London, UK, 28 July 2023
Edison issues update on BlackRock Latin American IT (BRLA)
BlackRock Latin American Investment Trust's (BRLA's) lead manager Sam Vecht and deputy manager Christoph Brinkmann have a high degree of confidence in the positive prospects for the trust's portfolio. It has an overweight exposure to Brazil versus its benchmark, the MSCI Emerging Markets Latin America Index. Vecht highlights high real interest rates in the country, providing scope for a lower base rate. Brazil now has a more stable political situation, and the manager anticipates that the economy should turn around in H223, which he believes would be positive for equity performance. Vecht and Brinkmann consider that BRLA's portfolio has real potential to deliver better absolute and relative performance.
BRLA's 13.6% discount is wider than the 9.9% to 11.5% range of average discounts over the last one, three, five and 10 years. Over the last 12 months the trust has traded between a 0.6% premium (around the time of a tender offer) and a 19.6% discount. There is scope for a higher valuation if the trust's performance improves or investors' risk appetite increases. BRLA has a clearly defined dividend policy; payments are based on 1.25% of its quarterly NAV. The trust currently offers an attractive 5.4% yield.
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