BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest protfolio update.
All information is at 30 November 2020 and unaudited.
For more information on this 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 | 17.4% | 14.6% | 26.6% | 13.9% | 23.2% | 81.3% | |
| Share price | 17.2% | 17.5% | 33.8% | 16.0% | 13.5% | 64.2% |
Sources: Datastream, BlackRock
| At month end | ||
| Net asset value – capital only: | 79.40p | |
| Net asset value cum income*: | 80.78p | |
| Share price: | 71.40p | |
| Discount to NAV (cum income): | 11.6% | |
| Net yield: | 5.6% | |
| Gearing – cum income: | 6.4% | |
| Total assets: | £97.2m | |
| Ordinary shares in issue: | 113,470,349 | |
| Gearing range (as a % of net assets): | 0-20% | |
| Ongoing charges**: | 1.5% |
* Includes net revenue of 1.38p.
** Calculated as a percentage of average net assets and using expenses, excluding any interest costs and excluding taxation for the year ended 30 November 2019.
| Sector Overview | |
| Mining | 45.2% |
| Energy Transition | 24.1% |
| Energy | 31.0% |
| Net Current Liabilities | -0.3% |
| —– | |
| 100.0% | |
| ===== |
| Sector Analysis | % Total Assets^ | Country Analysis | % Total Assets^ | |
| Mining: | ||||
| Diversified | 21.3 | Global | 58.8 | |
| Copper | 9.6 | USA | 11.6 | |
| Industrial Minerals | 4.7 | Latin America | 9.9 | |
| Gold | 3.2 | Canada | 7.5 | |
| Iron | 1.6 | Australia | 4.2 | |
| Diamonds | 1.6 | Germany | 2.2 | |
| Platinum | 1.2 | South Africa | 1.8 | |
| Steel | 1.1 | Norway | 1.3 | |
| Nickel | 0.9 | France | 0.9 | |
| Subtotal mining: | 45.2 | Ireland | 0.8 | |
| United Kingdom | 0.7 | |||
| Energy: | Brazil | 0.4 | ||
| Integrated | 19.1 | Africa | 0.2 | |
| E&P | 10.0 | Other Net Liabilities^ | -0.3 | |
| Distribution | 1.4 | —– | ||
| Oil Services | 0.5 | 100.00 | ||
| Subtotal Energy: | 31.0 | ===== | ||
| Energy Transition: | ||||
| Electrification | 10.9 | |||
| Energy Efficiency | 7.3 | |||
| Renewables | 4.0 | |||
| Transport | 1.1 | |||
| Storage | 0.8 | |||
| Subtotal Energy Transition: | 24.1 | |||
| Net Current Liabilities^ | -0.3 | |||
| —- | ||||
| 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 6.1% of the Company’s net asset value.
Ten Largest Investments
| Company | Region of Risk | % Total Assets | |
| BHP | Global | 6.3 | |
| Vale | Latin America | 6.0 | |
| Rio Tinto | Global | 5.6 | |
| Chevron | Global | 5.2 | |
| Petrobras – ADR | Latin America | 3.9 | |
| Freeport-McMoran | USA | 3.7 | |
| Anglo American | Global | 3.4 | |
| First Quantum Minerals* | Global | 3.1 | |
| Exxon Mobil | Global | 3.0 | |
| Enel | Global | 3.0 |
*The holding in First Quantum Minerals includes both an equity holding and a holding in several bonds.
Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:
The Company’s NAV increased by 17.4% during the month of November (in Sterling terms with dividends reinvested).
Despite renewed lockdowns across Europe and parts of Asia, global equity markets performed strongly during November, following the announcement of progress in a COVID-19 vaccine. This positive sentiment led to one of the strongest months on record for equities. For reference the MSCI AC World Index increased by 12.2%. Economic data also evidenced continued strength in global activity with, for example, global manufacturing PMIs at 53.7, the highest level since early 2018.
Most mined commodities performed well with copper and iron ore (62% fe.) prices rising 12.9% and 11.0% respectively. For reference, copper prices are now at the highest level since February 2013. Gold bucked the trend, however, its price falling by 5.7%, as improved investor sentiment dampened demand for ‘safe-haven’ assets.
The conventional energy sector was one of the strongest performing sectors during the month, on the back of increased confidence in some form of return to normality in 2021. Although the renewed lockdowns have led to some near-term demand challenges for oil, there was a general view that OPEC would extend the cuts to some degree, instead of starting to taper on 1 January 2021, as under the original agreement. Elsewhere, the US election took place during the month, resulting in a . Democrat president but a divided Congress. From an energy perspective, this suggests that there is less scope for a comprehensive energy policy going through congress. The changes are likely to be more driven by federal agencies, rather than through legislation. Against this backdrop, oil prices rose, with the Brent and WTI increasing by 28.9% and 26.0%, ending the month at $47/bbl and $45/bbl respectively.
Within the energy transition space, the sector continued to benefit from supportive commentary by policymakers. In the US Presidential Election, Joe Biden has been vocally supportive of the sustainable energy sector, whilst a split government may limit potential policy action.
All data points in US Dollar terms unless otherwise specified. Commodity price moves sourced from Thomson Reuters Datastream.
23 December 2020
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
