BlackRock Energy and Resources Income Trust (BERI) has a conviction-led approach to delivering a high income (currently yielding 4.8%) from the global mining and energy sectors. The managers have flexibility to use fixed income and option writing to boost income when the opportunity arises. Managed by Olivia Markham and Tom Holl, BERI typically has an even split between mining and energy stocks. A large chunk of the trust is invested in larger, dividend paying companies – and with the top ten holdings currently accounting for 55% of total assets, relative to most equity funds it can be considered highly concentrated. The team’s focus on income and higher quality has meant BlackRock Energy and Resources Income Trust has tended to generate its relative outperformance in flat or falling markets. The experience year-to-date diverges from this pattern, with the trust outperforming handsomely, generating NAV total returns of 8.9% against 5.6% from a 50/50 combination of the EMIX World Mining index and the MSCI World Energy Index. Much of this outperformance has been driven by stock selection, especially from smaller E&P names, where stock prices have finally started to reflect the solid results that these companies are delivering. Income has been (and continues to be) a major focus for the managers and board. However, the trust was not insulated from the dividend cuts experienced by the sector, and the board reduced the dividend from 6p paid in 2015 to the current level of 4p (paid in 2017, and the target for 2018). Whilst frustrating for shareholders, there are signs that the reduction in the dividend may have reached its furthest extent. The 2017 finals and 2018 interims both showed an improvement to overall income earned and a covered dividend once again. Given current commodity and oil prices, not to mention the effect of sterling’s depreciation against the dollar so far this year, the managers appear to be cautiously optimistic on revenues.