BlackRock Energy and Resources Income Trust plc (LON:BERI) has provided the following portfolio update.
All information is at 31 August 2020 and unaudited.
Performance at month end with net income reinvested
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
| One | Three | Six | One | Three | Five | |
| Month | Months | Months | Year | Years | Years | |
| Net asset value | 2.6% | 10.5% | 11.8% | -4.1% | 6.8% | 53.5% |
| Share price | -2.8% | 13.9% | 14.8% | -3.5% | 0.5% | 37.0% |
Sources: Datastream, BlackRock
At month end
| Net asset value – capital only: | 70.15p |
| Net asset value cum income*: | 71.54p |
| Share price: | 61.8p |
| Discount to NAV (cum income): | 13.6% |
| Net yield: | 6.5% |
| Gearing – cum income: | 3.5% |
| Total assets^: | 81.2m |
| Ordinary shares in issue: | 113,470,349 |
| Gearing range (as a % of net assets) | 0-20% |
| Ongoing charges**: | 1.5% |
* Includes net revenue of 1.39p.
** 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 | 51.30% |
| Energy Transition | 29.20% |
| Energy | 18.60% |
| Cash & Cash Equivalents | 0.90% |
| —- | |
| 100.00% | |
| ===== |
| Sector Analysis | Total Assets (%) |
Mining | |
| Diversified | 17.3 |
| Gold | 12.0 |
| Copper | 11.6 |
| Industrial Minerals | 4.9 |
| Diamonds | 1.5 |
| Iron | 1.4 |
| Platinum | 1.1 |
| Steel | 0.9 |
| Nickel | 0.6 |
| Subtotal mining: | 51.3 |
| Energy: | |
| Integrated | 9.6 |
| E&P | 4.3 |
| Distribution | 3.0 |
| Refining & Marketing | 1.4 |
| Oil Services | 0.3 |
| Subtotal Energy: | 18.6 |
| Energy Transition: | |
| Electrification | 13.7 |
| Energy Efficiency | 8.0 |
| Renewables | 5.3 |
| Transport | 1.4 |
| Storage | 0.8 |
| Subtotal Energy Transition: | 29.2 |
| Other Net Assets | 0.9 |
—- | |
100.0 | |
===== | |
| Country Analysis | Total Assets (%) |
| Global | 60.6 |
| United States | 12.8 |
| Australia | 7.9 |
| Latin America | 5.2 |
| Canada | 4.3 |
| Germany | 2.4 |
| South Africa | 1.5 |
| France | 1.1 |
| Ireland | 1.0 |
| Norway | 0.9 |
| United Kingdom | 0.8 |
| Brazil | 0.4 |
| Africa | 0.2 |
| Other Net Assets | 0.9 |
—- | |
100.0 | |
===== |
^ Total Assets for the purposes of these calculations exclude bank overdrafts, and the net current assets figure shown in the tables above therefore exclude bank overdrafts equivalent to 4.4% of the Company’s net asset value.
| Top 10 holdings | Country | Fund % |
| First Quantum Minerals * | United States | 7.0 |
| BHP | Australia | 6.9 |
| Barrick Gold | Canada | 4.3 |
| Vale | Brazil | 4.2 |
| Newmont Mining | United States | 4.2 |
| Rio Tinto | Australia | 3.6 |
| Vestas | Denmark | 3.5 |
| Enel | Italy | 3.3 |
| NextEra Energy | United States | 3.3 |
| Chevron | United States | 2.8 |
*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 2.6% during the month of August (in Sterling terms).
Global equity markets rose in August, amid continued signs of a global recovery, for reference the MSCI AC World Index rose by 6.0%. Economic data points further indicated the continued recovery in global activity, with US, Euro and China Manufacturing PMI statistics all above 50.
Against this macroeconomic backdrop, mined commodities performed well overall during the month. China’s infrastructure investment appeared to support copper and iron ore demand in particular, prices of which were up 4.3% and 15.1% respectively. Meanwhile, mined copper supply from Chile and Peru remained notably down versus recent years as the spread of COVID-19 in South America continued to disrupt operations.
Within the conventional energy sector, following noise around whether there will be a frack ban, Joe Biden announced that there would not be a blanket ban on fracking, however there could be restrictions around federal land. Elsewhere, there was an early August technical meeting for OPEC, where pressure was put on some of the laggards, such as Iraq and Nigeria, to increase cuts in order to maintain compliance. Data which was released following month end showed that there was a high level of compliance with the agreed cuts. Against this backdrop, oil prices posted positive returns, with Brent and WTI rising by 4.9% and 7.1%, to end the month at prices of $45/bbl and $43/bbl respectively.
Within the energy transition space, Joe Biden moving ahead in the polls for the upcoming US election has been positive for the Sustainable Energy space, due to his strong sustainable agenda. Solar companies have performed particularly well on the back of this. Within the clean transportation space, China’s auto sales continued to recover strongly, with August car sales rising 8.8% year-on-year.
All data points in US Dollar terms unless otherwise specified. Commodity price moves sourced from Thomson Reuters Datastream.
16 September 2020
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
