BlackRock Latin American Investment Trust plc (LON:BRLA) has announced its Annual Results Announcement for the year ended 31 December 2023.
PERFORMANCE RECORD
| As at | As at | ||
| 31 December | 31 December | ||
| 2023 | 2022 | ||
| Net assets (US$’000)1 | 189,719 | 148,111 | |
| Net asset value per ordinary share (US$ cents) | 644.24 | 502.95 | |
| Ordinary share price (mid-market) (US$ cents)2 | 569.84 | 457.10 | |
| Ordinary share price (mid-market) (pence) | 447.00 | 380.00 | |
| Discount3 | 11.5% | 9.1% | |
| For the year | For the year | ||
| ended | ended | ||
| 31 December | 31 December | ||
| 2023 | 2022 | ||
| Performance (with dividends reinvested) | |||
| Net asset value per share (US$ cents)3 | 37.8% | 6.6% | |
| Ordinary share price (mid-market) (US$ cents)2,3 | 35.3% | 4.7% | |
| Ordinary share price (mid-market) (pence)3 | 27.6% | 18.0% | |
| MSCI EM Latin America Index (net return, on a US Dollar basis)4 | 32.7% | 8.9% | |
| For the | For the | ||
| year ended | year ended | ||
| 31 December | 31 December | ||
| 2023 | 2022 | Change % | |
| Revenue | |||
| Net profit on ordinary activities after taxation (US$’000) | 8,967 | 13,842 | –35.2 |
| Revenue earnings per ordinary share (US$ cents) | 30.45 | 41.48 | –26.6 |
| Dividends per ordinary share (US$ cents) | |||
| Quarter to 31 March | 6.21 | 7.76 | –20.0 |
| Quarter to 30 June | 7.54 | 5.74 | +31.4 |
| Quarter to 30 September | 7.02 | 6.08 | +15.5 |
| Quarter to 31 December | 8.05 | 6.29 | +28.0 |
| Special dividend5 | – | 13.00 | n/a |
| Total dividends payable/paid | 28.82 | 38.87 | –25.9 |
Sources: BlackRock Investment Management (UK) Limited and Datastream.
Performance figures are calculated in US Dollar terms with dividends reinvested.
1 The change in net assets reflects the portfolio movements during the year and dividends paid.
2 Based on an exchange rate of US$1.27 to £1 at 31 December 2023 and US$1.20 to £1 at 31 December 2022.
3 Alternative Performance Measures, see Glossary contained within the Annual Report and Financial Statements.
4 The Company’s performance benchmark index (the MSCI EM Latin America Index) may be calculated on either a gross or a net return basis. Net return (NR) indices calculate the reinvestment of dividends net of withholding taxes using the tax rates applicable to non-resident institutional investors, and hence give a lower total return than indices where calculations are on a gross basis (which assumes that no withholding tax is suffered). As the Company is subject to withholding tax rates for the majority of countries in which it invests, the NR basis is felt to be the more accurate, appropriate, consistent and fair comparison for the Company.
5 During the year ended 31 December 2022, revenue earned by the Company was enhanced by a number of stock and special dividends, coupled with the effect of the tender offer reducing the number of ordinary shares in issue post May 2022. In order to maintain investment trust status, which requires the distribution of 85% of the Company’s revenue, the Board announced the payment of an additional dividend of 13.00 cents per ordinary share for the financial year to 31 December 2022.
CHAIRMAN’S STATEMENT
Dear Shareholder,
I am pleased to present the Annual Report to shareholders for the year ended 31 December 2023, which has delivered strong absolute returns and as I shall discuss below, provided grounds for optimism in the outlook for Latin American equities.
MARKET OVERVIEW
Latin American markets have significantly outperformed both developed market and the MSCI Emerging Markets indices over the year under review, with the MSCI EM Latin America Index net return of 32.7% in US Dollar terms, compared to a rise in the MSCI Emerging Markets EMEA Index net return of 8.6% in US Dollar terms and an increase in the MSCI World Index net return of 24.4% in US Dollar terms.
PERFORMANCE
Over the year ended 31 December 2023 the Company’s net asset value per share, with dividends reinvested rose by 37.8% in US Dollar terms, which compares to the benchmark returns with dividends reinvested of 32.7%. The share price rose by 35.3% in US Dollar terms (but increased by 27.6% in Sterling terms). The outperformance was driven by good stock selection across a range of markets, most notably driven by stock selection in Mexico, as the country has been and continues to be a key beneficiary from the shifting of global supply chains and coupled with a prudential fiscal policy and a strong export sector, Mexico has replaced China as America’s largest trade partner. The stock selection in Brazil was also a contributing factor to performance, the portfolio was overweight in domestic Brazil, this positioning reflected the Investment Manager’s view that interest rates were excessively high, with their expectation for interest rates to be cut during the year which has seen this increasingly being priced by the market in Brazil which has been a strong contributor to the portfolio’s returns.
GEARING
The Board’s view is that 105% of NAV is the neutral level of gearing over the longer term and that gearing should be used actively in an approximate range of plus or minus 10% around this as measured at the time that gearing is instigated. The Board is pleased to note that over the year the portfolio managers have used gearing actively with a low of 100.3% in May 2023 and a high of 108.9% of NAV in January 2023. Average gearing for the year to 31 December 2023 was 103.1% of NAV.
REVENUE RETURNS AND DIVIDENDS
Total revenue return for the year was 30.45 cents per share (2022: 41.48 cents per share). The decrease of 26.6% was largely due to the reduction in dividends paid by portfolio companies. Under the Company’s dividend policy dividends are calculated and paid quarterly, based on 1.25% of the US Dollar NAV at close of business on the last working day of March, June, September and December respectively.
Information in respect of the payment timetable is set out in the Annual Report and Financial Statements. Dividends will be financed through a combination of available net income in each financial year and revenue and capital reserves. The Company has declared interim dividends totalling 28.82 cents per share in respect of the year ended 31 December 2023 (2022: 38.87 cents per share) as detailed in the table below; this represented a yield of 5.1% based on the Company’s share price at 31 December 2023.
Dividends declared in respect of the year ended 31 December 2023
| Dividend | Pay date | |
| Quarter to 31 March 2023 | 6.21 cents | 16 May 2023 |
| Quarter to 30 June 2023 | 7.54 cents | 11 August 2023 |
| Quarter to 30 September 2023 | 7.02 cents | 9 November 2023 |
| Quarter to 31 December 2023 | 8.05 cents | 9 February 2024 |
| Total | 28. 82 cents |
The dividends paid and declared by the Company in 2023 have been funded from current year revenue and brought forward revenue reserves. As at 31 December 2023, a balance of US$5,876,000 remained in revenue reserves, which is sufficient to cover approximately two and a half quarterly dividend payments at the most recently declared dividend rate of 8.05 cents per share.
Dividends may be funded out of capital reserves to the extent that current year revenue and revenue reserves are insufficient. The current and previous years dividends have been funded from the high levels of income generated by the portfolio companies and revenue reserves. Next year it is anticipated that capital reserves may be utilised to supplement the dividend if there is lower income received from the underlying portfolio companies. The Board believes that this removes pressure from the portfolio managers to seek a higher income yield from the underlying portfolio itself which could detract from total returns. The Board also believes the Company’s dividend policy will enhance demand for the Company’s shares and help to narrow the Company’s discount, whilst maintaining the portfolio’s ability to generate attractive total returns. It is promising to note that since the dividend policy was introduced in 2018, the Company’s discount has narrowed from an average of 13.5% for the two-year period preceding the introduction of the new policy on 13 March 2018 to 11.5% as at 31 December 2023.
ESG AND SOCIALLY RESPONSIBLE INVESTMENT
As a Board we believe that good Environmental, Social and Governance (ESG) behaviour by the companies we invest in is important to the long-term financial success of our Company and believe we should be active in encouraging the companies we invest in to adopt good standards of governance. Accordingly, the board travelled to Sao Paulo last year to meet a number of the companies we invest in to discuss their governance policies. We also travelled to Brasilia and met a number of government officials and politicians to learn more about current approaches to the rainforest and Brazil’s role as a large producer of vital food, timber, minerals and oil.
The Board receives regular reporting from the portfolio managers on ESG matters and extensive analysis of our portfolio’s ESG footprint and actively engages with the portfolio managers to discuss when significant engagement may be required with the management teams of our Company’s portfolio holdings. The portfolio managers are supported by the extensive ESG resources within BlackRock and devote a considerable amount of time to understanding the ESG risks and opportunities facing companies and industries in the portfolio. The Company does not seek to become an Article 8 or 9 company under the EU’s Sustainable Finance Disclosure Regulation legislation and does not intend to seek to have one of the 4 sustainability labels under the FCA’s Sustainability Disclosure Requirements regime. However, consideration of ESG analytics, data and insights is integrated into the investment process when weighing up the risk and reward benefits and there is more information in relation to BlackRock’s approach to ESG integration contained within the Annual Report and Financial Statements.
DISCOUNT MANAGEMENT AND NEW DISCOUNT CONTROL MECHANCISM
The Board remains committed to taking appropriate action to ensure that the Company’s shares do not trade at a significant discount to their prevailing NAV and have sought to reduce discount volatility by offering shareholders a new discount control mechanism covering the four years to 31 December 2025. This mechanism will offer shareholders a tender for 24.99% of the shares in issue excluding treasury shares (at a tender price reflecting the latest cum-income NAV less 2% and related portfolio realisation costs) in the event that the continuation vote to be put to the Company’s AGM in 2026 is approved, where either of the following conditions have been met:
(i) the annualised total NAV return of the Company does not exceed the annualised benchmark index (being the MSCI EM Latin America Index) US Dollar (net return) by more than 50 basis points over the four-year period from 1 January 2022 to 31 December 2025 (the Calculation Period); or
(ii) the average daily discount to the cum-income NAV exceeds 12% as calculated with reference to the trading of the shares over the Calculation Period.
In respect of the above conditions, the Company’s annualised total NAV return on a US Dollar basis for the year ended 31 December 2023 was +21.2%, outperforming the annualised benchmark return of +20.2% over the year by 1.0% (equivalent to 100 basis points).
The cum-income discount of the Company’s ordinary shares over the calculation period has averaged 10.8%.
For the current year the cum-income discount has ranged from 6.8% to 18.6%, ending the year on a discount of 11.5% at 31 December 2023.
The Company has not bought back any shares during the year ended 31 December 2023 and up to the date of publication of this report.
BOARD COMPOSITION
As previously advised in last year’s Annual Report, Professor Doctor did not seek re-election at the 2023 AGM. The Board wishes to thank Professor Doctor for her many years of excellent service, we wish her the best for the future.
ANNUAL GENERAL MEETING
The Company’s Annual General Meeting will be held in person at the offices of BlackRock at 12 Throgmorton Avenue, London EC2N 2DL on Wednesday, 22 May 2024 at 12.00 noon. Details of the business of the meeting are set out in the Notice of Annual General Meeting contained within the Annual Report and Financial Statements.
The Board very much looks forward to meeting shareholders and answering any question you may have on the day. We hope you can attend this year’s AGM; a buffet lunch will be made available to shareholders who have attended the AGM.
OUTLOOK
Following the Board’s visit to Brazil in November 2023, it was encouraging to see the positive market sentiment for a range of the portfolio companies operating in Brazil. The Brazilian Government had embarked on some significant tax reforms which should allow businesses to operate more efficiently. The government’s continued prudent fiscal policy should enable the country’s central bank to decrease interest rates further which in turn should help stimulate the domestic economy.
The geopolitical environment is currently changing with three blocks emerging, US aligned, China aligned and the non-aligned, who are benefiting from trading with both of the other blocks. The markets in the Latin American region have managed to remain somewhat removed from the global geopolitical conflicts and so far, have been able to benefit from significant opportunities for direct investment as governments and businesses globally re-think supply chain configuration and seek to diversify risk away from countries more prone to geopolitical fallouts. The region is rich in natural resources of crude oil and natural gas and is also a major source of copper and lithium which are critical materials for the green energy transition. Not only is Latin America rich in natural resources, it is also an agricultural powerhouse. The region accounts for close to 25%1 of global exports in agricultural and fisheries products, and its significance in the global food supply chain is anticipated to increase in the future. The Board is optimistic for the outlook for Latin American equities.
Carolan Dobson
Chairman
26 March 2024
1 Source: https://www.weforum.org/agenda/2024/01/latin-america-solution-food-insecurity
To learn more about the BlackRock Latin American Investment Trust plc please follow this link: blackrock.com/uk/brla
INVESTMENT MANAGER’S REPORT
MARKET OVERVIEW
The MSCI EM Latin America Index gained +32.7% during 2023, significantly outperforming other Emerging Market (EM) regions. For reference, both the Asia-Pacific (APAC) and Europe, Middle East and Africa (EMEA) regions posted mid-single digit returns with the MSCI AC Asia Pacific ex Japan index up 4.6% while the MSCI Emerging Markets EMEA Index climbed 8.6% in 2023. The region also outperformed the MSCI USA Index, which was up 27.1%, and Developed Market equities, as represented by the MSCI World Index, up 24.4%. All performance figures are calculated in US Dollar terms with dividends reinvested.
All markets within our universe generated positive returns in 2023. Argentina was the standout performer, returning 65.7%, making it the best performing market globally. The market surged after libertarian Javier Milei picked up a majority of the votes, and finished ahead of Sergio Massa, the incumbent Finance Minister, in the elections that concluded on 19 November 2023. Javier Milei’s unexpected victory instilled cautious optimism in the market about the country’s potential for economic reform and the possibility of central bank orthodoxy.
In Brazil, Luiz Inacio Lula da Silva was sworn in as president on 1 January 2023. While the Brazilian market experienced some turmoil in the first half of the year, mainly due to concerns around fiscal prudency and lower activity resulting from elevated interest rates, the market bounced back in the latter half of the year, rising 32.7% in 2023. A large portion of the rally can be attributed to the much-awaited rate cuts, which finally began in August, when the central bank cut its policy rate by 50 basis points in response to falling inflation. The market continued to trend upwards in the latter half of the year, as the increased likelihood for rate cuts in the United States of America (US) should provide room for the central bank to ease more aggressively in 2024.
Mexico was yet another market that performed well in 2023, rising 40.9%. The market has benefitted from a gradual fall in inflation and resulting interest rate cut expectations. Performance had been further buoyed by a stronger than expected US market. It is also worth pointing out that the country has been and continues to be, a relative beneficiary of increased geopolitical tensions, as countries such as the US are looking to diversify their supply chains away from China. In 2023, Mexico also overtook China to become the US’ largest trading partner.
Political and social unrest has been the dominating picture of the Chilean and Peruvian markets throughout much of 2023, where both countries ended the year flat. In December, the Chilean population rejected the suggested changes to their constitution, for the second year in a row. This marks an end to the constitutional saga, for now, that has been ongoing since 2019. In Colombia, we note the improvement in the country’s external balance.
PERFORMANCE REVIEW AND POSITIONING
The Company outperformed its benchmark over the 12-month period ending 31 December 2023, returning +37.8% in US Dollar terms. Over the same time horizon, the Company’s benchmark, the MSCI Latin America Index, returned +32.7% on a net basis in US Dollar terms.
Over the period, the Company generated positive returns in a number of countries. The most notable outperformer was Mexico, driven by strong stock selection. Our positioning in Brazil was a reflection of the view that interest rates would come down, a view that played out in the latter half of the year as the central bank cut its policy rate for the first time in three years. It has since continued to cut in response to a normalisation in inflation, which has supported our domestic positioning in particular. Colombian exposure also contributed positively. On the flipside, Argentina exposure detracted on the margin. From a sector lens, the best performing sectors were industrials and materials while consumer staples and health care detracted from performance.
Our position in Vale, a Brazilian iron ore miner, was the largest contributor to relative returns over the year. Our underweight position in the company throughout the first half of 2023 was supportive to Company performance as iron ore prices declined on the back of disappointing commodity demand in China. As we became incrementally more positive on the name, and due to its relative weakness, we added to the position in the latter half of the year which proved timely. Rate sensitive names in Brazil have also done well with investment management platform XP and off-benchmark exposure to low-income homebuilder MRV Engenharia amongst the top contributors. For XP, in addition to delivering strong results, the company is also benefitting from increased flows from fixed income to equities as rates come down. In the case of MRV Engenharia, lower rates entail more affordable housing and lower costs on interest which is beneficial as this is a highly levered name. No exposure to WEG, a Brazilian electric equipment company, has also contributed to relative returns. The company has been faced with sequential growth challenges, particularly due to a solar demand slowdown in Brazil which is impacting the company’s outlook.
In Mexico, our overweight position in consumer company FEMSA, was supportive of relative returns, with a strong operating environment at its core convenience store business Oxxo. Cemex, the Mexican cement producer, was another contributor on a relative basis. Being underweight the stock helped the portfolio’s relative returns as the stock declined on fears of rising input costs. Another significant outperformer was Fibra Uno Administracion, the Mexican real estate operator. This is a stock that has continued to benefit from the nearshoring theme, i.e. increased foreign investment and demand for industrial properties. The stock also rose following the announcement of a potential IPO where the company would carve out a new vehicle of their industrial real estate assets.
Elsewhere in the region, Ecopetrol, a petroleum producer in Colombia, outperformed. Chilean lithium producer Sociedad Quimica Y Minera (SQM) was another strong performer during the last month of the year as the stock rose in anticipation of the announcement of the partnership with state entity Codelco, which has extended their mining lease in the Atacama until 2060.
While Brazil exposure has benefitted the Company more broadly, some names lagged with supermarket chain Assai being the biggest detractor over the period. The company sold off earlier in the year after its majority shareholder, Casino, showed signs of weak liquidity. This weighed on the stock after an announcement that Casino would be selling a portion of its shares. Brazilian retailers Arezzo and Grupo De Moda Soma (Soma) also hurt relative returns over the period as the retail sector was negatively impacted by the announcement of a tax reform, which could be margin dilutive for the sector. We maintain conviction in these names and believe that continued rate cuts from the central bank should be supportive for domestic consumption. Elsewhere, overweight position in Mexican silver miner MAG Silver Corp also detracted amid declining silver prices.
Over the period, we have taken advantage of the strong performance in Brazil to take profits in names that have outperformed or where our investment thesis has played out. We exited our position in Gerdau, a steel producer, and rotated this into iron ore producer Vale on a relative performance basis. We also exited XP following strong performance. As we believe continued rate cuts in Brazil should be supportive for domestic consumption, we initiated holdings in retailers Soma and Lojas Renner. For Soma specifically, we believe that mistakes made in the previous cycles have been overly penalized by the market, and we believe that their brand Farm Rio is one of the strongest brands in Brazil.
We also made some changes to our Mexican book. We exited Cemex, the Mexican cement producer, and used some of the proceeds to top up our holding in Walmart de Mexico y Centroamerica (Walmex). The latter has underperformed on cost pressures and disinflation, but we believe the negative earnings revisions are coming to an end. We also trimmed our exposure to rate sensitive bank Grupo Financiero Banorte. In Colombia, we initiated a position in bank Bancolombia on the back of cheap valuation and as the Colombian government has shown more signs of orthodoxy than initially expected. We took profits and exited Colombian oil & gas company Ecopetrol as our investment thesis has played out and as we are getting incrementally more negative on the outlook for oil prices. We also took some profits in Globant, the Argentinian IT services company, following strong performance.
We ended the year with Argentina as the largest portfolio overweight, driven by two off-benchmark holdings. Our second largest overweight position is in Panama, driven by an off-benchmark holding in the industrials sector. On the other hand, we remain underweight in Peru due to its ongoing political and economic uncertainty. We remain optimistic about the outlook for Brazil and have been selective in our positioning, with a preference for domestic businesses that will benefit more from further rate cuts.
OUTLOOK
We believe that global markets are starting to feel the impact of higher interest rates, noting slowing credit growth as evidence that a demand slowdown may be 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 could come from. On the other hand, we observe stronger fundamentals in EM, particularly in Latin America, as inflation has decreased and central banks have eased monetary policies across many of our markets. This is typically a good set up as domestic economies should see a cyclical improvement.
We are especially positive about the outlook for Brazil. We believe that the combination of a benign outlook for inflation and a relatively prudent fiscal policy by the government will enable the central bank to decrease interest rates faster than market participants currently expect. We expect further upside to the equity market in the next 12-18 months as local capital starts flowing back into the market.
We remain positive on the outlook for the Mexican economy as it is a key beneficiary of the ‘friend-shoring’ of global supply chains. Mexico remains defensive as both fiscal and the current accounts are in order. While our view remains positive, we have taken some profits after a strong relative performance, solely because we see even more upside in other Latin American markets such as Brazil. We also note that the Mexican economy will be relatively more sensitive to a potential slowdown in economic activity in the United States.
We continue to closely monitor the political and economic situation in Argentina, after libertarian Javier Milei unexpectedly won the presidential elections in November. Milei is facing a very difficult situation, with inflation at 210% year on year, foreign exchange reserves depleted and multiple economic imbalances. The country needs to go through a painful adjustment process and we worry about the hardship that this inflicts on society. We are hopeful that the country comes out stronger after the adjustment process, but we have limited exposure to the Argentinian economy for now.
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. In a world splitting into three groups: those aligned with China, those aligned with the US and the rest, the latter group which have been coined as the “Transactional 25”, are uniquely positioned to benefit from their ability to trade with both blocs. We are already seeing an increase in their share of global Foreign Direct Investment (FDI) flows, with the prime example being Mexico. Although some investor attention in 2024 may focus on the political and social challenges in countries such as Ecuador, Guyana and Panama, we maintain that the region when taken as a whole, appears to be a more attractive investment destination than many in the market currently believe.
Sam Vecht and Christoph Brinkmann
BlackRock Investment Management (UK) Limited
26 March 2024
TEN LARGEST INVESTMENTS
as at 31 December 2023
Together, the ten largest investments represented 55.3% of total investments of the Company’s portfolio as at 31 December 2023 (2022: 53.5%).
1 Vale (2022: 1st)
Materials
Market value – American depositary share (ADS): US$18,331,000
Share of investments: 9.6% (2022: 9.5%)
is one of the world’s largest mining groups, with other businesses in logistics, energy and steelmaking. Vale is the world’s largest producer of iron ore and nickel but also operates in the coal, copper, manganese and ferro-alloys sectors.
2 Petrobrás (2022: 2nd)
Energy
Market value – American depositary receipt (ADR): US$6,666,000
Market value – preference shares ADR: US$6,091,000
Market value – ordinary shares: US$3,705,000
Share of investments: 8.6% (2022: 7.1%)
is a Brazilian integrated oil and gas group, operating in the exploration and production, refining, marketing, transportation, petrochemicals, oil product distribution, natural gas, electricity, chemical-gas and biofuel segments of the industry. The group controls significant assets across Africa, North and South America, Europe and Asia, with a majority of production based in Brazil.
3 Banco Bradesco (2022: 6th)
Financials
Market value – ADR: US$8,726,000
Market value – preference shares: US$3,276,000
Share of investments: 6.2% (2022: 5.1%)
is one of Brazil’s largest private sector banks. The bank divides its operations into two main areas – banking and insurance services and management of complementary private pension plans and saving bonds.
4 Walmart de México y Centroamérica (2022: 21st)
Consumer Staples
Market value – ordinary shares: US$11,317,000
Share of investments: 5.9% (2022: 1.9%)
is also known as Walmex, it is the Mexican and Central American Walmart division.
5 B3 (2022: 5th)
Financials
Market value – ordinary shares: US$9,814,000
Share of investments: 5.1% (2022: 5.2%)
is a stock exchange located in Brazil, providing trading services in an exchange and OTC environment. B3’s scope of activities include the creation and management of trading systems, clearing, settlement, deposit and registration for the main classes of securities, from equities and corporate fixed income securities to currency derivatives, structured transactions and interest rates, and agricultural commodities. B3 also acts as a central counterparty for most of the trades carried out in its markets and offers central depository and registration services.
6 FEMSA (2022: 3rd)
Consumer Staples
Market value – ADR: US$9,126,000
Share of investments: 4.8% (2022: 6.0%)
is a Mexican beverages group which engages in the production, distribution, and marketing of beverages. The firm also produces, markets, sells, and distributes Coca-Cola trademark beverages, including sparkling beverages.
7 AmBev (2022: 4th)
Consumer Staples
Market value – ADR: US$6,394,000
Market value – ordinary shares: US$1,542,000
Share of investments: 4.2% (2022: 5.3%)
is a Brazilian brewing group which engages in the production, distribution, and sale of beverages. Its products include beer, carbonated soft drinks and other non-alcoholic and non-carbonated products with operations in Brazil, Central America, the Caribbean and Canada.
8 Grupo Aeroportuario del Pacifico (2022: 14th)
Industrials
Market value – ADS: US$7,694,000
Share of investments: 4.0% (2022: 2.3%)
is a Mexican airport operator headquartered in Guadalajara, Mexico. The company holds concessions to operate, maintain and develop approximately 10 international airports in the Pacific and Central regions of Mexico, and an international airport in Jamaica.
9 Itaú Unibanco (2022: 7th)
Financials
Market value – ADR: US$7,208,000
Share of investments: 3.8% (2022: 4.9%)
is a Brazilian financial services group that services individual and corporate clients in Brazil and abroad. Itaú Unibanco was formed through the merger of Banco Itaú and Unibanco in 2008. It operates in the retail banking and wholesale banking segments.
10 Grupo Financiero Banorte (2022: 8th)
Financials
Market value – ordinary shares: US$5,966,000
Share of investments: 3.1% (2022: 4.8%)
is a Mexican banking and financial services holding company and is one of the largest financial groups in the country. It operates as a universal bank and provides a wide array of products and services through its broker dealer, annuities and insurance companies, retirements savings funds (Afore), mutual funds, leasing and factoring company and warehousing.
All percentages reflect the value of the holding as a percentage of total investments. For this purpose, where more than one class of securities is held, these have been aggregated.
The percentages in brackets represent the value of the holding as at 31 December 2022.
PORTFOLIO OF INVESTMENTS
as at 31 December 2023
| Market | |||
| value | % of | ||
| US$’000 | investments | ||
| Brazil | |||
| Vale – ADS | 18,331 | 9.6 | |
| Petrobrás – ADR | 6,666 | } | 8.6 |
| Petrobrás – preference shares ADR | 6,091 | ||
| Petrobrás | 3,705 | ||
| Banco Bradesco – ADR | 8,726 | } | 6.2 |
| Banco Bradesco – preference shares | 3,276 | ||
| B3 | 9,814 | 5.1 | |
| AmBev – ADR | 6,394 | } | 4.2 |
| AmBev | 1,542 | ||
| Itaú Unibanco – ADR | 7,208 | 3.8 | |
| Hapvida Participacoes | 5,618 | 3.0 | |
| EZTEC Empreendimentos e Participacoes | 4,263 | 2.2 | |
| Sendas Distribuidora | 4,217 | 2.2 | |
| Arezzo Industria e Comercio | 4,028 | 2.1 | |
| Alpargatas | 3,874 | 2.0 | |
| Lojas Renner | 3,823 | 2.0 | |
| Vamos | 3,792 | 2.0 | |
| Rumo | 3,441 | 1.8 | |
| Grupo De Moda Soma | 2,808 | 1.5 | |
| Pagseguro Digital | 1,992 | 1.1 | |
| Rede D’or Sao Luiz | 1,912 | 1.0 | |
| IRB Brasil Resseguros | 1,776 | 0.9 | |
| MRV Engenharia | 1,417 | 0.8 | |
| 114,714 | 60.1 | ||
| Mexico | |||
| Walmart de México y Centroamérica | 11,317 | 5.9 | |
| FEMSA – ADR | 9,126 | 4.8 | |
| Grupo Aeroportuario del Pacifico – ADS | 7,694 | 4.0 | |
| Grupo Financiero Banorte | 5,966 | 3.1 | |
| Fibra Uno Administracion – REIT | 5,222 | 2.7 | |
| MAG Silver Corp | 4,595 | 2.4 | |
| Grupo México | 4,360 | 2.3 | |
| America Movil – ADR | 3,708 | 2.0 | |
| 51,988 | 27.2 | ||
| Chile | |||
| Sociedad Química Y Minera – ADR | 5,585 | 2.9 | |
| Empresas CMPC | 2,880 | 1.5 | |
| Cia Cervecerias Unidas | 1,366 | } | 1.2 |
| Cia Cervecerias Unidas – ADR | 968 | ||
| 10,799 | 5.6 | ||
| Argentina | |||
| Globant | 2,969 | 1.6 | |
| Tenaris | 2,513 | 1.3 | |
| 5,482 | 2.9 | ||
| Colombia | |||
| Bancolombia | 4,714 | 2.5 | |
| 4,714 | 2.5 | ||
| Panama | |||
| Copa Holdings | 3,178 | 1.7 | |
| 3,178 | 1.7 | ||
| Total investments | 190,875 | 100.0 |
All investments are in equity shares unless otherwise stated.
The total number of investments held at 31 December 2023 was 39 (2022: 40). At 31 December 2023, the Company did not hold any equity interests comprising more than 3% of any company’s share capital (2022: none).
To learn more about the BlackRock Latin American Investment Trust plc please follow this link: blackrock.com/uk/brla
