BlackRock Frontiers Investment Trust Plc

Emerging Markets

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
Name
BlackRock Frontiers Investment Trust Plc
Manager
BlackRock
Type
Closed Ended Investment Company
ISIN
GB00B3SXM832
Sector
Global Emerging Markets
Launched
17/12/2010
OCF
1.96 %
Risk Rating
5
3 Year Sharpe
0.80
3 Year Alpha
2.69
Yield
4.8 %
Benchmark
MSCI EM ex Sl Cy + FM + S Arabia NR USD
Fund Size
£ 316.48 million
NAV
131
Gearing
123
Discount Premium
3
The investment objective is to achieve long-term capital growth by investing in companies domiciled or listed in, or exercising the predominant part of their economic activity in, less developed countries. These countries are any country which is neither part of the MSCI World Index of developed markets, nor one of the eight largest countries by Market Cap in the MSCI Emerging Markets Index.
Holding %
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 %
Region %
Asia - Emerging 38.14 %
Middle East 20.03 %
Europe - Emerging 15.72 %
Africa 15.06 %
Latin America 8.94 %
United Kingdom 5.36 %
Sector %
Financial Services 35.07 %
Consumer Defensive 16.88 %
Real Estate 15.33 %
Basic materials 7.87 %
Energy 5.94 %
Industrials 5.22 %
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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