10 funds hoping to do well from big stakes in Xstrata

Investors in funds with top 10 positions in Xstrata will hope the mining group's £50 billion merger talks with Glencore lead to a deal.

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by Gavin Lumsden on Feb 02, 2012 at 16:20

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10 funds hoping to do well from big stakes in Xstrata

Many of the funds with top big positions in Xstrata have had a tough 12 months so news that the mining group and its 34% shareholder Glencore International are in merger talks is a welcome development.

Xstrata (XTA.L) shares had fallen over 22% in the past year before today’s announcement but shot up 10% to £12.32 as investors grew excited at the prospect of a £50 billion mining and commodities colossus.

Glencore (GLEN.L) shares gained 5.6% to 456p, making up some of the 17% loss in its share price since it floated on the London Stock Exchange last May. For more details read our market report.

Blackrock, Schroders and Standard Life Investments are among the investment groups benefiting from the rally.

Richard Buxton, the Citywire A-rated manager of Schroder UK Alpha Plus and the Schroder UK Growth investment trust, and Edward Legget, the Citywire AA-rated manager of the Standard Life Investments UK Equity Unconstrained fund, are key holders of Xstrata. Buxton’s top 10 holding has placed Xstrata in the Citywire Top Stocks league table since its launch last September.

Neil Gregson, who is taking over from Citywire AA-rated Ian Henderson on the giant JPM Natural Resources fund, is another leading investor, as is Evy Hambro of BlackRock on the BGF World Mining fund.

Funds with top 10 holdings in Xstrata

Fund	Manager	Top 10 position	% of fund	Date
Standard Life Inv UK Equity Recovery	David Cumming	5	5.18	31/10/2011
Legal & General UK Special Situations	Matt Fletcher	4	4.59	31/10/2011
Standard Life Inv UK Equity Unconstrained**	Edward Legget	3	4.38	31/10/2011
Schroder UK Growth (SDU) investment trust	Richard Buxton	5	4.1	31/12/2011
Standard Life Inv UK Equity High Alpha	Edward Legget	5	3.85	31/10/2011
BGF World Mining Fund	Evy Hambro	7	3.77	30/11/2011
Schroder UK Alpha Plus**	Richard Buxton	6	3.41	30/11/2011
Standard Life Inv Pan European	Iain Galloway	10	2.67	31/10/2011
JPM Natural Resources**	Neil Gregson	2	2.30%	30/11/2011
Cazenove UK Absolute Target	Steven Cordell	5	0.19	30/11/2011

Click on the links in the table to get more information on the funds and managers.
** Funds are recommendations of Citywire Selection. See our Best Investment Funds page for more details.

Background to 'Glen-strata'

Ever since Glencore completed its £10 billion listing in London last May there has been speculation that its 34% stake in Xstrata would lead to a tie-up between the two Swiss-based businesses.

Xstrata is the world's fourth largest diversified mining group. Adding its array of coal, copper, nickel and zinc mines would complement Glencore's strength in trading metals, minerals and oil.

However, because there is little overlap in their operations Xstrata chief executive Mick Davis and his Glencore counterpart Ivan Glasenberg are negotiating an all-share 'merger of equals'. Although there are efficiencies to be gained in areas like marketing, overall savings may be limited which may curb the extent to which the share prices can rise further.