Wednesday June 18, 12:50 PM
How to tap into soaring oil prices?
By dollarDEX.com
Oil is setting new price highs, amid reports it could reach $150 by July and even $200 later in the year. Which funds could help clients benefit from such a rise? Clearly, the biggest winners will be funds with direct exposure to oil and energy futures, oil company stocks or oil-rich economies. Here's a selection of funds worth considering. Bear in mind that slower non-G7 economic growth could be the catalyst for a correction in oil prices, and that for every dramatic rise in oil prices there could be an equally spectacular fall in prices at some point. Clients who prefer to invest gradually can use our VAP service to take advantage of the volatility of the commodity sector. The latest oil price can even be used as the VAP price benchmark.
Commodity futures
Schroder AS Commodity Fund has 30-40% of its investments in energy-related futures, including direct exposure to crude oil futures, its top holding.
Castlestone Aliquot Commodity Fund is a long-only, actively managed combination of individual commodities. Recently its indicative exposure included 17% in crude oil, 5% in Brent Oil, and almost 8% in Natural Gas.
The offerings from Superfund can also benefit from their approach of managed futures, including energy-related futures.
Oil & energy company stocks
ABN-Amro AM Energy Fund invests on a global basis in energy, mainly in companies whose assets and operations are in, or related to,
the oil and gas industry. Recently its top holdings included Exxon Mobil, Peabody Energy and Total.
First State Global Resources Fund invests in mining companies, as well as energy companies such as Petrobas Energia Participacio. BNP Paribas Parvest Global Resources Fund invests in companies specialised in sectors related to raw materials and base metals. Recent top holdings included firms such as Exxon Mobil, Royal Dutch Shell, and BP.
Regional plays
The Middle East is an obvious beneficiary of rising oil prices. Funds in that part of the world include Schroder ISF Middle East Fund and SGAM Oasis Middle East & North Africa Fund. Russia could be another winner. Schroder Emerging Europe Fund has over 60% exposure to Russia, investing in counters such as Lukoil, Gazprom and Rosneft Oil.
Invest in these funds here.
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