BlackRock Latin American Inv. Trust: New Dividend And Discount Management Polic
Edison | Jul 17, 2018 09:37AM ET
BlackRock Latin American Investment Trust plc (LON:BRLA) is managed by Will Landers, who says that investor attitudes towards Latin American equities have changed. 2017 was a period of confidence in the region’s prospects, but now there is more skepticism about the growth outlook. However, the manager remains optimistic about potential returns from Latin American equities. In the key Brazilian economy, he cites higher domestic demand and a favorable interest rate environment, with the benchmark interest rate having more than halved to a record low level. BRLA has recently announced new dividend and discount management policies, which may lead to a narrowing in its discount over time. Dividends will now be paid four times a year, equivalent to 1.25% of the dollar-based, quarter-end NAV. As a result, the trust now offers an attractive prospective yield.
Investment strategy: Primarily bottom-up approach
Landers and his team undertake thorough fundamental analysis, aiming to identify high-quality companies with robust cash flow and earnings growth, and strong management teams. On-the-ground research is an important element of the investment process and includes meeting companies, their competitors and government officials. The manager also takes account of the macro environment when deciding on portfolio asset allocation. Gearing of up to 25% of NAV is permitted; at end-May 2018, net gearing was 6.8%.
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