Income managers shrug off Glencore fears to buy into mining sector

Buying BHP and Rio Tinto

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...