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

Dutch pension schemes show relative conservatism

Dutch pension schemes have the highest allocation to bonds, with an average weighting of 48 per cent, while US and UK funds favour equities, according to the 2010 Towers Watson global pension assets study. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Farmland comes of age for pension funds

As a relatively new and untapped asset class, farmland remains mysterious to some institutional investors. Greg Bright spoke to Charmion McBride, chief operating officer of Insight Investment, an affiliate manager of BNY Mellon Asset Management, about the benefits of the asset class which include uncorrelated returns and SRI considerations. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Australian Future Fund favours hedge funds

The A$66 billion ($58.8 billion) Australian Future Fund has tapped its cash portfolio to increase its exposure to alternatives, with cash dropping from 46 to 15 per cent in the past year, including an estimated allocation of $3.7 billion to three hedge fund managers in the fourth quarter of last year. mrec4inarticleinline Sponsored Content scnative1

Appalled in Greenwich Connecticut

Managing and founding principal of AQR Capital Management, Cliff Asness, responds to President Obama’s call to limit the size and power of America’s banks. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Why institutions bypass hedge FoFs

More first-time investors in hedge funds are allocating to the strategies directly, rather than choosing hedge fund-of-funds (hedge FoFs), as investment talent circulates among institutions and investors observe the passive approach that many hedge FoFs apply to their portfolios. Simon Ruddick, managing director of hedge fund consultancy Albourne Partners spoke with Simon Mumme about this

UK Universities scheme focuses on emerging markets

The £27 billion ($44 billion) Universities Superannuation Scheme has made three new appointments and reorganised its equities team with a new dedicated global emerging markets capability, the first internal restructure under new chief investment officer Roger Gray. mrec4inarticleinline Sponsored Content scnative1 scnative2 scnative3

Previous