Frontiers Investment Trust, under BlackRock, has significantly reduced its position in Turkey, which it had rapidly increased at the beginning of the year. While the fund's weighting in Turkish assets reached as high as 11 percent of its net assets in February, recent data shows it has fallen to 0.5 percent.
According to portfolio data reported by Türkiye Today, the fund had made strong entries into Turkey in the first part of the year due to the decline in inflation, expectations of interest rate cuts, and relatively cheap multiples in banking stocks. However, this strategy was quickly reversed due to the tension in the Middle East and the risk perception regarding rising energy costs.
REASON FOR THE SELL-OFF: OIL AND GEOPOLITICAL RISK
In the fund management's assessments, concerns that the rise in oil prices could put pressure on Turkey's external balance and the disinflation process came to the fore. In this context, İş Bankası shares were sold off completely in March, while positions in Akbank and MLP were reduced.
BlackRock Frontiers Investment Trust confirmed that it had also zeroed out its remaining shares in Akbank in May. Thus, the fund's weighting in Turkey has shrunk by approximately 95 percent compared to its peak of 36 million pounds in February.
Akbank, İş Bankası, and MLP were not included in the portfolio report dated June 30. It was stated that among Turkey-linked assets, only a 1.9 million dollar stake in Canada-based Eldorado Gold remained, accounting for 0.4 percent of the portfolio.
In the first part of the year, Borsa İstanbul experienced a strong rise due to foreign investor interest and the effect of the decline in inflation, with the BIST 100 index hitting a record high of over 15,000 points in April. However, subsequent fund sales and concerns regarding market investigations increased volatility in the index.
The fund, which reduced its position in Turkey, shifted its portfolio weighting toward markets such as Saudi Arabia, Kazakhstan, and the United Arab Emirates. It was noted that the fund's total assets reached 417.7 million pounds, and capital was also directed to countries such as Georgia, Egypt, Pakistan, Argentina, Indonesia, and Nigeria.
News Source: 12punto
