Factsheet: BlackRock Frontiers Ord

Emerging Markets

Rated Fund 2013, 2015-2018. Offers diversification benefits and attractive valuations

This trust won Money Observer's Best Emerging Markets Trust award for three consecutive years in 2014, 2015 and 2016. Frontier markets have proved more resilient than might be expected, 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 Argentina, Kuwait, Vietnam and Romania is only suitable for those with a good appetite for risk.

The trust's managers, Sam Vecht and Emily Fletcher, believe frontier markets are very attractive portfolio diversifiers thanks to the low correlation between frontier markets and developed and emerging markets.

Vecht attributes the trust's relative success to three factors. First is a willingness not to adhere to benchmark country weightings. Second is a combination of extensive company research and macroeconomic analysis. Third is the importance of the trust's closed-ended structure, which gives the managers the time needed to assemble positions in companies with high growth potential but very illiquid share registers.

Vecht remains optimistic about the future and points out that frontier markets continue to exhibit strong economic growth and low government debt levels, and represent an opportunity to invest in companies with strong cash flow and high dividend yields on some of the lowest valuations in the world. The trust has a yield of 1.5 per cent and pays dividends half-yearly.

Ben Willis, head of research at Whitechurch Securities, rates the management team, but says investing in these markets is a �long-term story', made more so by the fact the trust trades on a premium to net assets, which was around 5 per cent at the end of 2017. We would recommend timing a purchase at or below this level.

Narrative and ratings content all as of 01 January 2018.

See all Money Observer rated funds
Name
BlackRock Frontiers Ord
Manager
BlackRock
Type
Closed Ended Investment Company
ISIN
GB00B3SXM832
Sector
Global Emerging Markets
Launched
17/12/2010
OCF
1.45 %
Risk Rating
4
3 Year Sharpe
1.12
3 Year Alpha
8.51
Yield
3.3 %
Benchmark
MSCI EM ex Sl Cy + FM + S Arabia NR USD
Fund Size
£ 306.14 million
NAV
155
Gearing
119
Discount Premium
2
The Company seeks to maximise total return and will invest globally in the securities of companies domiciled or listed in, or exercising the predominant part of their economic activity in, Frontier Markets (defined as any country which is not in either the MSCI Emerging Markets Index or the MSCI Developed Markets Index) or any of Columbia, Egypt, Peru or The Philippines, each of which was a member of the MSCI Emerging Markets Index as at 01-Dec-15 but which share similar characteristics to those of less developed markets.
Holding %
BlackRock ICS USD Liquidity Agency Inc 28.96 %
National Bank of Kuwait SAK 4.34 %
YPF SA ADR 3.73 %
Halyk Savings Bank of Kazakhstan JSC GDR 3.45 %
Equity Group Holdings Ltd 3.43 %
Banco Macro SA ADR 3.35 %
MHP SE GDR 3.24 %
Zenith Bank PLC 3.02 %
Mobile Telecommunications Co KSC 2.97 %
Short Cfd Positions 2.88 %
Region %
Middle East 24.40 %
Asia - Emerging 21.11 %
Latin America 18.55 %
Africa 17.77 %
Europe - Emerging 11.42 %
Sector %
Financial Services 48.42 %
Consumer Defensive 14.83 %
Industrials 6.53 %
Energy 6.48 %
Healthcare 5.76 %
Real Estate 5.25 %
Name
BlackRock
Address
02940-8019, Providence, United States
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Emily Fletcher
Joined 05/17/2013
Sam Vecht
Joined 12/17/2010

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.

Data provided by Morningstar.

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