JPM Natural Resources's Henderson slashes gold weighting

JP Morgan commodities star manager Ian Henderson has cut the gold weighting of his £2 billion JPM Natural Resources fund to its lowest level in almost two years.

The move comes as debate rages as to whether gold, which comprises around 85% of the gold and precious metals sector, is the latest asset bubble, or whether the investment story still has some way to run.
At the end of February, Henderson's gold and precious metals weighting had fallen to 29.9% - well below its historical peak of 44.5% in February 2009 - with Henderson reducing his holding in London-listed Russian gold miner Petropavlovsk (formerly Peter Hambro Mining ) from 2.2% last December to 1.6% at the end of March.
The fund's gold and precious metals weighting is currently at its lowest level since August 2008, with Henderson also reducing his position in copper miner Freeport-Mcmoran Copper, from 2.3% last December, to 1.4%.
Henderson's cash weighting has swelled as proceeds from the gold sales mount, with cash up from 2% in December to 7.5% at the end of March as Henderson seeks to take some profits in the sector after a strong run.
Henderson has outperformed his IMA Specialist benchmark comfortably over the last year, posting a return of 79.6% compared to the average 50.6% for the sector.
In the first quarter of 2010 the fund, which is part of Citywire Selection, has continued to motor, returning 12.3%, compared to the HSBC Global Mining and Energy (75:25) benchmark's 9.6% gain.
Over the same time frame gold has risen 5.6%, compared with a 2.8% rise in gold equities.
Henderson's largest sector weighting now is base metals and diversified miners, which comprised some 31.6% of the fund at the end of March.

(Matthew Goodburn - Citywire - 16/04/10)