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The prospects for miners (in a diversified income focused portfolio)

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
billG
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Re: The prospects for miners (in a diversified income focused portfolio)

#428264

Postby billG » July 17th, 2021, 10:47 am

Commodities tend to go through long (multiple year) cycles that do not coincide with equites. For instance in the early 2000 commodities did well whilst equities struggled. This cycle is a bit early according to the chartists and maybe a blip. I sure it will not escaped your notice that BRWM 5Y returns are good but 10Y returns are poor. So perhaps not one for the buy and hold forever types. I assume you have read the available literature on the BRWM website and the annual reports etc. They are bullish - they always are but look at what evidence they cite and see if that chimes with your own experience/observations.

BRWM is 3% of my portfolio with a nice yield. I am happy with that level of risk and hope to sell when/if the performance turns south but I maybe fooling myself because the timing is not always easy.

Good luck.
BillG

tjh290633
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Re: The prospects for miners (in a diversified income focused portfolio)

#428271

Postby tjh290633 » July 17th, 2021, 11:24 am

billG wrote:Commodities tend to go through long (multiple year) cycles that do not coincide with equites. For instance in the early 2000 commodities did well whilst equities struggled.

You stimulated me to compare two of my funds - JP Morgan Natural Resources (held since 1970 when it was Ebor Commodity) and M&G Dividend (held since 1975).

Up ro about 1982 they were essentially parallel on a log-linear chart, then Dividend grew ahead until about 1992, in 1996 Commodity fell back, but resumed upward growth in 1999, and Dividend Fund stayed roughly level by comparison, with minima in 2004 and 2009. Meanwhile Commodity surged ahead until 2008, sank back to that minimum in 2009, and rose to a peak in 2011. Fell to another minimum in 2015 then rose again to its current high point.

Absolute values are not easy to compare, because of various changes along the way, but the slopes of the log/linear curves tell us a lot.

TJH

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Re: The prospects for miners (in a diversified income focused portfolio)

#509121

Postby richfool » June 23rd, 2022, 10:17 pm

These are dropping back nicely. Whist I offloaded small holdings of BRWM and CYN a couple of months back, I hung onto BERI, where my gain has been knocked back from 100% to 50%.

Is it time to take (buy) a little of BRWM or even RIO or BHP? .. RIO currently offers a juicy yield, c11.7%.

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Re: The prospects for miners (in a diversified income focused portfolio)

#509125

Postby BullDog » June 23rd, 2022, 10:43 pm

richfool wrote:These are dropping back nicely. Whist I offloaded small holdings of BRWM and CYN a couple of months back, I hung onto BERI, where my gain has been knocked back from 100% to 50%.

Is it time to take (buy) a little of BRWM or even RIO or BHP? .. RIO currently offers a juicy yield, c11.7%.

Near term we might have seen the market top for miners? Recession looks baked in around the world so demand for commodities could have peaked until the outlook improves. By a remarkable coincidence I sold out of BERI at what turned out to be very close to the top by a penny or two. Naturally, I dived in at just the wrong time reinvesting the proceeds, but such is life.

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Re: The prospects for miners (in a diversified income focused portfolio)

#509166

Postby 77ss » June 24th, 2022, 9:20 am

richfool wrote:These are dropping back nicely. Whist I offloaded small holdings of BRWM and CYN a couple of months back, I hung onto BERI, where my gain has been knocked back from 100% to 50%.

Is it time to take (buy) a little of BRWM or even RIO or BHP? .. RIO currently offers a juicy yield, c11.7%.


At about 11%, miners form the largest single sector of my holdings (BRWM, RIO, BHP) and delivered 26% of my dividend income, so I am loth to add, but.....

I top-sliced BRWM and RIO earlier this year, since when the share prices have fallen by about 17% and 20%. More falls to come? Very probably, but I am tempted to start making modest top-ups of RIO - as surplus cash (a seriously wasting asset) comes available. Not so sure about BRWM, given its dividend policy.

I don't expect RIO to continue to deliver 11.7%, but even assuming no special and a halving of the ordinary dividend we are still looking at a return of nearly 6%.

tjh290633
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Re: The prospects for miners (in a diversified income focused portfolio)

#509169

Postby tjh290633 » June 24th, 2022, 9:27 am

richfool wrote:These are dropping back nicely. Whist I offloaded small holdings of BRWM and CYN a couple of months back, I hung onto BERI, where my gain has been knocked back from 100% to 50%.

Is it time to take (buy) a little of BRWM or even RIO or BHP? .. RIO currently offers a juicy yield, c11.7%.

The problem is that future dividends on RIO or BHP may be different from those paid in the last year. They could be even higher, of course, but more likely lower.

Both are currently ruled out from my top-ul table because of their high contribution to portfolio income. The current price falls are indicating market sentiment.

TJH

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Re: The prospects for miners (in a diversified income focused portfolio)

#509697

Postby richfool » June 26th, 2022, 10:03 am

BullDog wrote:
richfool wrote:These are dropping back nicely. Whist I offloaded small holdings of BRWM and CYN a couple of months back, I hung onto BERI, where my gain has been knocked back from 100% to 50%.

Is it time to take (buy) a little of BRWM or even RIO or BHP? .. RIO currently offers a juicy yield, c11.7%.

Near term we might have seen the market top for miners? Recession looks baked in around the world so demand for commodities could have peaked until the outlook improves. By a remarkable coincidence I sold out of BERI at what turned out to be very close to the top by a penny or two. Naturally, I dived in at just the wrong time reinvesting the proceeds, but such is life.



I generally stick to IT's to gain my exposure/diversification, but had pondered RIO or BHP because they were diversified miners and had particularly high yields. But then that diversification is only amongst miners, whereas holding a UK G&I IT, like for example: AEI (holds BHP, RIO and Glencore), or LWDB (holds RIO), - gives exposure to other asset classes besides just miners.

I sometimes make exceptions, if I see a particular theme I would like to pursue, such as seeking to increase my exposure to copper, lithium and gold, which was one of the reasons I had been looking at RIO and BHP as well as BRWM.

I currently only hold BERI, because it gives exposure to both miners and energy.


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