Gold equities have underperformed gold prices so far this year, providing an opportunity for investors hoping to ride the metal's bull run, a senior executive at BlackRock, the world's largest money manager, said on Monday.

Gold equities underperformed bullion prices by 25 percent to 30 percent this year, as gold prices rallied nearly 30 percent and equities market took a hit from mounting worries about the euro zone's debt crisis and slower global growth.

That may well be the opportunity, said Malcolm Smith, Director and product specialist for BlackRock's Natural Resources Team.

If investors believe gold prices will remain at these levels or perhaps even go higher, there is an opportunity that gap may well narrow.

Smith told reporters that historically gold equities have significantly outperformed gold prices, and the window of underperforming equities have tended to be short lived.

In the past they lasted nine months to a year. I will be hopeful that in the next nine months to a year these gaps may be closed, Smith told reporters at a press conference.

BlackRock's World Gold Fund holds shares of companies including Newcrest Mining, the world's No.3 gold miner, and Kinross Gold, one of the fastest growing gold miners in the world. The fund had $8.34 billion of assets under management by July 31.


Spot gold traded at $1,840 an ounce by 4:39 a.m. ET, down 4 percent from a record high of $1,920.30 hit on September 6, but up nearly 30 percent so far this year.

Really your question on gold is -- Do you believe the world economy will get better or worse? Do you think there will be a cost to move on from where we are today? If the answer is yes, gold is potentially quite interesting, said Smith.

A rapid reduction on uncertainty in financial markets, a rise in real interest rates around the world, a reassertion of the dollar as the global default currency and a fast increase in gold supply would end gold's bull run, he said.

But none of them seems immediately particularly likely, therefore gold prices may well be quite supported.

Smith's team manages six funds, including World Gold Fund and the $17-billion World Mining Fund, with total assets under management pegged at $44.9 billion by end of August, the company said.

BlackRock managed $3.66 trillion of assets as of June 30, 2011, according to the company's website. (