Here's How Blackrock's Frontier Markets Fund Crushed Competitors In 2016

2016: A good year for Frontier Markets and Sam Vecht

Frontier market funds performed well in 2016. It was also a bounce-back year for Sam Vecht’s GBP 270 million (USD $340 million) Blackrock Frontiers Investment fund (BRFI). The fund outperformed the MSCI Frontier Market index by earning 30% for its investors for the year up to October 31. The MSCI Frontier Market index was up 19.4% during the period. Argentina’s recovery and the weak pound served as tailwinds for the fund’s returns in 2016.

  • Argentina’s stock market jumped by 50% under the aegis of its new president, Mauricio Macri. The Global X MSCI Argentina ETF (ARGT) is up 58.13% over the past 1 year (ending Jan 19).
  • The weak pound has benefitted investments made in the UK (EWU).

Not to forget, stellar stock picking by Vecht in companies such as those listed below led gains made by the fund in 2016.

StockSectorCountryReturn in 2016
Mobile WorldTelecomVietnam130%
Pampa EnergiaUtilityArgentina116%
Banco MacroFinancialsArgentina107%
Hub PowerUtilityPakistan28%


In 2016, Vecht’s bet on Asian economies such as Vietnam and Pakistan, and Argentina in Latin America (ILF) helped him generate stellar returns for his frontier fund.

- Advertisement -

Shift in focus

In 2017, Vecht says he will be focusing on the Middle East (GULF) as oil prices recover. “Facts have changed” and “valuations are attractive” for the area, according to Vecht.

Currently, the funds’ top holdings include:

BlackRock Frontiers Fund (BRFI): Top 10 Holdings
MCB Bank Ltd.5.41%
Banco Macro S.A. ADR4.53%
Maroc Telecom4.53%
Grupo Financiero Galicia4.07%
Halyk Savings Bank4.07%
Mobile Telecommunication Co4.07%
Kazmunaigas Exploration-Production JSC.3.95%
Square Pharmaceuticals3.84%
BRD-Groupe Societe Generale3.60%

The Middle East, and particularly Saudi Arabia (KSA) do seem to hold promise for 2017. In the next article in this series, we look at the reasons why.

- Advertisement -