From Marketwatch on Oil funds- speaks to some of Isopatch's ideas:
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Of the energy focused funds, most concentrate on three major sub-sectors: Major integrated oil players, such as a Chevron or an Exxon; energy service companies, which are a lot of the oil drillers; and then the smaller exploration and production companies.
"Those last two sub-sectors are the ones that are really respond to price changes in oil. So those are the places that investors really want to look if they want to make a play that's sensitive to the commodity prices of oil and natural gas," hinted McNeela.
State Street Global Resources (SSGRX: news, chart, profile) is one such fund that's highly sensitive to energy price changes, observed McNeela. As of Monday, the fund has gained 8.5 percent in the last 13 weeks.
Investors looking for a little bit less volatility might also consider Vanguard Energy (VGENX: news, chart, profile), which is more diversified throughout the energy sectors. It also benefits from low expenses and a very experienced manager, Ernst von Metzsch, at the helm for 17 years. Vanguard Energy rose 6.2 in the last 13 weeks.
Clearly one of McNeela's favorites is Excelsior Energy and Natural Resources (UMESX: news, chart, profile). Michael Hoover, running the fund for six years, has been getting a lot of attention by becoming more aggressive at the "right times."
"Yet when energy prices looked to be a little more unstable and vulnerable to price decreases, he's been able to get that message relatively early in the game and moved to protect the fund by buying some of those major integrated oil companies," McNeela noted. The portfolio picked up 5.2 percent in the last 13 weeks.
Icon Energy (ICENX: news, chart, profile) is another fund in McNeela's radar, though the fund is quantitatively managed, which means that stock selection is driven by numbers rather than the quality of management.
Computer stockpicking has certainly worked for the portfolio both long and short-term. Icon Energy has an impressive record, ranking at the top of the natural resources group for the three-year period with average annual returns of nearly 36 percent. While the fund dipped by 3.3 percent in 2001, Icon Energy had a blowout year in 2000, up roughly 79 percent, which followed a 50 percent return in 1999.
In the last 13 weeks, this fund added roughly 12 percent, but it should probably be avoided if oil prices take another turn for the worse. When oil fell in 1998, this fund fell with it, losing over 37 percent that year. |
