BlackRock Energy and Resources Income Trust (BERI) saw a shift in emphasis in its mandate over a year ago, explicitly positioning the trust towards the decarbonisation of the global economy. In our view, this is one of the biggest changes we will see over our lifetimes, and as an investment theme is set to run for decades. As such, from being a relatively niche trust, BERI is now relevant to a significantly wider audience of investors. At the same time BERI is not trying to be an explicitly ‘green’ trust: allocations between mining, traditional energy and energy transition stocks are expected to be dynamic. The past year has illustrated what this means in practice, with the team significantly increasing traditional energy exposure in November 2020, and continuing to add since. As we discuss in the Performance section, energy stocks have contributed very strongly to the performance of the trust since then. The scale of the energy transition opportunity means that BERI now has potential exposure to a wider range of sub-sectors and niches than it previously had (see the Portfolio section). All other things being equal, this should potentially allow the NAV to have a less volatile trajectory than it has had in the past. Income continues to be a key part of what BERI seeks to offer investors, and the shares yield 4.1% on a historic basis. The board has stated that they are happy to use revenue and capital reserves to support the dividend, but the recent interims showed that the dividend for the first six months of the financial year is covered once again.
23 Nov 2021
BlackRock Energy and Resources Income - Overview
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BlackRock Energy and Resources Income - Overview
BlackRock Energy and Resources Income Trust plc (BERI:LON) | 120 0 0.0% | Mkt Cap: 149.7m
- Published:
23 Nov 2021 -
Author:
William Heathcoat Amory -
Pages:
7
BlackRock Energy and Resources Income Trust (BERI) saw a shift in emphasis in its mandate over a year ago, explicitly positioning the trust towards the decarbonisation of the global economy. In our view, this is one of the biggest changes we will see over our lifetimes, and as an investment theme is set to run for decades. As such, from being a relatively niche trust, BERI is now relevant to a significantly wider audience of investors. At the same time BERI is not trying to be an explicitly ‘green’ trust: allocations between mining, traditional energy and energy transition stocks are expected to be dynamic. The past year has illustrated what this means in practice, with the team significantly increasing traditional energy exposure in November 2020, and continuing to add since. As we discuss in the Performance section, energy stocks have contributed very strongly to the performance of the trust since then. The scale of the energy transition opportunity means that BERI now has potential exposure to a wider range of sub-sectors and niches than it previously had (see the Portfolio section). All other things being equal, this should potentially allow the NAV to have a less volatile trajectory than it has had in the past. Income continues to be a key part of what BERI seeks to offer investors, and the shares yield 4.1% on a historic basis. The board has stated that they are happy to use revenue and capital reserves to support the dividend, but the recent interims showed that the dividend for the first six months of the financial year is covered once again.