BERI offers a pragmatic and realistic approach to the net-zero investment theme…by Helal Miah


growthThis trust has been awarded a rating by Kepler Trust Intelligence for growth… Find out more 




BlackRock Energy & Resources Income (BERI) is a specialist fund investing in sectors that underpin the health of the global economy. However, a subtle shift in emphasis in the mandate in June 2020 brought in an allocation to energy transition stocks which has changed its proposition.

This added a wider range of growth opportunities, but the managers now take a total return approach having been unshackled from the previous income focus (see Portfolio section).

This evolution in strategy came at an opportune time, just after the pandemic spread across the world, investors seemingly took more notice of the need for a healthier planet, adding momentum to the low-carbon and energy transition movement.

The portfolio’s positioning benefitted from the sharp rise in the sector, but subsequent well-timed strategic allocation changes by the managers after the vaccine rollout and the outbreak of war in Ukraine has helped deliver strong performance figures (see Performance section).

Whilst traditional energy and mining sectors do not have a strong appeal for ESG conscious investors, the managers take a pragmatic approach and view such companies as essential for a smooth transition to net-zero goals.

The new mandate and wider investment opportunities, along with the strong performance record has seen BERI’s discount narrow in recent years, and it now hovers around par. The managers have been consistent in their moderate use of gearing and the trust offers a dividend yield of approximately 3.2% (see Dividend section). Its latest OCF is 1.13%, a reduction from the last published figure, reflecting the larger size of the trust.


Analyst’s View


The shift in the mandate has opened BERI to a wider investor audience, including ESG conscious investors who take the view that engagement is better than exclusion as well as those who now see the portfolio benefitting from the longer-term growth opportunities provided by the energy transition stocks.

That said, the traditional mining and energy sectors, have in recent years, been the main contributor to strong performance. Despite this, the managers’ analysis leads them to believe that these sectors remain undervalued by historical measures compared to the wider market.

We believe the managers have generated significant value through adeptly shifting the portfolio between mining, energy and energy transition stocks to deliver strong portfolio returns. We also believe that BERI offers a solid income proposition.

The underlying portfolio income is healthy after mining and energy companies went through a process of cleaning up balance sheets and improving cash flows. BERI has substantial distributable reserves, a valuable asset when times turn sour as demonstrated during the pandemic when dividends were slashed across the market. However, we believe that investors need to be mindful of the specialist and relatively narrow sector exposure BERI represents compared to generalist equity funds, which brings greater volatility.

We believe BERI offers a good balance between income and growth and the managers’ adept strategic allocations between sectors should continue to provide strong performance potential going forward.




  • Attractive prospective dividend yield of approximately 3.2%, supported by strong revenue reserves
  • Active management has helped trust to deliver strong absolute and relative total returns since evolution of strategy
  • OCF is starting to reduce, thanks to growth of trust



  • Specialist mandate means BERI is less diversified than generalist equity income funds/trusts
  • Discount could widen out if sentiment towards mining or energy sector fades
  • Gearing can exacerbate downside


See the full research on BERI here >


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Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by BlackRock Energy and Resources Income. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research


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