Portfolio Update

BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC
All information is at31 December 2016 and unaudited.

Performance at month end with net income reinvested   

	One month	Three months	One year	Three years	Five years	^^Since 31.03.06
Sterling:
Net asset value^	0.7	0.9	49.2	5.0	-6.0	65.0
Share price	1.5	-0.4	45.9	2.8	-10.1	53.0
MSCI EM Latin America	2.1	4.3	56.8	7.2	-4.8	83.4
US Dollars:
Net asset value^	-0.4	-4.0	25.0	-21.6	-25.1	17.7
Share price	0.4	-5.3	22.2	-23.3	-28.5	9.1
MSCI EM Latin America	0.9	-0.8	31.5	-20.0	-24.3	30.7

^cum income

^^Date which BlackRock took over the investment management of the Company.

Sources: BlackRock, Standard & Poor’s Micropal
 

At month end
Net asset value – capital only:	444.47p
Net asset value – cum income:	454.71p
Share price:	393.75p
Total Assets#:	£184.5m
Discount (share price to cum income NAV):	13.4%
Average discount* over the month – cum income:	14.7%
Net gearing at month end**:	2.3%
Gearing range (as a % of net assets):	0-25%
Net yield##:	2.3%
Ordinary shares in issue***:	39,369,620
Ongoing charges****:	1.1%

#Total assets include current year revenue.

## calculated using total dividends declared in the last 12 months as at the date of this announcement as a percentage of month end share price.

*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.

***Excluding 2,071,662 shares held in treasury.

**** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 December 2015.

Geographic Exposure

	% of Total Assets	% of Equity Portfolio *	MSCI EM Latin American Index
Brazil	64.5	65.0	57.9
Mexico	23.7	23.8	26.7
Peru	4.9	4.9	3.0
Argentina	3.3	3.4	0.0
Chile	1.6	1.6	9.0
Colombia	1.3	1.3	3.4
Net current assets (inc.Fixed interest)	0.7	0.0	0.0
	-----	-----	-----
Total	100.0	100.0	100.0
	-----	-----	-----

Sector	% of Equity Portfolio *	% of Benchmark
Financials	31.3	30.2
Consumer Staples	22.4	17.2
Materials	13.6	15.1
Energy	12.9	9.4
Industrials	5.3	5.9
Utilities	4.4	6.5
Consumer Discretionary	3.5	5.8
Telecommunication Services	3.1	5.8
Information Technology	2.6	1.7
Real Estate	0.9	1.4
Health Care	0.0	1.0
	-----	-----
Total	100.0	100.0
	-----	-----

*excluding net current assets & fixed interest

Ten Largest Equity Investments (in percentage order)

Company	Country of Risk	% of Equity Portfolio	% of Benchmark
Banco Bradesco	Brazil	9.2	6.1
Petrobras	Brazil	9.0	6.4
Itau Unibanco	Brazil	7.4	6.4
Vale	Brazil	4.5	4.6
AmBev	Brazil	3.9	4.5
BM&F Bovespa	Brazil	3.8	1.7
Femsa	Mexico	3.8	2.7
Grupo Financiero Banorte	Mexico	3.5	2.4
BRF	Brazil	3.1	1.7
Telefonica Brasil	Brazil	3.1	1.2

Commenting on the markets, Will Landers, representing the Investment Manager noted;

Performance

For the month of December 2016, the Company’s NAV increased by 0.7% and its share price rose by 1.5%, whilst the Company’s benchmark, the MSCI Latin America Free Index, rose by 2.1% (all performance figures are in sterling terms).

Stock selection in Brazil and Mexico was the primary detractor from returns.   Higher than benchmark exposure to Petrobras and Vale weighed on returns given weakness in the energy and material stocks.  Our lower than benchmark exposure to Chile was the largest contributor to returns driven mainly by weak activity levels and continued low levels of business confidence.  In a month where Latin America was basically flat there were no material positive contributors to performance at the stock level.

Transactions/Gearing

During the month we adjusted our banking exposure in Brazil by adding to Bradesco, reducing Itau Banco and introducing Banco do Brasil.  We increased our position in Banco Bradesco as we expect better upside relative to Itau Banco.  Banco Bradesco had underperformed due to concerns about their merger with HSBC Brazil.  We introduced Banco do Brasil given our positive view on the management changes, cost cutting initiatives and falling provisions, which should contribute positively to its return on equity, expansion and earnings growth in coming years.  We reduced exposure to Ambev, taking the name to an underweight given weak demand for their Brazilian operations; we expect a better entry point sometime in 2017. 

Net gearing was approximately 2.3% at the end of December.

Positioning

We enter 2017 maintaining a large overweight in Brazil.  We expect the Central Bank to begin cutting rates more aggressively in its first meeting of the year on January 11th, potentially bringing rates back to the single digits by the end of the year or early 2018.  This should be the main driver for improved economic activity in the short-term.  By the end of the second quarter, the passage of social security reform will ensure that medium to long-term fiscal numbers improve, thus providing the economy with a path for sustainable growth.  Meanwhile, we maintain the underweight in Mexico as the market looks to digest whatever policies will be pursued by the incoming Trump administration and their potential impact on trade and immigration.  Peru remains our favoured Andean country, and the changes in the finance ministry in Argentina should result in a higher focus on fiscal reforms, which should be positive for investor confidence in that country. 

16 January 2017

ENDS

Latest information is available by typing www.blackrock.co.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.