BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC (LEI:
UK9OG5Q0CYUDFGRX4151)
All information is at 30 June
2018 and unaudited.
Performance at month end with net income
reinvested
|
One
month
% |
Three
months
% |
One
year
% |
Three
years
% |
Five
years
% |
Sterling: |
|
|
|
|
|
Net asset value^ |
-3.9 |
-16.8 |
-1.9 |
25.4 |
1.5 |
Share price |
-4.4 |
-17.8 |
-2.4 |
24.3 |
0.8 |
MSCI EM Latin
America |
-2.3 |
-12.5 |
-1.4 |
27.7 |
3.4 |
US Dollars: |
|
|
|
|
|
Net asset value^ |
-4.6 |
-21.7 |
-0.3 |
5.3 |
-11.6 |
Share price |
-5.2 |
-22.7 |
-0.8 |
4.3 |
-12.2 |
MSCI EM Latin
America |
-3.0 |
-17.7 |
0.2 |
7.2 |
-10.0 |
^cum income
Sources: BlackRock, Standard & Poor’s Micropal
At month
end |
|
Net asset value –
capital only: |
453.20p |
Net asset value – cum
income: |
458.63p |
Share price: |
390.00p |
Total Assets#: |
£195.1m |
Discount (share price
to cum income NAV): |
15.0% |
Average discount* over
the month – cum income: |
14.9% |
Net gearing at month
end**: |
9.0% |
Gearing range (as a %
of net assets): |
0-25% |
Net yield##: |
4.0% |
Ordinary shares in
issue***: |
39,259,620 |
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. As previously announced, the Board of the BlackRock
Latin American Investment Trust plc have introduced a new dividend
policy whereby the Company will pay regular quarterly dividends
equivalent to 1.25% of the Company’s US Dollar cum income NAV on
the last working day of December, March, June and September each
year, with the dividends being paid in November, February, May and
August each year respectively. The first quarterly dividend
under this new policy of 7.57 cents
was declared on 3 July 2018 and is
payable on 23 August 2018. The yield on the Company’s shares
projecting future quarterly dividends forward based on four
quarters being paid at the same rate as the July dividend, and
based on the Company’s share price at 30
June 2018 converted to US dollars at the exchange rate on
30 June 2018, would be 5.8%.
*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 2,181,662 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 2017.
Geographic Exposure
|
% of
Total Assets |
% of
Equity
Portfolio * |
|
MSCI
EM Latin
America Index |
|
|
|
|
|
Brazil |
64.4 |
64.0 |
|
54.2 |
Mexico |
27.7 |
27.6 |
|
27.2 |
Chile |
4.4 |
4.3 |
|
10.4 |
Argentina |
2.9 |
2.9 |
|
0.0 |
Colombia |
1.2 |
1.2 |
|
4.4 |
Peru |
0.0 |
0.0 |
|
3.8 |
Net current
assets/liabilities (inc. fixed interest) |
-0.6 |
0.0 |
|
0.0 |
|
----- |
----- |
|
----- |
Total |
100.0 |
100.0 |
|
100.0 |
|
----- |
----- |
|
----- |
Sector |
% of
Equity Portfolio * |
% of
Benchmark |
|
|
|
Financials |
28.5 |
29.5 |
Materials |
21.5 |
19.0 |
Consumer Staples |
11.4 |
16.0 |
Consumer
Discretionary |
11.1 |
6.2 |
Energy |
7.9 |
8.8 |
Telecommunication
Services |
7.8 |
6.7 |
Industrials |
7.0 |
6.2 |
Utilities |
1.5 |
4.6 |
Information
Technology |
1.2 |
0.9 |
Health Care |
1.1 |
0.6 |
Real Estate |
1.0 |
1.5 |
|
----- |
----- |
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 |
|
|
|
|
Vale |
Brazil |
9.4 |
7.2 |
Itau Unibanco |
Brazil |
7.3 |
6.0 |
Banco Bradesco |
Brazil |
7.3 |
5.3 |
Petrobras |
Brazil |
6.7 |
5.8 |
America Movil |
Mexico |
6.0 |
5.0 |
Femsa |
Mexico |
4.2 |
3.1 |
Grupo Financiero
Banorte |
Mexico |
4.0 |
2.6 |
Walmart de Mexico |
Mexico |
3.5 |
2.5 |
B3 |
Brazil |
3.1 |
1.9 |
Cemex SAB |
Mexico |
2.8 |
1.7 |
Commenting on the markets,
Will Landers, representing the
Investment Manager noted;
For the month of June 2018, the
Company’s NAV fell by 3.9%* with the share price falling by 4.4%*.
The Company’s benchmark, the MSCI EM Latin America Index, fell by
2.3%* (all performance figures are in sterling terms with income
reinvested).
The Portfolio’s underweight exposure to Chile was the month’s top contributor to
relative outperformance as the market broadly underperformed the
region with the Chilean Peso depreciating further against the US
Dollar. Brazilian stock selection also contributed positively
although our heavy overweight position detracted. Off-benchmark
positions such as digital retailer B2W and medical service provider
Fleury, showed some resilience, ending the month in positive
territory. Given that it was the best performing country in June,
our light overweight to Mexico
benefitted performance as markets and the Mexican Peso rallied
given the easing of concerns regarding the election of Andres Manuel Lopes Obrador (“AMLO”). Defensive
staples WalMart de Mexico and Arca
Continental both performed well on strong execution and resiliency
through this period of macro uncertainty. Cement manufacturer, GCC,
was the month’s top contributor. On the other hand our
off-benchmark position in Argentina continued to weigh on performance
despite a US$50 billion stand-by
arrangement with the IMF (International Monetary Fund) to help
support the currency and MSCI’s decision to reclassify the country
to Emerging Market status. Brazilian banks, Banco Bradesco and Itau
Unibanco, were among the largest detractors amid pressure on the
Real and increasing volatility on the back of approaching
presidential elections.
Most recently we increased the portfolio’s overweight exposure
to Brazil, while also shifting
positioning within the country. Specifically, we added to
underperforming SOEs (State Owned Enterprises) in Brazil given significant underperformance,
attractive valuation, and our continued belief that the October
election will elect a government committed to the current economic
reform process. We notably took profits from Rumo and
Magazine Luiza amid strong performance, while adding to Petrobras
and Banco do Brasil on weakness.
On the other hand, we increased exposure across Mexico, moving the country exposure from
underweight to neutral, on the expectation that an eventual AMLO
administration would initially adopt market friendly policies. We
also initiated a position in Colombia, while trimming some exposure to
off-benchmark Argentina as tough
fiscal and CPI (Consumer Price Index) targets associated with the
IMF Stand-By Agreement are likely to result in lower growth. The
portfolio ended the month being overweight Brazil while being underweight Chile, Peru
and Colombia and neutral in
Mexico. We also maintain an
off-benchmark allocation to Argentina. At the sector level, we are
overweight the domestic consumer and real estate, while being
underweight utilities and financials.
While Brazilian risk assets are likely to remain volatile
through the election, we will look to take opportunities while
markets are down. Meanwhile, after a landslide victory for
both the presidency and in congress, all eyes remain on how much of
AMLO’s campaign rhetoric will flow through into practice. Our
sentiment towards Brazil has
improved as we expect a less controversial administration in year
one with a more tempered agenda. We continue to maintain
underweight portfolio exposure to Chile due to rich valuations and lack of
free-float liquidity, and have become more cautious on Peru given disappointing growth figures. We
are keeping a close eye on Argentine inflation and the
effectiveness of government measures to stabilize the currency,
however at this point we remain comfortable with our exposure and
have initiated a position in Colombia given higher oil prices, which in
turn should ease fiscal concerns
Sources:
*BlackRock as at 30 June 2018
**Datastream as at 30 June 2018
17 July 2018
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.