BlackRock World Mining Trust plc (LON:BRWM) has announced its portfolio update.
All information is at 30 November 2020 and unaudited.
For more information on this Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
Performance at month end with net income reinvested
| One Month | Three Months | One Year | Three Years | Five Years | |
| Net asset value | 8.3% | 5.7% | 26.7% | 36.8% | 186.9% |
| Share price | 14.3% | 13.1% | 39.7% | 45.2% | 212.6% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | 6.8% | 4.0% | 17.2% | 23.1% | 156.5% |
* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream
At month end
| Net asset value (including income)1: | 481.64p |
| Net asset value (capital only): | 474.95p |
| 1 Includes net revenue of 6.69p | |
| Share price: | 453.00p |
| Discount to NAV2: | 6.0% |
| Total assets: | 925.8m |
| Net yield3: | 4.9% |
| Net gearing: | 13.6% |
| Ordinary shares in issue: | 173,550,814 |
| Ordinary shares held in Treasury: | 19,461,028 |
| Ongoing charges4: | 0.9% |
2 Discount to NAV including income.
3 Based on quarterly interim dividends of 4.00p per share declared on 12 November, 19 August and 30 April 2020 in respect of the year ending 31 December 2020 and a final dividend of 10.00p per share announced on 27 February 2020 in respect of the year ended 31 December 2019.
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 | 66.6 | Diversified | 35.6 | |
| Australasia | 9.5 | Gold | 28.5 | |
| Latin America | 7.8 | Copper | 21.2 | |
| South Africa | 4.8 | Iron | 2.9 | |
| Canada | 4.1 | Platinum Group Metals | 2.9 | |
| United Kingdom | 2.4 | Nickel | 2.5 | |
| Other Africa | 1.6 | Steel | 2.3 | |
| United States | 1.5 | Industrial Minerals | 1.8 | |
| Indonesia | 1.4 | Iron Ore | 1.6 | |
| Russia | 1.2 | Materials | 1.0 | |
| Net Current Liabilities | -0.9 | Silver & Diamonds | 0.3 | |
| —– | Zinc | 0.3 | ||
| Net Current Liabilities | -0.9 | |||
| 100.0 | —– | |||
| ===== | 100.0 | |||
| ===== |
| Ten largest investments | |
| Company | Total Assets % |
| Vale: | |
| Equity | 6.7 |
| Debenture | 3.9 |
| Rio Tinto | 7.3 |
| Anglo American | 7.3 |
| BHP | 7.2 |
| Freeport-McMoRan Copper & Gold | 5.3 |
| Newmont Mining | 5.0 |
| Barrick Gold | 4.8 |
| OZ Minerals: | |
| Royalty | 1.9 |
| Equity | 1.8 |
| First Quantum Minerals: | |
| Equity | 1.8 |
| Debt | 1.9 |
| Wheaton Precious Metals | 3.5 |
| Asset Analysis | Total Assets (%) |
| Equity | 94.8 |
| Bonds | 3.9 |
| Preferred Stock | 2.3 |
| Option | -0.1 |
| Net Current Liabilities | -0.9 |
| —– | |
| 100.0 | |
| ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned 8.3% in November, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned 6.8% (Figures in GBP).
Despite renewed lockdowns across Europe and in parts of Asia, global equity markets performed strongly during November, following the announcement of progress in a COVID-19 vaccine. This positive sentiment led to one of the strongest months on record for equities. For reference the MSCI AC World Index increased by 12.2%. Economic data also evidenced continued strength in global activity with, for example, global manufacturing PMIs at 53.7, the highest level since early 2018.
Most mined commodities performed well with copper and iron ore (62% fe.) prices rising by 12.9% and 11.0% respectively. For reference, copper prices are now at the highest level since February 2013. Gold bucked the trend, however, its price falling by 5.7% as improved investor sentiment dampened demand for ‘safe-haven’ assets.
Within the Company, outperformance was mainly driven by sub-sector allocation. Whilst our underweight to the steel sub-sector detracted, this was more than offset by a positive impact from our overweight to the copper and diversified sub-sectors. At the stock-level, our position in Vale was the top performer as the stock benefited from investor rotation into Brazilian-listed stocks and iron ore price strength.
Strategy and Outlook
The rebound in global economic activity remains robust, whilst COVID-19 vaccine developments provide greater certainty around growth. Mined commodity prices have performed well and we expect them to be well supported at these levels. Overall, mined commodity supply has been impacted by COVID-19 related disruptions and inventories are low relative to history for most commodities.
Longer term, we expect commodity supply to be constrained by the underinvestment of recent years and continued capital discipline. Meanwhile, commodity demand should continue to be buoyed by increased global infrastructure spend as governments seek to kick-start their economies. Longer term, we also expect the transition to a lower carbon global economy to also support demand for certain mined commodities.
Turning to the miners, balance sheets are in strong shape, whilst earnings and dividends are rising. Meanwhile, we see strong arguments for inflation exceeding current expectations and, historically, the mining sector has performed well on an absolute basis and relative to broader equity markets during periods of rising inflation. We maintain a quality bias in the portfolio, with a focus on companies with stronger balance sheets and lower costs.
All data points are in USD terms unless stated otherwise.
21 December 2020
For more information on the Blackrock World Mining Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
