US fund takes stake in FMG
US fund management giant The Capital Group has taken a 5 per cent stake in the world's fourth biggest iron ore miner Fortescue Metals Group.
The Capital Group, which has assets of around one trillion US dollars under management, confirmed it has purchased a 5.02 per cent stake in the pure play Pilbara iron ore miner at an average price of $2.34 per share over the past three months.
The Capital Group did not previously hold shares in Fortescue.
Fortescue shares, which slumped below $2 a fortnight ago, were off 9.5 cents, or 3.68 per cent, to $2.485 at 11.25am.
The move by the Los Angeles-based parent company comes as the price of iron ore continues to slide.
The steel-making ingredient has more than halved to a five and a half year low of $US61 a tonne in the past year because of slowing demand for steel in China as the economy there grows at a slower pace.
Still, Fortescue Metals continues to increase its output, lifting ore production by two per cent to 43.6 million tonnes during the December quarter.
