Index drives top energy funds for 2018
Given energy stocks look to be a fund manager favourite this year, Money Management used FE Analytics to find the top five energy and commodity funds for 2018, most of which are passive funds, suggesting the index is driving performance.
SG Hiscock’s portfolio manager, Hamish Tagdell, told Money Management that he expects this year to be reasonably volatile, and the firm believes energy stocks could ride out the wave.
“We’ve liked the energy space, particularly LNG [liquified natural gas], and the China pollution thematic – we think that will certainly continue to play out through the course of this year,” he said.
From 30 November 2017 to 30 November 2018, the top energy and commodity fund was the BetaShares S&P ASX 200 Resources Sector ETF, which returned 4.83 per cent.
The exchange-traded fund aims to track the price and income performance of the S&P ASX 200 Resources Index before fees and expenses, with BHP, Rio Tinto, Origin Energy, Caltex and Santos among the ETF’s top holdings.
VanEck’s Australian Resources ETF returned 3.14 per cent, aiming to track the MVIS Australia Energy and Mining index, with similar investments like BHP, Rio Tinto, Santos, Origin Energy and Woodside Petroleum.
In fact, seven of the top ten funds in the sector were exchange-traded funds, suggesting that the market alone has driven the performance of the funds.
One of the top active funds, BT Classic Investment BT Natural Resources, returned 0.22 per cent.
“We also think the east coast infrastructure thematic looks pretty strong, so stocks that are exposed to that we think should continue to do reasonably well,” said Tagdell. “We’re a bit more cautious on the consumer.”
The chart below tracks the performance of the top five funds as compared to the sector average.
AUTHOR
Anastasia Santoreneos
Recommended for you
Some 42 per cent of CEOs say they are actively reinventing their business to stay relevant in the next decade, with consumer services the most common choice for asset and wealth managers.
Former Ophir Asset Management chief executive, George Chirakis, has joined private equity manager Scarcity Partners, while the asset manager has appointed a replacement from Macquarie.
Australian Unity has appointed a fund manager for its Healthcare Property Trust, joining from Centuria Healthcare, as it restructures the product with a series of senior appointments.
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
