BlackRock sees attractive frontier market bets

BlackRock Frontiers Investment Trust Plc, a $297 million frontier markets equity fund, said it returned 33% last year and expects attractive investment opportunities this year including initial public offerings.
JAN 24, 2014
BlackRock Frontiers Investment Trust Plc, a $297 million frontier markets equity fund, said it returned 33% in 2013 and expects attractive investment opportunities this year including initial public offerings. While the performance of frontier markets has been “relatively strong” over the past three years and more, this has mainly been driven by earnings growth rather than an expansion in valuation multiples, investment managers Sam Vecht and Emily Fletcher said in a regulatory filing. Frontier markets are “no more expensive now than they were just over three years ago” and the fund continues to find “attractive” investment opportunities across various countries, they said. The jump in net asset values in pounds compares with a 24% gain in the MSCI Frontiers Index, BlackRock said. The United Arab Emirates, the second-biggest Arab economy, overtook Nigeria as the fund’s biggest investment destination. Indices in the U.A.E.’s two main markets of Dubai and Abu Dhabi were among the top three performers last year globally as the country’s real-estate and banking industries recovered. Dubai’s gauge more than doubled as Abu Dhabi’s rose 63%. The benchmark index in Saudi Arabia, the biggest market in the six-nation Gulf Cooperation Council, gained 26%. BlackRock is the world’s biggest asset manager and had $4.2 trillion under management at the end of December. The New York- based company’s fourth-quarter profit increased 22% to $841 million as investors put money into funds, boosting client assets and fees for managing them. ’RELATIVELY IMMUNE’ Frontier markets are relatively immune to the short-term swings of global financial markets as institutional investors’ holdings there are about $20 billion, compared to approximately $1 trillion in emerging markets, Mr. Vecht and Ms. Fletcher said. This year company owners in frontier will “take the opportunity to crystallize the value of their holdings by listing their companies on the stock market and we anticipate the start of an initial public offering boom,” they said. Aldar Properties PJSC and Emaar Properties PJSC, Abu Dhabi and Dubai’s biggest real-estate companies respectively, were among the fund’s top three holdings. Qatar National Bank SAQ, the Persian Gulf country’s biggest lender and Qatar Gas Transport Co. were also among its biggest holdings. “We rotated positions in the U.A.E., reducing Emaar Properties and exiting First Gulf Bank and investing this capital into the Abu Dhabi based property company Aldar,” Mr. Vecht and Ms. Fletcher said. The share of financial services stocks in the fund, which also invests in countries including Argentina and Bulgaria, climbed to 34%. “We expect this weighting to fall gradually as we continue to take profits in those,” they said. (Bloomberg News)

Latest News

Micro 401(k) boom places advisors at the center of retirement plan growth
Micro 401(k) boom places advisors at the center of retirement plan growth

As SECURE 2.0 and state mandates drive micro 401(k) plan adoption, advisors are set to play a bigger role in helping small businesses navigate retirement solutions.

Advisors prize AI's potential for productivity gains, improved advice
Advisors prize AI's potential for productivity gains, improved advice

More than three-fifths of surveyed advisors see generative AI as an efficiency booster, though many are still concerned about data privacy and lack of tech integration.

Edward Jones, Franklin Templeton beef up SMA menus amid industry growth
Edward Jones, Franklin Templeton beef up SMA menus amid industry growth

The new offerings, including managed options on Franklin's canvas platform, come as managed account assets surge in the US to hit $13.7 trillion.

Advisor moves: RBC, Steward Partners add elite advisors from Goldman, Truist
Advisor moves: RBC, Steward Partners add elite advisors from Goldman, Truist

Meanwhile, Raymond James bolstered its employee advisor arm with an industry veteran who previously oversaw $750 million at Stifel.

DOGE cuts risk bogging down push to implement Trump’s tax breaks
DOGE cuts risk bogging down push to implement Trump’s tax breaks

Staffing shortfalls, new policies, and increased demand for clarity create potential speed bumps for tax planning and compliance.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.