The oil spill from an investor’s perspective – not as bad

The BP oil spill in the Gulf of Mexico is not only the most devastating environmental disaster ever in the US, it raises issues around energy policies which continue to evolve. A client note from Russell Investments says energy stocks will continue to reflect the impact of the disaster and investors may well look at opportunities in companies involved in the clean-up effort or alternative energy supply.“The oil spill, environmental concerns and previous periods of soaring oil and gasoline prices have spurred countries, governments and individuals to pursue the development of alternative energy sources and policies,” the note, written by Natalie Miller, Russell’s consulting director of client services, says.

“Whenever disasters strike, stock prices rise and fall. In the case of the April 20 BP oil spill, energy securities immediately felt the impact; they lagged the broader US market by nearly 4 percentage points for the month of May (Russell 1000 Energy Index, –11.6 per cent; Russell 3000 Index, –7.9 per cent), and will continue to reflect the impact of this disaster.”

However, Miller says that the impact for investors with a well-diversified portfolio is likely to be relatively small. The state of the global economy and currency movements are more likely of greater concern, she says.

Sponsored Content

Leave a Comment

Sort content by

Wilshire paints dire picture for state retirement systems

Wilshire Consulting’s annual report on US state retirement systems reveals near-universal underfunding, leavened only slightly by the 19.5 per cent rally in global equity markets in the eight months since its cut-off date. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

OMERS overwhelms with underperformance

OMERS Strategic Investments, the investment entity of the C$47 billion ($45 billion) Ontario Municipal Employees Retirement System (OMERS) focused on co-investment opportunities in private markets, has dramatically underperformed its benchmark for the year. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Risk parity becomes bittersweet flavour of the month

A risk parity approach to asset allocation is flavour of the month, in spite, and because, of the leverage it requires. Amanda White explores the topic.

Institutions worldwide rethink passive exposures: Towers Watson

The number of bond mandates awarded by institutional funds shot up by more than 50 per cent in 2009 as credit markets provided attractive investment opportunities, while the amount of passive allocations made by institutions increased fourfold in the past two years, according to Towers Watson.   mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

DC plans must look at governance and design

Towers Watson’s Roger Urwin and Gordon Clark from the University of Oxford are finalising their fourth collaboration on global best practice for defined contribution plans. Amanda White spoke with Roger Urwin about the inefficiencies in plan design. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

AIMCo splits top job, beefs up investment team

The C$69 billion ($66 billion) Alberta Investment Management Corporation (AIMCo) will split its chief executive and chief investment officer roles, with Leo de Bever retaining the chief executive position, while a search is underway for a new CIO. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Previous