BlackRock World Mining Trust

A recent list of best-selling investment trusts in May included BlackRock World Mining, which provides exposure to a global portfolio of mining stocks. These sorts of companies are largely driven by changes in the value of the underlying commodities, with investors using the fund to benefit from the surge in the price of copper that hit a new all-time high in May.¹

One of the main reasons the industrial metal has done so well is the boom in investments in green technologies. This could see the level of demand double by 2035, with supply unlikely to keep pace. It is a volatile area though and the outlook could change, so anyone thinking of investing needs to keep that in mind.²

The underlying portfolio

BlackRock World Mining aims to provide a diversified exposure to mining and metal assets worldwide and is actively managed with the objective of maximising total returns. It mostly holds the relevant company shares, but can also invest in royalties derived from the production of commodities, as well as the actual physical metals.

At the end of May the largest allocation was to the diversified miners that made up 35.4% of the portfolio, with copper in second place at 24.7% followed by gold at 17.4%. The largest individual holdings included the likes of Glencore, BHP, Rio Tinto and Vale.

BlackRock World Mining Trust - top 10 holdings

1. Glencore
2. BHP
3. Rio Tinto
4. Vale
5. Anglo American
6. Freeport-McMoRan
7. Newmont
8. Teck Resources
9. Norsk Hydro ASA
10. Agnico Eagle Mines

Source: BlackRock World Mining Trust factsheet, May 2024

What are the manager’s latest views?

Writing in the latest factsheet, the managers say that they are excited by the structural demand growth for a range of mined commodities that will result from the low carbon transition.

“We are seeing Brown to Green emerge as a key theme, where mining companies are focusing on reducing the greenhouse gas emissions intensity associated with their production. We expect to see a re-rating for the mining companies able to best navigate this and are playing this in the portfolio.”

Performance

Over the five years to the end of May the trust generated a share price total return of 139.2%, which was well ahead of its benchmark. It has been incredibly volatile though with three of those 12-month periods finishing in the red and there is every chance that the variability will continue, with the net gearing of 12.8% magnifying the potential gains and losses.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. Shares in the trust are listed on the London Stock Exchange and their price is affected by supply and demand. The trust can gain additional exposure to the market, known as gearing, potentially increasing volatility. This fund uses financial derivative instruments for investment purposes, which may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.