BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.
All information is at 31 January 2023 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 | Three Year | Four Years | Five Years | |
| Net asset value | 5.0% | 9.0% | 17.4% | 36.3% | 128.9% | 124.3% |
| Share price | 9.0% | 15.1% | 29.3% | 36.3% | 159.6% | 132.3% |
Sources: Datastream, BlackRock
| At month end | |
| Net asset value – capital only: | 143.53p |
| Net asset value cum income1: | 144.53p |
| Share price: | 145.00p |
| Discount to NAV (cum income): | 0.3% |
| Net yield: | 3.0% |
| Gearing – cum income: | 7.4% |
| Total assets: | £195.1m |
| Ordinary shares in issue2: | 135,006,194 |
| Gearing range (as a % of net assets): | 0-20% |
| Ongoing charges3: | 1.13% |
1 Includes net revenue of 1.00p.
2 Excluding 0 ordinary shares held in treasury.
3 The Company’s ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain other non-recurring items for the year ended 30 November 2022. In addition, the Company’s Manager has also agreed to cap ongoing charges by rebating a portion of the management fee to the extent that the Company’s ongoing charges exceed 1.25% of average net assets.
| Sector Overview | |
| Mining | 51.7% |
| Traditional Energy | 28.8% |
| Energy Transition | 20.3% |
| Net Current Liabilities | -0.8% |
| —– | |
| 100.0% | |
| ===== |
| Sector Analysis | % Total Assets^ | Country Analysis | % Total Assets^ | |
| Mining: | ||||
| Diversified | 23.5 | Global | 60.2 | |
| Copper | 11.2 | USA | 17.2 | |
| Industrial Minerals | 5.6 | Latin America | 9.3 | |
| Aluminium | 3.7 | Canada | 6.6 | |
| Steel | 2.7 | Germany | 3.6 | |
| Gold | 2.0 | Australia | 3.0 | |
| Nickel | 1.9 | Ireland | 0.5 | |
| Uranium | 0.9 | France | 0.4 | |
| Platinum Group Metals | 0.2 | Net Current Liabilities | -0.8 | |
| Subtotal Mining: | 51.7 | —– | ||
| 100.0 | ||||
| Traditional Energy: | ===== | |||
| Integrated | 15.1 | |||
| E&P | 10.9 | |||
| Distribution | 1.2 | |||
| Oil Services | 1.1 | |||
| Refining & Marketing | 0.5 | |||
| Subtotal Traditional Energy: | 28.8 | |||
Energy Transition: | ||||
| Electrification | 6.4 | |||
| Energy Efficiency | 6.3 | |||
| Transport | 4.1 | |||
| Renewables | 3.5 | |||
| Subtotal Energy Transition: | 20.3 | |||
| Net Current Liabilities | -0.8 | |||
| —- | ||||
| 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 6.5% of the Company’s net asset value.
Ten Largest Investments
| Company | Region of Risk | % Total Assets |
| Vale | Latin America | |
| Equity | 5.0 | |
| Bond | 1.2 | |
| Glencore | Global | 5.8 |
| Exxon Mobil | Global | 4.8 |
| BHP | Global | 4.6 |
| Teck Resources | Global | 4.1 |
| First Quantum Minerals | Global | |
| Equity | 1.9 | |
| Bond | 1.4 | |
| NextEra Energy | United States | 2.8 |
| Shell | Global | 2.8 |
| BP | Global | 2.7 |
| Freeport-McMoRan | United States | 2.6 |
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 5.0% during the month of January (in GBP terms).
Equity markets experienced a strong start to the year, with the MSCI All Country World index returning +7.1% in January 2023. Continuing the trend from last year, the correlation between equities and bonds remained positive. The inflation readings for December 2022 also showed slowing inflation across the US and the eurozone. The end to the zero-COVID policy in China has raised expectations for a strong recovery of the Chinese economy as we progress through 2023. Elsewhere, a relatively warm winter has helped to reduce the magnitude of the energy crisis in Europe.
The mining sector performed strongly during the month, with the fund’s benchmark recording its best start to a year since 2017. Mined commodity prices were up almost across the board, supported by the impressive pace of China’s reopening and expectations for a pickup in demand. We saw downgrades to supply in the release of quarterly production results during the month, which with inventories at record lows highlights continued supply constraints. Civil unrest in Peru created further risks to commodity supply, significantly impacting the tin and the copper market. Iron ore (62% fe.) and copper prices were up by 9.8% and 10.0% respectively over the month. Meanwhile, the gold price was up by 6.2%, aided by a weakening US dollar. There was also record central bank purchases of gold during the month. Warmer-than-expected weather caused weakness in natural gas prices, which put pressure on thermal coal prices, particularly in Europe.
Within the traditional energy space, it has been a quiet month for the sector due to warmer than expected weather conditions. Oil prices were broadly flat during the month, despite China re-opening showing signs of acceleration. The US rig count has also been dropping, down to 609 in January after peaking at the start of December, due to softening in activity in the US in response to lower oil prices.
Within the energy transition theme, there continues to be growing expectations that Europe will provide policy support in response to the Inflation Reduction Act. This will be a positive catalyst for the theme, providing momentum around energy transition in Europe and energy security.
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
