BlackRock Commodities Income Investment Trust (BRCI) seeks to meet an annual dividend target and achieve long-term capital growth by investing in companies operating in the mining and energy sectors. Its report for the year to 30 November 2016 shows shareholders’ assets recovering 52 per cent to £98.8 million, but still 21 per cent lower than six years earlier.
Olivia Markham has been manager since January 2014 and Tom Holl is co-manager. They invest mainly in quoted securities, including equities, convertible bonds and debt, and are responsible for actively managing the balance between the energy and mining sectors, as well as for bottom-up stock selection.
At end-November the trust’s portfolio comprised 70 securities. Energy-related securities accounted for 51 per cent, of which half was in integrated oil companies such as RDS, ExxonMobil and BP, with most of the rest in exploration and production companies.
Mining accounted for 49 per cent, of which 44 per cent was in diversi¬fied companies such as First Quantum Minerals, RioTinto and Vale, with 12 per cent in gold miners.
Gearing ended the financial year at 3.7 per cent. Ongoing charges remained at 1.4 per cent. Net asset value and share price total returns were 51.9 per cent and 51.4 per cent respectively. BRCI has no benchmark, but as a guideline a 50:50 composite of the Euromoney Global Mining and MSCI World Energy indices gained 66 per cent over the same period. With earnings per share down from 6.32p to 4.43p, quarterly dividends were cut from 1.5p in the first half of the financial year to 1p in the second half. The target for the current year is at least 1p per quarter.
As BRCI’s shares on average traded close to NAV, the board did not tender for any shares in February or August 2016. Instead, it was able to issue 2.7 million new shares at an average premium of 3.3 per cent.
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