Natural Resources The new era has begun

Transcription

1 Natural Resources The new era has begun Catherine Raw, Portfolio Manager BlackRock Natural Resources, London 11 & 12 September 2014

2 Natural resources not just a nice to have allocation Demand for natural resources is growing not all supply is equal Global economic growth +3.8% per year Iron ore cost of supply US$/t (CIF China equivalent basis) Urbanisation Mechanisation Consumption 80 Commodities: Iron ore +8% pa Copper +2% pa Commodities: Crude oil +1% pa Nat. gas +3% pa Commodities: Corn +4% pa Wheat +1% pa Used in: construction of buildings and infrastructure Used in: fuel in growing vehicle ownership, heating and trade Used in: inputs for increasing sophistication of food demand 20 0 Production volume (2013) 10 year average growth rates Rio Tinto, Australia Chinese domestic producers Companies with superior access to resources are able to add value and deliver strong returns Source: BlackRock, BAML November 2013 Source: BlackRock, Macquarie November

3 The sector is changing Investors typically think of Natural Resources as just one sector True when accelerating demand growth was driven by China and Emerging Markets alone Not the case any more Performance of individual sectors within Natural Resources and DJ UBS Commodities Index over last decade 500 China Effect 450 Rebased to Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 MSCI World Energy Gross TR DAX Global Agribusiness Gross TR Euromoney Global Mining Gross TR DJ UBS Commodity Index TR Source: Thomson Reuters Datastream 1 September

4 What might it look like in the future? At this point in the cycle, a more selective approach needed to take advantage of multiple themes across the Natural Resources Sector Entering a period of more balanced growth, with all major commodity-consuming regions seeing positive economic growth Supply side environment has moved back into balance for many commodities, leading to range-bound commodity prices Potential for supply deficits to reappear in coming years increasing as capital discipline by mining and energy industry has reduced supply-side growth expectations Post China-effect, subsectors driven by different factors Dec 12 Apr 13 Aug 13 Dec 13 Apr 14 MSCI World Energy Gross TR DAX Global Agribusiness Gross TR Euromoney Global Mining Gross TR DJ UBS Commodity Index TR Source: Thomson Reuters Datastream to 1 September

5 Creating value whatever the commodity price Shareholder returns are not necessarily determined by commodity price movements Having lagged broader equity markets, and with operational improvements coming through, the sector is a compelling investment opportunity today Case study Exxon Relative valuations are attractive 8% 10 year annualised returns +25% Exxon s share price Dividend yield 6% 4% 2% 0% Jul 04 Jul 06 Jul 08 Jul 10 Jul 12 Jul 14 Integrateds Miners MSCI Europe 0% -10% 0% +10% +20% Crude oil price -25% EV/EBITDA Multiple Jul-04 Jul-06 Jul-08 Jul-10 Jul-12 Jul-14 Source: Bloomberg, end-november Monthly rolling data from 1982 to Returns are in USD. Equity - total return, gross dividends reinvested. Commodity returns are gross of storage/roll costs. Source: Bernstein, as at end July

6 Stability returning to the mining sector Our view on the mining sector in December 2013 Our view on the mining sector in September 2014 New management delivering New management delivering Demand outpacing estimates Demand outpacing estimates No more writedowns No more writedowns Earnings stable to up Earnings stable to up No Major M&A No Major M&A Asset Sales Asset Sales Balance sheets improving Balance sheets improving New interest in the sector New interest in the sector We are in a transition phase Source: BlackRock, indicative only and not reflective of historical return data or future return projections. 6

7 Commodity price outlook range bound for now Iron ore supply costs to Chinese market Copper inventories drawing down Current spot price Price in US$ / lbs Mar-91 Mar-95 Mar-99 Mar-03 Mar-07 Mar Inventory stocks in weeks Weeks of Consumption (RHS) Price (LHS) Nickel supply should the Indonesian ban remain Zinc potential deficit by Surplus 35,000 25,000 kt Zn Probable B Projects Probable A Projects Possible Mine Life Extensions Base Case Production Capability Requirement for Zinc Mine Production , Deficit 5, f 2016f 2018f 2000 Supply/demand balance LHS Nickel Price (U$/mt) RHS Wood Mackenzie Estimates Sources: Clockwise from top left: Macquarie December UBS and Thomson Reuters Datastream Latest data 2Q Wood Mackenzie April 2014, Macquarie Research, April

8 Rising free cash flow in the mining sector Our view: Reductions in capex and costs have led to expectations of rising Free Cash Flow (FCF) Acquisitions declining, asset disposals increasing Rising Operating Cash Flows Positive for investor interest and shareholder returns Should drive a re-rating of the mining sector Rio Tinto and BHP Billiton are expected to deliver improving Free Cash Flows and strong dividends Positive net Cash Flow position for 2014 and 2015 Free Cash Flow and dividend yield for mining sector OpCF Growth Capex Maintenance Capex Acquisition/(Disposal) Dividend Buyback FCF yield (%) Dividend yield (%) Source: Exane BNP Paribas Company estimates covering AngloAmerican, BHP Biliton, GlencoreXstrata, Rio Tinto, Antofagasta, Boliden, Eramet, First Quantum, Imerys, Kazakhmys, Lonmin, NWR, Norsk, Nystar 2014 and 2015 estimate data. All as at February Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. For professional clients only/qualified investors only 8

9 Investment demand Total Gold ETF Holdings Speculative net length has fallen Millions Ounces QE-related demand Net Length (ounces, millions) Jan-2011 Jan-2012 Jan-2013 Jan-2014 Gold Net Length (LHS) Net annual move in gold ETF holdings (tonnes) ,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 US$/ounce Gold Price (RHS) Source: UBS. Data as at 15 August 2014 Source: Top - COTR and UBS, 12 August Bottom ETF Issuers, UBS, 25 July For professional clients only/qualified investors only 9

10 Costs and capex in the gold industry coming down sharply Industry cost of gold production Analyst consensus forecasts for the gold price US$/oz $1,400 $1,200 $1,000 $800 $600 Sustaining capital Other G&A Exploration Operating e 2015e 2016e 2017e Jan-12 Jul-13 Spot Price as at 15/08/2014 Jul-12 Jun-14 EV/EBITDA gold sector versus base metal sector $400 $200 $ E Trailing EBITDA Multiples 30x 25x 20x 15x 10x 5x 0x Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 EV To EBITDA Base Metals EV To EBITDA Golds Source: TD Securities, May 2014 Source: Top, Bloomberg 30 June 2014, Bottom, CIBC, 8 August For professional clients only/qualified investors only 10

11 Portfolio Themes Growth in a constrained market World Discovery Trends Over the past 20 years the number of large gold discoveries has been falling Millions of Ounces Primarily Gold Only Copper Gold Porphyry # - Discoveries In The Year Randgold Resources has a robust growth profile Randgold Resources increased production by 15% in 2013 (Source: Randgold Resources, April 2014) Randgold Resources GFMS Global Mine Production Forecast (Tonnes) Scenario B Scenario C Base Case 1,400 1,200 1, % E 2015E 2016E Annual Gold Mine Production (000 tonnes) Forecasted Annual Gold Mine Production (tonnes) Source: Top-Left: CIBC, as at May Bottom left: GFMS, April base case scenario assumes a gold price of $980/oz until 2016, before increasing to $1620/oz by the end of the forecast. Scenario B is the high GDP growth scenario and assumes prices will remain above $1,300/oz. Scenario C assumes a slower economic recovery and assumes a gold price fall to $900/oz by 2016, but then due to weaker mine production a stronger price recovery. Bottom-right: Bloomberg, December Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. For professional clients only/qualified investors only 11

12 Portfolio Themes Showcasing our main silver holdings BlackRock Gold and General Fund FTSE Gold Mines Index Gold 100.0% Gold 71.5% Silver 14.3% Other 14.2% Fresnillo Tahoe Resources US Millions World s largest primary silver producer Operates within the lowest cost quartile of silver producers Attractive margins at current silver prices Robust Profit Margins 2,500 2,000 1,500 1, Revenues Cost of Sales Silver Equivalent Ounces Produced (Millions) Escobal Mine is Tahoe Resources key asset Tahoe Resources has a strong production profile Escobal 18 Year Minelife Total Cash Cost per silver Oz (net of byproducts) Source: Top charts: BlackRock Internal, as at end July Bottom-left chart: Fresnillo interactive factsheet, April Bottom-right chart: Preliminary Economic Assessment May 2012 by M3 Engineering/Tucson, Arizona based on Ag $25.00, Au $1,300, Pb $0.95, Zn %0.90. Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. For professional clients only/qualified investors only 12

13 Portfolio Themes Backing new management Barrick Gold Corporation Mr. John Thornton Became Executive Chairman of Barrick Gold Corporation on 30 April 2014 AngloGold Ashanti Mr. Srinivasan Venkatakrishnan Appointed CEO of AngloGold on 8 May 2013 $ millions E AngloGold Annual Production, oz Minesite Sustaining 2,418 2,000 2,200 Minesite expansion Projects 2, Capex 5,000 2,400 2,700 De-levered balance sheet with $3.0bn equity offering 3,000 Improving costs Total value of asset sales in 2013 = $522mn (cash) + $179mn (royalty and stock) Reduced costs by ~$2.0bn in ,000 1,000 1,089 1,157 1,254 1,551 1,275 1,302 1,155 1,015 Completion of further asset sales in Q1, 2012 Q2, 2012 Q3, 2012 Q4, 2012 Q1, 2013 Q2, 2013 Q3, 2013 Q4, 2013 All-in-sustaining costs $/oz Total cash costs $/oz Source: Barrick, 2 April 2014 Source: AngloGold Ashanti, BMO Conference Presentation, 25 February 2014 Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies. For professional clients only/qualified investors only 13

14 Beta s back Gold equities have not offered the leverage to the gold price investors desired in recent years. Why? Cost inflation Poor capital allocation Loss of investor trust Physically backed gold ETFs as an alternative Given a lower gold price, companies are more leveraged to moves in bullion and their beta has returned Beta of gold equities to gold bullion 2011 Beta of gold equities to gold bullion YTD to 12 August % y = x % y = x % R² = % R² = % 0% -5% -5% -10% -10% -15% -15% -10% -5% 0% 5% 10% -15% -15% -10% -5% 0% 5% 10% Source: Thomson Reuters Datastream. Data points indicate weekly returns of the FTSE Gold Mines Index and gold bullion. R squared is a statistical measure that represents the percentage of the FTSE Gold Mines Index movements that can be explained by movements in gold bullion. The circled figures relate to the gradients of the trend lines and are therefore measures of the sensitivity of gold equity returns to gold bullion returns over each period. The higher the gradient, the greater the sensitivity. For professional clients only/qualified investors only 14

15 BlackRock Natural Resources Growth & Income Range of single sector funds with long track records and a Natural Resources Fund that allocates between sectors Experienced and stable team Investment philosophy, research process and risk management that are consistent across all funds BlackRock Natural Resources Funds Mining Energy Agriculture BFM World Mining Trust BFM Gold & General BGF World Energy BGF New Energy BGF World Agriculture BlackRock Natural Resources Growth & Income Evy Hambro Catherine Raw Olivia Markham Tom Holl Hannah Gray Robin Batchelor Poppy Allonby Alastair Bishop Joshua Freedman Desmond Cheung Piers Holden 15

16 BlackRock Natural Resources Growth & Income The Fund offers A flexible approach that enables the PMs to invest across the Natural Resources Sector A concentrated portfolio of high conviction equity holdings with a target of maximising total return Income from equity dividends and a covered-call writing strategy Launch Date Fund Managers Catherine Raw, Desmond Cheung, Joshua Freedman, Tom Holl Benchmark S&P Global Natural Resources Index Energy Sector Mining Sector AUM 1 Fund: 14million Strategy: 403 million Target Maximise total return with a higher than average income distribution Vehicle Agriculture Sector Open Ended Unit Trust # of holdings 1 52 An attractive combination of Growth and Income 1 Source: BlackRock, as at end July

17 Sector allocation BlackRock Natural Resources Growth & Income Drivers of allocation decision Outlook on commodity prices Valuation & yields Stock specific opportunities 25% 20% 15% Sector allocation through time overweights and underweights Mining Energy Agriculture 10% 5% 0% -5% -10% -15% -20% -25% Source: BlackRock, as at the end July Data shows active positioning versus BM as a percentage of NAV 17

18 Strong performance vs. peer group The BlackRock Natural Resources Growth & Income Fund does not have a comparable peer group of UK domiciled funds, therefore the BGF Fund and its peer group is shown here Why we believe the approach has been successful We look for quality assets, with proven management teams We actively manage the allocation between Energy, Mining and Agriculture according to the team s macro views Source: Morningstar Direct. The Peer group is formed of the top 5 Natural Resources funds by AUM in the Morningstar universe. As at end July Performance data shown is Total Return, in USD, net of fees 18

19 Summary What? The Natural Resources sector has changed Requires a more selective approach and asset allocation is key Why? As the Chinese economy matures, different themes are coming to the fore No longer a single overriding theme driving the performance of the sector We offer world class exposure through our single sector funds How? Or let us do it for you, leveraging our individual sector expertise to asset allocate via BlackRock Natural Resources Growth & Income 19

20 Appendix

21 BlackRock Natural Resources Growth and Income: Performance 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% Performance, Total Return (net of fees, in GBP) -12% BFM Natural Resources Growth & Income S&P Natural Resources Index Aug-14 YTD 1 year 2 years (Cumulative) Since Inception (Cumulative) 0.7% 5.4% 4.5% 3.4% -1.8% 0.1% 3.3% 4.1% 3.3% -3.0% Source: BlackRock internal, as at end August YTD to end August

22 BlackRock World Mining Trust Performance 10 Year Performance of BRWM Share Price, NAV and Benchmark Aug 04 Aug 05 Aug 06 Aug 07 Aug 08 Aug 09 Aug 10 Aug 11 Aug 12 Aug 13 Aug 14 Share Price NAV Euromoney Global Mining Index Source: DataStream. Weekly Data to 19 th August Annual performance data, including year-to-date performance GBP YTD Share Price (total return) Undiluted NAV (total return) Euromoney Global Mining (total return) 9.8% -17.5% -4.1% -21.5% 48.6% 117.5% -62.7% 52.8% 29.6% 61.5% 6.8% 77.2% 7.4% -24.7% -4.8% -22.3% 46.3% 100.4% -58.0% 57.2% 32.9% 63.0% 3.8% 61.2% 9.5% -24.1% -2.4% -27.0% 35.6% 83.2% -42.1% 54.4% 21.8% 58.6% 4.4% 52.1% Source: Internal, Performance net of fees with income reinvested. YTD performance to end July

23 BlackRock Gold and General Fund: Performance Launched in 1988 AUM of U$ 2.0bn (GBP 1.2bn) Open Ended Unit Trust Gold rated- Morningstar/ OBSR Aug-99 Aug-00 Aug-01 Aug-02 Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14 GBP Aug 2014 BlackRock Gold & General FTSE Gold Mines Index Gold Bullion Source: DataStream, as at 29/08/14, rebased to 100 over 15 years YTD BlackRock Gold and General FTSE Gold Mines Index Gold Bullion (sterling terms) Source: Internal BlackRock and Thomson Reuters Datastream. Net performance on a NAV pricing basis in percent and in sterling terms. Source for gold bullion performance: Datastream. AUM as at 25/08/14. YTD performance to 31/08/14 23

24 Investment theme Energy Investing in companies whose returns are not just dependent on rising oil prices Valuation anomalies exist across many energy sub-sectors Southwestern Energy Exxon Mobil The Fayetteville shale Dividends per share $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 SouthWestern is a US natural gas producer with 900,000 acre in the core of the Fayetteville shale Prime acreage within the Fayetteville means that the company is one of the lowest cost natural gas producers in the world $ Over 30 years of continuous dividend increases Attractively valued on sum-of parts basis 2013 Source: Washington Post, 2012 Source: Bloomberg, December 2013 Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies 24

25 Investment theme Agriculture Market dynamics driven by demographic shifts rather than economic growth Improving profitability will drive supply-side response Invest in companies providing goods and services Bunge Monsanto Million metric tons Brazil, Soybean net exports Exposure to growth in volume of soft commodity trading Bunge holds unique position in Brazilian origination & export infrastructure Global corn production (billion bushels) Agriculture Mega-Trends: Increasing demand requires sustainable yield improvements across all regions 1 Global corn production increase Ex-production growth by region ( ) International corn production U.S. corn production Production Demand Demand growth has outpaced supply s decreasing ending stocks by approximately 600 million bushels in five years Global corn production (billion bushels) Global leader in plant biotechnology and crop protection chemicals Well positioned for global product penetration Corn production increases /30 production growth split acres vs yield 80/20 production growth split int l vs U.S. Global corn production increase Ex-yield vs acres ( ) Demand Opportunity Demand is increasing it is structural and driven by population, income, and protein demand Fewer new acres available to meet the increasing demand Focus will be on improved productivity per acre globally Source: USDA, February 2013 Source: BMO, as at 1 May 2013 Reference to the names of each company mentioned in this communications is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies 25

26 Important Notes BlackRock Natural Resources Growth & Income The following notes should be read in conjunction with the attached document: Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: Registered in England No For your protection telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. Changes in the rates of exchange between currencies may cause the value of investments to go up and down. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time. The fund can invest in mining shares which typically experience above average volatility when compared to other investments. Trends which occur within the general equity market may not be mirrored within mining securities. Investors in this Fund should understand that capital growth is not a priority and values may fluctuate and the level of income may vary from time to time and is not guaranteed. The fund may make distributions from capital as well as income or pursue certain investment strategies in order to generate income. Whilst this might allow more income to be distributed, it may also have the effect of reducing capital and the potential for long-term capital growth. Compared to more established economies, the value of investments in developing Emerging Markets may be subject to greater volatility due to differences in generally accepted accounting principles or from economic or political instability. The fund may invest in smaller company shares which can be more unpredictable and less liquid than those of larger company shares. The fund utilises derivatives as part of its investment strategy. Compared to a fund which only invests in traditional instruments such as stocks and bonds, derivatives are potentially subject to a higher level of risk and volatility. The use of covered call options in the fund will usually provide some limited protection to investors when stockmarkets are falling, but may also result in a lower return in a rising market, when compared to the benchmark The fund invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. The fund invests in a limited number of market sectors. Compared to investments which spread investment risk through investing in a variety of sectors, share price movements may have a greater effect on the overall value of this fund. Unless indicated the fund information displayed only provides summary information. Investment should be made on the basis of the relevant booklet together with the Prospectus and Key Investor Information Document, which are available from the Manager. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock Group funds and has not been prepared in connection with any such offer. Subject to the express requirements of any client-specific investment management agreement or provisions relating to the management of a fund, we will not provide notice of any changes to our personnel, structure, policies, process, objectives or, without limitation, any other matter contained in this document. Unless otherwise specified, all information contained in this document is current as at the date on the front page of this presentation. No part of this material may be reproduced, stored in retrieval system or transmitted in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written consent of BlackRock BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, ishares, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, and BUILT FOR THESE TIMES are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. THIS MATERIAL IS FOR DISTRIBUTION TO PROFESSIONAL CLIENTS AND SHOULD NOT BE RELIED UPON BY ANY OTHER PERSONS. For professional clients only/qualified investors only 26

27 Important Notes BlackRock World Mining Trust The following notes should be read in conjunction with the attached document: BlackRock have not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the Key Features document, current Shareholder circular and the Annual and Half Yearly Reports {for more information where you can find a full explanation of these type of investment techniques} which details more information about the risk profile of the investment. We recommend you seek independent professional advice prior to investing. The Trust can invest in mining shares which typically experience above average volatility when compared to other investments. Trends which occur within the general equity market may not be mirrored within mining securities. The Trust invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall. Net Asset Value (NAV) performance is not the same as share price performance, and shareholders may realise returns that are lower or higher than NAV performance. Compared to more established economies, the value of investments in developing Emerging Markets may be subject to greater volatility due to differences in generally accepted accounting principles or from economic or political instability. The BlackRock Investment Trusts ISA are managed by BlackRock Investment Management (UK) Limited. The BlackRock Investment Trusts Savings Plan is operated by BlackRock Investment Management (UK) Limited. All the trusts are traded on the London Stock Exchange and dealing may only be through a member of the Exchange. The Trust has appointed BlackRock Investment Management (UK) Limited as Investment Manager. It will not invest more than 15% of its gross assets in other listed investment trusts. SEDOL is a trademark of the London Stock Exchange plc and is used under licence. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. Changes in the rates of exchange between currencies may cause the value of investments to go up and down. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of July 2014 and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Any investments named within this material may not necessarily be held in any accounts managed by BlackRock. Reliance upon information in this material is at the sole discretion of the reader BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, ishares, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, and BUILT FOR THESE TIMES are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. For professional clients only/qualified investors only 27

28 Important Notes BlackRock Gold & General The following notes should be read in conjunction with the attached document: Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: Registered in England No For your protection telephone calls are usually recorded. BlackRock is a trading name of BlackRock Investment Management (UK) Limited. Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed. Changes in the rates of exchange between currencies may cause the value of investments to go up and down. Fluctuation may be particularly marked in the case of a higher volatility fund and the value of an investment may fall suddenly and substantially. Levels and basis of taxation may change from time to time. The fund can invest in mining shares which typically experience above average volatility when compared to other investments. Trends which occur within the general equity market may not be mirrored within mining securities. The fund invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. The fund invests in a limited number of market sectors. Compared to investments which spread investment risk through investing in a variety of sectors, share price movements may have a greater effect on the overall value of this fund. Unless indicated the fund information displayed only provides summary information. Investment should be made on the basis of the relevant booklet together with the Prospectus and Key Investor Information Document, which are available from the Manager. Any research in this document has been procured and may have been acted on by BlackRock for its own purpose. The results of such research are being made available only incidentally. The views expressed do not constitute investment or any other advice and are subject to change. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. This document is for information purposes only and does not constitute an offer or invitation to anyone to invest in any BlackRock Group funds and has not been prepared in connection with any such offer. Subject to the express requirements of any client-specific investment management agreement or provisions relating to the management of a fund, we will not provide notice of any changes to our personnel, structure, policies, process, objectives or, without limitation, any other matter contained in this document. Unless otherwise specified, all information contained in this document is current as at the date on the front page of this presentation. No part of this material may be reproduced, stored in retrieval system or transmitted in any form or by any means, electronic, mechanical, recording or otherwise, without the prior written consent of BlackRock BlackRock, Inc. All Rights reserved. BLACKROCK, BLACKROCK SOLUTIONS, ishares, SO WHAT DO I DO WITH MY MONEY, INVESTING FOR A NEW WORLD, and BUILT FOR THESE TIMES are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners. THIS MATERIAL IS FOR DISTRIBUTION TO PROFESSIONAL CLIENTS AND SHOULD NOT BE RELIED UPON BY ANY OTHER PERSONS. For professional clients only/qualified investors only 28

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