18th Aug 2015 14:38
LONDON (Alliance News) - BlackRock Latin American Investment Trust PLC on Tuesday said it trailed its benchmark index in the first half, hurt by stocks in Brazil and Peru.
The trust's net asset value per share declined by 8.8% and the share price by 10.7% during the first six months of 2015 in dollar terms. That is equivalent to decreases of 9.6% and 11.5% in sterling.
The trust said its returns lagged the 6.2% decrease for the MSCI Latin America Index over the same time period in dollar terms, equivalent to a fall of 7.0% in sterling.
"Peformance during the period suffered as a result of stock selection in Brazil and Peru," the investment manager's report said.
"Offsetting some of the negative contributions were our allocation decisions in Colombia, where we had an underweight position, and in Mexico, where we had an overweight position," the report continued.
The report said the investment manager is starting the second half overweight in Mexico and Peru and underweight in Brazil, Chile and Colombia.
"The main risk in Brazil is the potential inability of the current administration to execute on reforms. If this happens we would need to reposition the portfolio fairly quickly, but this is not currently our base case," the report said.
"In addition, an unlikely expedient resolution to the investigation into the alleged corruption at Petrobrás as well as its balance sheet issues would necessitate a change in our zero-weight to the stock. In Mexico, the main risk would be the failure of the energy project auctions and a failure for the economic recovery to gather strength," the report added.
Shares in the trust were down 2.3% at 304.00 pence on Tuesday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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