Blackrock World Mining Trust plc (LON:BRWM) has provided the following portfolio update.
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 | Three | One | Three | Five | |
| Month | Months | Year | Years | Years | |
| Net asset value | -0.7% | 7.5% | 17.2% | 29.6% | 163.6% |
| Share price | -0.6% | 7.8% | 21.0% | 31.6% | 161.2% |
| MSCI ACWI Metals & Mining 30% Buffer 10/40 Index (Net)* | -1.2% | 5.6% | 10.7% | 18.4% | 143.2% |
* (Total return)
Sources: BlackRock, MSCI ACWI Metals & Mining 30% Buffer 10/40 Index, Datastream
At month end
| Net asset value (including income)1: | 456.18p |
| Net asset value (capital only): | 446.49p |
| 1 Includes net revenue of 9.69p | |
| Share price: | 401.50p |
| Discount to NAV2: | 12.0% |
| Total assets: | 884.5m |
| Net yield3: | 5.5% |
| Net gearing: | 11.1% |
| 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 two quarterly interim dividends of 4.00p per share declared on 19 August 2020 and 30 April 2020 for the year ending 31 December 2020 and a quarterly interim dividend of 4.00p per share declared on 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.
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 (%) |
| Global | 66.5 |
| Australasia | 7.9 |
| Latin America | 7.6 |
| Canada | 5.7 |
| South Africa | 3.8 |
| United Kingdom | 2.7 |
| Russia | 1.5 |
| United States | 1.4 |
| Other Africa | 1.2 |
| Indonesia | 1.0 |
| Argentina | 0.1 |
| Other Net Assets | 0.6 |
| ——- 100.0 ==== |
| Sector Analysis | Total Assets (%) |
| Gold | 37.0 |
| Diversified | 31.3 |
| Copper | 18.1 |
| Platinum Group Metals | 2.9 |
| Nickel | 2.1 |
| Industrial Minerals | 2.0 |
| Steel | 1.9 |
| Iron Ore | 1.7 |
| Iron | 0.9 |
| Materials | 0.9 |
| Zinc | 0.3 |
| Silver & Diamonds | 0.2 |
| Aluminium | 0.1 |
| Net Current Assets | 0.6 |
| ——- 100.0 ==== |
| Top 10 holdings | Company % |
| Vale: | |
| Equity | 5.3 |
| Debenture | 3.8 |
| BHP | 8.2 |
| Rio Tinto | 7.1 |
| Barrick Gold | 6.9 |
| Newmont Mining | 6.7 |
| Anglo American | 5.5 |
| Wheaton Precious Metals | 5.3 |
| Freeport-McMoRan Copper & Gold | 4.2 |
| OZ Minerals: | |
| Royalty | 2.1 |
| Equity | 1.6 |
| Franco-Nevada | 3.1 |
| Asset Analysis | Total Assets (%) |
| Equity | 93.4 |
| Bonds | 4.1 |
| Preferred Stock | 1.9 |
| Net Current Assets | 0.6 |
| ——- 100.0 ===== |
Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:
Performance
The Company’s NAV returned -0.7% in September, outperforming its reference index, the MSCI ACWI Metals and Mining 30% Buffer 10/40 Index (net return), which returned -1.2% (Figures in GBP).
Global equity markets lost ground in September, amid rising COVID-19 infection rates across much of Western Europe and renewed concerns about the strength of the global economic recovery. For reference, the MSCI AC World Index fell by 3.4%. Elsewhere, the US Federal Reserve disappointed expectations with respect to further stimulus to spur inflation and support the economy on a short-term basis, potentially driving the tick up in real interest rates.
The mining sector pulled back in September following a strong run in August. Most mined commodities were down over the month, with US dollar strength acting as a headwind. For reference, copper, gold and iron ore (62% fe.) prices fell by -0.4%, -3.5% and -4.4% respectively, albeit remaining at elevated prices, all still well above where they started the year. Market sentiment appeared to be negatively impacted by mounting fears around COVID-19 second waves. Economic activity data continued to be encouraging, however, with China’s manufacturing PMI coming in at 51.5, up from 51.0 in August, for example. China also announced an aim to achieve carbon neutrality before 2060 during the month, in a move seen as hugely significant in the fight against climate change.
Within the portfolio, our exposure to the diversified mining sub-sector contributed positively, with the Vale debentures being the largest contributor to relative performance. Elsewhere, our holding in platinum group metal (PGM) producer, Northam Platinum, also appeared amongst the top performers over the month. The Company benefited from its significant exposure to rhodium, the price of which rallied over the month owing to growing demand for the metal for use in cleaning vehicle emissions and disruptions in supply from South Africa.
Strategy and Outlook
We expect continued volatility as the COVID-19 pandemic evolves and believe broader equity markets could be vulnerable to a pull back 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 months, 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.
15 October 2020
For more information on this Trust and how to access the opportunities presented by mining, please visit www.blackrock.com/uk/brwm
