Fund of the week: an adventurous punt on oil
Oil may have eased back from the $100 mark, but it's hardly cheap. If you're looking for a more adventurous way to invest, then try Angelos Damaskos's Junior Oils Trust.
Oil has eased back from the $100 a barrel mark, but at $90 or so, it's hardly cheap. And it could yet go further, with oil cartel Opec refusing to expand supply.
So how can you profit from the rising oil price? There's the usual big-name energy funds, which invest in the larger listed oil stocks. "But if you want something a little more adventurous and risky you could invest in the Junior Oils Trust (JOT)", says Philip Scott on Thisismoney.co.uk. Managed by Angelos Damaskos, who came to the UK from Greece in 1981 to study engineering, it buys small- to medium-sized oil stocks that he believes have the potential to grow quickly.
"Buying shares in one of these companies is a bit like a lottery: they drill holes and if they find something, the share price soars and if they find nothing, it slumps," says Chris Gilchrist on Everyinvestor.co.uk. But CF Junior Oil spreads its money around both speculative and non-speculative stocks, meaning "oil at $150 a barrel should see many of its shareholdings soar in value".
What's more, these companies, of which there are 23 in the portfolio, "may also be targets for takeover approaches", says Mark Dampier of Hargreaves Lansdown in The Sunday Telegraph. "These are just the types of companies that are being bought by the large multinationals, such as Shell, BP and Exxon, who are low on reserves but are cash rich."
To cap it all, the fund manager is "the son-in-law of legendary investor Jim Slater", who has bought heavily into the fund himself, "and I hold it in my own portfolio too".
Contact: 020-7256 3955
Junior Oils Trust top ten holdings
Name of holding, % of assets
Dana Petroleum PLC, 6.40 Dragon Oil, 5.40 Venture Production, 5.00 Cirrus Energy Corporation, 4.80 Oilex Inc, 4.70 JKX Oil & Gas, 4.40 Premier Oil, 4.20 Roc Oil Co Ltd, 4.00 Tullow Oil PLC, 4.00 Nighthawk Energy PLC, 3.70