TIDMBRLA
BlackRock Latin American Inv Tst
11 April 2022
BlackRock Latin American (BRLA)
11/04/2022
Results analysis from Kepler Trust Intelligence
BlackRock Latin American Investment Trust (BRLA) has released
its financial results for the year ending 31 December 2021. In USD
terms, BRLA saw its NAV fall by 12.5% over the period, compared to
an 8.1% drop in its benchmark, the MSCI EM Latin America Index.
Those figures were 11.7% and 7.3% respectively in GBP terms.
However, since the period end the trust has performed well,
generating returns of 31.4% compared to 33.8% for the index (to
31/03/2022) as Latin America has been one of the bright spots in
world markets, buoyed by rising commodity prices. BRLA has been the
top-performing investment trust in 2022 to date.
Managers Ed Kuczma and Sam Vecht are positive on the outlook for
their region this year, pointing to increases in food and energy
prices of which many countries in the region are major suppliers.
They also highlight higher interest rates in the region which could
attract capital flows as well as relative political and economic
isolation from the consequences of the war in Ukraine.
Kepler View
There is no doubt that 2021 was a tough year for Latin American
investors, but BlackRock Latin American (BRLA) was the
top-performer in the investment trust sector in the first quarter
of 2022 and looks ideally placed for a new economic
environment.
In particular, Latin America should benefit from raw material
price inflation as well as political tensions between the West and
China and Russia. Rising commodities prices should benefit
companies across the region, which has large supplies of oil, gas,
copper, and lithium as well as agricultural commodities. Meanwhile
the region is a potential alternative trading partner for the
West.
We can already see some of these dynamics coming into play, as
companies in Latin America now have the highest earnings momentum
in emerging markets. Compounding this is the fact that countries in
the region were quick to raise interest rates during the pandemic,
making their currencies some of the best performers so far in 2022.
In fact, over the past 4 weeks, consensus earnings were revised up
by 14% in LatAm, led by Brazil and Chile. In Mexico and Peru,
earnings were revised up by c. 5%.
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April 11, 2022 09:42 ET (13:42 GMT)
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