BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.
All information is at 31 October 2024 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 | Three | Six | One | Three | Five | ||||||||
| Month | Months | Months | Year | Years | Years | ||||||||
| Net asset value | 1.1% | 0.3% | -0.3% | 12.8% | 39.6% | 117.3% | |||||||
| Share price | 1.1% | 0.3% | -0.8% | 14.2% | 33.9% | 120.6% | |||||||
| Sources: Datastream, BlackRock | |||||||||||||
| At month end | ||||||||||||
| Net asset value – capital only: | 131.57p | |||||||||||
| Net asset value cum income1: | 131.85p | |||||||||||
| Share price: | 119.25p | |||||||||||
| Discount to NAV (cum income): | 9.6% | |||||||||||
| Net yield: | 3.8% | |||||||||||
| Gearing – cum income: | 7.4% | |||||||||||
| Total assets: | £160.8m | |||||||||||
| Ordinary shares in issue2: | 121,964,497 | |||||||||||
| Gearing range (as a % of net assets): | 0-20% | |||||||||||
| Ongoing charges3: | 1.19% | |||||||||||
| 1 Includes net revenue of 0.28p.2 Excluding 13,621,697 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 2023. 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 | 40.1% | ||||||||||||
| Energy Transition | 30.3% | ||||||||||||
| Traditional Energy | 30.3% | ||||||||||||
| Net Current Liabilities | -0.7% | ||||||||||||
| —– | |||||||||||||
| 100.0% | |||||||||||||
| ===== | |||||||||||||
| Sector Analysis | % Total Assets^ | Country Analysis | % Total Assets^ | ||||||||||
| Mining: | |||||||||||||
| Diversified | 19.7 | Global | 50.2 | ||||||||||
| Copper | 6.1 | United States | 23.5 | ||||||||||
| Gold | 3.6 | Canada | 11.9 | ||||||||||
| Aluminium | 2.7 | Latin America | 3.5 | ||||||||||
| Industrial Minerals | 2.4 | United Kingdom | 3.4 | ||||||||||
| Uranium | 2.1 | Australia | 2.3 | ||||||||||
| Nickel | 1.3 | Italy | 2.2 | ||||||||||
| Steel | 1.2 | Other Africa | 2.0 | ||||||||||
| Metals & Mining Subtotal Mining: | 1.040.1 | GermanyIrelandFinland Net Current Liabilities | 0.60.60.5-0.7 | ||||||||||
| —– | |||||||||||||
| 100.0% | |||||||||||||
| ===== | |||||||||||||
| Traditional Energy: | |||||||||||||
| E&P | 14.9 | ||||||||||||
| Integrated | 6.7 | ||||||||||||
| Oil Services | 3.4 | ||||||||||||
| Distribution | 3.2 | ||||||||||||
| Oil, Gas & Consumable Fuels | 1.6 | ||||||||||||
| Refining & Marketing | 0.5 | ||||||||||||
| Subtotal Traditional Energy: | 30.3 | ||||||||||||
| Energy Transition: | |||||||||||||
| Energy Efficiency | 13.2 | ||||||||||||
| Electrification | 7.3 | ||||||||||||
| Renewables | 6.5 | ||||||||||||
| Storage | 2.2 | ||||||||||||
| Transport | 1.1 | ||||||||||||
| Subtotal Energy Transition: | 30.3 | ||||||||||||
| Net Current Liabilities | -0.7 | ||||||||||||
| —– | |||||||||||||
| 100.0 | |||||||||||||
| ===== | |||||||||||||
| Ten Largest Investments | |||||||||||||
| Company | Region of Risk | % Total Assets | |||||||||||
| Rio Tinto | Global | 5.0 | |||||||||||
| Anglo American | Global | 3.9 | |||||||||||
| Shell | Global | 3.3 | |||||||||||
| Targa Resources | United States | 3.2 | |||||||||||
| Vale – ADS | Latin America | 2.7 | |||||||||||
| Vertiv Holdings | Global | 2.7 | |||||||||||
| Norsk Hydro | Global | 2.6 | |||||||||||
| ConocoPhillips | Global | 2.6 | |||||||||||
| Schneider Electric | Global | 2.5 | |||||||||||
| Teck Resources | Global | 2.5 | |||||||||||
Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:
The Company’s Net Asset Value (NAV) increased by 1.1% in October 2024 (in GBP terms).
Global equity markets fell during the month. US economic data pointed to stronger than expected growth with a higher number of jobs added in September 2024 and upward revisions to prior months. US inflation data as shown by core Consumer Price Index (CPI) also remained higher than expected. These led to US bond yields rising and reduced expectations around the scale and pace of US interest rate cuts. In Europe, the ECB reduced interest rates by a further 0.25% following lower growth, employment and inflation data. Positive sentiment from China’s boost from monetary stimulus announced last month eased with a lack of clarity over the potential for fiscal stimulus measures. Higher broader market valuation levels going into Q3 results, US election uncertainty, changes in interest rate expectations and elevated geopolitical risks have contributed to notable individual stock price reactions.
Within energy, in recent months geopolitical risk in the Middle East has contributed to oil price volatility. During October 2024, oil prices rose to $80 on the potential for risk of disruption to energy infrastructure, before falling back to end the month little changed. Brent and WTI oil prices rose by 1.2%, ending the month at $73/bbl and $70bbl respectively. The US Henry Hub natural gas price fell -7% during the month to end at $2.7/mmbtu, as gas producers continued to add back supply, which had previously been curtailed.
The mining sector had challenged performance in October as a lack of detail on China’s stimulus measures weighed on commodities. In the commodities space, iron ore (62% fe), copper and nickel fell by 7.3%, 3.3% and 10.5% respectively. The aluminium price held up better, down by just 0.7%, as supply was disrupted by port issues at Jamalco and as future supply looked set to be increasingly constrained by Alcoa announcing the curtailment of its Kwinana alumina refinery in Western Australia. In the precious metals space, gold and silver prices rose by 4.1% and 4.8% respectively, appearing to benefit from ‘safe-haven’ demand as a result of ongoing geopolitical tensions in the Middle East and the approaching U.S. presidential election. Additionally, we saw more technology hyperscalers indicating a preference for nuclear to power their artificial intelligence (AI) datacentres, which lifted sentiment on uranium and uranium miners.
Within the sustainable energy theme, the Internation Energy Agency (IEA) released its World Energy Outlook 2024 and Renewables 2024. IEA expect more than 5,500GW of new renewable energy capacity between 2024 and 2030. Solar is expected to account for c.80% of this new capacity due to growth in manufacturing capacity and a continuation of improving solar PV economics. The EU announced tariffs on China EV imports in addition to the existing 10%, ranging from an additional 17% to 35%.
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
