BHP, CIA,& RIO – Iron Ore

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Question asked 04/11/2023

BHP, CIA,& RIO – Iron Ore

Dear James, am interested to hear your views on Champion Iron as a leveraged play to the buzz on iron ore? Secondly - MM has put its weight in the Growth fund behind BHP, longer term I can see the point of this, however it is going through a lot of change - why is MM so bullish BHP rather than RIO, which has been through a lot of negativity in the past few years which it now seems to be coming out of positively - perhaps it has better upside in the shorter term? After all MM doesn't just own one bank...

Answer

Hi Rebecca,

Firstly, we remain bullish toward iron ore targeting the $US140-150 region moving into 2024, a contrarian view although not as much as it was a few months ago. In terms of our thoughts around iron ore stocks please see below:

Champion Iron (CIA) – we like CIA as a iron play in line with our bullish outlook on the bulk commodity, a break above its post COVID $8.12 high looks very likely into Christmas.
BHP Group (BHP) – our Active Growth Portfolio only holds 8% in BHP, below its current market weight, in this portfolio we actually top up our exposure to iron ore with Mineral Resources (MIN) plus we like BHP’s bigger push into future facing commodities, more so than RIO.
RIO Tinto (RIO) – we like RIO but cannot obviously hold the whole market, we selected BHP over RIO because we prefer its commodity mix moving forward including copper 20-25% which will move more towards 40% in FY25 and potash from 2026.

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BHP Group Ltd (BHP)

LAST UPDATED 03/11/2023 13:07

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