BlackRock Latin American has published its results for the year that ended on 31 December 2014. over that period the fund outperformed its benchmark. The total return on net assets was -9.3% – better than the -12% return on the MSCI Latin America Index. the return to shareholders was -4.0%. The final dividend is being maintained at 15 cents per share to give a total distribution for the year of 30 cents – unchanged on 2013.
The statement breaks down the fund’s performance against the index and concludes that asset allocation (investing in the better performing countries) added 0.8% to the value of the fund and stock selection (investing in the right companies) added 3%.
The manager’s report says there was good stock selection in Brazil and Mexico and Peruvian exposure helped the fund. In Brazil, the largest individual contributors to relative performance included positions in Kroton Educacional and BB Seguridade Participaçóes, being underweight Petrobrás also helped their relative performance. In Mexico, the largest individual contributors were property stocks Terrafina and Vesta which have benefited from growth in manufacturing in Mexico and their protection from the devaluation of the Mexican Peso given that a majority of their revenues is contracted in US Dollars.
On the downside, a Peruvian company, Grana y Montero, was penalised earlier in the year for not participating in a subway auction in Lima and continued to suffer after reporting weak second quarter results which showed revenue growth decelerating and lower margins. Also detracting from performance were Cosan and Mills in Brazil. Cosan was negatively affected by falling oil prices and their impact on the company’s sugar/ethanol business. Mills suffered from project delays and oversupply in the equipment rental market.
BRLA : BlackRock Latin outperforms a falling market