BlackRock Energy and Resources Income Trust plc (LON:BERI) has announced its latest portfolio update.
All information is at 30 November 2023 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 | 2.1% | -3.2% | 2.3% | -11.8% | 71.3% | 103.7% | |||||||
| Share price | 1.7% | -3.4% | 0.8% | -15.2% | 73.9% | 99.2% | |||||||
| At month end | ||||||||||||
| Net asset value – capital only: | 122.51p | |||||||||||
| Net asset value cum income1: | 123.62p | |||||||||||
| Share price: | 110.40p | |||||||||||
| Discount to NAV (cum income): | 10.7% | |||||||||||
| Net yield: | 4.0% | |||||||||||
| Gearing – cum income: | 7.5% | |||||||||||
| Total assets: | £162.4m | |||||||||||
| Ordinary shares in issue2: | 131,386,194 | |||||||||||
| Gearing range (as a % of net assets): | 0-20% | |||||||||||
| Ongoing charges3: | 1.13% | |||||||||||
2 Excluding 4,200,000 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 2022. 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 | 44.5% | |||||||||||
| Traditional Energy | 31.0% | |||||||||||
| Energy Transition | 25.0% | |||||||||||
| Net Current Liabilities | -0.5% | |||||||||||
| —– | ||||||||||||
| 100.0% | ||||||||||||
| ===== | ||||||||||||
| Sector Analysis | % Total Assets^ | Country Analysis | % Total Assets^ | |||||||||
| Mining: | ||||||||||||
| Diversified | 23.8 | Global | 58.1 | |||||||||
| Copper | 6.8 | USA | 15.9 | |||||||||
| Gold | 3.2 | Canada | 9.2 | |||||||||
| Industrial Minerals | 2.9 | Latin America | 8.0 | |||||||||
| Steel | 2.6 | Germany | 3.2 | |||||||||
| Aluminium | 2.1 | France | 2.6 | |||||||||
| Uranium | 1.7 | Australia | 1.3 | |||||||||
| Nickel | 1.5 | Africa | 1.0 | |||||||||
| Platinum Group Metals | 0.3 | United Kingdom | 0.7 | |||||||||
| Tin | -0.4 | Ireland | 0.5 | |||||||||
| Subtotal Mining: | 44.5 | |||||||||||
| Net Current Assets | -0.5 | |||||||||||
| —– | ||||||||||||
| Traditional Energy: | 100.0 | |||||||||||
| E&P | 13.3 | ===== | ||||||||||
| Integrated | 12.8 | |||||||||||
| Distribution | 2.4 | |||||||||||
| Oil Services | 2.0 | |||||||||||
| Refining & Marketing | 0.5 | |||||||||||
| Subtotal Traditional Energy: | 31.0 | |||||||||||
| Energy Transition: | ||||||||||||
| Energy Efficiency | 9.2 | |||||||||||
| Electrification | 8.1 | |||||||||||
| Renewables | 4.3 | |||||||||||
| Transport | 3.4 | |||||||||||
| Subtotal Energy Transition: | 25.0 | |||||||||||
| Net Current Liabilities | -0.5 | |||||||||||
| —- | ||||||||||||
| 100.0 | ||||||||||||
| ===== | ||||||||||||
Ten Largest Investments
| Company | Region of Risk | % Total Assets | ||||||||||
| Glencore | Global | 4.8 | ||||||||||
| BHP | Global | 4.7 | ||||||||||
| Vale | Latin America | |||||||||||
| Equity | 3.3 | |||||||||||
| Bond | 1.3 | |||||||||||
| Rio Tinto | Global | 4.4 | ||||||||||
| Shell | Global | 3.8 | ||||||||||
| Exxon Mobil | Global | 3.8 | ||||||||||
| NextEra Energy | United States | 2.7 | ||||||||||
| Canadian Natural Resources | Canada | 2.7 | ||||||||||
| RWE | Germany | 2.5 | ||||||||||
| Hess | Global | 2.4 | ||||||||||
Commenting on the markets, Tom Holl and Mark Hume, representing the Investment Manager noted:
The Company’s NAV returned by 2.1% during the month of November (in GBP terms).
Global equity markets performed well in November, on the back of signs of economic moderation in the US and falling inflation across developed markets. Central banks also indicated that they had reached the peak of the rate hiking cycle. The Bank of England, Federal Reserve, and European Central Bank left their policy rates unchanged. Markets anticipated rate cuts in the first half of next year on the release of softer inflation data across developed markets. Lower bond yields and healthy corporate earnings also contributed to returns. Given this macroeconomic backdrop, the MSCI All Country World Index returned 9.2%.
The mining sector performed well but modestly lagged broader equity markets. China’s manufacturing PMI reached a three-month high, rising to 50.7 from 49.5 in October. Mined commodities were up across the board, with the copper and iron ore prices (62% fe) rising by 4.5% and 7.8% respectively. The copper price was buoyed by the shock to supply caused by the closing of the Cobre de Panama asset in Panama, which accounts for 1.5% of global copper supply. Iron ore prices appeared to be up on China’s seasonal restocking ahead of Chinese New Year. Elsewhere, the precious metals also performed well on geopolitical risk in the Middle East, an uncertain macroeconomic outlook, a fall in real rates and weakness in the US dollar. For references, gold and silver prices rose by 2.1% and 9.2% respectively.
Within energy markets, OPEC announced a rollover of existing production targets and greater production cuts. However, the impact on oil prices proved temporary with apparent uncertainty over the cohesion and support within OPEC. Year to date, global oil demand has been resilient rising 1.6mbpd to 101.6mbps according to US Energy Information Administration (EIA). However, oil supply has also exceeded expectations with some additional supply from Iran and Brazil, whilst there remains modest production growth from US shale. Brent and WTI oil prices fell -5.9% and -7.4%, ending the month at $82/bbl and $76/bbl respectively. The US Henry Hub natural gas price fell -21.6% during the month to end at $2.80/mmbtu, given back last month’s price increase.
Within the energy transition theme, ahead of COP28, US and China released a joint statement announcing support for the G20 leaders to triple global renewable energy capacity by 2030 and to accelerate renewable energy deployment in their respective economies. It has been estimated that this would require a ~21% per annum growth in renewable energy capacity additions between 2023 and 2030. The statement also included that each would advance at least five large scale carbon capture and storage projects. Elsewhere, the UK Government released revised parameters for the pricing cap on AR6 offshore wind bidding, an estimated 8GW of offshore capacity and increased the price cap by 66% compared to a recent auction, where there were no bidders due to the price cap for the power being set too low to attract bids.
All data points in US dollar terms unless otherwise specified. Commodity price moves sourced from Thomson Reuters Datastream.
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
