The risk of contagion spreading from Libya to Opec’s other Arab members remains. “Over the past few weeks we had a domino effect, and the concern is that anything can happen,” says Justin Urquhart Stewart, co-founder of Seven Investment Management in London. Possible disruptions to oil and gas supply, plus rising energy demand as the global recovery gathers pace, could create the perfect price pincer.
Enter Investec’s Global Energy Fund. Co-managers Jonathan Waghorn and Mark Lacey took over in 2008 and it’s performed well since. Waghorn had a stint as a drilling engineer for Shell and thinks oil and gas equities will offer “significant upside in 2011”. He notes that “energy equities were laggards versus the energy commodity complex and broader commodity sectors during 2010”. But, as he told Investment Week, he thinks that will change this year. “We see good opportunities across energy commodities, providing access for longer-term investors looking to enter the market.”
The pair are bullish on US gas prices and have invested around 40% of the fund in America. France, Canada and the UK have taken 10% each. They target large integrated oil and gas firms, such as Total, plus smaller explorers. The fund underperformed when oil prices tumbled in the second half of 2008 but has returned just over 22% in the last 12 months. It’s Isa-eligible with a total expense ratio of 1.61%, assuming the initial fee of 4.5% is rebated by your broker.
Contact: 020-7597 1800.
Investec Global Energy Fund top ten holdings
| Name of holding | % of assets |
|---|---|
| Total SA | 9.4 |
| Royal Dutch Shell | 6.1 |
| Ultra Petroleum Corp | 5.7 |
| Petroleo Brasileiro SA Petr | 5.7 |
| Southwestern Energy Co | 5.4 |
| ENI SPA | 4.7 |
| Suncor Energy Inc | 4.5 |
| Statoil Asa | 4.3 |
| Petrohawk Energy Corp | 4.1 |
| Exxon Mobil Corp | 3.9 |