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23 Mar 2020

BlackRock World Mining

Company Notes

9% yield and 25% allocation to gold

In the year to 31 December 2019 BlackRock World Mining* delivered a NAV total return of 17.2%, underperforming the EMIX Global Mining Index, which rose 22.7% in Sterling total return terms. The fund benefitted from better than expected iron ore prices, with holdings in large diversified producers and iron ore royalty exposure, but relative performance suffered from not having enough exposure to lower quality iron ore producers. In addition, the portfolio’s overweight allocation to copper and the index’s highly concentrated exposure to the large diversified mining companies, which performed strongly, impacted the fund’s returns on a relative basis. Evy Hambro notes that after a period of deleveraging, mining now having the second lowest level of leverage of all sectors (after technology).



The fund’s revenue return per share in 2019 was 22.46p, up 24% from 18.15p in the previous year. The total dividend of 22.0p per share declared in respect of 2019 represented an increase of 22% from 18.0p the previous year and reflects a dividend yield of 9.2% based on the current share price. 



The start of 2020 has seen a notable deterioration in the fund’s performance in the wake of concerns over demand for commodities in the wake of the coronavirus outbreak, with the fund’s NAV down 34% and the EMIX Global Mining Index down 30% in Sterling total return terms.



*Denotes a corporate broking client of Winterflood Securities