'The energy transition will need more commodities than we think'

Inflation is falling and the outlook for global growth is slowing, which does not usually pan out well for natural resources. But there are other factors at play: investors are still underestimating just how many commodities will be necessary to the energy transition, argues Olivia Markham, co-manager of the BlackRock World Mining Trust (BRWM). “While the markets have understood the growth opportunity in the renewables and electric vehicle (EV) space, they haven't properly connected the dots and recognised you can't have those end markets if you don't have commodities,” she says.

BlackRock World Mining invests in mining and metal assets worldwide, with a focus on listed shares but also has exposure to royalties and private assets. It had a less than stellar 2023. The mining sector is notoriously volatile, but in the year to 21 December 2023, BlackRock World Mining's share price was down 9.3 per cent, well below the MSCI ACWI Metals & Mining index gain of 3.4 per cent (the trust uses a variation of this index as its benchmark). Over the same period, the MSCI All World Index was up 15.7 per cent in sterling terms, and the FTSE All Share 8.9 per cent.