BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.
All information is at 31 January 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
| Month | Months | Months | Year | Years | Years | ||
| Net asset value | 0.1% | 26.1% | 26.2% | 25.9% | 23.3% | 118.5% | |
| Share price | -1.4% | 28.5% | 25.1% | 28.1% | 14.6% | 101.3% |
Sources: Datastream, BlackRock
| At month end | ||
| Net asset value – capital only: | 85.01p | |
| Net asset value cum income*: | 85.73p | |
| Share price: | 77.30p | |
| Discount to NAV (cum income): | 9.8% | |
| Net yield: | 5.2% | |
| Gearing – cum income: | 7.5% | |
| Total assets: | £104.0m | |
| Ordinary shares in issue: | 113,470,349 | |
| Gearing range (as a % of net assets): | 0-20% | |
| Ongoing charges**: | 1.3% |
* Includes net revenue of 0.72p.
** 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.
| Sector Overview | |||
| Mining | 46.5% | ||
| Energy Transition | 26.0% | ||
| Energy | 28.0% | ||
| Net Current Liabilities | -0.5% | ||
| —– | |||
| 100.0% | |||
| ===== |
| Sector Analysis | % Total Assets^ | Country Analysis | % Total Assets^ | |
| Mining: | ||||
| Diversified | 23.7 | Global | 59.2 | |
| Copper | 6.6 | USA | 12.3 | |
| Industrial Minerals | 5.3 | Latin America | 10.1 | |
| Gold | 3.4 | Canada | 6.5 | |
| Iron | 2.8 | Australia | 4.4 | |
| Diamonds | 1.6 | Germany | 2.3 | |
| Steel | 1.1 | South Africa | 2.1 | |
| Platinum | 1.0 | Norway | 1.2 | |
| Nickel | 1.0 | France | 0.9 | |
| Subtotal mining: | 46.5 | United Kingdom | 0.7 | |
| Ireland | 0.6 | |||
| Energy: | Africa | 0.2 | ||
| Integrated | 16.8 | Other Net Liabilities^ | -0.5 | |
| E&P | 9.5 | |||
| Distribution | 1.2 | —– | ||
| Oil Services | 0.5 | 100.00 | ||
| Subtotal Energy: | 28.0 | ===== | ||
| Energy Transition: | ||||
| Electrification | 11.6 | |||
| Energy Efficiency | 7.4 | |||
| Renewables | 5.0 | |||
| Transport | 1.1 | |||
| Storage | 0.9 | |||
| Subtotal Energy Transition: | 26.0 | |||
| Net Current Liabilities^ | -0.5 | |||
| —- | ||||
| 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 7.0% of the Company’s net asset value.
Ten Largest Investments
| Company | Region of Risk | % Total Assets | |
| Vale | Latin America | ||
| Equity | 6.7 | ||
| Bond | 0.2 | ||
| BHP | Global | 6.6 | |
| Rio Tinto | Global | 6.1 | |
| Chevron | Global | 4.0 | |
| Anglo American | Global | 4.0 | |
| ExxonMobil | Global | 3.4 | |
| Vestas | Global | 3.2 | |
| Petrobras – ADR | Latin America | 3.2 | |
| Enel | Global | 3.2 | |
| Freeport-McMoran | Unites States | 2.9 |
Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:
The Company’s NAV increased by 0.1% during the month of January (in Sterling terms with dividends reinvested).
Despite much of the world remaining in a state of lockdown due to the coronavirus pandemic, the year started with a flavour of optimism in global equity markets as investors focused on the potential for a vaccine-driven economic restart. This narrative was somewhat derailed towards the end of the month as it became clear that there was a divergence in the vaccine roll out in different countries. Against this backdrop, the MSCI AC World Index fell by 0.6%. In Europe, the vaccine roll-out, or lack of it, dominated the headlines. The UK and the US remain in the lead with Europe lagging behind and tensions escalated at the end of the month over vaccine supplies.
President Joe Biden was inaugurated in mid January and cyclical stocks were buoyed as the market digested the $1.9 trillion stimulus package proposed by the new President. Within the conventional energy sector, we have seen a moratorium on new drilling permits and potential question marks around federal land and future drilling on federal land. This will likely further constrain US shale growth. Elsewhere, President Biden has scrapped the Keystone XL permit. Despite continued concerns on the demand side for oil, offsetting this on the supply side, Saudi Arabia has planned to unilaterally cut production in February and March by an additional million barrels per day. This is keeping the oil market tight. For reference, oil continues to trade in backwardation. Against this backdrop, oil prices rose, with Brent and WTI (West Texas Intermediate) increasing by 7.9% and 8.4%, ending the month at $55/bbl and $52/bbl respectively.
The energy transition space benefitted from expectations of supportive policies and from China’s greater than expected wind and solar installations reported for 2020. The Chinese National Energy Administration (NEA) announced 72GW of wind generation capacity and 48GW of solar capacity installed, a total of 120GW. Market expectations differed widely but typically were for around half the capacity for wind power installations. Within clean transportation, electric vehicle (EV) sales for 2020 totalled 3.2m units, 43% higher than for 2019, despite the negative impact from COVID-19 related restrictions on total vehicle sales.
Within the mining sub-sector, tougher COVID-related restrictions in China stoked concern around economic activity in the country and in turn, its commodity demand. Mined commodity performance was varied, with iron ore (62% fe) and gold prices down 0.9% and 2.1% respectively, but the copper price up 1.5%. Turning to the companies, 2020 production results were announced during the month and, in general, they were in line with expectations, with relatively limited COVID-19 related disruptions. Investors are now looking ahead to the February earnings reporting season in which we are expecting to see strong financial results and continued focus on returning capital to shareholders.
All data points in US Dollar terms unless otherwise specified. Commodity price moves sourced from Thomson Reuters Datastream.
18 February 2021
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
