The information contained in this release was correct as at 28
February 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 28 February
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^ |
-4.1 |
-1.8 |
-14.2 |
-21.9 |
42.3 |
Share price |
-5.0 |
-1.7 |
-9.8 |
-14.2 |
54.7 |
MSCI EM Latin America
(Net Return)^^ |
-4.7 |
-3.3 |
-14.1 |
-22.6 |
39.8 |
US Dollars: |
|
|
|
|
|
Net asset value^ |
-2.4 |
2.9 |
-6.1 |
-20.8 |
42.6 |
Share price |
-3.3 |
2.9 |
-1.3 |
-13.0 |
55.1 |
MSCI EM Latin America
(Net Return)^^ |
-3.0 |
1.3 |
-6.0 |
-21.5 |
40.2 |
^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: |
384.39p |
Net asset value - including
income: |
384.45p |
Share price: |
352.50p |
Total assets#: |
£161.6m |
Discount (share price to cum income
NAV): |
8.3% |
Average discount* over the month –
cum income: |
10.5% |
Net gearing at month end**: |
6.1% |
Gearing range (as a % of net
assets): |
0-25% |
Net yield##: |
5.0% |
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 5.0% is calculated based on total dividends
declared in the last 12 months as at the date of this announcement
as set out below (totalling 23.06
cents per share) and using a share price of 492.48 US cents
per share (equivalent to the sterling price of 352.50 pence per share translated in to US cents
at the rate prevailing at 28 February
2021 of $1.3981 dollars to
£1.00).
2020 Q1 interim dividend of 4.59
cents per share (paid on 20 May
2020).
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).
*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 |
58.7 |
59.2 |
61.8 |
Mexico |
25.7 |
26.0 |
23.1 |
Chile |
10.7 |
10.8 |
7.5 |
Argentina |
4.0 |
4.0 |
1.8 |
Peru |
0.0 |
0.0 |
3.3 |
Colombia |
0.0 |
0.0 |
2.5 |
Net current assets (inc. fixed
interest) |
0.9 |
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 7.1%
of the Company’s net asset value.
Sector |
% of Equity
Portfolio* |
% of
Benchmark* |
Materials |
30.9 |
24.1 |
Financials |
20.5 |
24.0 |
Industrials |
9.2 |
6.3 |
Consumer Discretionary |
8.4 |
6.3 |
Energy |
6.5 |
8.4 |
Communication
Services |
5.5 |
6.0 |
Information Technology |
5.4 |
1.8 |
Health Care |
4.6 |
2.3 |
Real Estate |
4.0 |
1.0 |
Consumer Staples |
4.0 |
14.5 |
Utilities |
1.0 |
5.3 |
|
----- |
----- |
Total |
100.0 |
100.0 |
|
===== |
===== |
*excluding net current assets & fixed interest
Company |
Country
of Risk |
% of Equity
Portfolio |
% of
Benchmark |
|
|
|
|
Vale – ADS |
Brazil |
9.2 |
10.3 |
Petrobrás – ADR: |
|
|
|
|
Brazil |
4.4 |
2.6 |
|
Brazil |
2.1 |
3.4 |
Banco Bradesco - ADR |
Brazil |
5.9 |
3.6 |
B3 |
Brazil |
4.5 |
3.9 |
Suzano |
Brazil |
4.3 |
1.8 |
América Movil - ADR |
Mexico |
4.1 |
3.9 |
Walmart de México y
Centroamérica |
Mexico |
4.0 |
2.7 |
Cemex – ADR |
Mexico |
4.0 |
1.8 |
Grupo México |
Mexico |
3.6 |
2.6 |
Quimica Y Minera - ADR |
Chile |
3.5 |
1.1 |
|
Commenting on the markets,
Ed Kuczma and Sam Vecht, representing the Investment Manager
noted;
For the month of February 2021,
the Company’s NAV returned –4.1%1, with the share price
moving -5.0%1. The Company’s benchmark, the MSCI EM
Latin America Index, returned -4.7%1 on a net basis (all
performance figures are in sterling terms with dividends
reinvested).
Latin American (LatAm) equities posted negative performance over
the month with Brazil leading the
decline.
Stock selection in Mexico
contributed the most to relative performance over the period while
allocation in Peru detracted most
from relative returns. An overweight position in Brazilian pulp and
paper company, Suzano, was the biggest stock contributor to
relative performance as pulp prices have increased. An
off-benchmark holding in Ternium, the Argentinian flat steel and
long steel manufacturer, also benefitted the portfolio as flat
steel markets in the US are very tight given a strong rebound in
demand. An overweight position in Petrobras, a major Brazilian
petroleum company, detracted most from relative returns during the
month as the stock declined on the back of concerns over asset
sales and corporate governance risk. An overweight position in
Brazilian retail company, Via Varejo, also weighed on relative
performance despite having a better than expected set of results in
the second half of 2020 as increased macro and political risk
weighed on the Brazilian equity market as a whole.
Over the month we added to Brazilian retail company, Via Varejo,
as the company saw triple digit growth in online sales and
continuation of favourable sales in offline channels despite
withdrawal of government stimulus. We initiated a position in
Brazilian software company, Locaweb, as the company continues to
show a strong position to accelerate their growth in relation to
the market. We reduced exposure to Brazilian bank, BTG Pactual, to
take profits following the stock’s recent outperformance. We sold
our holding of Brazilian online retail company, B2W Companhia,
given our low conviction on long-term investment thesis as the
company has recently been losing market share to competitors. The
portfolio ended the period being overweight to Mexico and Chile, whilst being underweight to
Peru and Colombia. At the sector level, we are
overweight materials and information technology, and underweight
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
LatAm equities strong fourth quarter performance, 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 new year. Higher raw material prices should also
provide a tailwind for LatAm given the high level of commodity
exports across major economies in the region.
At the end of February, we saw increased market volatility as
investors assess the credibility of the government’s economic
policy in Brazil. We see this as a
reminder of how Brazil’s fiscal policy is on thin ice as the
pandemic worsens and the country’s spending cap becomes more
binding amid a high level of debt. This policy instability is one
reason we have been more cautious on Brazilian equities despite
fourth quarter GDP (Gross Domestic Product) coming in much stronger
than expected. In addition, recent COVID-19 trends have been going
against the near-term economic recovery as positive cases and
hospitalizations have increased following the increased mobility
and social gathering surrounding the annual Carnival holiday.
Our tempered expectations in Brazil have been offset by renewed optimism in
Chile as the country has been one
of the fastest in the region to deploy vaccines. Chile should continue to benefit from a strong
commodity price tailwind, relatively firmer fiscal situation and an
opportunity for the economy open up on the back of proactive
vaccine purchases and distribution program.
1Source: BlackRock, as of 28
February 2021.
25 March 2021
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.