Fund managers see value in energy stocks

June 24, 2010

For equity investors, 2010 has yet to deliver the “fun” to fund investing.

The average stock fund has lost 3.5 percent so far this year, according to Lipper, a Thomson Reuters company. And the funds that are at the top of the performance charts thus far this year are typically taking a defensive stance.

One such defensive portfolio is the Ave Maria Growth fund, which is up 4.86 percent through June 23. According to Lipper, top holdings include defense contractor General Dynamics, retailer Coach and tech giant Hewlett-Packard.

Manager George Schwartz says he has been underweight in the energy sector thus far, but he is looking to increase the portfolio’s stake in energy and oil stocks. “They are inordinately cheap right now,” Schwartz says. While the fund has a 3.4% position in Occidental Petroleum, “Halliburton and Schumberger are great companies that aren’t in this portfolio, but could find their way in,” says Schwartz. “The value is definitely in energy patch today.”

Indeed, several mutual fund managers at the Morningstar  Investment Conference in Chicago this week said they are looking at energy stocks, including oil giant BP Plc, which has lost about half of its value since the April oil spill.

Which begs the question: Is offense the best defense?

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see