Investing in gold, mining and precious metal stocks, we’ve been fans of the £1.5bn BlackRock Gold & General Fund here at MoneyWeek for some time. Up 123% over five years, it’s easy to see why. But should you hold on to your position in it now that its manager of ten years, Graham Birch, is leaving for a 12-month sabbatical?
We’d cautiously say yes. Birch’s replacement, Evy Hambro, is hardly inexperienced – he’s part of BlackRock’s 14-strong natural resources team, managing $20bn worldwide. And he has run BlackRock’s offshore World Gold fund alongside Birch for some time.
So although “it is always a little disappointing when a good fund manager takes time out of the industry, we feel confident that BlackRock’s team can continue to do a good job for investors in Mr Birch’s absence”, said Stuart Goodwin at Hargreaves Lansdown.
The gold price is currently hovering below $900 an ounce, but Hambro thinks it will rise sharply. Production problems mean demand for gold, which is rising among nervous investors looking for hard currency, won’t be met. He tells The Daily Telegraph: “Gold production fell last year and may fall further in 2009. This is partly due to the lack of exploration success by the gold mining industry, which discovered 15 million ounces last year, compared with production of 80 million ounces.”
As continued fears over the world’s paper currencies and the state of the economy push the price of gold higher, gold miners, which remain cheap compared with bullion, should take off.
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BlackRock Gold & General Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Newcrest Mining | 7.9 |
| Newmont Mining Corporation | 7.7 |
| Kinross Gold Corporation | 7.6 |
| Lihir Gold | 5.1 |
| Goldcorp Inc | 4.5 |
| Randgold Resources | 4.5 |
| Compania de Minas Buenaventura SA | 4.4 |
| Gold Fields | 4.4 |
| Barrick Gold Corp | 3.8 |
| Fresnillo Plc | 3.8 |