BlackRock Frontiers Investment Trust Plc
Rated Fund 2013, 2015-19. A strong contender for adventurous investors
This trust won Money Observer’s Best Emerging Markets Trust award in 2014, 2015 and 2016. It remains a solid long-term performer, but even at the best of times this trust is not for the faint-hearted. Investing in companies listed or operating in countries such as Thailand, Indonesia, Argentina and Vietnam is only suitable for those with a good appetite for risk.
The inclusion of derivatives – around 7% of the portfolio is in ‘short’ positions, which means it profits from falling share prices – makes this a pick for truly adventurous investors. Good use of these should increase the fund’s defences during periods of emerging market stress, however.
The fund’s remit was widened in April 2018 to include some emerging market countries. However, this was simply due to the continuous reclassification of frontier countries into emerging and a desire to have a stable, consistent universe. Managers Sam Vecht and Emily Fletcher remain focused on less advanced capital markets, which they believe are attractive portfolio diversifiers.
They point to many frontier markets being in better shape than feared, with robust economic growth, low government debt levels, strong cash flows and high dividend yields. Investors have the opportunity to invest in these on “some of the lowest valuations in the world”. The trust has a decent yield of 4.1% and pays dividends half yearly. The trust’s shares have traded at close to net asset value over the past year, albeit sometimes at a premium as high as 6.5%, so it is important to time entry carefully.
Narrative and ratings content all as of January 2019.See all Money Observer rated funds
|BlackRock ICS USD Liquidity Agency Inc||28.31 %|
|Short Cfd Positions||7.70 %|
|MHP SE GDR||3.51 %|
|Halyk Savings Bank of Kazakhstan JSC GDR||3.29 %|
|Otc Richter Gedeon Nyr Hu||3.22 %|
|YPF SA ADR||3.14 %|
|Otc Astra Internati Idr50||3.13 %|
|Emaar Properties PJSC||3.11 %|
|Otc Indorama Ventures Pc||3.06 %|
|HSBC Bank plc||3.02 %|
|Asia - Emerging||38.14 %|
|Middle East||20.03 %|
|Europe - Emerging||15.72 %|
|Latin America||8.94 %|
|United Kingdom||5.36 %|
|Financial Services||35.07 %|
|Consumer Defensive||16.88 %|
|Real Estate||15.33 %|
|Basic materials||7.87 %|
Sam Vecht, CFA, Director and portfolio manager, is head of BlackRock's Emerging Europe equity team. Mr. Vecht's service with the firm dates back to 2000, including his years with Merrill Lynch Investment Managers (MLIM), which merged with BlackRock in 2006. Mr. Vecht began his career with MLIM in 2000 as a member of the Global Emerging Markets team.Mr. Vecht earned a BSc degree, with honours, in international relations and history from the London School of Economics in 2000, and he is fluent in Hebrew.
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