BlackRock World Mining’s results for the year ended 31 December 2015 reflect th poor performance of the mining sector. The fund’s NAV total return was -35.3%, the share price return was -37.0% and the benchmark, the Euromoney Global Mining Index, was down 36.9%. the discount widened from 11.9% to 15.0%. The dividend was maintained at 21p even though earnings fell from 21.1p to 18.5p. The Board says shareholders should expect a lower dividend in 2016 than the previous year though they say their Avanco royalty payment should kick in.
The managers say their small outperformance of the index was due to a range of factors, of which the largest was a core holding in Norilsk Nickel, as well as gold producer Northern Star Resources, whose assets are located in countries where the domestic currency weakened relative to the U.S. dollar. Performance was also helped by avoiding companies that had no plan to escape the prospect of debt issues. These positives were in part offset by the overweight in copper producers, an underweight in the larger gold companies and an underweight in the aluminium producers.
BRWM : BlackRock World Mining warns on dividend