BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.
All information is at 31 May 2021 and unaudited.
For more information on BlackRock Energy and Resources Income Trust and how to access the opportunities presented by the energy and resources markets, please visit www.blackrock.com/uk/beri
Performance at month end with net income reinvested
| | One Month | Three Months | Six Months | One Year | Three Years | Five Years |
| Net asset value | 3.0% | 11.2% | 27.5% | 61.4% | 33.4% | 112.5% |
| Share price | 5.2% | 12.3% | 46.9% | 96.6% | 50.0% | 120.9% |
Sources: Datastream, BlackRock
| At month end | |
| Net asset value – capital only: | 99.64p |
| Net asset value cum income1: | 100.72p |
| Share price: | 102.50p |
| Premium to NAV (cum income): | 1.8% |
| Net yield: | 3.9% |
| Gearing – cum income: | 5.2% |
| Total assets: | £117.1m |
| Ordinary shares in issue2: | 116,270,349 |
| Gearing range (as a % of net assets): | 0-20% |
| Ongoing charges3: | 1.25% |
1 Includes net revenue of 1.08p.
2 Excluding 2,695,651 ordinary shares held in treasury.
3 Calculated as a percentage of average net assets and using expenses, excluding any interest costs and excluding taxation for the year ended 30 November 2020. The Company’s Ongoing Charges for each financial year to 30 November are capped at 1.25% of average daily net asset value for that period.
Sector Overview
| Mining | 49.2% |
| Energy | 28.9% |
| Energy Transition | 22.5% |
| Net Current Liabilities | -0.6% |
| | —– |
| | 100.0% |
| | ===== |
| Sector Analysis | % Total Assets^ | | Country Analysis | % Total Assets^ |
| Mining: | | | | |
| Diversified | 25.7 | | Global | 55.9 |
| Copper | 7.7 | | USA | 16.7 |
| Industrial Minerals | 4.6 | | Latin America | 10.1 |
| Gold | 4.1 | | Canada | 9.7 |
| Steel | 2.6 | | Australia | 2.2 |
| Iron | 1.3 | | Germany | 1.9 |
| Diamonds | 1.3 | | South Africa | 1.9 |
| Platinum | 1.2 | | France | 0.8 |
| Nickel | 0.7 | | Ireland | 0.7 |
| Subtotal mining: | 49.2 | | United Kingdom | 0.5 |
| | | | Africa | 0.2 |
| Energy: | | | Net Current Liabilities^ | -0.6 |
| E&P | 13.6 | | | |
| Integrated | 10.6 | | | —– |
| Refining & Marketing | 3.1 | | | 100.00 |
| Distribution | 1.2 | | | ===== |
| Oil Services | 0.4 | | | |
| Subtotal Energy: | 28.9 | | | |
| | | | | |
| Energy Transition: | | | | |
| Electrification | 8.8 | | | |
| Energy Efficiency | 7.0 | | | |
| Renewables | 4.9 | | | |
| Transport | 1.0 | | | |
| Storage | 0.8 | | | |
| Subtotal Energy Transition: | 22.5 | | | |
| | | | | |
| Net Current Liabilities^ | -0.6 | | | |
| | —- | | | |
| | 100.0 | | | |
| | ===== | | |
^ Total Assets for the purposes of these calculations exclude bank overdrafts, and the net current liabilities figure shown in the tables above therefore exclude bank overdrafts equivalent to 4.6% of the Company’s net asset value.
Ten Largest Investments
| Company | Region of Risk | % Total Assets |
| Vale | Latin America | |
| Equity | | 7.2 |
| Bond | | 2.9 |
| Rio Tinto | Global | 4.3 |
| BHP | Global | 4.0 |
| Chevron | Global | 3.9 |
| Freeport-McMoran | United States | 3.9 |
| Anglo American | Global | 3.8 |
| Glencore | Global | 3.5 |
| Enel | Global | 3.1 |
| ConocoPhillips | Global | 2.8 |
| Vestas Wind | Global | 2.8 |
Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:
The Company’s Net Asset Value (NAV) per share increased by 3.0% during the month of May (in Sterling terms with dividends reinvested).
The reopening of economies supported a positive global economic outlook, whilst the pace of rollout of vaccinations in Europe is improving. US employment data for April, in the form of non-farm payrolls, was weaker than expected with inflation data stronger than expected, which supported commodity related sectors, including energy. Federal Reserve officials continued to suggest the central bank would look through transitory inflation data, consistent with previous announcements. The US Colonial Pipeline company was the subject of a cyber attack, which took its key pipeline offline before a ransom was paid to regain control. Market expectations have been for an Iran/US nuclear deal that would pave the way for Iranian oil exports to resume, whilst the US navy fired warning shots at Iranian vessels, underlying the continuing geopolitical tensions. Against this backdrop, Brent and WTI (West Texas Intermediate) increased by 2.4% and 4.3%, ending the month at $69/bbl and $66/bbl respectively.
The mining sector continued to outperform broader equity markets in May. Mined commodity prices performed well, with copper and iron ore (62% fe) prices reaching fresh all-time highs. A combination of strong economic activity in China, with its manufacturing Purchase Managers’ Index at 52.0, and stronger demand in the US and Europe helped boost prices. The period also saw robust performance from precious metals, with gold rising by 7.7% as a weakening US Dollar and rising inflation expectations acted as tailwinds. Turning to the companies, the team attended the Bank of America Global Metals, Mining and Steel 2021 Conference during the month and were encouraged by the general rhetoric around continued capital discipline.
Within the energy transition space, as part of the UK’s plan to reach net zero CO2 emissions by 2050 it was suggested that homeowners may have to replace gas heating with efficient heat pumps when a property is sold. The International Maritime Organisation (IMO), which plans to reduce CO2 emissions from shipping by 50% by 2050 agreed a step towards this through a reduction of 2% CO2 emissions annually from 2023-2026.
For more information on BlackRock Energy and Resources Income Trust and how to access the opportunities presented by the energy and resources markets, please visit www.blackrock.com/uk/beri
