AGM update

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About this investment trust

The Company’s 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 (the “Frontiers Universe”) are any country  which is neither part of the MSCI World Index of developed markets nor  one of the eight largest countries by market capitalisation in the MSCI  Emerging Markets Index as at 1 April 2018: being Brazil, China, India,  Korea, Mexico, Russia, South Africa, and Taiwan.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Why choose it?

Frontier markets are smaller countries at an early stage of economic and political development. These economies don’t simply follow global markets but are subject to their own internal dynamics. Their growth potential often depends largely on their domestic outlook, which means they can thrive independently of the wider global economy. This Trust targets smaller, under-researched markets such as Vietnam, Egypt, Romania, and Chile. For investors, this can be a source of diversifying long-term income and growth.

Capital growth values may fluctuate, and the level of income may vary from time and is not guaranteed.

Suited to…

Investors looking to target the world’s youngest economies, which present exciting opportunities but may be volatile. This Trust suits those with a high appetite for risk, able to invest for the medium to long term.

award logos

Kepler Rating: As at 30 January 2020.
Money Observer Award: As at 7 February 2020
Awards/Ratings have not been superseded to date.

Past performance is not a reliable indicator of future results and should not be the sole factor of consideration when selecting a product or strategy.

What are the risks?

  • Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.
  • Overseas investment will be affected by movements in currency exchange rates.
  • Emerging market investments are usually associated with higher investment risk than developed market investments. Therefore the value of these investments may be unpredictable and subject to greater variation.
  • Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.
  • Frontier markets are generally more sensitive to economic and political conditions than developed and emerging markets. Other factors include greater 'Liquidity Risk', restrictions on investment or transfer of assets and failed/delayed delivery of securities or payments to the Fund. There may be larger fluctuations to the value of your investment and increased risk of losing your capital.

Useful information

Fees & Charges

Annual Expenses as at Date: 30/09/2020

Ongoing Charge (including any Performance Fee): 1.36% as at 30/09/2020

Important Notice: Key Investor Document (KID) – Costs disclosures error

During the period 5th March 2021 – 5th July 2021 the KID contained incorrect costs data as set out in the Previously stated costs tables below. The figures that should have been published are set out in the Corrected costs tables.

Previously stated costs (as per KID published 5 March 2021, based on data as at December 2020):

Costs over time

If you cash in after 1 year If you cash in after 3 years If you cash in after 5 years
Total costs (GBP) 158 529 982
Impact on return (RIY) per year 1.58% 1.58% 1.58%


Composition of costs

Ongoing costs Portfolio transaction costs 0.04%
 Other ongoing costs 1.47%
Incidental costs Performance fees 0.00%


Corrected costs (based on data as at December 2020):

Costs over time

If you cash in after 1 year If you cash in after 3 years If you cash in after 5 years
Total costs (GBP) 175 585 1,088
Impact on return (RIY) per year 1.75% 1.75% 1.75%


Composition of costs

Ongoing costs Portfolio transaction costs 0.03%
 Other ongoing costs 1.54%
Incidental costs Performance fees 0.18%

An updated KID with cost data as at 31st March 2021 was published on 5th July 2021.

There has been no financial impact to the Company as a consequence of this error.

Please accept our apologies for any inconvenience that may have been caused as a result of this matter. You are not required to take any action as a result of this statement. If you have any queries regarding the above, please contact our Investor Services Team by email at Alternatively, please feel free to contact us by telephone on 0800 44 55 22, quoting the relevant account number where applicable.  Our lines are open from 8.30am to 6.00pm, Monday to Friday. For your protection, telephone calls may be recorded.

Management Fee Summary: Management fee is 1.10% p.a. of the Gross Assets. Performance fee 10% of any NAV outperformance of the MSCI Emerging Markets Index ex Selected Countries + MSCI Frontier Markets Index + MSCI Saudi Arabia Index (net total return, USD).

  • ISIN: GB00B3SXM832

    Sedol: B3SXM83

    Bloomberg: BRFI LN

    Reuters: BRFI.L

    LSE code: BRFI

  • Name of Company: BlackRock Fund Managers Limited

    Telephone: 020 7743 3000



    Correspondence Address:

    Investment Trusts, BlackRock Investment Management (UK) Limited, 12 Throgmorton Avenue, London EC2N 2DL

    Name of Registrar: Computershare PLC

    Registered Office: 12 Throgmorton Avenue, London EC2N 2DL

    Registrar Telephone: +44 (0)370 707 4027

    Place of Registration: England

    Registered Number: 5612963

  • Year End: 30 September

    Results Announced: May (half yearly), November/December (final)

    AGM: February

    Dividends Paid: February (final), June/July (interim)

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The Board’s approach to ESG

Environmental, social and governance (ESG) issues can present both opportunities and risks to long-term investment performance. The securities within the Company’s investment remit may involve significant additional risk due to the political volatility and ESG concerns facing many of the countries in the Company’s investment universe. These ethical and sustainability issues are a key focus of the Board, and your Board is committed to a diligent oversight of the activities of the Manager in these areas. The Frontier Markets in which the Company can invest are home to almost 3 billion of the world’s poorest people.  We believe that the companies in which the portfolio is invested should operate within a healthy ecosystem of all their stakeholders whether these are shareholders, employees, customers, regulators or suppliers and that this may aid the sustainability of long-term returns. The Board believes effective engagement with management is, in most cases, the most effective way of driving meaningful positive change in the behaviour of investee company management. The Board believes that BlackRock is well placed as Manager to fulfil these requirements due to the integration of ESG into its investment processes, the emphasis it places on sustainability, its collaborative approach in its investment stewardship activities and its position in the industry as one of the largest suppliers of sustainable investment products in the global market.

Sustainable investing: BlackRock’s approach

Sustainability is BlackRock’s standard for investing, based on the investment conviction that integrating sustainability can help investors build more resilient portfolios and achieve better long-term, risk-adjusted returns. BlackRock believes that climate change is a defining factor in companies’ long-term prospects and that it will have a significant and lasting impact on economic growth and prosperity. BlackRock believes that climate risk equates to investment risk and this will drive a profound reassessment of risk and asset values as investors seek to react to the impact of climate policy changes. This in turn is likely to drive a significant reallocation of capital away from traditional carbon intensive industries over the next decade. More information in respect of the actions taken by BlackRock in 2020 on making sustainability the new standard for investing can be found here.

Environmental, Social and Governance: integration into BlackRock’s investment management process

Environmental, Social and Governance (ESG) investing is often used interchangeably with the term “sustainable investing.” BlackRock has identified sustainable investing as being the overall framework and ESG as a data toolkit for identifying and informing our solutions. BlackRock has defined ESG Integration as the practice of incorporating material ESG information and consideration of sustainability risks into investment decisions in order to enhance risk-adjusted returns. BlackRock recognises the relevance of material ESG information across all asset classes and styles of portfolio management. ESG information and sustainability risks are included as a consideration in investment research, portfolio construction, portfolio review, and investment stewardship processes. The Investment Manager considers ESG insights and data, including sustainability risks, within the total set of information in its research process and makes a determination as to the materiality of such information in its investment process. ESG insights are not the sole consideration when making investment decisions and the extent to which ESG insights are considered during investment decision making will also be determined by the characteristics or objectives of the Company. The Investment Manager’s evaluation of ESG data may be subjective and could change over time in light of emerging sustainability risks or changing market conditions. This approach is consistent with the Investment Manager’s regulatory duty to manage the Company in accordance with its investment objective and policy and in the best interests of the Company’s investors. The Investment Manager’s Risk and Quantitative Analysis group will review portfolios to ensure that sustainability risks are considered regularly alongside traditional financial risks, that investment decisions are taken in light of relevant sustainability risks and that decisions exposing portfolios to sustainability risks are deliberate, and the risks diversified and scaled according to the investment objectives of the Company.

BlackRock’s approach to ESG integration is to broaden the total amount of information the Investment Manager considers with the aim of improving investment analysis and understanding the likely impact of sustainability risks on the Company’s investments. The Investment Manager assesses a variety of economic and financial indicators, which may include ESG data and insights, to make investment decisions appropriate for the Company objectives. This can include relevant third-party insights or data, internal research or engagement commentary and input from BlackRock Investment Stewardship.  Sustainability risks are identified at various steps of the investment process, where relevant, from research, allocation, selection, portfolio construction decisions, or management engagement, and are considered relative to the Company’s risk and return objectives. Assessment of these risks is done relative to their materiality (i.e. likeliness of impacting returns of the investment) and in tandem with other risk assessments (e.g. liquidity, valuation, etc.).

ESG integration does not change the Company’s investment objective or constrain the Investment Manager’s investable universe and does not mean that an ESG investment strategy or exclusionary screens has been or will be adopted by the Company. Similarly, ESG integration does not determine the extent to which the Company may be impacted by sustainability risks.

Investment stewardship

BlackRock Investment Stewardship (BIS) plays a key role in our fiduciary approach. As an essential component of BlackRock’s responsibility to clients is engagement with companies to advocate for the sound corporate governance and business practices that drive the sustainable, long-term financial returns that enable clients to meet their investing goals. BIS looks to boards and executive management to serve the interests of long-term shareholders and other stakeholders. BIS’ active and ongoing dialogue with the leaders of these companies provides a valuable perspective on their long-term strategies, financial performance, and the business challenges they face.  Read more about BlackRock’s Investment Stewardship work here.

Engagement with portfolio companies in 2020

The Board receive periodic updates from the Manager in respect of activity undertaken for the year under review. Over the year to 30 September 2020, 8 total company engagements were held with the management teams of 7 portfolio companies, representing 12.9% of the portfolio at 30 September 2020. To put this into context, there were 62 companies in BlackRock Frontiers Investment Trust plc’s portfolio at 30 September 2020 (30 September 2019: 61).  In total 637 proposals were voted on at 60 shareholder meetings.

Fund manager commentary

31 May 2021

Please note that the commentary below includes historic information in respect of the performance of portfolio investments, index performance data and the Company’s NAV and share performance.

The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results.

The Company’s NAV returned +3.0% versus the Company’s benchmark (the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”)), which returned +1.9% in May1. For reference, the MSCI Emerging Markets Index ended the month +2.1% and the MSCI Frontier Markets Index +4.0%1 over the same period (all performance figures are on a US Dollar basis with net income reinvested).

Frontier and emerging markets ended the month well after a sell-off intra-month. MSCI Emerging Markets rose by 2.1% in May, outperforming Developed Markets (MSCI World). The first half of the month saw the markets under pressure, triggered by higher-than-expected inflation in the US, which revived concerns of tighter monetary policy worldwide. Rising COVID-19 cases across the Emerging Markets added to investor woes. As the month progressed, positive news regarding the global economic outlook accompanied by US Dollar weakness helped emerging and frontier markets stage a rebound to end the month in positive returns. We continue to believe the coming months will remain challenged by covid-related newsflow while our base case for broad based economic normalization in H2 2021 remains unchanged. We believe that frontier assets remain very attractively valued in this context.

Among regions, Emerging Latin America was the best performer (+7.3%) in May followed by EMEA (+5.3%) and Emerging Asia (+1.1%). Peru led in Latin America (+10.2%) against the backdrop of its Presidential election. Many Central and Eastern European countries also performed strongly over the month with the MSCI Hungary (+16.0%), MSCI Poland (+13.5%) and MSCI Czech Republic (+10.6%). Most were led by positive earnings revisions and foreign exchange strength.

Our positions in Vietnam and Poland contributed the most to the portfolio in May. Our holding in information technology (IT) services company FPT benefited from investor's expectation that FPT could benefit from Indian IT companies impacted by the COVID-19 situation in India. We took some profit in the name on the back of strong performance. In Poland, collection agency Kruk (+46.6%) and apparel retailer LPP (+18.2%) contributed to returns after both reported strong Q1 earnings numbers. Our holding in Indonesia was the biggest detractor over the month, led by Indonesian retailer MAPI (-11.5%).

We made a few changes to the portfolio in May. We took profits in some of our holdings which have done well and where we think our investment view is now at least in part in the price. These included payments company Kaspi and Yansab where we view limited further upside from oil prices. We switched up some ASEAN exposure. We sold down financial Aeon in Thailand taking profit as the stock has re-rated to reflect fair market value in our view. To keep Thailand exposure we initiated a position in petrochemical company IRPC which should benefit from current commodity spreads and rising margins. We added to Indonesia where the market looks cheap in context of the economy eventually reopening. The current account looks strong which should support domestic liquidity and growth should pick up as the economy reopens. We added to our position in Credicorp in Peru last month and had been monitoring the very close results in the presidential election of 6th June which leftish candidate Pedro Castillo won. This adds some uncertainty to what looks like an improving macro backdrop given Peru’s weak currency while the country’s terms of trade improved significantly with the rise in commodity prices.

Globally the economy is recovering quickly and supported by a very accommodative policy mix in the developed world with extraordinary levels of both fiscal and monetary support. We believe this backdrop is likely to be inflationary given the broad spending plans across private and public spending, which are being reflected in rising commodity prices. While we see the potential for higher rates globally which could put global equity multiples under pressure we note that frontier markets are at a very different starting point given a number of markets still trading significantly below their average 10-year price to book valuations. We believe that frontier markets continue to look very attractive against this backdrop both on a relative and absolute basis.

1MSCI as at 31 May 2021.

Unless otherwise stated all data is sourced from BlackRock as at 31 May 2021.

Risk: Reference to the names of each company in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies

BlackRock Frontiers Investment Trust plc will not invest more than 10% of its gross assets in other closed-ended listed investment funds.


Portfolio manager biographies

Sam Vecht is co-manager of BlackRock Frontiers Investment Trust plc. He is Head of the Emerging Europe & Frontiers team within the Fundamental Active Equity division of BlackRock's Active Equities Group and is responsible for managing long-only and long/short portfolios in both Emerging and Frontier markets. He is also co-manager of the BlackRock Greater Europe Investment Trust plc and the BlackRock Latin American Investment Trust plc. Sam joined BlackRock in 2000 in the Global Emerging Markets Team. He has a degree in international relations and history.

Emily Fletcher is co-manager of the BlackRock Frontiers Investment Trust plc, and is a member of BlackRock's Emerging Markets Specialist Team, within the Fundamental Equity division of the Alpha Strategies Group, specialising in African and Frontier markets. Emily has degrees in experimental and theoretical physics.

Sam Vecht profile photo
Sam Vecht
Portfolio Manager
Emily Fletcher profile photo
Emily Fletcher
Portfolio Manager

Board of directors

All the Directors are independent of the Investment Manager and are members of the Audit & Management Engagement Committee.

Audley Twiston-Davies (Chairman) (date of appointment 23 November 2010) is currently non-executive chairman of TR European Growth Trust plc. He was formerly chairman of Taylor Young Investment Management Ltd and also the chief executive officer of Foreign & Colonial Emerging Markets Ltd.

Mr. Sarmad Zok (date of appointment 8 February 2011) is the Chairman and Chief Executive Officer of Kingdom Hotel Investments (KHI) headquartered in Dubai, UAE and a non-executive director on the boards of Four Seasons Hotels and Resorts, AccorHotels, Mövenpick Hotels & Resorts Management, BlackRock Frontiers Investment Trust plc and Kingdom Holding Company. Mr. Zok is an active member of the boards of the hotel management companies he sits on, being directly engaged on strategy, product, operations/guest experience, growth and value creation.

In 2006, Mr. Zok led KHI on its Initial Public Offering on the Dubai International Financial Exchange (the predecessor to NASDAQ Dubai) and the London Stock Exchange. Since a successful take-private in 2010 he has headed KHI's accomplished hotel investment management team in Dubai in managing an integrated luxury hospitality investment portfolio across the US, Europe and growth/developing markets in the Middle East, Africa and Asia. In 2016, he successfully led the KHI team on the sale and merger of Fairmont Raffles with AccorHotels, one of the largest recent transactions in the luxury hospitality sector.

In his early career, Mr. Zok worked at HVS International and Hilton International. He holds a Bachelor of Science in Hotel Management from the University of Surrey and a Masters of Arts in Property Valuation and Law from City University Business School in London.

Stephen White (Chairman of the Audit and Management Engagement Committee) (appointed 13 July 2016) qualified as a Chartered Accountant at PwC before starting a career in investment management. He has more than thirty five years' experience of managing investment portfolios, most notably twenty as Head of European Equities at F&C Asset Management and ten as Head of European and US equities at British Steel Pension Fund.

Stephen is a Non-Executive Director and Chairman of the audit committee of Aberdeen New India Investment Trust plc and a Non-Executive Director of JP Morgan European Smaller Companies Trust plc, Polar Capital Technology Trust plc and Jupiter US Smaller Companies PLC.

Katrina Hart (date of appointment 1 October 2019) spent her executive career in investment banking, advising, analysing and commentating on a broad range of businesses. Initially working in corporate finance at ING Barings and Hawkpoint Partners, she then moved into equities research at HSBC, covering the General Financials sector. Latterly, Katrina headed up the Financials research teams at Bridgewell Group plc and Canaccord Genuity, specialising in wealth and asset managers. Mrs Hart has been a Non-Executive Director of Miton Group plc, an AIM-listed fund manager, since 2011. She is also a Non-Executive Director of Polar Capital Global Financials Trust plc, Keystone Investment Trust plc and of AEW UK REIT plc.

Investment strategies targeting growth and income
Investment strategies targeting growth and income
Over 28 years of proven experience running investment trusts (Dec 2020)
Over 28 years of proven experience running investment trusts (Dec 2020)
Unparalleled research capabilities
Unparalleled research capabilities and experienced stock pickers
To get in touch contact us on:
Telephone: 020 7743 3000

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