Weak Sterling Hits BlackRock World Mining

THE VALUE INVESTOR: This Gold Rated investment trust has underperformed its peers recently resulting in a two-star fund rating. Could it be due a bounce back?

Jackie Beard, FCSI 25 September, 2014 | 1:27PM

The BlackRock World Mining (BRWM) team has faced a currency headwind for much of this year and this has eaten away at some of their returns, particularly to dividends. While the underlying companies themselves have been delivering, and the structural reforms translating through into better performance, the strength of sterling has been an issue.  Gold shares have finally started to outperform the gold price once again – a trend that had disconnected for some time.

In the last few weeks, weaker economic data from China has had an impact on markets, as well as the iron ore price which is sensitive to Chinese production levels. BHP Billiton (BLT), which makes up 10% of the trust, has also disappointed because it failed to announce a share buyback, contrary to analysts’ expectations.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BHP Group PLC1,661.60 GBX-0.93
BlackRock World Mining Trust plc376.50 GBX-1.31

About Author

Jackie Beard, FCSI

Jackie Beard, FCSI  is Director of Manager Research Services, Morningstar EMEA

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