108.5		Colombia	2.7
	-----		Argentina	2.5
Short positions	-3.8		Egypt	2.3
	=====		Philippines	1.9
			Panama	1.9
			Peru	1.7
			Georgia	1.7
			Malaysia	1.5
			Kuwait	1.3
			Romania	1.0
			Kenya	0.7
			Cambodia	0.6
			Ukraine	0.3
				-----
			Total	108.5
				-----
			Short positions	-3.8
				=====

*reflects gross market exposure from contracts for difference (CFDs).

Market Exposure
 

	31.05  2022     %	30.06  2022     %	31.07  2022     %	31.08  2022     %	30.09  2022     %	31.10  2022     %	30.11  2022     %	31.12  2022     %	31.01  2023     %	28.02  2023     %	31.03  2023     %	30.04  2023     %
Long	107.9	106.1	107.3	107.3	106.2	107.4	106.2	110.7	112.4	111.9	106.3	108.5
Short	4.7	4.6	6.2	5.3	5.2	5.3	4.8	4.9	5.1	3.9	3.9	3.8
Gross	112.6	110.7	113.5	112.6	111.4	112.7	111.0	115.6	117.5	115.8	110.2	112.3
Net	103.2	101.5	101.1	102.0	101.0	102.1	101.4	105.8	107.3	108.0	102.4	104.7

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Bank Central Asia	Indonesia	5.1
Astra International	Indonesia	3.9
PKO Bank Polski	Poland	3.5
Saudi Basic Industries Corp	Saudi Arabia	3.2
Abdullah Al Othaim Markets	Saudi Arabia	3.2
JSC Kaspi	Kazakhstan	3.1
OTP Bank	Hungary	3.0
Bank Mandiri	Indonesia	2.9
Wizz Air Holdings	Hungary	2.9
Halyk Savings Bank	Kazakhstan	2.8

Commenting on the markets, Sam Vecht, Emily Fletcher and Sudaif Niaz, representing the Investment Manager noted:
 

The Company’s NAV was up by 4.2% in April, strongly outperforming its benchmark, the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”) which was up by 3%. For reference, the MSCI Emerging Markets Index had relatively muted performance and returned 0.2% while the MSCI Frontier Markets Index was up by 0.5% over the same period. All performance figures are on a US Dollar basis with net income reinvested.

The Company’s outperformance was primarily driven by country allocation particularly in Eastern Europe where gas prices moved close to the lowest levels since the beginning of the energy crisis boosting hopes of a stronger economic recovery and buoying equity markets. Oil prices also retreated to near levels seen before Russia's invasion of Ukraine. This decline in energy prices and commodities at large should help temper the outlook for global inflation. We observe a growing consensus around peak US interest rates. A gradual reversal from here should bode positively for emerging markets, with the caveat of an unexpectedly severe recession in the US.

In our universe, Eastern European markets were the top performers, notably Poland (+13%), supported by strong earnings from the banking sector and optimism surrounding the consumer recovery. Elsewhere, Indonesia (+7%) did well from the gradual structural shift underway in its balance of payments from downstream nickel exports. On the other hand, equity markets in Turkey (-5%) and Thailand (-3%) were challenged given increased political uncertainty from general elections in both countries in May.

Several stock picks did well in April. It is encouraging to see earnings delivery and capital return by our holdings starting to reflect in market valuations. Polish Bank PKO (+17%) was the top performer following strong earnings results. Indonesian auto conglomerate Astra International (+15%) performed well given good results, and importantly, improved capital returns via larger than anticipated dividend payment. Kazakh bank Halyk (+16%) also contributed positively during the month on back of strong results and capital return. On the other side, Colombian bank Bancolombia was the weakest link (-12%) from the unexpected dismissal of the country’s finance minister. Mitra Adiperkasa (-7%) was the second worst performer; we believe this is from short-term profit taking as the Indonesian consumer confidence remains robust.

We made few changes to the portfolio in April. We trimmed our exposure to Colombia following news of the change in finance minister. We took some profits across a few names such as Saudi grocery operator Al Othaim which had an outsized move on heels of a bonus stock dividend and also in Argentinian energy company Vista on strong performance.

We believe global markets are still adjusting to a significantly higher cost of capital and remain vulnerable to unexpected hiccups such as the liquidity crisis in the regional banking space in the US. However, through the last few years, we have observed a marked contrast in the monetary and fiscal policy decisions taken in small emerging/frontier markets versus developed markets and this keeps us optimistic on our opportunity set. Our investment universe, in absolute and relative terms, remains under-researched and this should enable compelling alpha opportunities.

Sources:

¹BlackRock as at 30 April 2023

²MSCI as at 30 April 2023

19 May 2023

ENDS

Latest information is available by typing www.blackrock.com/uk/brfi 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 BlackRock’s website (or any other website) is incorporated into, or forms part of, this announcement.