Blackrock World Mining Trust plc (LON:BRWM) has provided the following portfolio update:
All information is at 31 August 2020 and unaudited.
Performance at month end with net income reinvested
| One | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | 2.4% | 16.5% | 16.8% | 20.4% | 140.0% |
| Share price | 1.0% | 19.3% | 23.5% | 23.7% | 145.8% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 0.7% | 13.2% | 11.5% | 10.2% | 121.2% |
* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream
At month end
| Net asset value (including income)1: | 459.37p |
| Net asset value (capital only): | 454.41p |
| 1 Includes net revenue of 4.96p | |
| Share price: | 404.00p |
| Discount to NAV2: | 12.1 |
| Total assets: | 887.5m |
| Net yield3: | 5.4% |
| Net Cash: | 14.1% |
| Ordinary shares in issue: | 173,605,020 |
| Ordinary shares held in Treasury: | 19,406,822 |
| Ongoing charges4: | 0.9% |
2 Discount to NAV including income.
3 Based on two quarterly interim dividends of 4.00p per share declared on 19 August 2020 and 14 November 2019 and a final dividend of 10.00p per share announced on 27 February 2020 in respect of the year ended 31 December 2019 and a quarterly interim dividend of 4.00p per share declared on 30 April 2020 in respect of the year ending 31 December 2020.
4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2019.
| Country Analysis | Total Assets (%) | Sector Analysis | Total Assets (%) | |
| Global | 66.3 | Gold | 37.0 | |
| Australasia | 9.6 | Diversified | 31.8 | |
| Latin America | 7.5 | Copper | 18.2 | |
| Canada | 5.7 | Industrial Minerals | 3.0 | |
| South Africa | 3.7 | Platinum Group Metals | 2.7 | |
| United Kingdom | 3.5 | Nickel | 2.6 | |
| Russia | 1.7 | Iron Ore | 1.8 | |
| Other Africa | 1.2 | Steel | 1.7 | |
| Indonesia | 1.0 | Iron | 1.4 | |
| United States | 0.8 | Materials | 0.4 | |
| Argentina | 0.1 | Silver & Diamonds | 0.3 | |
| Other Net Liabilities | -1.1 | Aluminium | 0.1 | |
| —– | Zinc | 0.1 | ||
| 100.0 | Net Current Liabilities | -1.1 | ||
| ===== | —– | |||
| 100.0 | ||||
| ===== |
| Top 10 holdings | Fund % |
| BHP | 10.3 |
| Vale: | |
| Equity | 4.9 |
| Debenture | 3.2 |
| Rio Tinto | 6.9 |
| Barrick Gold | 6.9 |
| Newmont Mining | 6.7 |
| Wheaton Precious Metals | 5.5 |
| Anglo American | 5.3 |
| Freeport-McMoRan Copper & Gold | 4.0 |
| OZ Minerals: | |
| Royalty | 2.0 |
| Equity | 1.6 |
| Franco-Nevada | 3.1 |
| Asset Analysis | Total Assets (%) |
| Equity | 94.5 |
| Bonds | 4.9 |
| Preferred Stock | 1.7 |
| Net Current Liabilities | -1.1 |
| —– | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV increased by +2.4% in August, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned +0.7% (Figures in GBP).
Global equity markets rose in August, amid continued signs of a global recovery, for reference the MSCI AC World Index rose by +6.0%. Economic data points further indicated the continued recovery in global activity, with US, Euro and China Manufacturing PMI statistics all above 50.
Against this macroeconomic backdrop, mined commodities performed well overall during the month. China’s infrastructure investment appeared to support copper and iron ore demand in particular, prices of which were up +4.3% and +15.1% respectively. Meanwhile, global mined copper supply remained notably down versus recent years as the spread of COVID-19 in South America continued to disrupt operations.
Within the Company, our exposure to copper companies benefitted relative performance, with positions in Freeport-McMoRan, Ero Copper and Cerro Verde among the top performers. On the negative side, our position in Australian gold producer, Northern Star Resources, was one of the largest detractors. The company underperformed as the gold price declined modestly and as Australian dollar strength negatively impacted its margin outlook.
Strategy and Outlook
We expect continued volatility as the COVID-19 pandemic evolves and believe broader equity markets could be vulnerable to a pullback in the near-term. However, with balance sheets in strong shape, we believe the miners are relatively well positioned to weather economic weakness. Mined commodity prices have performed strongly in recent weeks, with most now up on a year-to-date basis, and the sector should see strong earnings growth on the back of that. We expect mined commodity demand to be supported by increased infrastructure spending in China and the US as well as coordinated green spending initiatives in Europe. The capital discipline story remains intact, with mining companies focused on shareholder returns through dividends and buybacks.
All data points are in USD terms unless stated otherwise
17 September 2020
For more information on this Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
