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About this investment trust

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.

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.

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.

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

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.

Fees & Charges

Annual Expenses as at Date: 30/09/2023

Ongoing Charge (excluding any Performance Fee): 1.38% as at 30/09/2023
Ongoing Charge (including any Performance Fee): 3.78% as at 30/09/2023

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)

Latest company announcements

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.

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To receive email alert notifications once an update to the Trust occurs, please sign up and select the updates you would like to receive via The Association of Investment Companies website here.

The Board’s approach to ESG

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.

Material environmental, social and governance (ESG) issues can present both opportunities and threats 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. While the Company does not have a sustainable investment objective or exclude investments based only on ESG criteria, these ethical and sustainability issues are a consideration of the Board, and your Board is committed to a diligent oversight of the activities of the Manager in these areas. 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. This is particularly true for the Company’s Manager given the extent of BlackRock’s shareholder engagement and BlackRock’s capacity to vote against management when they fall short of its expectations. As well as the influence afforded by its sheer scale, 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.

ESG: 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 2022

The Board receive periodic updates from the Manager in respect of activity undertaken for the year under review. Over the year to 30 September 2022, 19 total company engagements were held with the management teams of 11 portfolio companies, representing 28% of the portfolio at 30 September 2022. To put this into context, there were 40 companies in BlackRock Frontiers Investment Trust plc’s portfolio at 30 September 2022. In total 451 proposals were voted on at 69 shareholder meetings.

Fund manager commentary

31 March 2024

Comments from the Portfolio Managers

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 rose by 0.5% in March, outperforming its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”) which returned 0.1%.1

For reference, the MSCI Emerging Markets Index was up 2.5% while the MSCI Frontier Markets Index was up 4.2% over the same period. All performance figures are on a US Dollar basis with net income reinvested.

Emerging markets more broadly continued their strong run from February, gaining +2.5% in March. Latin America finished the month up by 1.1%, with Argentina outpacing the rest of the region, climbing 12.7%. EMEA finished the month flat at +0.2%, with Central Europe pulling back after a strong February and Czech Republic (+3.3%) leading the region. Egypt was the worst performing market across EM, down -33.0% in USD terms on heels of currency devaluation that we had been anticipating.

March was yet another good month for the fund where several stocks picks across a variety of different markets did well. Our Kazakhstan exposure continued to add to performance with e-commerce company Kaspi (+24.3%) being the single best performing stock over the period. Turkey exposure through gold mine operator Eldorado Gold (+35.3%) also helped performance, reversing February losses. In Asia, Vietnamese IT services provider FPT Corp (+6.3%) and Philippines based port management company International Container Terminal Services (ICTSI, +12.9%) both did well. ICTSI delivered a slight beat on underlying revenues for 4Q 2023 and the free cash flow generation remains solid.

On the flipside, Polish clothing manufacturer LPP (-13.9%) was the largest detractor over the month following a short seller report released by Hindenburg Research claiming the company has continued its operations in Russia, despite the company's communication with the market suggesting otherwise. Another detractor over the month was Jeronimo Martins (-17.0%), a Polish supermarket chain. The stock sold off on week food inflation prints in Poland. Ukrainian iron ore pellet producer Ferrexpo (-44.2%) continued to weigh on performance in March. In addition to cancellation of the dividend announced in January, the company communicated that they needed more time to finalize FY results, following potential proceedings related to one of their mining units in Ukraine.

Over the course of March, we made some changes to the portfolio. We locked in profits by exiting our holding in Peruvian bank Credicorp, which has done very well. We added to our holding in Philippines based resort and casino operator Bloomberry Resorts. The stock sold off after having paid $300mn to settle a decade long dispute with casino management firm Global Gaming Philippines LLC. This remains a high conviction stock as we are positive on the new property outlook. Elsewhere, we also exited our holding in Ferrexpo. The ongoing court proceedings in Ukraine will likely put the operating company in creditor administration.

We believe global markets are starting to feel the impact of higher interest rates, noting slowing credit growth in particular as evidence that a demand slowdown is imminent in developed markets. When combined with a Chinese economy which is struggling to find its footing we find it difficult to see where a meaningful pick up in global growth will come from. In contrast we see better fundamentals in frontier and smaller emerging markets. Monetary tightening across much of our universe was ahead of that in developed markets, particularly in Latin America and Eastern Europe. With inflation falling across many countries within our universe, rate cuts have started to materialize. This is a good set up for domestically oriented economies to see a cyclical pick up. Our investment universe, in absolute and relative terms, remains under-researched and we believe this should enable compelling alpha opportunities.

1 MSCI as at 31 March 2024.

Unless otherwise stated all data is sourced from BlackRock as at 31 March 2024.

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

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.

Sam Vecht, CFA, Managing Director, is Head of Emerging Europe, Frontiers and Alternative Strategies and a portfolio manager within BlackRock’s Fundamental Equity Group. Mr. Vecht is lead portfolio manager for the Emerging Markets Equity Strategies Fund and also co-manages the Latin America, Emerging Europe, Emerging Frontiers Hedge Fund, Frontiers, and Asia Pacific Absolute Return strategies. He is also a research pod leader of the EMEA & Frontiers pod.

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 earned a BSc degree, with honours, in international relations and history from the London School of Economics.

Emily Fletcher, CFA, Managing Director, is a portfolio manager and a research analyst on the Global Emerging Markets Equities Team within BlackRock’s Fundamental Equity Group. She is responsible for co-managing the BlackRock Frontier Investment Trust, the Emerging Frontier hedge fund, Emerging Markets Sustainable Equity and the Emerging Market Equity Income strategies.

Mrs. Fletcher joined the Emerging Markets team in 2008 and since then has covered African, ASEAN, Frontier and Latam equities and is based in London.

Prior to moving to her current role in 2008, Ms. Fletcher was a member of the Multi-Asset Portfolio Strategies (MAPS) group and the UK Equity team. She joined BlackRock as an Analyst in 2006.

Mrs. Fletcher earned a BA degree and an MSc degree in experimental and theoretical physics, both from the University of Cambridge in 2005 and 2006, respectively.

Sudaif Niaz, Director, is a research analyst on the Global Emerging Markets Equities Team within the Fundamental Active Equity division of BlackRock's Active Equities Group. Sudaif covers Indonesia, Saudi Arabia, Qatar, Turkey, Malaysia, and other emerging market equities based out of London. Sudaif has 14 years emerging markets investment experience.

He joined Blackrock in 2015 and previously worked in New York for Perella Weinberg and Caravel Management. Sudaif holds a BA in Economics from Northwestern University in Chicago and an MBA from INSEAD.

Sam Vecht
Sam Vecht
Portfolio Manager
Emily Fletcher
Emily Fletcher
Portfolio Manager
Sudaif Niaz
Sudaif Niaz
Portfolio Manager

Board of directors

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

Katrina Hart (Chair with effect from 6 February 2024) (date of appointment 1 October 2019) currently a non-executive director of Keystone Positive Change Investment Trust plc, Montanaro Asset Management Ltd, JPMorgan UK Smaller Companies Investment Trust plc and of AEW UK REIT plc. She was formerly a non-executive director of Polar Capital Global Financials Trust Plc and Premier Miton Group plc. Mrs Hart 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, Mrs Hart headed up the Financials research teams at Bridgewell Group plc and Canaccord Genuity, specialising in wealth and asset managers.

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 of Henderson EuroTrust plc, JP Morgan European Smaller Companies Trust plc, Polar Capital Technology Trust plc, Henderson EuroTrust plc and Brown Advisory US Smaller Companies PLC. He was formerly a non-executive director of Aberdeen New India Investment Trust plc.

Hatem Dowidar (date of appointment 7 February 2024) is the Group CEO of e&. He joined the e& Group in September 2015 as Group Chief Operating Officer and was appointed as CEO, International in March 2016, before becoming Group CEO in 2020. He is currently a board member of Etihad Etisalat Company (Mobily), Maroc Telecom, e& Egypt, Careem Technologies, Abu Dhabi Chamber of Commerce & Industry and GSM Association. He is also a member of the United Nations International Governance Forum Leadership Panel.

Liz Airey (Senior Independent Director with effect from 6 February 2024) (date of appointment 10 December 2021) is currently Chairman of abrdn UK Smaller Companies Growth Trust plc, Chairman of Rolls-Royce UK Pension Fund Trustees Limited, a non-executive Director of Kirk Lovegrove & Company Limited and a member of the Investments Committee of the Royal Horticultural Society. Within the past five years, she has also been non-executive Chairman of Jupiter Fund Management plc, a non-executive Director of Tate & Lyle plc, a non-executive Director of Dunedin Enterprise Investment Trust plc and a member of the Investment Committee of the Institute of Chartered Accountants in England and Wales. In her executive career she was Finance Director of Monument Oil and Gas plc, a post she held from 1990 until the sale of the company to Lasmo plc in 1999.

Lucy Taylor-Smith (date of appointment 10 December 2021) was previously Global Head of Strategy with Standard Chartered Bank based in Singapore. Prior to this, she was Chief Strategy Officer and a member of the Executive Committee at Manulife Asia, and Chairman of Manulife Singapore, as well as Chief Strategy Officer and Board Director for Prudential Corporation Asia. She also spent 13 years with UBS advising companies on a wide range of strategic initiatives and corporate transactions encompassing mergers and acquisitions, equity and debt capital markets deals, culminating in her position as Executive Director of Corporate Broking.

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Investment strategies targeting growth and income
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Over 29 years of proven experience running investment trusts (Dec 2021)
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Unparalleled research capabilities and experienced stock pickers
To get in touch contact us on:
Telephone: 020 7743 3000