BlackRock Latin American Investment Trust plc

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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ESG Integration

The fund noted above does not commit to sustainable criteria nor does it have a sustainable investment objective.

BlackRock considers many investment risks in our processes. In order to seek the best risk-adjusted returns for our clients, we manage material risks and opportunities that could impact portfolios, including financially material Environmental, Social and/or Governance (ESG) data or information, where available. See our Firm Wide ESG Integration Statement for more information on this approach and fund documentation for how these material risks are considered within this product, where applicable.

Fund manager commentary

31 March 2025

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 +4.1% in March, outperforming the benchmark, MSCI Emerging Markets Latin America Index, which returned +2.3% on a net basis over the same period. All performance figures are in sterling terms with dividends reinvested.¹

Emerging Markets rose 0.6% in March outperforming Developed Markets by  over 5%, the highest margin since November 2022. Performance in Latin America was primarily driven by the returns seen in  Brazil (6.5% month on month), Peru (4.9%) and Chile (4.2%).

At the portfolio level, security selection in Brazil and Mexico were the largest contributors to performance during the month. On the other hand, an off-benchmark exposure to Argentinian IT stock detracted.

From a security lens, overweight positions to a collection of Brazilian real estate developers was the largest contributor to returns over the month. Both EZ Tec and Cyrela performed well after delivering strong fourth quarter 2024 results, where the latter reported net revenues ahead of consensus estimates. B3, the Brazilian stock exchange, also contributed. The stock bounced following a favourable ruling from Brazil's Administrative Tax Appeals Board, annulling fines imposed by the Brazilian tax authorities. Our underweight position to digital banking platform provider, NU Holdings, also continued to aid relative performance during March.

On the flipside, our overweight position in IT services firm, Globant, was the worst performer over the month. The IT services sector more broadly performed poorly on the back of US growth concerns. XP, the Brazilian investment management platform, was another detractor amidst a short seller report accusing the company of financial misconduct. We believe the allegations to be unfounded and therefore currently have maintained our position. Our underweight position to JBS, a Brazilian meatpacker, also detracted. The company's share price jumped to a 5-year high following news of a potential listing in New York.

We made few changes to the portfolio in March. We took profits and reduced our position to Mexican miner, MAG Silver. We also reduced our exposure to B3 following strong performance. We took advantage of the global sell-off in the IT services sector to add further to our Globant position. We also added to Azzas 2154 as we believe the stock was oversold.

Mexico remains the largest portfolio overweight as of March end, while Peru is the largest underweight. 

Outlook

With Donald Trump securing a second term, there is potential for an acceleration in the already shifting geopolitical landscape. The President has been clear on his “America First” policy since his inauguration, which in our view is supportive of our “World in 3” narrative where we see a world splitting into three groups: those aligned with China, those aligned with the US and the rest (neutrals). We believe that neutral countries, many of which are in Latin America, will continue to benefit from increased geopolitical polarization through increased FDI (Foreign Direct Investment) as new alliances are forged.

Meanwhile, at a macroeconomic level, the Brazilian Real, which declined by more than 20% in 2024, has made a broad range of Brazilian exports much more competitive. This, together with higher interest rates, might lead to a decline in economic activity, less pressure on inflation and thus lower interest rates down the line. This in turn should lift the multiples of equities. Given cheap valuations, we also see the potential for share buybacks supporting the market in 2025. As such, we see several bottom-up opportunities in domestic Brazil, focusing on companies with lower leverage and stronger earnings outlook.

Due to the volatility Mexico faced in 2024, the Mexican central bank had been relatively cautious in reducing rates. As we entered 2025, we anticipated further rate cuts, which most recently materialized in a 50 basis points cut in March, bringing the policy rate down to 9%. We see scope for further rate cuts in 2025, which should support asset price performance.

Furthermore, despite the claims of the media, we do not see a major change in the secular trend of nearshoring of supply chains, as Mexico will remain a much cheaper location to manufacture than the United States. Mexico therefore remains our biggest overweight in the fund.

The portfolio is underweight the rest of Latin America to fund these high conviction positions in Brazil and Mexico.

¹Source: BlackRock as at 31 March 2025.

Source: Unless otherwise stated all data is sourced from BlackRock as at 31 March 2025.

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.

Gordon Fraser, CFA, Managing Director, is co-Head of the EM & Frontiers team as a part of BlackRock's Fundamental Equity Global Emerging Markets Platform. Mr. Fraser is a named portfolio manager on the Emerging Frontiers Hedge Fund and is also the co-portfolio manager on the long-biased Emerging Markets Equity Strategies and long-only Latin America strategies. Mr. Fraser's research coverage is across Asian markets, and he is the platform lead for macroeconomic analysis. He joined BlackRock as an Analyst in 2006.

Mr. Fraser earned a BA (1st class) and an MPhil (distinction) in Economics from Cambridge University in 2006. He is also a CFA Charterholder.

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.