BlackRock Energy and Resources Income Trust plc

Annual General Meeting

On 13 March 2023, Co-Portfolio Managers, Tom Holl and Mark Hume provided an update on the Trust, highlighting portfolio positioning, performance, sources of income, energy transition and the outlook for the mining and energy sectors.

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Key insights:

  • The trust decreased its conventional energy exposure over the first six months of 2022, as valuations rose, oil prices weakened and operating costs rose for many companies.
  • Exposure to energy transition companies has remained consistent, with exciting demand and policy support tempered by higher valuations in this part of the market.
  • There remains significant underinvestment in traditional energy supply. The mismatch between supply and demand is likely to persist for several years.
  • Reviving growth in China and weakness in the Dollar have helped support the mining sector. Iron ore, for example, has seen a moderate improvement in demand and a significant drop in supply, which has been supportive for prices.
  • The mining sector has changed significantly in its approach to capital expenditure and balance sheet management over recent years, with underinvestment in new supply being a notable contrast to previous exuberance.
  • Mining demand is no longer focused exclusively on China, but is increasingly led by global demand drivers associated with the move towards a lower carbon economy. The mining sector will be essential in providing the materials for the decarbonisation of the global economy.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or financial product or to adopt any investment strategy. The opinions expressed are as of March 2023 and may change as subsequent conditions vary.