Fund Profile

Disclaimer

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by BlackRock World Mining. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
BRWM is providing the best of both worlds: growth and income…
Overview

BlackRock World Mining (BRWM) is a specialist trust offering exposure to mining and metals companies globally. A number of themes have coalesced in the last couple of years to provide a strong tailwind to the sector. Despite short term volatility, profitability, dividends and sentiment towards mining companies and BRWM have all improved significantly. In our recent meeting with the managers, they expressed their firm opinion that the tailwinds are still entrenched and gave a positive outlook.

Underpinning the positive outlook is the fact that mining and metals groups have exercised strong discipline on their cost structure and capital expenditure programmes. As a result, constrained supply capacity facing up against structural demand has led to elevated commodity prices. This has resulted in improved corporate balance sheets, profitability and impressive dividend pay-outs. In turn, this has resulted in BRWM’s revenues more than doubling over the last financial year and enabled its own annual dividend to surge up by 109%, with a historic dividend yield in excess of 6%.

The increased attention and sentiment that BRWM has gathered has seen its discount to NAV narrow and has occasionally traded at a premium over the last year. BRWM’s Gearing currently stands at 12.1%, according to Morningstar (30/04/2022), and this is within its normal range.

In essence, BRWM offers an actively managed ‘one stop shop’ for investors looking for exposure the global mining and metals industry. In some ways, the managers offer a diversified and nimble ‘virtual’ mining company, with flexibility to quickly shift allocations between commodities depending on their view at the time. This is unlike a standalone mining company which needs to invest significant capex and resources to execute a strategy.

Analyst's View

There are strong long-term structural drivers and market dynamics that potentially underpin the investment case for the mining sector and BRWM, and we share the managers enthusiasm for the outlook. These include the global goal towards decarbonisation and the need to replenish creaking infrastructure in the US, infrastructure projects in Europe to help stimulate economies out of the pandemic effects, and the ongoing development needs of emerging markets such as China.

There is a strong argument that commodities and mining are not just the latest ‘hot’ sector, but one where the long-term upside potential more than counterbalances the downside risks. Going forward, there is a chance the commodity market will be more globally balanced and not as reliant on China. At the same time, mining company balance sheets are in good health, and valuations are far from stretched despite recent strength.

BRWM is a concentrated high conviction Portfolio, and its short-term volatility will be higher than the wider market. However, we believe BRWM is a compelling proposition for investors aligning their portfolios to what we view as long-term growth themes. It also has a strong appeal to investors seeking income. In these times of concern over the cost of living, we are reminded that commodities and mining and stocks have traditionally proven as a good hedge against inflation. We would view a pullback in the sector as an attractive opportunity for a longer-term investment.

Bull

  • Large liquid trust in a specialist sector, using the structure’s flexibility to the full
  • Prospects for attractive dividend yield
  • Structural tailwinds to the investment case look entrenched

Bear

  • Single sector portfolio that is highly cyclical in nature adds volatility
  • Dividend yield (both underlying, and that of the trust) is not progressive
  • Discount has historically been wide, and could quickly return if market sentiment drops
Continue to Portfolio

Fund History

01 Jun 2022 Fund Analysis
BRWM is providing the best of both worlds: growth and income…
11 May 2022 Catch a tiger by the tail
As inflation bites harder than it has for decades, we consider the best ways for investors to hang on to their capital...
29 Apr 2022 Commodities: how the energy transition is changing the sector
Global commitments to net zero are changing the landscape for commodities, says Olivia Markham, Co-Manager of the BlackRock World Mining Trust plc. This creates a strong backdrop for the year ahead...
14 Apr 2022 Has the commodities ship sailed?
The commodities boom may be longer-lasting than you think…
25 Mar 2022 Slides and Audio: BlackRock World Mining
Download the presentation and listen to the audio from our 'Ideas for your ISA' virtual Spring event on 17 March...
23 Mar 2022 Fifteen ideas for your ISA
Slides and audio from our event last week, featuring fund managers running money in every major market in the world...
17 Mar 2022 It's the end of the world as we know it
We examine five potential themes for investors seeking long-term returns in a troubled and uncertain world...
11 Mar 2022 Results analysis: BlackRock World Mining
BRWM reports another strong year, and a dividend increase of 109%...
23 Feb 2022 Regime change
Ahead of our spring conference, we ask whether investors need to junk their portfolios and start again…
29 Sep 2021 Fund Analysis
Tailwinds behind BRWM seem undiminished, yet the shares are back on a discount...
21 Jul 2021 Is there room to run in the commodities cycle?
It has been a bumper time for commodities as the global economy recovers and infrastructure programmes support demand, but - says Olivia Markham, Co-Manager of the BlackRock World Mining Trust plc - there is still plenty of scope for growth...
30 Jun 2021 Inflation – a real threat or hot air?
Two of our analysts ask whether recent high inflation numbers indicate something long-lasting and troubling is happening…
10 Jun 2021 Green is good!
2021 will see billions dedicated to sustainable initiatives, which brings with it a host of possible investment opportunities...
29 Mar 2021 Mining in 2021: the start of a new cycle?
After a good year in 2020, the mining sector is only in the foothills of a new cycle, driven by economic recovery and green infrastructure investment, says Evy Hambro, Co-Manager of the BlackRock World Mining Trust plc.
24 Mar 2021 Shoot to Thrill: ISA targets for long term growth
We all intend to invest for the long-term but can often be distracted by the news...
24 Mar 2021 Gold is money, everything else is on Reddit
Initial winners in the COVID-19 crisis, gold bullion and gold miners pulled back over H2 2020. Is now an opportune moment to build exposure?
12 Mar 2021 Results analysis: BlackRock World Mining
BRWM has delivered strong returns and could continue to do so given the number of tailwinds behind the strategy……
11 Mar 2021 Slides and Audio: BlackRock World Mining
Download the presentation and listen to the audio from our 'Ideas for your ISA' Spring Conference on 03 March...
10 Mar 2021 Spring Conference '21
Audio and presentations from 21 of the UK’s leading investment trust managers…
10 Feb 2021 Fund Analysis
BRWM is exposed to several powerful themes, and the discount has narrowed decisively…
10 Feb 2021 Eye of the Pfizer
Mining shares have rallied in recent months. With further potential, what impact could this have on the relative returns of active UK Small cap strategies...
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
06 Jan 2021 This time next year Rodney...
We review the performance of the team’s ‘top picks’ for 2020 – including some proper plonkers – and place our bets for the year ahead…
09 Dec 2020 A bumper harvest?
Agricultural and industrial commodities have rallied strongly, but what are the implications for emerging market allocations...?
11 Nov 2020 Rebuilding after COVID-19: the role of the mining sector
We hear from Olivia Markham, Co-Manager, on how significant budgets from governments worldwide are allocating to infrastructure and a greener economy in the wake of COVID-19 and what this could mean for BlackRock World Mining Trust...
29 Oct 2020 Fund Analysis
BRWM offers a unique exposure to themes which look increasingly attractive, on a discount of 11%...
24 Sep 2020 Bull in the Chinese market?
The Chinese stock market has been a notable winner thus far in 2020. Should investors stay the course, or take profits?
26 Aug 2020 Trump v. Biden
Two of our analysts debate who will win the US election and what that means for markets…
19 Aug 2020 Has the time come for Europe?
With mutual eurozone debt established all eyes are on the continent once more; but what will drive relative returns?
29 Jul 2020 To be, or not to be (geared), that is the question
Gearing is part of the toolkit that trusts use to outperform OEICs. But how is it best implemented?...
22 Jul 2020 A game of four quarters
Seven trusts, two quarters. Are our team still happy with their trust picks for 2020?
01 Jul 2020 Oh the humanity...
We consider two strategies to cope with markets which, boosted by massive government support, may be witnessing the start of a ‘melt-up’ which may be followed swiftly by a melt-down...
02 Jun 2020 Mining: resilience in a crisis
The fortunes of the mining sector are often associated with economic growth but on the BlackRock World Mining Trust plc, we believe the inherent strength of mining companies has been widely underestimated...
27 May 2020 Fund Analysis
This veteran commodities trust has sharply increased exposure to gold and is trading on a wide discount...
29 Apr 2020 On solid ground
Our analysis of discounts highlights trusts which are likely to offer significantly less discount downside from the current level…
25 Mar 2020 Of mice and men
Our ‘best laid plans’ have somewhat ‘gang aglay’ since the KTI team put forward its best ideas for 2020 in early January…
02 Jan 2020 Crystal Balls
Drunk on our success in choosing funds to perform well in 2019, the team at Kepler Trust Intelligence is back at the table with a glint in its eye…
13 Nov 2019 Global megatrends and mining
30 Oct 2019 All that glitters? The case for and against gold
Two of our analysts go head-to-head, debating whether gold is the ultimate safe haven asset...
23 Oct 2019 Fund Analysis
BRWM's wide discount to NAV, in an already under-owned sector, could offer potential for a rerating...
16 Oct 2019 Life on Mars: could inflation take us back to the '70s?
We discuss two potential catalysts for inflation - and the assets that could offer a hedge against it...
04 Jun 2019 Fund Analysis
BRWM provides a diversified investment in mining and metal assets worldwide, actively managed with the objective of maximising total returns...
19 Mar 2019 Electric Dreams: The future of energy
At our first public event, three fund managers gave their insights on the future of energy and the investment opportunities in this space...
02 Jan 2019 Can metals be made to shine?
The team at BlackRock World Mining say lessons have been learned from the recent downturn, and highlight opportunities they see in the sector...
02 Jan 2019 Olivia Markham: The case for energy
Confidence is returning to the energy sector, says portfolio manager Olivia Markham, while mining may not have reached its peak...
24 Dec 2018 Why did the chicken cross the road?
Because he was so bored of reading newspapers devoted entirely to Brexit he was hoping he’d be hit by a truck.
05 Dec 2018 Surf's up
As rough markets drive share price volatility up, we use a proprietary statistical technique to highlight trusts which are on unusually wide discounts...
26 Nov 2018 Fund Analysis
Celebrating its 25th anniversary this year, the team has demonstrated a strong track-record and is now one of the most experienced specialist teams globally
05 Apr 2018 The search for discounted yield
We scour the investment trust universe for trusts offering chunky yields on a discount...
04 Apr 2018 Electric dreams
We examine the growing shift toward electrical power across a broad range of industries, and the implications for investment trusts with exposure to them...
29 Mar 2018 Fund Analysis
2017 represented a return to outperformance for the managers, as well as marking another very strong performance in absolute terms
12 Mar 2018 Fund Analysis
2017 represented a return to outperformance for the managers of this well known commodities focused trust...
06 Jun 2017 Fund Analysis
A commodity focused investment trust that has undergone a difficult period but the managers have done much in terms of rebuilding the portfolio...
View all

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