BlackRock Energy and Resources Income (BERI)

BlackRock Energy and Resources Income (BERI) is a one-stop shop offering exposure to a diverse set of commodity and energy industries and themes. These sectors now make up very little of the major global equity indices, but are central to some key growth trends, not least the energy transition and the expansion of artificial intelligence. BERI’s managers, Tom Hull and Mark Hume, invest in traditional energy, mining and energy transition companies, able to switch between these potentially volatile industries on valuation and growth grounds, investing in some of the key long-term changes in the global economy with a flexible remit.

The trust has recently celebrated five years under this current strategy, and has outperformed indices tracking each of the three key underlying sectors (see Performance). Some adept manoeuvring between sectors has helped the trust deliver relatively stable returns despite some very volatile swings in the relative performance between them.

Tom and Mark have been adding to the energy transition sector over the last year or so, looking for opportunities in oversold companies which they think are in the right industries or niches. In their view, the energy transition is a key megatrend of the coming years and decades, and continues to provide investment opportunities, notwithstanding the poor returns of the past three years. This positioning has paid off, with the energy transition sector producing improved performance over the past 12 months, even after the election of the net-zero sceptic Donald Trump.

As well as attractive total returns, BERI has delivered a decent income, and the current historic yield is 3.8%. The board has extensive revenue and capital reserves that it can use to support the dividend if it wishes.