MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Oil Prices Trending Lower/Should We Invest ?

TSP_TransferTSP_Transfer
edited November 2013 in Fund Discussions
Just to change the subject from Politics (unfortunately most subjects are) /Fed Watching/Everyday market noise.As investors should we have a percentage of our assets in pure energy or energy related assets via mutual funds,ETF's, CEF's or individual stocks?Or are we to trust the managers we invest in to make the decision as to our energy asset percentage? Is it too late or too risky on the MLP front? Does any manager have an insight or possess an above average record in the domestic energy exploration/production realm,especially in the Bakken? I recently bought some GAGEX. This was my first pure natural resource play since Pete Calhoun ran the T Rowe Price New Era Fund! Other options I am looking at Include the venerable PEO,BENFX,ICPAX,and NDP. Other options include assorted funds from Saliant,ClearBridge (Legg Mason),Tortoise,Cushing,etc. How about Fidelity's FENY ,top heavy with the majors but still with exposure to the smaller E&P's and commission free ! Certainly there are national politics involved in the producer/consumption equation,but isn't there opportunity in North America's energy assets? Is this opportunity worth a niche part of our portfolios or too volatile and politically unpredictable to be an option for long term investors?

Comments

  • scott
    edited November 2013
    If you want value, I think the oil majors (COP, CVX, RDS.A/B) are reasonably priced in many cases. If you want growth, there are the PDX/Pioneer Resources of the world. MLPs will not fare well at least initially if there are substantial moves higher in interest rates, but I think many of them have compelling assets for the long-term. The one word of warning if you get into individual MLPs is the K-1 forms.

    Personally, what I find interesting is transportation - pipelines and rail. The former provides a solid yield and is not tied heavily to commodity prices in most cases. The latter is a way to capitalize on energy delivery and other aspects (delivery of equipment and frack sand - the latter is big on rails lately.) There is a real need for energy infrastructure in this country and particularly in Canada and until more pipelines are built (which, given the protests seems like it isn't going to happen quickly) rail benefits, although some rails benefit more than others. (Rail delivery of energy isn't safe either, but people seem to dislike pipelines more.)

    I like Gibson Energy in Canada (which has US/Canadian exposure) which has a diversified mix of transportation and services.

    The other thing that I think is a positive is anything related to clean-up/waste in regards to fracking (Ecolab has some exposure to that), because I just think there's going to be more regulation.


Sign In or Register to comment.