BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.
All information is at 31 January 2022 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 | 4.3% | 5.7% | 12.9% | 33.4% | 64.4% | 62.1% |
| Share price | 9.2% | 11.7% | 25.0% | 48.7% | 80.5% | 62.2% |
Sources: Datastream, BlackRock
| At month end | |
| Net asset value – capital only: | 108.41p |
| Net asset value cum income1: | 109.71p |
| Share price: | 110.00p |
| Premium to NAV (cum income): | 0.3% |
| Net yield: | 3.7% |
| Gearing – cum income: | 4.7% |
| Total assets: | £129.9m |
| Ordinary shares in issue2: | 118,393,357 |
| Gearing range (as a % of net assets): | 0-20% |
| Ongoing charges3: | 1.21% |
1 Includes net revenue of 1.30p.
2 Excluding 572,643 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 2021.
| Sector Overview | |
| Mining | 41.8% |
| Traditional Energy | 37.7% |
| Energy Transition | 21.7% |
| Net Current Liabilities | -1.2% |
| —– | |
| 100.0% | |
| ===== |
| Sector Analysis | % Total Assets^ | Country Analysis | % Total Assets^ |
| Mining: | |||
| Diversified | 25.0 | Global | 52.5 |
| Copper | 4.3 | USA | 18.3 |
| Industrial Minerals | 3.3 | Canada | 13.0 |
| Steel | 3.2 | Latin America | 8.2 |
| Gold | 2.4 | Australia | 3.2 |
| Diamonds | 1.1 | Germany | 2.0 |
| Iron | 1.0 | Russia | 1.4 |
| Nickel | 0.8 | South Africa | 0.7 |
| Platinum | 0.7 | India | 0.7 |
| Subtotal Mining: | 41.8 | Ireland | 0.6 |
| France | 0.6 | ||
| Net Current Liabilities | -1.2 | ||
| Traditional Energy: | —– | ||
| E&P | 17.5 | 100.00 | |
| Integrated | 14.2 | ===== | |
| Refining & Marketing | 3.2 | ||
| Distribution | 2.4 | ||
| Oil Services | 0.4 | ||
| Subtotal Traditional Energy: | 37.7 | ||
Energy Transition: | |||
| Energy Efficiency | 9.3 | ||
| Electrification | 6.5 | ||
| Renewables | 3.7 | ||
| Transport | 2.2 | ||
| Subtotal Energy Transition: | 21.7 | ||
| Net Current Liabilities | -1.2 | ||
| —- | |||
| 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 3.4% of the Company’s net asset value.
| Ten Largest Investments | ||
| Company | Region of Risk | |
| % Total Assets | ||
| Vale | Latin America | |
| Equity | 5.3 | |
| Bond | 2.2 | |
| Glencore | Global | 6.9 |
| Chevron | Global | 5.1 |
| BHP | Global | 4.0 |
| First Quantum Minerals | Global | |
| Equity | 2.4 | |
| Bond | 1.2 | |
| Anglo American | Global | 3.4 |
| ConocoPhillips | Global | 3.2 |
| Canadian Natural Resources | Canada | 2.7 |
| TotalEnergies | Global | 2.6 |
| EOG Resources | USA | 2.4 |
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 4.3% during the month of January (in Sterling terms with dividends reinvested).
Global stock markets fell in January as investors reacted to the potential for US interest rates to rise through 2022 following stronger inflation data and hawkish commentary by the US Federal Reserve. Additionally, geopolitical tensions added to uncertainty given a build-up of Russian troops on the border with Ukraine. Western powers sought to deter Russia from an invasion through heavy retaliatory sanctions. These factors contributed to a market rotation away from higher valued ‘growth’ stocks in favour of ‘value’ stocks. US President Biden’s Build Back Better Bill continued to stall in the senate but there was increased optimism that key parts of it would eventually pass separately. For reference, the MSCI AC World Index fell by 5.0%.
The mining sector held up better than broader equity markets in January. Encouragingly, economic activity in China showed continued signs of improvement, with December steel production data (released in January) up by 24.4% month-on-month. This contributed to the iron ore (62% fe.) price rising by 20.8% despite the physical market remaining relatively weak. Performance across the other mined commodities was mixed with aluminium, nickel and palladium prices rising by 8.7%, 9.4% and 23.9% respectively but copper and gold prices down by 1.7% and 1.4% respectively.
Traditional energy equities recorded a positive start to the year, driven by a tightness in supply in the physical market, increased inflation expectations and with rising tensions in Europe between Russia and Ukraine. Western powers sought to deter Russia from an invasion through heavy retaliatory sanctions. Natural gas prices remained volatile again with prices in the US increasing to $4.87mmbtu. The Brent and WTI (West Texas Intermediate) rose by 19.6% and 17.2%, on the tighter market, ending the month at $92/bbl and $88/bbl respectively.
Within the energy transition theme, in a revision to the EU Taxonomy, the European Commission added nuclear and natural gas to be counted as green energy if they met certain criteria. In California, a change to terms for rooftop solar was proposed as part of Net Energy Metering (NEM) 3.0. This would reduce payments by utility companies to rooftop solar owners and included a monthly grid access charge. However, following month end it was announced that the proposal would be delayed. 2021 saw record global renewable power installations, with forecasts for installations in 2022 to accelerate further. Within clean transportation, global Electric Vehicle (EV) sales exceeded 6.5million vehicles, up from 3.2million in 2020, as EV adoption accelerates.
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
