The
information contained in this release was correct as at
30 April 2024.
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
2024 and
unaudited.
Performance
at month end with net income reinvested
|
One
month
%
|
Three
months
%
|
One
year
%
|
Three
years
%
|
Five
years
%
|
Sterling:
|
|
|
|
|
|
Net
asset value^
|
-4.4
|
-3.4
|
14.7
|
28.6
|
10.4
|
Share
price
|
-3.8
|
-5.2
|
15.7
|
23.1
|
7.1
|
MSCI
EM Latin America
(Net
Return)^^
|
-2.6
|
-1.0
|
15.7
|
38.7
|
19.8
|
US
Dollars:
|
|
|
|
|
|
Net
asset value^
|
-5.3
|
-5.0
|
14.3
|
16.4
|
6.1
|
Share
price
|
-4.7
|
-6.8
|
15.2
|
11.3
|
3.0
|
MSCI
EM Latin America
(Net
Return)^^
|
-3.5
|
-2.7
|
15.2
|
25.4
|
15.1
|
^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:
|
440.51p
|
Net
asset value - including income:
|
441.68p
|
Share
price:
|
380.00p
|
Total
assets#:
|
£138.9m
|
Discount (share
price to cum income NAV):
|
14.0%
|
Average discount*
over the month – cum income:
|
13.8%
|
Net
Gearing at month end**:
|
6.8%
|
Gearing range (as
a % of net assets):
|
0-25%
|
Net
yield##:
|
6.3%
|
Ordinary shares
in issue(excluding 2,181,662 shares held in treasury):
|
29,448,641
|
Ongoing
charges***:
|
1.13%
|
#Total assets
include current year revenue.
##The
yield of 6.3% is calculated based on total dividends declared in
the last 12 months as at the date of this announcement as set out
below (totalling 30.00 cents per
share) and using a share price of 475.82.56 US cents per share
(equivalent to the sterling price of 380.00
pence per share translated in to US cents at the rate
prevailing at 30 April 2024 of
$1.252 dollars to £1.00).
2023
Q2 Interim dividend of 7.54 cents per
share (Paid on 11 August
2023)
2023
Q3 Interim dividend of 7.02 cents per
share (Paid on 09 November
2023)
2023
Q4 Interim dividend of 8.05 cents per
share (Paid on 09 February
2024)
2024
Q1 Interim dividend of 7.39 cents per
share (To be paid on 16 May
2024)
*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.
***
The Company’s ongoing charges are calculated as a percentage of
average daily net assets and using the management fee and all other
operating expenses excluding finance costs, direct transaction
costs, custody transaction charges, VAT recovered, taxation and
certain non-recurring items for the year ended 31 December 2023.
Geographic Exposure
|
% of Total Assets
|
% of Equity Portfolio *
|
MSCI EM Latin America Index
|
Brazil
|
58.8
|
58.7
|
58.6
|
Mexico
|
27.7
|
27.7
|
30.6
|
Chile
|
6.2
|
6.2
|
5.5
|
Colombia
|
2.4
|
2.4
|
1.3
|
Multi-Country
|
1.7
|
1.7
|
0.0
|
Panama
|
1.6
|
1.7
|
0.0
|
Argentina
|
1.6
|
1.6
|
0.0
|
Peru
|
0.0
|
0.0
|
4.0
|
Net
current Liabilities (inc. fixed interest)
|
0.0
|
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 6.7% of the Company’s net
asset value.
Sector
|
% of Equity Portfolio*
|
% of Benchmark*
|
Financials
|
21.9
|
25.4
|
Consumer
Staples
|
19.3
|
15.7
|
Materials
|
17.6
|
18.3
|
Industrials
|
12.4
|
10.5
|
Consumer
Discretionary
|
11.4
|
1.9
|
Energy
|
8.6
|
14.3
|
Health
Care
|
3.9
|
1.4
|
Real
Estate
|
2.6
|
1.2
|
Information
Technology
|
1.6
|
0.5
|
Communication
Services
|
0.7
|
4.3
|
Utilites
|
0.0
|
6.5
|
|
-----
|
-----
|
Total
|
100.0
|
100.0
|
|
=====
|
=====
|
|
|
|
*excluding
net
current assets & fixed interest
Company
|
Country of Risk
|
% of
Equity Portfolio
|
% of
Benchmark
|
Vale
– ADS
|
Brazil
|
8.8
|
6.8
|
Petrobrás:
|
Brazil
|
|
|
Equity
|
|
2.2
|
|
Equity
ADR
|
|
3.8
|
5.2
|
Preference Shares
ADR
|
|
2.6
|
6.3
|
Walmart de México
y Centroamérica
|
Mexico
|
6.4
|
3.2
|
Banco
Bradesco:
|
Brazil
|
|
|
Equity
ADR
|
|
3.9
|
0.6
|
Preference
Shares
|
|
1.9
|
2.3
|
Grupo
Aeroportuario del Pacifico – ADS
|
Mexico
|
4.4
|
1.0
|
AmBev:
|
|
|
|
Equity
|
Brazil
|
0.8
|
|
Equity
ADR
|
Brazil
|
3.4
|
1.8
|
B3
|
Brazil
|
4.1
|
1.9
|
Lojas
Renner
|
Brazil
|
3.5
|
0.5
|
Sociedad Química
Y Minera – ADR
|
Chile
|
3.2
|
1.1
|
Itaú
Unibanco – ADR
|
Brazil
|
3.2
|
4.8
|
Commenting
on the markets, Sam Vecht and
Christoph Brinkmann, representing
the Investment Manager noted;
The
Company’s NAV fell by -4.4% in April, underperforming the
benchmark, MSCI Emerging Markets Latin America Index, which
returned -2.6% on a net basis over the same period. All performance
figures are in sterling terms with dividends
reinvested.1
Emerging markets
(+0.4%) significantly outperformed developed markets in April,
which ended the month down -3.9%. Latin
America (-3.5%) lagged the rest of Emerging Markets on the
back of Fed (Federal Reserve) re-pricing, with Colombia (-4.4%) and Brazil (-4.1%) falling the most. Argentina was once again the strongest
performer (+9.8%), followed by Peru (3.8%).
At
the portfolio level, our exposure to precious metals stocks in both
Mexico and Ecuador have been the key positive
contributors to performance. On the other hand, stock selection in
the Brazilian Consumer Discretionary space hurt relative returns
during the period. Having no exposure to Peru also hurt performance over the
month.
From
a security lens, Mexican silver miner, Mag Silver, was the largest
contributor, for the second month in a row. In addition to strong
1Q24 production numbers, the company continues to benefit from the
latest surge in silver prices. An overweight holding in Mexican
airport operator, Grupo Aeroportuario del Pacífico (GAPB), also
helped returns on the back of decent Q124 results. IRB, the
Brazilian reinsurance company, was another contributor to
performance. While the company's reported headline numbers were a
slight miss, they delivered good cost performance over the first
quarter. Not owning Brazilian conglomerate, Itaúsa, also helped
returns, as the stock fell alongside the Brazilian
market.
On
the flipside, an overweight position in Brazilian footwear
retailer, Arezzo, weighed on performance. While topline numbers
were a beat, underlying sales volumes declined. EZ Tec, a Brazilian
homebuilder, also hurt relative returns. This remains a high
conviction position for us as the company is net cash and trades on
a cheap PE (price to earnings) multiple. An underweight exposure to
Petrobras, the Brazilian oil and gas company, was another detractor
during the month. The stock rose following news that the Board had
reinstated 50% of an extraordinary dividend (which had previously
been announced as cancelled).
We
made some changes to the portfolio in April. In Brazil, we exited homebuilder, MRV and added
to our position in investment management platform, XP Inc, as we
see greater upside potential for the latter. We also topped up our
holding in Brazilian stock exchange, B3 following recent
underperformance. In Mexico, we
initiated a holding in Kimberly-Clark de Mexico, a manufacturer of personal care
products, as we see potential for positive earnings revisions. We
also took some advantage of the strong performance of Grupo
Aeroportuario del Pacífico (GAPB) to take profits.
Brazil is the largest portfolio overweight as
at the end of April 2024.
Multi-Country appears as our second largest overweight, due to our
holding in Lundin Gold, a Canadian
based mining company with operations in Ecuador. On the other hand, we remain
underweight in Peru due to its
political and economic uncertainty. The second largest portfolio
underweight is Mexico.
Outlook
We
remain optimistic about the outlook for Latin America. Central banks have been
proactive in increasing interest rates to help control inflation,
which has fallen significantly across the region. As such we have
started to see central banks beginning to lower interest rates,
which should support both economic activity and asset prices. In
addition, the whole region is benefitting from being relatively
isolated from global geopolitical conflicts. We believe that this
will lead to both an increase in foreign direct investment and an
increase in allocation from investors across the
region.
Brazil is the showcase of this thesis - with
the central bank cutting the policy rate considerably. We
anticipate further reductions, particularly if the Federal Reserve
ceases its own rate hikes. The government’s fiscal framework being
more orthodox than market expectations has helped to reduce
uncertainty regarding the fiscal outlook and was key for
confidence. We expect further upside to the equity market in the
next 12-18 months as local capital starts flowing into the
market.
We
remain positive on the outlook for the Mexican economy as it is a
key beneficiary of the friend-shoring of global supply chains.
Mexico remains defensive as both
fiscal and the current accounts are in order. While our view
remains positive, we have taken profits after a strong relative
performance, solely because we see even more upside in other Latin
American markets such as Brazil.
We also note that the Mexican economy will be relatively more
sensitive to a potential slowdown in economic activity in
the United States.
We
continue to closely monitor the political and economic situation in
Argentina, after libertarian
Javier Milei unexpectedly won the presidential elections in
November 2023. Milei is facing a very
difficult situation, with inflation around 290% year-on-year, FX
reserves depleted and multiple economic imbalances. To further
gauge sentiment on the ground, we travelled to the country in
January 2024. The trip further
instilled our cautious view on the economic outlook for the
country, and we see no fundamental reasons as to why we would want
to buy this market now.
We
acknowledge the strengths of the data in the United States, but we believe that,
ultimately, the domestic economic outlook in the Latin American
countries will be the key driver of local interest rates. We
therefore maintain conviction in the positioning of the portfolio
in rate-sensitive domestic stocks. In addition to this, after three
months of very strong labor market data and higher-than-expected
inflation data in the United
States, we believe there is a high probability that both
measures will soften going forward. This view is predicated on
leading indicators such as hiring intentions and high-frequency
pricing data. The recent U.S. data releases for jobless claims and
non-farm payroll employment could indicate that the thesis
regarding the labor market is starting to play out. If this view
would prove to be correct, there should be less pressure from
rising rates in the United
States.
1Source:
BlackRock, as of 30 April
2024.
17 May 2024
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.