BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.
All information is at 30 June 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
| One Month | Three Months | Six Months | One Year | Three Years | Five Years | |
| Net asset value | 1.7% | 9.4% | 20.9% | 54.5% | 35.3% | 84.4% |
| Share price | -9.4% | 1.9% | 19.7% | 73.1% | 29.9% | 86.2% |
Sources: Datastream, BlackRock
| At month end | |
| Net asset value – capital only: | 100.99p |
| Net asset value cum income1: | 101.45p |
| Share price: | 91.90p |
| Discount to NAV (cum income): | 9.4% |
| Net yield: | 4.4% |
| Gearing – cum income: | 6.2% |
| Total assets: | £118.0m |
| Ordinary shares in issue2: | 116,270,349 |
| Gearing range (as a % of net assets): | 0-20% |
| Ongoing charges3: | 1.25% |
1 Includes net revenue of 0.46p.
2 Excluding 2,695,651 ordinary shares held in treasury.
3 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. The Company’s Ongoing Charges for each financial year to 30 November are capped at 1.25% of average daily net asset value for that period.
| Sector Overview | |
| Mining | 46.2% |
| Traditional Energy | 32.0% |
| Energy Transition | 23.5% |
| Net Current Liabilities | -1.7% |
| —– | |
| 100.0% | |
| ===== |
| Sector Analysis | % Total Assets^ | Country Analysis | % Total Assets^ | |
| Mining: | ||||
| Diversified | 26.2 | Global | 54.9 | |
| Copper | 4.7 | USA | 16.3 | |
| Industrial Minerals | 4.5 | Canada | 12.0 | |
| Gold | 3.8 | Latin America | 10.8 | |
| Steel | 2.6 | Australia | 2.2 | |
| Diamonds | 1.3 | Germany | 1.9 | |
| Iron | 1.3 | South Africa | 1.9 | |
| Platinum | 1.2 | France | 0.8 | |
| Nickel | 0.6 | Ireland | 0.7 | |
| Subtotal Mining: | 46.2 | Africa | 0.2 | |
| Net Current Liabilities^ | -1.7 | |||
| Traditional Energy: | ||||
| E&P | 14.4 | —– | ||
| Integrated | 12.2 | 100.00 | ||
| Refining & Marketing | 3.8 | ===== | ||
| Distribution | 1.2 | |||
| Oil Services | 0.4 | |||
| Subtotal Traditional Energy: | 32.0 | |||
| Energy Transition: | ||||
| Electrification | 8.3 | |||
| Energy Efficiency | 7.1 | |||
| Renewables | 6.4 | |||
| Transport | 0.9 | |||
| Storage | 0.8 | |||
| Subtotal Energy Transition: | 23.5 |
| Net Current Liabilities^ | -1.7 |
| —- | |
| 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 4.4% of the Company’s net asset value.
| Company | Region of Risk | % Total Assets |
| Vale | Latin America | |
| Equity | 7.8 | |
| Bond | 3.0 | |
| Rio Tinto | Global | 4.2 |
| BHP | Global | 4.0 |
| Chevron | Global | 3.9 |
| Glencore | Global | |
| Equity | 3.9 | |
| Option | -0.1 | |
| Anglo American | Global | 3.5 |
| ConocoPhillips | Global | 3.1 |
| Vestas Wind | Global | 3.0 |
| Enel | Global | 3.0 |
| Canadian Natural Resources | Canadian | 2.5 |
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 1.7% during the month of June (in Sterling terms with dividends reinvested).
The mining sector saw a pullback in June, underperforming broader equity markets, with the MSCI ACWI TR Index returning a modest +1.2%. Mined commodity performance was varied, with copper falling 8.8% and iron ore (62% fe) rising 7.5% and reaching an all-time high during the month. However, economic data from China remained resilient, with its manufacturing Purchase Manager Index (PMI) at 51.3, and robust demand in the US and Europe helped support prices. The period also saw a sell-off across precious metals, with gold falling 7.4%. Turning to the companies, following its share buyback program Brazilian miner Vale announced a special dividend in June, based on expected profits for the current year.
Traditional energy stocks continued to rise modestly over the month, whilst oil prices increased as economic data continued to suggest global economic recovery and stronger activity levels. Despite concerns over the spread of the delta variant of COVID-19, vaccinations continued and allowed movement restrictions to be eased. Within the energy sector, underlying oil demand appeared robust with a further drawdown in barrels held in storage. Negotiations for an Iranian nuclear deal continued without breakthrough, whilst market expectations are for an agreed additional production increase from OPEC given the continuing strength in oil demand. Against this backdrop, Brent and WTI (West Texas Intermediate) increased by 10.9% and 11.1%, ending the month at $77/bbl and $75/bbl respectively, whilst natural gas prices increased 25%.
Within the energy transition sector, the G7 countries committed to support development and deployment of renewable energy and to promote sustainable mobility and reduce greenhouse gas emissions from the transport sector. At a national level, the German government proposed an increase in renewables targets. Spain proposed a windfall tax on profits linked to higher carbon prices impacting nuclear and hydroelectric plants, whilst France increased taxation on solar power.
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
