Investment trusts

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 aims to secure long-term capital growth and an attractive total return primarily through investing in quoted securities in Latin America.

Why choose it?

Latin American countries hold a wealth of opportunities for long-term investors keen to participate in the region's growth and diversity. Our experienced team draws on its extensive network in the region to uncover the most compelling opportunities across a variety of countries and sectors.

Diversification and asset allocation may not fully protect you from market risk.

Suited to…

Investors with a long-term horizon who want to include Latin American shares in their portfolio and are able to tolerate periods of market volatility in pursuit of capital growth. This means shares prices may rise and fall more frequently.

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.

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

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Fund manager commentary

30 April 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 fell by -4.4% in April, underperforming the benchmark, MSCI Emerging Markets Latin America Index, which returned -2.6% on a net basis over the same period. All performance figures are in sterling terms with dividends reinvested.¹

Emerging markets (+0.4%) significantly outperformed developed markets in April, which ended the month down -3.9%. Latin America (-3.5%) lagged the rest of Emerging Markets on the back of Fed (Federal Reserve) re-pricing, with Colombia (-4.4%) and Brazil (-4.1%) falling the most. Argentina was once again the strongest performer (+9.8%), followed by Peru (3.8%).

At the portfolio level, our exposure to precious metals stocks in both Mexico and Ecuador have been the key positive contributors to performance. On the other hand, stock selection in the Brazilian Consumer Discretionary space hurt relative returns during the period. Having no exposure to Peru also hurt performance over the month.

From a security lens, Mexican silver miner, Mag Silver, was the largest contributor, for the second month in a row. In addition to strong 1Q24 production numbers, the company continues to benefit from the latest surge in silver prices. An overweight holding in Mexican airport operator, Grupo Aeroportuario del Pacífico (GAPB), also helped returns on the back of decent Q124 results. IRB, the Brazilian reinsurance company, was another contributor to performance. While the company's reported headline numbers were a slight miss, they delivered good cost performance over the first quarter. Not owning Brazilian conglomerate, Itaúsa, also helped returns, as the stock fell alongside the Brazilian market.

On the flipside, an overweight position in Brazilian footwear retailer, Arezzo, weighed on performance. While topline numbers were a beat, underlying sales volumes declined. EZ Tec, a Brazilian homebuilder, also hurt relative returns. This remains a high conviction position for us as the company is net cash and trades on a cheap PE (price to earnings) multiple. An underweight exposure to Petrobras, the Brazilian oil and gas company, was another detractor during the month. The stock rose following news that the Board had reinstated 50% of an extraordinary dividend (which had previously been announced as cancelled).

We made some changes to the portfolio in April. In Brazil, we exited homebuilder, MRV and added to our position in investment management platform, XP Inc, as we see greater upside potential for the latter. We also topped up our holding in Brazilian stock exchange, B3 following recent underperformance. In Mexico, we initiated a holding in Kimberly-Clark de Mexico, a manufacturer of personal care products, as we see potential for positive earnings revisions. We also took some advantage of the strong performance of Grupo Aeroportuario del Pacífico (GAPB) to take profits.

Brazil is the largest portfolio overweight as at the end of April 2024. Multi-Country appears as our second largest overweight, due to our holding in Lundin Gold, a Canadian based mining company with operations in Ecuador. On the other hand, we remain underweight in Peru due to its political and economic uncertainty. The second largest portfolio underweight is Mexico.

Outlook

We remain optimistic about the outlook for Latin America. Central banks have been proactive in increasing interest rates to help control inflation, which has fallen significantly across the region. As such we have started to see central banks beginning to lower interest rates, which should support both economic activity and asset prices. In addition, the whole region is benefitting from being relatively isolated from global geopolitical conflicts. We believe that this will lead to both an increase in foreign direct investment and an increase in allocation from investors across the region.

Brazil is the showcase of this thesis - with the central bank cutting the policy rate considerably. We anticipate further reductions, particularly if the Federal Reserve ceases its own rate hikes. The government’s fiscal framework being more orthodox than market expectations has helped to reduce uncertainty regarding the fiscal outlook and was key for confidence. We expect further upside to the equity market in the next 12-18 months as local capital starts flowing into the market.

Source: Unless otherwise stated all data is sourced from BlackRock as at 30 April 2024.

¹Source: BlackRock as at 30 April 2024

Any opinions or forecasts represent an assessment of the market environment at a specific time and are not intended to be a forecast of future events or a guarantee of future results.

This information should not be relied upon by the reader as research, investment advice or a recommendation.

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

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 lead manager of the BlackRock Latin American Investment Trust plc. He is Head of the Emerging Europe, Frontiers and LatAm 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 Frontiers Investment Trust plc. Sam joined BlackRock in 2000 in the Global Emerging Markets Team. He has a degree in International Relations and History.

Christoph Brinkmann is deputy manager of the BlackRock Latin American Investment Trust plc. He is Vice President in the Global Emerging Markets Equities Team who has covered multiple sectors and countries across the Latin American region. He joined BlackRock in 2015 after graduating from the University of Cologne with a Masters in Finance and a CEMS Masters in International Management.

Board of directors

Carolan Dobson (Chairman) was appointed as a Director on 1 January 2016 and as Chairman on 2 March 2017. She is the former Head of UK Equities at Abbey Asset Managers and former Head of Investment Trusts at Murray Johnstone and therefore brings a wealth of industry experience to the Board. She is currently Non-Executive Chairman of Brunner Investment Trust plc and Baillie Gifford UK Growth Fund plc.

Craig Cleland was appointed as a Director on 1 January 2019 and Chairman of the Audit Committee from 31 March 2019. He is Head of Corporate Development/Investment Trusts at CQS (UK) LLP, a multi-asset asset management firm in London with a focus on credit markets, where his responsibilities include advising and developing the closed-end fund business. He is also a Director of Invesco Perpetual Select Trust plc and the CC Japan Income & Growth Trust plc and was formerly a Director of Martin Currie Asia Unconstrained Trust plc. He was previously at JPMorgan Asset Management (UK) Limited, latterly as Managing Director, and led their technical groups in the investment trust business. Prior to that, he was a Director and Senior Company Secretary at Fleming Investment Trust Management, transferring to JPMorgan Asset Management after Chase Manhattan Bank acquired Robert Fleming Holdings Limited.

Laurie Meister was appointed as a Director on 1 February 2020. Ms Meister has 32 years of financial markets experience, both in New York and in London, with 28 years dedicated to having led and developed Latin American equity and capital markets businesses and other emerging markets. Her most recent position was as the Director of Latin American equity sales for European institutional clients for Deutsche Bank from 2008 to 2018. Prior to this she worked for J.P. Morgan Chase as a Director with responsibility for rebuilding the Cemea (Central and Eastern Europe, Middle East and Africa) equity business and then became the Senior European Equity Director for their Latin American equity business. Her initial experiences in the Latin American equity arena included the European start up in the early 1990s of the Merrill Lynch Latin American research sales operation. She then moved as a Managing Director to Robert Flemings in 1995 where she co-led the start-up of their Latin American trading sales and research operations across the region. Ms Meister has a B.A. from the University of Pennsylvania and an M.B.A. in Finance from the New York University Stern School.

Nigel Webber was appointed as a Director on 1 April 2017. Mr Webber’s broad investment experience has seen him lead the design of investment solutions for affluent and high-net-worth individuals across global markets and multiple asset classes. Most recently, he was Global Chief Investment Officer for HSBC Private Banking where he held global responsibility for all investment activity for Group Private Banking. During his time at HSBC, Mr Webber was also Chairman of the Global Investment Committee for Group Private Bank and Chairman for HSBC Alternative Investments Limited. Prior to this, he held a number of blue-chip executive positions around the world for investment and asset management businesses. He is also a qualified accountant.