Fund of the week: There's still money in oil
This fund specialises in finding smaller, undervalued energy stocks and taking a big stake in them. It's up 30.7% in the last year to date.
Earlier this month the US Federal Reserve announced that it would be printing more money. That came as part of its second quantitative easing programme in two years. The move led to a rally in commodities.
This is all great news for Angelos Damaskos, the manager of the CF Junior Oils Trust. It has enjoyed a strong couple of weeks as a result of the rally. The Trust is up 30.7% year-to-date against a drop of 6.6% in the FTSE 350 Oil & Gas index over the same period.
"Regardless of volatility, we believe commodity prices remain on a long-term rising trend, driven by the industrialising East's economic strength and continued growth," says Damaskos, who has been running the fund since 2004. The rally saw the oil price briefly exceed $88.50 a barrel, but Damaskos doesn't expect to see that repeated in the near future.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"Oil prices will probably remain range-bound for the next year to year and a half in the $85-$65 range". He also believes any volatility within that range can be put down to financial speculation. But that doesn't mean there isn't still money to be made in oil.
The Junior Oil Trust specialises in finding smaller, undervalued energy stocks and taking a big stake in them. An example of how successful the strategy can be is Caza Oil & Gas. The fund has held the company since 2007, and what started out as a small part of the fund has turned into the fund's biggest holding. The turnaround has happened after a successful drilling programme began to send the share price soaring. It is currently around 42p, yet Damaskos bought the stock for an average of eight pence a share.
table.ben-table table { border: 3px solid #2b1083;font: 0.928em/1.23em verdana, arial, sans-serif;}
th { background: #2b1083; padding: 10px 5px;color: white;font-weight: bold;text-align: center;border-left: 1px solid #a6a6c9;}th.first { border-left: 0; padding: 5px 2px;text-align: left;}
tr {background: #fff;}
tr.alt {background: #f6f5f9; }
td { padding: 5px 2px;text-align: center;border-left: 1px solid #a6a6c9;color: #000;vertical-align: center;}td.alt { background-color: #f6f5f9; }td.bold { font-weight: bold; }td.first { border-left: 0; text-align: left;}
CF Junior Oils Trust top ten holdings
Caza Oil & Gas Inc | 9.1 |
Premier Oil | 6.3 |
Encore Oil | 6.0 |
Norwegian Energy Co SA | 4.5 |
Dragon Oil | 4.5 |
Bowleven | 4.3 |
Bridge Energy ASA | 4.0 |
Carnarvon Petroleum | 3.0 |
North Energy ASA | 2.7 |
Questerre Energy Corp | 2.7 |
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Higher rates are disappearing – should you fix your savings?
Fixed savings rates have dropped to their lowest levels in over a year. Should you fix your savings now ahead of a potential base rate cut in November?
By Katie Williams Published
-
Nine million people fall victim to financial scams, says Citizens Advice
The charity says that around one in five people across the UK have been caught out by a finance scam in the past year - here is how to protect your money
By Chris Newlands Published