Portfolio Update

The information contained in this release was correct as at 30 April 2021.  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 2021 and unaudited.
 

Performance at month end with net income reinvested
 

	One month %	Three months %	One  year %	Three years %	Five years %
Sterling:
Net asset value^	2.6	3.4	38.8	-14.1	29.5
Share price	3.6	2.4	39.7	-7.3	39.0
MSCI EM Latin America (Net Return)^^	3.3	4.4	33.4	-13.4	26.2
US Dollars:
Net asset value^	2.9	4.2	52.4	-13.7	22.3
Share price	3.9	3.3	53.5	-6.8	31.2
MSCI EM Latin America (Net Return)^^	3.7	5.3	46.4	-12.9	19.3

^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:	407.51p
Net asset value - including income:	409.33p
Share price:	375.00p
Total assets#:	£173.5m
Discount (share price to cum income NAV):	8.4%
Average discount* over the month – cum income:	10.5%
Net gearing at month end**:	8.2%
Gearing range (as a % of net assets):	0-25%
Net yield##:	4.9%
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 4.9% is calculated based on total dividends declared in the last 12 months as at the date of this announcement as set out below (totalling 25.44 cents per share) and using a share price of 519.19 US cents per share (equivalent to the sterling price of 375 pence per share translated in to US cents at the rate prevailing at 30 April 2021 of $1.38445 dollars to £1.00).

2020 Q2 interim dividend of 5.57 cents per share (paid on 11 August 2020).

2020 Q3 interim dividend of 5.45 cents per share (paid 09 November 2020).

2020 Q4 Final dividend of 7.45 cents per share (paid on 08 February 2021).

2021 Q1 interim dividend of 6.97 cents per share (payable on 10 May 2021).

*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 2020.

Geographic Exposure	% of Total Assets	% of Equity Portfolio *	MSCI EM Latin America Index
Brazil	58.6	58.5	63.1
Mexico	26.1	26.1	23.9
Chile	11.0	11.0	6.7
Argentina	3.7	3.6	1.6
Peru	0.8	0.8	2.6
Colombia	0.0	0.0	2.1
Net current liabilities (inc. fixed interest)	-0.2	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 7.9% of the Company’s net asset value.

Sector	% of Equity Portfolio*	% of Benchmark*
Materials	29.1	25.3
Financials	22.0	23.8
Consumer Discretionary	9.1	5.6
Industrials	8.2	6.0
Energy	5.9	8.5
Consumer Staples	5.8	14.6
Information Technology	5.4	1.8
Communication Services	5.2	6.4
Health Care	4.4	2.2
Real Estate	4.0	0.8
Utilities	0.9	5.0
	-----	-----
Total	100.0	100.0
	=====	=====

*excluding net current assets & fixed interest

Company	Country of Risk	% of Equity Portfolio	% of Benchmark
Vale – ADS	Brazil	10.1	12.3
Banco Bradesco – ADR	Brazil	7.2	3.6
Petrobrás – ADR:	Brazil
Equity		3.8	2.6
Preference Shares		2.2	3.4
América Movil – ADR	Mexico	5.2	4.0
Suzano Papel e Celulose	Brazil	3.9	1.6
Cemex – ADR	Mexico	3.8	2.0
B3	Brazil	3.7	3.2
Grupo Financiero Banorte	Mexico	3.7	2.5
Walmart de México y Centroamérica	Mexico	3.5	2.9
Sociedad Química Y Minera - ADR	Chile	3.2	1.2

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

For the month of April 2021, the Company’s NAV returned 2.6%¹ with the share price moving 3.6%¹. The Company’s benchmark, the MSCI EM Latin America Index, returned 3.3%¹ on a net basis (all performance figures are in sterling terms with dividends reinvested).

Latin American (LatAm) equities posted positive performance over the month with Colombia and Peru leading the rise.

Allocation in Colombia contributed the most to relative performance over the period while stock selection in Brazil detracted most from relative returns. The off-benchmark holding of Brazilian internet services company, Locaweb, was the top contributor on a relative basis as the company’s growth continues to accelerate relative to the rest of the market. An off-benchmark holding in Afya, a leader in Brazil in the medical education sector, also benefitted the portfolio as the company recently held an investor day where the company announced plans to further consolidate its dominant position in the industry through acquisitions and development of digital solutions.  On the other hand, an overweight position in Empresas CMPC, a Chilean pulp and paper company, detracted most from relative performance as the stock declined following a period of strong outperformance. The absence from the portfolio of the Mexican mass multi-media company, Grupo Televisa, also weighed on relative returns following an announcement that the company will merge its media, content, and production assets with Univision (creating the global leader in Spanish-language media) which led the shares to outperform the benchmark.

Over the month we added to Pagseguro Digital, a Brazilian e-commerce company, taking advantage of recent weakness despite the company having a good set of earnings and strong growth outlook. We initiated a position in Credicorp, the largest financial holding company in Peru, on the view that political uncertainty is creating opportunity for long term alpha generation. We reduced exposure to Ternium, Argentinian flat steel and long steel manufacturer, to take profits following the stock’s recent outperformance on the back of skyrocketing steel prices. We reduced exposure to Sociedad Quimica y Minera de Chile, a Chilean Lithium company as the Lithium sector in Chile is coming under scrutiny as a target for higher taxation in the country to pay for additional social programs which we feel could reduce profitability going forward. The portfolio ended the period being overweight to Chile and Mexico, whilst being underweight to Colombia and Peru. At the sector level, the portfolio was overweight in materials and information technology, and underweight in consumer staples and utilities.

COVID-19 has devastated the global economy in 2020, with LatAm hit especially hard. As we look ahead to 2021 we are optimistic that global growth will rebound on the back of increased vaccine distribution as catalysts for a reflation trade.  Despite  the strong fourth quarter performance of LatAm equities, the region remains cheaper than developed markets and emerging markets on both a forward P/E (price to earnings) basis and trailing P/BV (price to book value) basis. We are optimistic on returns for LatAm equities going forward given an economic recovery in 2021 and the strong commodity prices as a tailwind for many commodity rich nations in the region. Furthermore, LatAm equities have benefited from a recent global value rotation in the market, which we expect to continue into the second half of the year. Higher raw material prices should also provide a tailwind for Latin America given the high level of commodity exports across major economies in the region.

¹Source: BlackRock, as of 30 April 2021.

24 May 2021

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.