JEFF PRESTRIDGE: World Mining Trust’s AGM put wind in my sails

It is a rarity to see the whites of the eyes of those well-paid individuals who look after your investments. It shouldn’t be, but that’s how the investment industry has become. Hesitant.

While it appeals to financial advisors, it leaves us poor souls trying to get all our important investment information from online platforms like Hargreaves Lansdown and Interactive Investor.

Arrogant? A little. Disrespectful? Yes. After all, without our hard-earned cash to take care of, these for-profit investment houses wouldn’t have businesses to run. Customers should always be king.

So it was refreshing last Tuesday to rock out in the London offices of investment giant BlackRock, attend the annual general meeting of investment trust World Mining Trust and listen to the co-managers’ views on the future of commodity prices.

As one of more than 100 shareholders who attended the event, it was a thought-provoking hour and a half. It was like going back to college as Evy Hambro and Olivia Markham shared their thoughts on the trust’s performance in 2022 (pretty good, a 26 percent return on share price) and how it’s likely to fare in the near future go (quite well). We eagerly absorbed what they told us, some took notes – myself included.

I came out of the meeting stronger and more in touch with an investment that was in my Isa pack and was quietly minding its own business (and I ignored it). I’m sure I wasn’t alone, judging by the faces of those around me – full of concentration and all ears.

Hambro and Markham gave a compelling case for investing in commodities. Simply put, their view is that as we move to net zero in 2050, the demand for metals fundamental to achieving that goal will increase.

Everything from copper and nickel (integral in electric cars); cobalt, lithium and graphite (key in solar and wind energy production); to iron ore (essential in making the steel needed to build more and more wind turbines).

Unfortunately, the opening of new mines in Africa and South America will be insufficient to provide enough tonnage of raw materials to meet this growing demand. As a result, the prices of these important commodities will remain high, generating mega profits for mining companies. Investors in these companies, such as World Mining Trust, will benefit greatly from a stream of dividends that they can pass on to shareholders. In the past financial year, the trust paid a dividend of 40 pence. With the shares currently trading at £6.90, that’s an attractive level of income, equivalent to a dividend yield of just under 5.8 per cent.

Most mining companies, say Hambro and Markham, are not heavily indebted, their balance sheets are robust, and their stocks look cheap from a market valuation standpoint. At some point, perhaps when some of these mining companies start decarbonizing their own production processes – ‘brown2green’ – their shares will be revised upwards.

From an investor’s point of view, there is a strong case for commodities. In addition to BlackRock, a number of investment houses, such as Barings and JP Morgan, offer funds that give you exposure.

Yet this is not one. As investors, we should rejoice, but as consumers with a household budget to keep up to date, higher commodity prices will jeopardize our purchasing power – as the things we are told to adhere to in a new green society become increasingly expensive.

Nor should we ignore the threat of raw materials becoming geopolitical “weapons” as China, like China, seeks to seize control of them and force the rest of the world to ransom them.

Hambro and Markham were well worth the rather scary bike ride across London to hear them speak. Other investment funds also offer their asset managers to shareholders during AGMs. So, if you are invited to attend, give them a try. If my experience is anything to go by, it could get your investment juices flowing.

…and inviting small investors is key

One last point about AGMs. Hats off to BlackRock as World Mining Trust managers for writing to ‘nominated’ shareholders like myself inviting us to attend last Tuesday’s meeting.

It is the first time the investment giant has done so, using shareholder information from Hargreaves Lansdown, which holds its clients’ investments in nominee accounts.

The result was a higher-than-usual shareholder turnout and comments from at least three attendees (including myself), who complimented the trust’s board on embracing “small” investors.

Such boldness should be the norm, not the exception – and I trust that other investment funds (and public companies) will follow BlackRock’s lead. My suggestion that the AGM be shown live to shareholders unable to attend in person was met with a lukewarm reception from trust chairman David Cheyne. But his time will come.

Publicly traded investment companies must give investors the feeling that they are wanted. That’s why a ‘Share Your Voice’ campaign spearheaded by Marks & Spencer chairman Archie Norman is gaining momentum.

Share Your Voice, backed by the UK Shareholders’ Association, ShareSoc and the Quoted Companies Alliance, is calling for changes to company law that can reconnect shareholders with the companies they invest in. It’s a wonderful campaign that should support all investors in the UK stock market. You can sign the petition at petition.parliament.uk/petitions/636051.

The voice of Lord Holmes must be heard at banking centres

Lord Holmes of Richmond, a Conservative peer, is a remarkable person. A Paralympic swimmer, he won nine gold medals for Great Britain – six at the 1992 Barcelona Paralympic Games. As Director of Paralympic Integration at the 2012 London Olympics, he was integral to the success of the Games.

His blindness has never stopped him, and since joining the House of Lords in 2013, the 51-year-old has campaigned on issues close to his heart: ensuring legal recognition of British Sign Language and protesting financial exclusion, for example. One of his victories was paving the way for people to get cashback from a local store without having to make a purchase.

On Thursday, Holmes will “put the government on the spot” when he asks Treasury Secretary of Economic Affairs Andrew Griffith to explain why the rollout of banking hubs is excruciatingly slow. Griffith is obligated to respond.

So far, only four puny hubs (community banks, funded by the big banks, run by the post office, and open to customers of all banks) have gotten off the ground.

Yet during the same period, 847 bank branches have been closed or told they are going to close, leaving many communities bankless.

Holmes says this is unacceptable and the rollout of banking hubs urgently needs to be accelerated before irreversible damage is done to the community.

“Local residents and businesses need access to cash,” he told me last week. “They also need a place where they can deposit cash or speak to a bank representative. More pressure needs to be put on the banks to get this banking hub show going.”

I trust Holmes is being listened to – prompting the major banking hub rollout.

It can’t come soon enough.

Time for NS&I to raise the prize money

Some nice Premium Bond holders have reached out to say it’s time for NS&I to raise the prize rate from the current 3.3 percent. It’s hard to disagree with them.

Since the price rate was raised from 3.15 to 3.3 percent in March, the base rate has increased by 0.25 percent — and is likely to rise again when the Monetary Policy Committee meets on May 11.

Such a move would jump-start Dax Harkins’ reign as CEO of NS&I.