The fund invests in around 46 global energy stocks, such as Chevron Corporation and Royal Dutch Shell, and is benchmarked against MSCI World Energy index. Stocks included in the fund are generally within gas, energy, and equipment services companies but may also include investments from other energy related industries.
Portfolio manager Michael Hulme will take a bottom up approach to identify stocks with above average growth potential that are trading at lower than average valuations. Hulme leads both the U.S. Energy Sector team and the International Energy Sector team and is a senior energy investment specialist covering integrated oil and exploration and production companies globally.
Before he joined MFS in 2002, he was a fund manager for SG Asset Management Emerging Markets and an investment analyst for F&C Management.
The prices of energy stocks fell significantly last year and the valuations of some oil and gas companies are still low due to the strength of the dollar. This could provide useful buying opportunities for the fund, particularly as oil prices recently reached an eight month high and could move higher.
Prices of oil and gas companies could rise due to concerns about oil reserves and the prospect of an economic recovery, which would benefit this fund. However, investing in one sector makes this fund potentially more volatile than broad equity funds and it may face competition from specialist energy funds such as Martin Currie’s global energy fund.