Source - PRN


All information is at 31 August 2016 and unaudited.

Performance at month end with net income reinvested   

One year
Net asset value^ 2.0 30.0 35.6 3.3 -17.2 62.4
Share price 3.2 22.8 37.9 4.9 -20.5 50.8
MSCI EM Latin America 2.1 31.6 41.1 1.9 -14.1 75.8
US Dollars:
Net asset value^ 0.6 17.0 15.7 -12.4 -33.2 22.9
Share price 1.8 10.5 17.5 -11.1 -35.9     14.0
MSCI EM Latin America 0.7 18.5 20.1 -13.7 -30.9 32.8


^cum income
^^Date which BlackRock took over the investment management of the Company.
Sources: BlackRock, Standard & Poor’s Micropal


At month end
Net asset value – capital only: 442.04p
Net asset value – cum income: 452.44p
Share price: 393.00p
Total Assets#: £178.2m
Discount (share price to cum income NAV):  13.1%
Average discount* over the month – cum income: 13.3%
Net cash at month end**: 1.0%
Gearing range (as a % of net assets): 0-25%
Net yield##: 3.5%
Ordinary shares in issue***: 39,369,620
Ongoing charges****: 1.1%


#Total assets include current year revenue.
## calculated using total dividends declared in the last 12 months as at the date of this announcement as a percentage of month end share price.
*The discount is calculated using the cum income NAV (expressed in sterling terms).
**Net cash/net gearing is calculated using debt at par, less cash and cash equivalents and fixed interest investments as a percentage of net assets.
***Excluding 2,071,662 shares held in treasury.
**** Calculated as a percentage of average net assets and using expenses, excluding performance fees and interest costs for the year ended 31 December 2015.


Geographic Exposure
% of Total Assets % of Equity Portfolio * MSCI EM Latin American Index
Brazil 59.1 59.7 56.1
Mexico 28.2 28.4 29.0
Peru 6.2 6.3 2.8
Argentina 2.4 2.5 0.0
Chile 1.7 1.7 8.6
Colombia 1.4 1.4 3.5
Net current assets (inc.Fixed interest) 1.0 0.0 0.0
----- ----- -----
Total 100.0 100.0 100.0
----- ----- -----


Sector % of Equity Portfolio * % of Benchmark
Financials 32.1 31.2
Consumer Staples 24.4 20.2
Energy      11.8       8.5
Materials 9.6 12.5
Industrials 7.7 6.5
Consumer Discretionary 5.0 6.6
Information Technology 3.8 2.2
Telecommunication Services 3.4 5.5
Utilities 2.2 6.3
Health Care 0.0 0.5
----- -----
Total 100.0 100.0
----- -----

*excluding net current assets & fixed interest

Ten Largest Equity Investments (in percentage order)

Country of Risk % of
Equity Portfolio
% of
Itau Unibanco Brazil 9.4 6.0
Banco Bradesco Brazil 8.1 6.1
Petrobas Brazil 8.0 5.5
AmBev Brazil 7.0 5.2
Femsa Mexico 4.5 3.1
Cielo Brazil 3.8 2.0
Grupo Financiero Banorte Mexico 3.5 2.5
Telefonica Brasil Brazil 3.4 1.3
Credicorp Peru 3.4 2.0
Cemex SAB Mexico 3.2 2.2


Commenting on the markets, Will Landers, representing the Investment Manager noted;


For the month of August 2016, the Company’s NAV rose by 2.0% and the share price rose by 3.2%, whilst the Company’s benchmark, the MSCI EM Latin America Free Index, rose by 2.1% (all performance figures are in sterling terms).

An underweight to Chile added to returns as the Chilean peso weakened relative to the US dollar amid falling copper prices.  Stock selection in Brazil also contributed positively to returns.  An overweight to Petrobras contributed positively as the stock benefitted from a stronger oil price and positive developments in asset sales under its new management team, which was put in place by Brazil’s new administration.

An off-benchmark position in Argentina weighed on returns driven by mixed economic data and uncertainty around potential tariff hikes in the country. Our lower than benchmark exposure to Colombia also detracted from returns as the country benefitted from a rally in oil prices and a finalized peace agreement with the FARC.  Cielo detracted from returns as concerns regarding the regulatory environment resurfaced during the month.


During the month we added to Mexican real estate stock Fibra Uno given attractive valuations.  In Brazil, we took profits in Petrobras given its recent strong performance while maintaining a higher than benchmark exposure.  We exited Chilean retailer Falabella due to our increased concerns regarding the timing of a potential economic pick-up in Chile.

Net cash was approximately 1.0% at the end of August.


Brazil remains attractive in our view.  With the impeachment of former president Rousseff completed, we expect President Temer and his team to move the fiscal and growth agenda forward, providing an attractive background for Brazilian equities.  Peru is favoured for similar reasons relating to the recently elected President Kuczynski.  We are less enthusiastic about Chile, due to a lack of catalysts to improve growth in the near term, and Colombia given fiscal imbalances at current oil prices. We have a lower than benchmark exposure to Mexico given concerns surrounding its high valuation levels and political noise from both sides of the border.   Overall, we are positive on the asset class as a result of the ongoing reform process in many countries, the low interest rate environment around the developed world and our expectation that 2017 could potentially provide positive surprises to growth expectations.

19 September 2016


Latest information is available by typing on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.