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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: 30/09/2021

Ongoing Charge (including any Performance Fee): 2.44% as at 30/09/2021

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.

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.

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 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

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.

30 April 2022

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 +0.4% versus its benchmark the MSCI Emerging ex Selected Countries + Frontier Markets + Saudi Arabia Index (“Benchmark Index”), which fell by 1.2% in April. For reference, the MSCI Emerging Markets Index ended the month down 5.6%1 and the MSCI Frontier Markets Index returned -2.7%1 over the same period (all performance figures are on a US Dollar basis with net income reinvested).

The trend of divergence in performance between larger and smaller emerging markets continued in April. Over the past 12 months, the benchmark index has risen by +14.6% whilst the MSCI Emerging Markets index has fallen -18%. Frontier Markets have benefited from an acceleration of economic growth driven by reopening and attractive market valuations, whilst Emerging Markets have tumbled lower as markets priced in continued uncertainty from Russia-Ukraine dispute, an increasingly hawkish Fed, intensifying lockdowns in China, and dollar strength.

In our universe, country level performance was mixed. Kazakhstan bounced off its lows (+9.9%), Saudi Arabia (+5.9%) was another top performer, and Indonesia continued its rally this month, returning +3.7%. On the other side, Poland (-19%), Peru (-17%), and Chile (-12%) were challenged. Russia’s decision to cut off gas exports to Poland and Bulgaria was the key driver of performance in Eastern Europe. The risk of recession continues to loom large as we approach key deadlines for the EU and Russia to establish payment terms. In Latin America. In Chile, inflation is forcing the hand of the central bank to raise rates more steeply, with the most recent annual CPI print coming in at 9.4%.

The Company benefited from its exposure to the UAE, which has been buoyed by stronger commodity prices, economic recovery, and an influx of foreign capital as it rebrands itself from a transitory base to one that can be a permanent hub for expatriates. We’ve held positions in the UAE across a variety of sectors which all contributed positively. Air Arabia (+33%) was the biggest contributor driven by a rebound in tourism in the region. Emaar Properties (+9%) also did well driven by the booming property sector in UAE. We have seen a particularly strong recovery in the luxury segment volumes are ticking up, mortgages and residencies are being easier to obtain, and demand is resilient. Nitrogen fertilizer producer Fertiglobe (+3%) was another key contributor. The current high levels of European gas prices has pushed urea prices up around 150% over the pastyear, which coupled with the supply disruptions from Ukraine has benefited the company. Elsewhere, Indonesian auto conglomerate Astra International (+14%) did on coal price tightness continues and beta to domestic recovery. Kazakh super-app Kaspi (+30%) recovered after a sentiment-driven drawdown month in March despite strong earnings results.

On the other side, stock picks in Saudi Arabia detracted. Gym operator Leejam Sports (-12%) is seeing pressure on subscriber growth and pricing. National Medical Care (-7%) also detracted. In Egypt, our position in tobacco product name Eastern Company (-11%) hurt returns.

We made a few changes to the portfolio in April. We shifted our exposure in Thailand, exiting Kasikorn Bank as we look to reduce exposure to domestic Thailand in light of an expected inflation uptick and pressure on the central bank to raise rates against an already weak consumption backdrop. We also exited convenience store operator CP ALL on the same view and because we do not expect a full resumption of tourism this year as China holds onto to a strict zero COVID stance. We bought petrochemical name PTT Global to express a view on elevated refining spreads and compelling dividend yield. In Malaysia, we rotated out of Genting Berhad into Genting Malaysia as the latter has shown more capital discipline and a stronger balance sheet. We continue to expect a tourism and travel recovery (ex China) and as such, have upped positions in both Wizz Air and Copa Airlines. We also bought uranium producer Kazatamprom, the stock price has lagged the rally in uranium prices. We took profits across several names such as AKR Corpindo, Air Arabia, Fertiglobe, and Kaspi.

Overall, we are excited by the prospects of our portfolio. In an environment of high inflation, rising rates, and pressure on global Central Banks, frontier markets stack up favourably, and we would highlight the GCC where Current account and fiscal surpluses are on track to be the highest seen for 8 years. Valuations in fronter markets remain attractive relative to their own history and also relative to more developed markets. We believe our opportunity set is a compelling universe to generate alpha.

1 MSCI as at 30 April 2022.

Unless otherwise stated all data is sourced from BlackRock as at 30 April 2022.

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 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.

Sarmad Zok (date of appointment 8 February 2011) is the Chief Executive Officer of Kingdom Hotel Investments (UK, Ltd) and a director on the boards of Four Seasons Hotels and Resorts, AccorHotels 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 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 Master of Arts in Property Valuation and Law from City University Business School in London.

Liz Airey (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, a member of the Investment Committee of the Institute of Chartered Accountants in England and Wales 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 and a non-executive Director of Dunedin Enterprise Investment Trust plc. 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.

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 Brown Advisory US Smaller Companies PLC.

Katrina Hart (date of appointment 1 October 2019) currently a non-executive director of Polar Capital Global Financials Trust Plc, 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 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.

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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