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Monday 28 august 2017 BUSINESS
A24

Fund manager Q&A: Investing in energy sector funds

portfolio manager for the I’m excited about the op- heard this referred to in the
ICON Energy Fund, makes portunities that are current- energy sector as the “New
the case for investing in ly available in the energy Abundant,” where lower
energy stocks, noting that sector. margins can be offset by
companies are becoming increased volume.
more efficient and stand Q: Is it your sense that a
to benefit from developing global oil supply glut is Q: For investors weighing
countries’ growing energy what’s primarily weighing whether to buy into an
needs. on energy stocks? energy stocks fund, would
Answers have been edited A: Pricing mechanics in oil, you say the steep pullback
for length and clarity: since mid-2014, have been in the sector this year rep-
focused on supply exceed- resents a good value or
Q: How should investors ing demand, which led to should investors hold off
think about the perfor- a buildup in oil inventories. until oil prices rebound, the
mance of an energy sector Recently, however, that supply glut eases or some
fund like yours, given the has begun to change. Re- other catalyst?
turbulent swings in the sec- cent data has showed in- A: If investors wait for the
This photo shows Derek Rollingson, portfolio manager for the tor we’ve seen in recent ventories declining. If this news to be much bet-
ICON Energy Fund. Rollingson makes the case for investing in years? trend continues again, it is ter for the energy sector,
energy stocks despite oil prices being down in 2017. A: The past few years have another positive for both oil there is a chance that they
(James Chance/ICON Advisers, Inc. via AP) been tough as an energy pricing and energy stocks. will miss the initial bump in
By ALEX VEIGA percent.The slump comes fund manager. Fortunate- sector. The improvement
AP Business Writer as the price of U.S. crude oil ly, as an active manager, Q: Do oil prices have to in the earnings and antici-
Investors who own energy has declined nearly 10 per- I have being able to ad- climb further before shares pated earnings growth in
stocks have seen more cent this year to $48.41 a just the portfolio to help in energy sector compa- the energy sector, espe-
than their share of swings in barrel. Just three years ago, reduce the volatility of the nies recover from their cially in the exploration
recent years. it topped $100 a barrel. ICON Energy Fund. When steep slump? and production industry,
After a two-year slide, the While energy companies in you compare our perfor- A: While higher commod- already shows the improv-
sector rebounded in 2016 the S&P 500 ceased being mance relative to our peers ity pricing would be an ing economics within the
as crude oil prices stabi- a drag on the index’s over- it shows that historically we obvious boon for energy sector. I believe the lack
lized above $50 a barrel to all earnings this year, many have been able to moder- stocks, investors should not of energy stock price re-
lead all other sectors in the investors remain weary ate that volatility. However, underestimate the power sponse has presented in-
Standard & Poor’s 500 in- over an oil supply glut that going forward the bottom of higher production in vestors with an entry point
dex. But so far this year, the continues weighing down line is that past turbulence a lower margin environ- into energy. Earnings and
sector is the S&P 500’s big- crude prices. has made energy compa- ment as a good path to revenue growth coupled
gest decliner, down 17.1 Even so, Derek Rollingson, nies better and leaner and improved earnings. I have with declining inventories
and improving global eco-
Former GE CEO Immelt out of running to lead Uber nomic conditions equate
to a good opportunity to
establish a position in en-
By The Associated Press job. Uber has been plagued tee is trying to change the ergy.
Former General Electric One faction within the much of the year by high- company’s culture so it’s
CEO Jeffrey Immelt has board, led by Silicon Valley profile missteps including better behaved, a difficult Q: What’s your outlook on
taken himself out of the venture capital firm Bench- allegations of espionage task without a top leader. developing economies in-
running to lead Uber as the mark Capital, wanted and deceit, and revelations Some on the board favored creasing their demand for
ride-hailing giant seeks to Hewlett Packard Enterprise of rampant sexual harass- Immelt to quickly bring sta- oil in the next few years?
overcome its ethical scan- CEO Meg Whitman, who ment and bullying among bility to the company. Oth- A: Emerging markets have
dals and turn itself into a several times publicly dis- employees. The company ers wanted to make anoth- shown notable improve-
profitable business. avowed any interest. The also has been rocked by er run at Whitman or keep ment over the last year or
Immelt announced Sunday group had hoped to per- management upheaval. searching.Immelt, who will so. This has been reflected
on Twitter: “I have decided suade her to jump aboard, All of the problems caused remain GE’s chairman un- in their strong stock per-
not to pursue a leadership but Whitman would have co-founder and former til Dec. 31, stepped down formance year to date.
position at Uber.” He add- none of it. On Friday, she CEO Travis Kalanick to step as CEO at the end of July. Growth in these develop-
ed that he has “immense reiterated that she’s not in- down from the leadership His experience running a ing markets is key to growth
respect” for the company terested, saying through a post in June, leaving the job diverse conglomerate and in energy demand. A focus
and its founders. spokesman that she has no vacant.Uber now is being dealing with a corporate on increasing demand in-
Uber’s fractured eight- plans to meet with the Uber run by a 14-person commit- board was considered creases the optimism for oil
member board has been board. Her previous disin- tee of executives but has a big plus by some Uber pricing and is yet another
meeting this weekend to terest remains, said HP En- several top positions open board members who want strong argument for estab-
find a new leader. Immelt terprise spokesman Henry that won’t be filled until a to bring experienced lead- lishing a long-term position
was among the finalists for Gomez. CEO is hired. That commit- ership to the company. q in the energy sector.q