Portfolio Update

BLACKROCK FRONTIERS INVESTMENT TRUST PLC (LEI: 5493003K5E043LHLO706)

All information is at 30 October 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	-6.6	-7.9	10.8	57.8	22.7	115.0
Net asset value	-4.9	-4.2	9.2	66.4	39.3	142.1
Benchmark (NR)**	-3.4	-4.9	-7.4	28.2	10.1	73.9
MSCI Frontiers Index (NR)	-5.3	-4.8	-0.5	4.6	11.5	60.7
MSCI Emerging Markets Index (NR)	-3.3	-6.9	5.1	-4.8	14.0	44.9
US Dollars:
Share price	-7.1	-13.1	16.9	48.2	16.7	68.2
Net asset value	-5.4	-9.6	15.2	56.3	32.4	89.1
Benchmark (NR)**	-4.0	-10.3	-2.4	20.3	4.5	36.4
MSCI Frontiers Index (NR)	-5.8	-10.2	4.8	-1.8	5.9	25.1
MSCI Emerging Markets Index (NR)	-3.9	-12.2	10.8	-10.6	8.2	12.8

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:	176.07c
Net asset value - cum income:	181.63c
Sterling:
Net asset value - capital only:	145.10p
Net asset value - cum income:	149.68p
Share price:	134.50p
Total assets (including income):	£283.0m
Discount to cum-income NAV:	10.1%
Gearing:	Nil
Gearing range (as a % of gross assets):	0-20%
Net yield*:	4.4%
Ordinary shares in issue**:	189,325,748
Ongoing charges***:	1.38%
Ongoing charges plus taxation and performance fee****:	3.78%

*The Company’s yield based on dividends announced in the last 12 months as at the date of the release of this announcement is 4.1% and includes the 2022 final dividend of 4.25 cents per share, declared on 8 December 2022, and paid to shareholders on 19 January 2023, and the 2023 interim dividend of 3.10 cents per share, declared on 6 June 2023, and paid to shareholders on 7 July 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 2023.

**** 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 2023.

Sector Analysis	Gross market value as a % of net assets		Country Analysis	Gross market value as a % of net assets
Financials	39.9		Saudi Arabia	15.6
Energy	14.7		Indonesia	13.6
Industrials	14.7		United Arab Emirates	8.7
Materials	12.2		Thailand	8.4
Consumer Staples	10.3		Philippines	8.0
Consumer Discretionary	7.0		Kazakhstan	7.0
Information Technology	6.8		Hungary	5.8
Communication Services	6.7		Vietnam	5.5
Real Estate	6.0		Poland	5.2
Health Care	0.5		Chile	5.2
	-----		Malaysia	5.1
	118.8		Qatar	4.3
	-----		Colombia	4.0
Short positions	-3.1		Greece	3.0
	=====		Turkey	2.6
			Multi-International	2.3
			Czech Republic	2.1
			Argentina	2.0
			Georgia	1.9
			Peru	1.7
			Romania	1.3
			Kuwait	1.1
			Oman	1.1
			Cambodia	1.0
			Ukraine	0.9
			KenyaBangladeshEgypt	0.50.50.4
				-----
			Total	118.8
				-----
			Short positions	-3.1
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*reflects gross market exposure from contracts for difference (CFDs).

Market Exposure
 

	30.11 2022    %	31.12 2022    %	31.01 2023    %	28.02 2023    %	31.03 2023    %	30.04 2023    %	31.05 2023    %	30.06 2023    %	31.07 2023    %	31.08 2023    %	30.09 2023    %	31.10 2023    %
Long	106.2	110.7	112.4	111.9	106.3	108.5	112.9	116.9	113.0	113.3	114.9	118.8
Short	4.8	4.9	5.1	3.9	3.9	3.8	3.6	4.0	3.0	3.0	3.0	3.1
Gross	111.0	115.6	117.5	115.8	110.2	112.3	116.5	120.9	116.0	116.3	117.9	121.9
Net	101.4	105.8	107.3	108.0	102.4	104.7	109.3	112.9	110.0	110.3	111.9	115.7

Ten Largest Investments

Company	Country of Risk	Gross market value as a % of net assets
Bank Central Asia	Indonesia	4.7
Saudi National Bank	Saudi Arabia	4.6
Emaar Properties	United Arab Emirates	3.2
PKO Bank Polski	Poland	3.2
Advanced Info Service	Thailand	2.9
Astra International	Indonesia	2.9
Ayala Land	Philippines	2.8
CP All	Thailand	2.8
Saudi Basic Industries Corporation	Saudi Arabia	2.7
FPT	Vietnam	2.7

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

The Companys’s NAV fell by 5.4% in October, underperforming its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”) which fell by 4.0%. For reference, the MSCI Emerging Markets Index was down  by 3.9% while the MSCI Frontier Markets Index was down by 5.8% over the same period. All performance figures are on a US Dollar basis with net income reinvested.

October was another weak month for markets amidst geopolitical conflict. From a regional lens, Latin America was the worst performer. This drop was largely driven by the weak performance of Chile (-9.1%) and Argentina (-8.9%). ASEAN markets also lagged with Vietnam and Indonesia down by 14.4% and 8.3%, respectively. In our universe, CEEMEA markets posted the biggest gains with Poland (+16.3%) as the best performing market. The rally in Poland followed elections in mid-October with the opposition parties securing victory after nearly 8 years of Law and Justice party PiS controlled coalition in parliament.

Polish Financials did well in October led by the Polish bank PKO (+29.8%) and the insurance company PZU (+19.2%). Our gold investment in mine operator Eldorado Gold, listed in Turkey, rallied (+20.7%) with gold prices up over the course of the month. On the other hand, Hungarian low-cost carrier Wizz Air (-19.9%) was the worst performing stock for the second month in a row. October operating numbers were better than expected, but as one of the international operators in Israel, the stock reacted negatively to the middle eastern conflict. FPT Corp, the Vietnamese IT services provider, also detracted the Fund’s performance.

We made few changes to the portfolio in October. We added to the UAE real estate developer Emaar Properties as it sold off disproportionately from the risk of the middle eastern conflict spreading. We also initiated a position in OQ Gas Networks. We believe the IPO was priced attractive both relative to regional peers and also absolute for the company’s underlying asset based return framework. In Asia, we added to our holding in Ayala Land, a Philippines based property developer. We took profits and trimmed some exposure to Indonesian Bank Mandiri.

We believe global markets are starting to feel the impact of higher interest rates, noting slowing credit growth in particular as evidence that a demand slowdown is imminent developed markets. When combined with a Chinese economy which is struggling to find its footing we find it difficult to see where a meaningful pick up in global growth will come from. In contrast we see better fundamentals in frontier and smaller emerging markets. Monetary tightening across much of our universe was ahead of that in developed markets, particularly in Latin America and Eastern Europe. With inflation falling across many countries within our universe, rate cuts have started to materialize. This is a good set up for domestically oriented economies to see a cyclical pick up. Our investment universe, in absolute and relative terms, remains under-researched and we believe this should enable compelling alpha opportunities.

Sources:

¹BlackRock as at 31 October 2023

²MSCI as at 31 October 2023

21 November 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.

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Release

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