BlackRock Latin Am Portfolio Update
September 14 2015 - 10:36AM
UK Regulatory
TIDMBRLA
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC
All information is at 31 August 2015 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five ^^Since
month months year years years 31.03.06
% % % % % %
Sterling:
Net asset value^ -6.8 -14.6 -36.1 -30.4 -40.0 19.8
Share price -7.4 -20.3 -37.1 -33.0 -44.5 9.4
MSCI EM Latin America -9.2 -17.8 -37.6 -34.2 -39.4 24.6
US Dollars:
Net asset value^ -8.3 -14.0 -41.0 -32.6 -40.0 6.2
Share price -8.7 -19.6 -41.7 -35.1 -44.4
-3.0
MSCI EM Latin America -10.5 -17.1 -42.3 -36.3 -39.3 10.5
^cum income
^^Date which BlackRock took over the investment management of the Company.
Sources: BlackRock, Standard & Poor's Micropal
At month end
Net asset value - capital only: 336.27p
Net asset value - cum income: 347.45p
Share price: 298.25p
Total Assets#: GBP136.8m
Discount (share price to cum income NAV): 14.2%
Average discount* over the month - cum income: 13.0%
Net cash at month end**: 2.2%
Gearing range (as a % of net assets): 0-25%
Net yield##: 6.6%
Ordinary shares in issue***: 39,369,620
Ongoing charges****: 1.2%
#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.
*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 2,071,662 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
2014.
Geographic Exposure
% of Total % of Equity Portfolio MSCI EM Latin American
Assets * Index
Brazil 46.3 47.4 48.5
Mexico 39.2 40.1 35.1
Peru 7.0 7.2 2.8
Chile 3.6 3.6 9.6
Colombia 1.2 1.2 4.0
Argentina 0.5 0.5 0.0
Net current assets 2.2 0.0 0.0
(inc.Fixed interest)
----- ----- -----
Total 100.0 100.0 100.0
----- ----- -----
*excluding net current assets & fixed interest
Sector % of Total Assets % of Benchmark
Materials 14.7 13.5
Consumer Discretionary 5.9 6.9
Consumer Staples 22.8 22.9
Financials 32.8 27.1
Health Care 1.1 0.4
Industrials 6.1 6.6
Information Technology 2.5 2.2
Energy 3.1 7.0
Telecommunication 6.2 8.0
Services
Utilities 2.6 5.4
Fixed Income 1.1 0.0
Net current assets 1.1 0.0
----- -----
Total 100.0 100.0
----- -----
Ten Largest Equity Investments (in percentage order)
Country of Risk % of % of
Company Equity Portfolio Benchmark
Itau Unibanco Brazil 6.4 4.8
AmBev Brazil 5.7 5.3
Femsa Mexico 5.5 3.5
Banco Bradesco Brazil 5.0 4.5
Cemex SAB Mexico 4.8 2.1
BRF Brazil 4.1 2.7
Credicorp Peru 4.1 1.6
Walmart de Mexico Mexico 4.1 2.7
America Movil Mexico 4.0 6.4
BB Seguridade Brazil 3.7 1.2
Participacoes
Commenting on the markets, Will Landers, representing the Investment
Manager noted;
Performance
For the month of August 2015 the Company's NAV fell by 6.8% and the shares fell
by 7.4% (all in sterling terms) while the Company's benchmark, the MSCI EM
Latin America Free Index, fell by 9.2%.
Positive contributions to relative performance stemmed primarily from stock
selection in Brazil and cash which averaged 3.5% during the month. An
overweight to Mexico also contributed positively. At the stock level,
Brazilian pulp stock Fibria was the largest contributor benefiting from a
weaker Real. Also contributing positively was a lack of exposure to Petrobras
which declined along with oil prices and continued volatility in the Brazilian
market.
Weighing on performance was an underweight to Chile as the country benefited
after reporting stronger economic activity for 2Q15. An overweight to Peru
also weighed on returns as MSCI announced that it has initiated consultations
regarding potentially moving Peru from its emerging market indices to its
frontier market indices. As a result, the largest individual detractor was
Peruvian bank Credicorp. Brazilian insurance stock BB Seguridade Participacoes
also weighed on performance.
Transactions/Gearing
During the month we reduced exposure to Brazil, specifically Itau Unibanco and
Banco Bradesco, given the increased potential for Brazil being downgraded below
investment grade after the government's 2016 budget proposal showed a primary
deficit. In addition, we exited Vale due to concerns regarding the price
performance of iron ore in the second half of the year. We initiated a
position in Brazilian exchange BM&F Bovespa as a result of attractive
valuations and the company's position of being a net beneficiary of a
depreciating Real. Elsewhere in the portfolio we initiated a position in YPF
in Argentina in order to begin reducing our underweight in the oil sector.
Net cash was approximately 2.2% at the end of August.
Positioning
Given the uncertainties at the macro level throughout the region, we maintain a
defensive portfolio, with a high cash level relative to our history. At the
country level we maintain above benchmark exposure to Mexico given the
continued improving performance of its domestic economy and in Peru, where
valuations became even more attractive following the above mentioned MSCI
announcement. We continue to view the Peruvian economy positively. We
maintain our below benchmark exposure to Brazil, Chile and Colombia. Brazil
continues to suffer from weakening economic activity and significant political
turmoil. In addition, we do not believe market forecasts have bottomed out
yet. Chile and Colombia continue to deal with weak commodity prices and the
impact that they have on their respective currencies as well as fiscal
accounts.
14 September 2015
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.
END
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September 14, 2015 10:36 ET (14:36 GMT)
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