Is it time to sell Evy Hambro's world mining trust?

The discount on the closed-end BlackRock World Mining Trust is typically wide, with its average hovering around 16% virtually regardless of how manager Evy Hambro performs.

But in recent days, the £1.47 billion investment trust has seen its discount come in, narrowing to just over 12%.  This is tightening is a rarity for BlackRock World Mining,and according to Citywire data was last seen in the Spring of 2009.

Over three years it is hard to fault Hambro's record.  He and his co-manager Catherine Raw have grown the vehicle's ordinary share net asset value (NAV) by 150.19%, some 30% ahead of its HSBC Global Mining benchmark.  But over one year this spread has narrowed, with the managers seeing the value of their portfolio decline 9.3% versus a fall of 13.40% in the benchmark.

The dip in performance over the 12 months to December has also seen BlackRock World Mining, which trades at around 726p per share, slip down its sector league table from position three to five.

While year to date the bulk of the natural resources and commodities closed-end fund sector has seen NAVs fall into negative territory, there are two that have avoided this fate.  Baker Steel Resources has growth the value of its portfolio by almost a quarter, and International Oil & Gas Technology has enjoyed a 6.8% rise.

Time to switch?

Some investors may be looking to take advantage of the tightening in BlackRock World Mining Trust's discount. 

Analysts at Canaccord have in the past pointed to City Natural Resources as a compelling switch because the vehicle is likely to benefit from mergers and acquisitions.  City Natural Resources, which is managed by Will Smith, trades at 282p per share and at a 14.1%% discount.

Based on its one-year numbers Baker Steel has had a strong year-one run, but its track record is not as long as Hambro and Raw's, whose trust has earned a place in Citywire Selection.

Meanwhile, International Oil & Gas has performed well over the past 12 months, but it has a $15.8 million damages claim hanging over it, and at £44.4 million in size, the trust's liquidity may turn off some potential investors.