Income managers shrug off Glencore fears to buy into mining sector

Buying BHP and Rio Tinto

Laura Dew
clock • 4 min read

UK equity income managers are increasing their exposure to miners including BHP Billiton and Rio Tinto as valuations become "hard to resist", despite troubles at Glencore casting a long shadow over the sector.

Mining shares have been badly hit over the past four years as commodity prices continue to fall. BHP Billiton is down 39% over the period, while Rio Tinto has fallen 20%, creating attractive entry points for managers. They argue these companies have stronger balance sheets and a better outlook than crisis-hit Glencore, whose shares have plummeted nearly 70% year to end of September. Glencore's share price has been particularly volatile in the past two weeks, following a 1.3 billion share issue in mid-September, worth $2.5bn, launched in a bid to reduce its net debt from $29.6bn to $27...

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