Portfolio Update

The information contained in this release was correct as at 28 February 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 28 February 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^	3.7	19.2	12.2	-11.0	-0.2
Share price	5.2	19.4	13.1	-3.2	9.2
MSCI EM Latin America (Net Total Return)^^	4.8	17.6	19.1	-6.2	0.8
US Dollars:
Net asset value^	3.7	20.8	7.6	-10.2	7.6
Share price	5.2	21.1	8.5	-2.3	17.8
MSCI EM Latin America (Net Total Return)^^	4.8	19.2	14.3	-5.3	8.7

^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:	406.30p
Net asset value - including income:	410.02p
Share price:	377.00p
Total assets#:	£171.3m
Discount (share price to cum income NAV):	8.1%
Average discount* over the month – cum income:	8.3%
Net gearing at month end**:	6.7%
Gearing range (as a % of net assets):	0-25%
Net yield##:	5.4%
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 5.4% is calculated based on total dividends declared in the last 12 months as at the date of this announcement as set out below (totalling 27.56 cents per share) and using a share price of 505.84 US cents per share (equivalent to the sterling price of 377.00 pence per share translated in to US cents at the rate prevailing at 28 February 2022 of $1.3417 dollars to £1.00).

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

*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	61.8	61.6	62.2
Mexico	26.1	26.1	26.7
Chile	5.6	5.6	5.6
Peru	3.1	3.1	3.1
Panama	2.0	1.9	0.0
Argentina	1.7	1.7	0.0
Colombia	0.0	0.0	2.4
Net current Liabilites (inc. fixed interest)	-0.3	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 liabilities figure shown in the table above therefore excludes bank overdrafts equivalent to 6.4% of the Company’s net asset value.

Sector	% of Equity Portfolio*	% of Benchmark*
Financials	26.8	23.7
Materials	21.9	23.9
Consumer Staples	11.5	15.0
Communication Services	8.1	7.7
Energy	8.0	11.9
Industrials	7.7	6.4
Health Care	6.2	2.7
Real Estate	3.4	0.5
Consumer Discretionary	3.2	3.7
Information Technology	1.7	0.5
Utilities	1.5	4.0
	-----	-----
Total	100.0	100.0
	=====	=====

*excluding net current liabilities & fixed interest

Company	Country of Risk	% of Equity Portfolio	% of Benchmark
Vale – ADS	Brazil	9.2	12.3
Petrobrás – ADR:	Brazil
Equity		4.5	4.4
Preference Shares		3.5	5.2
B3	Brazil	6.0	2.9
Banco Bradesco – ADR	Brazil	5.5	4.0
América Movil – ADR	Mexico	5.0	5.2
Grupo Financiero Banorte	Mexico	4.3	2.9
Walmart de México y Centroamérica	Mexico	4.3	3.3
Rede D’or Sao Luiz	Brazil	3.4	0.7
Credicorp	Peru	3.1	1.7
Hapvida Participacoes	Brazil	2.9	1.7

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

For the month of February 2022, the Company’s NAV returned 3.7%¹ with the share price moving 5.2%¹. The Company’s benchmark, the MSCI EM Latin America Index, returned 4.8%¹ on a net basis (all performance figures are in sterling terms with dividends reinvested).

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

Allocation in Argentina contributed the most to relative performance over the period while security selection in Chile detracted most from relative returns. An overweight position in Brazilian’s biggest hospital chain, Rede D’Or, was the top contributor during the month. Rede  D'Or has started a nationwide consolidation of the private hospital sector in Brazil. By doing so, the group acquired significant expertise in turning around less efficient (acquired) hospitals, achieved considerable bargaining power against private insurance payors, and built attractive mechanisms for highly productive medical teams to increase the volume and complexity of procedures in its premises. Not holding a position in Brazilian motors and generators company, Weg, also benefitted the portfolio as our view remains that the stock is expensive and rising input costs are likely to weigh on near term profits. On the other hand, an overweight position in Banco Bradesco, a Brazilian bank, detracted most from relative performance following recent outperformance of the stock. An overweight position in Mexican cement company, Cemex, also weighed on relative returns as rising energy costs could pressure profitability in the near term.

Over the month we added to Brazilian food processing company, Marfrig, as beef spreads have started the year above expectations and stronger than last year. We reduced our exposure to Peruvian holding company, Credicorp, to take profits following stock outperformance.  The portfolio ended the period being overweight to Brazil and Mexico, whilst being underweight to Colombia. At the sector level, we are overweight financials and health care, and underweight energy and consumer staples.

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 FX remains relatively cheap at current levels as the combination of rising interest rates and low valuations have been attracting investors to increase regional exposure. Latin American central banks were the first to raise rates last year and policy makers in Chile and Colombia have both surprised markets with steep hikes this year in preparation for Federal Reserve (Fed)  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 ahead of the curve from a monetary standpoint relative to developed markets. Having been one of the worst performing EM (Emerging Markets) 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 is 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 in Latin America and considering the Fed’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 28 February 2022.

31 March 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.