BlackRock Energy and Resources Income Trust
Company Notes
4% yield with exposure to energy transition
BlackRock Energy and Resources Income Trust* was launched in December 2005. It aims to achieve an annual dividend target and, over the long term, capital growth by investing primarily in securities of companies operating in the mining and energy sectors. In March 2020 the fund announced that, in recognition of the structural shift in the energy sector from carbon-based towards alternative and renewable sources, it would increasingly focus on companies that benefit from this energy transition. Reflecting this portfolio evolution, Tom Holl was joined by Mark Hume, an energy specialist at BlackRock, who replaced Olivia Markham as co-manager. The portfolio’s neutral sector weights are now 40% Mining, 30% Traditional Energy and 30% Energy Transition.
Over the last five years, the fund has delivered a NAV total return of +68.2%, outperforming the +43.5% return of the Commodities & Natural Resources peer group. The fund does not have a benchmark but over this period the EMIX Global Mining Index has returned +90.2%, the MSCI World Energy Index has returned -0.7%, the S&P Global Clean Energy Index has returned +217.5% and the WilderHill Clean Energy Index has returned +356.6%.
The Board sets an annual dividend target at the beginning of each financial year and the fund has met or exceeded this target each year since launch. The target for the current year to 30 November 2021 is to pay quarterly dividends totalling at least 4p per share, which is in line with the previous year (when it was 108% covered by revenue) and represents a prospective yield of 4.1%.
*Denotes a corporate broking client of Winterflood Securities
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