BlackRock's Hambro to Oversee First U.S. Mutual Fund as Gold Prices Rally
BlackRock Inc.’s Evy Hambro, whose gold fund in Europe has beaten most of its rivals, started the firm’s first gold mutual fund in the U.S. as demand for the metal rises on concern that global economic growth is slowing.
BlackRock World Gold Fund is a version of funds available only outside the U.S., Hambro, 38, said today in a telephone interview from his London office. BlackRock also plans to cut fees on its iShares Comex Gold Trust exchange-traded fund to 0.25 percent of assets from 0.4 percent, Robert Fairbairn, head of New York-based BlackRock’s global client group, said in an interview.
BlackRock, the world’s biggest asset manager, is courting investors seeking refuge from financial-market volatility and the European debt crisis. Concern that growth is slowing sent gold to a record high of $1,265.30 an ounce. Hambro oversees about $35 billion in natural-resources funds, including the BlackRock Gold and General Fund, which has gained an annualized 26 percent over the past decade to beat all but two similar funds over that period, according to data compiled by Bloomberg.
“Gold has been a serious safe haven for thousands of years,” Hambro said. “In today’s unstable environment, gold is coming back into people’s minds as the place to be in.”
BlackRock acquired Barclays Global Investors on Dec. 1 to add the industry’s biggest lineup of ETFs. The transaction was the largest to bring together active funds, in which portfolio managers select securities, and passive ones such as ETFs, which track market indexes. Fairbairn said BlackRock is a “strong believer” that investors can use both strategies to invest in a range of assets, including gold.
“Gold investing for retail investors has been far from mainstream,” especially in the U.S., Fairbairn said. “This brings U.S. investors more opportunities.”
The $3.4 billion iShares Comex Gold Trust, which invests in bullion, planned to issue 409.8 million shares as part of a 10- for-1 split, according to a U.S. Securities and Exchange Commission filing on June 24. Holdings in ETFs backed by bullion have soared this year, with the largest, the SPDR Gold Trust, rising 13 percent to $52.7 billion in assets. The fund is overseen by State Street Corp. in Boston.
Gold, heading for its 10th straight annual gain, is up 13 percent this year, beating stocks and bonds. The MSCI World Index of equities has fallen 11 percent while the BarCap U.S. Aggregate Total Return Index for bonds has climbed 5.3 percent.
Hambro’s BlackRock Gold and General Fund, which invests in gold-mining and precious-metals companies, has advanced 17 percent this year.
Forces contributing to higher prices for the metal include a decline in production since its 2001 peak, purchases by individuals and institutions and a move by central banks worldwide to accumulate gold reserves, Hambro said. Those factors will continue to lift prices, he said.