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About this investment trust

The Company 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.

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.

Why choose it?

Mining and energy companies lie at the heart of the global economy. Without them, countries cannot grow and develop. Mining companies provide everything from materials to build wind turbines to lithium for electric cars. They play an important role in the long-term de-carbonisation of the global economy. Energy companies power our cars, our homes and drive economic development. On the sustainable energy side, the path to a lower carbon global economy is forecast to disrupt many industries and business models. However, this evolution is also expected to create remarkable opportunities. Investment in a specialist trust gives targeted exposure to these important companies, as it is positioned to capture such industry shifts and reap the benefits from this transition.

Suited to…

Investors looking for a specialist energy and mining trust that provides long-term diversification of income and capital, geared to economic expansion. These companies can be volatile, so some tolerance for market uncertainty is important.

AJ Bell Award: As at 30 September 2020.
Awards/Ratings have not been superseded to date.
Past performance is not a reliable indicator of future results and should not be the sole factor of consideration when selecting a product or strategy.

What are the risks?

  • 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.
  • Overseas investment will be affected by movements in currency exchange rates.
  • Emerging market investments are usually associated with higher investment risk than developed market investments. Therefore the value of these investments may be unpredictable and subject to greater variation.
  • Mining shares typically experience above average volatility when compared to other investments. Trends which occur within the general equity market may not be mirrored within mining securities.
  • Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.

Useful information

Fees & Charges

Annual Expenses as at Date: 30/11/2020

Ongoing Charge (including any Performance Fee): For the year to 30 November 2020, the Company’s Ongoing Charges were 1.25% of net assets. The Company’s Ongoing Charges (as defined in the Glossary of the annual report for the year to 30 November 2020) are capped at 1.25% of net assets.

Management Fee Summary: The Company’s management fee is 80bps on gross assets per annum.

  • ISIN: GB00B0N8MF98

    Sedol: B0N8MF9

    Bloomberg: BERI:LN

    Reuters: BERI.L

    Ticker: BERI/LON

  • Name of Company: BlackRock Fund Managers Limited

    Telephone: 020 7743 3000

    Email: cosec@blackrock.com

    Website: www.blackrock.com/uk

    Correspondence Address: Investor Services,

    BlackRock Investment Management (UK) Limited

    12 Throgmorton Avenue

    London

    EC2N 2DL

    Name of Registrar: Computershare PLC

    Registered Office: 12 Throgmorton Avenue

    London

    EC2N 2DL

    Registrar Telephone: +44 (0)370 707 1476

    Place of Registration: England

    Registered Number: 5612963

  • Year End: 30 November

    Results Announced: July (half yearly), January/February (final)

    AGM: March

    Dividends Paid: April/July/October and January (quarterly)

  • BlackRock is aware of a company, "BlackRock Commodities", which is fraudulently claiming to be affiliated to this Company and is quoting the BlackRock Investment Management (UK) Limited London office. "BlackRock Commodities" is not a regulated firm and is not authorised to perform the duties that they currently promote. Please read our latest shareholder communication for further details and an example of the fraudulent communication from "BlackRock Commodities".

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The Board's approach to ESG

Environmental, social and governance (ESG) issues can present both opportunities and threats to long term investment performance. The Company’s investment universe comprises sectors that are undergoing significant structural change and are likely to be highly impacted by increasing regulation as a result of climate change and other social and governance factors. Its universe also includes companies that will provide the materials and technologies to deliver the decarbonisation of energy. Your Board is committed to ensuring that we have appointed a manager that applies the highest standards of ESG practice, and also one that has the skill and vision to navigate the structural transition that the Company’s investment universe is undergoing. The Board believes effective engagement is, in most cases, the most effective way of driving meaningful change in the behaviour of investee company management. This is particularly true for the Company’s Manager given the extent of BlackRock’s shareholder engagement (BlackRock held 3,040 engagements with 2,020 companies based in 54 markets for the year to 30 June 2020). As well as the influence afforded by its scale, the Board believes that BlackRock is well placed as Manager to fulfil these requirements due to the integration of ESG into its investment processes, the emphasis it places on sustainability, its collaborative approach in its investment stewardship activities and its position in the industry as one of the largest suppliers of sustainable investment products in the global market.

Sustainable investing: BlackRock's approach

Sustainability is BlackRock’s standard for investing, based on the investment conviction that integrating sustainability can help investors build more resilient portfolios and achieve better long-term, risk-adjusted returns. BlackRock believes that climate change is a defining factor in companies’ long-term prospects and that it will have a significant and lasting impact on economic growth and prosperity. BlackRock believes that climate risk equates to investment risk and this will drive a profound reassessment of risk and asset values as investors seek to react to the impact of climate policy changes. This in turn is likely to drive a significant reallocation of capital away from traditional carbon intensive industries over the next decade. More information in respect of the actions taken by BlackRock in 2020 on making sustainability the new standard for investing can be found here

Environmental, Social and Governance: integration into BlackRock’s investment management process

Environmental, Social and Governance (ESG) investing is often conflated or used interchangeably with the term “sustainable investing.” BlackRock has identified sustainable investing as being the overall framework and ESG as a data toolkit for identifying and informing its solutions. BlackRock has defined ESG Integration as the practice of incorporating material ESG information and consideration of sustainability risks into investment decisions in order to enhance risk-adjusted returns. BlackRock recognises the relevance of material ESG information across all asset classes and styles of portfolio management.  ESG information and sustainability risks are included as a consideration in investment research, portfolio construction, portfolio review, and investment stewardship processes. The Investment Manager considers ESG insights and data, including sustainability risks, within the total set of information in its research process and makes a determination as to the materiality of such information in its investment process. ESG insights are not the sole consideration when making investment decisions. and the extent to which ESG insights are considered during investment decision making will also be determined by the characteristics or objectives of the Company. The Investment Manager’s evaluation of ESG data may be subjective and could change over time in light of emerging sustainability risks or changing market conditions. This approach is consistent with the Investment Manager’s regulatory duty to manage the Company in accordance with its investment objectives and policy and in the best interests of the Company’s investors. The Investment Manager’s Risk and Quantitative Analysis group will review portfolios to ensure that sustainability risks are considered regularly alongside traditional financial risks, that investment decisions are taken in light of relevant sustainability risks and that decisions exposing portfolios to sustainability risks are deliberate, and the risks diversified and scaled according to the investment objectives of the Company.

BlackRock’s approach to ESG integration is to broaden the total amount of information the Investment Manager considers with the aim of improving investment analysis and understanding the likely impact of sustainability risks on the Company’s investments. The Investment Manager assesses a variety of economic and financial indicators, which may include ESG data and insights, to make investment decisions appropriate for the Company objectives. This can include relevant third-party insights or data, internal research or engagement commentary and input from BlackRock Investment Stewardship.

Sustainability risks are identified at various steps of the investment process, where relevant, from research, allocation, selection, portfolio construction decisions, or management engagement, and are considered relative to the Company’s risk and return objectives. Assessment of these risks is done relative to their materiality (i.e. likeliness of impacting returns of the investment) and in tandem with other risk assessments (e.g. liquidity, valuation, etc.).

ESG integration does not change the Company’s investment objective or constrain the Investment Manager’s investable universe, and does not mean that an ESG investment strategy or exclusionary screens has been or will be adopted by the Company. Similarly, ESG integration does not determine the extent to which the Company may be impacted by sustainability risks.

Investment Stewardship

BlackRock undertakes investment stewardship engagements and proxy voting with the goal of protecting and enhancing the long-term value of clients’ investments for relevant asset classes. In our experience, sustainable financial performance and value creation are enhanced by sound governance practices, including risk management oversight, board accountability, and compliance with regulations. We focus on board composition, effectiveness and accountability as a top priority. In our experience, high standards of corporate governance are the foundations of board leadership and oversight. We engage to better understand how boards assess their effectiveness and performance, as well as their position on director responsibilities and commitments, turnover and succession planning, crisis management and diversity. BlackRock takes a long-term perspective in its investment stewardship work informed by two key characteristics of our business: the majority of our investors are saving for long-term goals, so we presume they are long-term shareholders; and BlackRock offers strategies with varying investment horizons, which means BlackRock has long-term relationships with its investee companies. For further detail regarding BlackRock’s Investment Stewardship approach please refer to the website here.

Engagement with portfolio companies

The Board receives regular updates from the Investment Manager in respect of engagement activity undertaken in respect of portfolio companies. Over the year to 30 November 2020, 94 total company engagements were held with the management teams of 32 portfolio companies representing 71.6% of the portfolio by value at 30 November 2020. To put this into context, there were 63 companies in the BlackRock Energy and Resources Income Trust plc’s portfolio at 30 November 2020. In total 657 proposals were voted on at 48 shareholder meetings.

Fund manager commentary

31 July 2021

Please note that the commentary below includes historic information on sector performance, commodity price performance and the Company’s NAV performance.

The figures shown relate to past performance. Past performance is not a reliable indicator of current or future results.

The Company’s Net Asset Value (NAV) per share decreased by 2.2% during the month of July (in Sterling terms with dividends reinvested).

Broader equity markets continued to recover in July, with the MSCI ACWI TR Index rising by 0.7%, as COVID-19 vaccination rollouts made steady progress. Despite concerns over the delta variant, some COVID-related restrictions were eased further around the world, and there are signs that activity levels are picking up. 

The mining sector saw recovery in July, outperforming broader equity markets. Mined commodity performance was varied, with copper rising by 3.7% and iron ore (62% fe(iron)) falling by 14.2%, hit by the sector’s sell-off. Economic data from China remained resilient, with its manufacturing Purchasing Manager Index (PMI) at 50.3 (a reading over 50 indicates growth or expansion), and credit tightening came to an end. The period also saw a sell-off across precious metals, with the exception of gold which rose 3.3%. Q2 financial reporting showed some minor cost inflation, still modest relative to margins. It was also a strong earnings season for Anglo and Rio, amidst dividend hikes and share buybacks.

Traditional energy stocks were impacted by concerns around the increase in spread of the delta variant of COVID-19 and whether this may reduce the strength of economic growth as economies reopen. OPEC announced an agreement on quotas out to 2022 to continue to raise oil supply (by 0.4 million barrels each month) as economies recover and oil demand increases and to support oil prices. Physical indicators suggest the oil market remains tight. With global oil demand standing around 95mbpd at present and expected to recover to c.100mbpd by the end of 2022, if realised, this would exhaust OPEC+’s spare production within 18 months. Oil prices ended the month almost flat, however, this masked significant volatility during the month where oil prices moved sharply lower before recovering, leading the energy equities, particularly the higher beta exploration and production companies, to underperform the commodity over the month. Brent and WTI (West Texas Intermediate) increased by 1.0% and 0.4%, ending the month at $74/bbl and $71/bbl respectively, whilst natural gas prices increased 5%. Recent quarterly results by the energy companies have shown a trend of using the higher cash flows following the recovery in oil prices to raise dividend payments, initiate share buybacks and accelerate deleveraging plans. In our view, this focus on shareholder returns suggests continued capital discipline by energy company management.

In the energy transition sector, there was news during the month that an international consortium wants to build the world’s biggest renewable energy hub in Australia, to convert wind and solar power into green fuels like hydrogen. The group of energy companies announced the proposal over a 15,000 sq km area that could have a 50 gigawatt (GW) capacity and cost $100bn. The area would be the size of greater Sydney and has consistently high levels of wind and solar energy. The project’s 50GW capacity compares to the 54 GW of generation capacity of all the coal, gas and renewables plants currently in the national energy market.

Commodity price moves sourced from Thomson Reuters Datastream as of 31 July 2021.

Unless otherwise stated all data is sourced from BlackRock as at 31 July 2021. All data points in US Dollar terms unless otherwise specified.

Risk: Reference to the names of each company mentioned in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies.

Any opinions or forecasts represent an assessment of the market environment at a specific time and are not intended to be a forecast of future events or a guarantee of future results. This information should not be relied upon by the reader as research, investment advice or a recommendation.

Portfolio manager biographies

Tom Holl is co-manager of the BlackRock Energy and Resources Income Trust plc and is a member of BlackRock's Natural Resources team. Tom is responsible for the nutrition strategy, the gold and mining sectors and co-manages a number of the team's gold and mining portfolios as well as income strategies. He moved to his current role in 2008, but his service with the firm dates back to 2006. Previously, Tom was a member of the Global Equity team and the Real Estate team. Tom has a degree, with honours in land economy.

Mark Hume is co-manager of the BlackRock Energy and Resources Income Trust plc and is a member of the Natural Resources team within the Fundamental Equity division of BlackRock's Active Equity Group. He is responsible for covering the energy and new energy sectors.

Prior to joining BlackRock in 2017, Mark was an energy portfolio manager at Colonial First State Global Asset Management. He had previously worked at Bank of America Merrill Lunch, Credit Suisse, JP Morgan and Wood Mackenzie as a senior equities analyst covering large-cap energy stocks. He holds a MEng in Petroleum Engineering from Heriot-Watt University, and a BSc in Mathematics from the University of Edinburgh.

Tom Holl profile photo
Tom Holl
Portfolio Manager
Mark Hume profile photo
Mark Hume
Portfolio Manager

Board of directors

All of the Directors are non-executive and are independent of the Investment Manager.

* Denotes Member of the Audit and Management Engagement Committee.

Ed Warner (Chairman) was appointed to the Board on 1 July 2013 and became Chairman on 17 March 2015. Ed is Chairman of LMAX Ltd, HarbourVest Global Private Equity and Air Partner plc. He was previously Chairman of Grant Thornton UK LLP's Partnership Oversight Board, Panmure Gordon & Co Plc and of UK Athletics, and a Non-Executive Director of Clarkson plc, BlackRock Emerging Europe plc (formerly the Eastern European Trust), and Chairman of the Standard Life Private Equity Trust plc. He was also formerly the Chief Executive of IFX Group and of Old Mutual Financial Services UK, Head of Pan European Equities at BT Alex Brown, and Head of Global Research at both NatWest Markets and Dresdner Kleinwort Benson.

Dr Carol Bell* (appointed 1 December 2014) A Non-Executive Director of Tharisa plc, Bonheur ASA, TransGlobe Energy Corporation and a Trustee of the National Museum Wales. Dr Bell was formerly a Managing Director of Chase Manhattan Bank's Global Oil & Gas Group, Head of European Equity Research at JP Morgan and an Equity Research Analyst in the oil and gas sector at Credit Suisse First Boston and UBS. She has also previously been a Non-Executive Director of Petroleum Geo-Services ASA and Ophir Energy plc and a Director of Salamander Energy plc, Hardy Oil & Gas plc, Det norske oljeselskap ASA and Caracal Energy Inc. (now Glencore E&P (Canada) Inc.).

Adrian Brown* (appointed 10 December 2019) Mr Brown is a senior advisor for MJ Hudson Allenbridge. He was formerly an Investment Analyst and Corporate Finance Manager at Morgan Grenfell & Co before joining Pearson plc as a Corporate Resources Executive. In 1992 he joined Boots plc, holding a range of senior roles before returning to work in the financial services sector in 2006 as a Senior Portfolio Manager in the Equity / Multi-Asset Group at AllianceBernstein LP and subsequently at JPMorgan Asset Management, where he was a Managing Director and Client Portfolio Manager in the Global / International Equity Group from 2011 until his retirement in 2018.

Andrew Robson* (appointed 8 December 2020) is a qualified chartered accountant with over 15 years of corporate finance experience, gained at Robert Fleming & Co Limited and SG Hambros. He has considerable experience as a finance director and as chairman of audit committees, including for a number of investment companies, and has a business advisory practice. He is currently a Non-Executive Director of Baillie Gifford China Growth Trust plc. He was also a Non-Executive Director of AVI Global Trust plc (formerly British Empire Trust plc) until 2017, Shires Income plc until July 2020 and JPMorgan Smaller Companies Investment Trust plc until November 2020. Mr Robson has a degree in History from Trinity College, Cambridge.

Investment strategies targeting growth and income
Investment strategies targeting growth and income
Over 28 years of proven experience running investment trusts (Dec 2020)
Over 28 years of proven experience running investment trusts (Dec 2020)
Unparalleled research capabilities
Unparalleled research capabilities and experienced stock pickers
Contact
To get in touch contact us on:
Telephone: 020 7743 3000
Email: cosec@blackrock.com

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