We think the BlackRock Gold & General fund is a high-quality way to invest in gold-related equities in a risk-controlled manner.
Evy Hambro has been fund manager since Jan 2010, when he was appointed alongside team head Dr Graham Birch in advance of the latter’s sabbatical and subsequent departure from the group. He therefore brings a wealth of experience to this fund and has proved over time that he is a talented portfolio manager who further benefits from the deep, talented natural resources team that he has helped build over time. In running this fund Hambro benefits from the support from Catherine Raw, whom we rate highly.
The manager continues to apply the controlled process that was in place before Birch’s departure. The long-term record indicates Hambro has been successful in adding value by applying the outcome of the team’s detailed commodity and company analysis in a risk- and liquidity-aware manner. At the company level, the valuation analysis is rigorous and aims to find companies offering the best exposure to commodity prices within an acceptable level of risk.
In practice, this leads to an emphasis on larger producers with the ability to grow their production in a relatively low-cost manner. In terms of the fund’s size, the negative sentiment towards gold securities has resulted in the fund’s assets under management falling from £3 billion in 2012 to £1 billion by the end of 2013, though the fund remains one of the largest amongst its peers.
The strong performance is evident through a track record that was substantially ahead of the FTSE Gold Mines benchmark and the Morningstar Sector Equity Precious Metals Category through Hambro’s tenure to the end of Jan 2014. The fund is not overly expensive either, its TER is in line with the category median. We believe it is one of the best offerings available for those seeking mainstream gold and precious metals equity exposure; it therefore retains its Gold rating.
