BlackRock World Mining Trust looks to gain from China 'soft landing'

Latin American exposure boosted

The manager said the trust’s recent increase in its Latin American exposure was mainly on the back of outperformance by its holdings in the region.

Its combined position in Mexican miners Fresnillo and Peñoles was an ‘excellent performer’, Raw noted. The trust was now beginning to trim those holdings to stop the trust becoming too concentrated.

In the five years to 31 December, 2011, BlackRock World Mining Trust has given total returns of 49.9%, against a return of 62.1% by its benchmark, HSBC Global Mining index. But in the three years to the end of last year, the trust returned a huge 158%, versus 62.1% by the index.

Citywire Selection verdict:

Evy Hambro has run this strategy for many years and with great success. When commodities do well, this trust will handsomely outperform, and despite giving back some gains in 2011 it has still returned more than 150% over the past three years – nearly triple the world mining benchmark. The discount on this trust may seem attractive, but historically it does trade at around 15% less than the value of its assets.