Two managers make a one-off case for departing from traditional, tried-and-tested strategies to invest in something different
As a rule of thumb, it is sensible to avoid funds with the word 'new' in the title. In-house marketing departments may get excited by the faddish, but investors should instead entrust their hard-earned savings to proven funds, traditional sectors, boring product structures and tried and tested formulae.
The New Energy Fund from Merrill Lynch Investment Managers (MLIM) may be an exception to that rule. It is run from London by co-managers Poppy Buxton and Robin Batchelor, who also jointly manage the investment house's World Energy Fund.
Ms Buxton, who worked at Esso before joining MLIM, says managing the two funds is as akin to looking after two demanding children.
The World Energy Fund seeks out growing energy companies around the world best positioned to benefit from rising crude oil and natural gas prices. The fund has produced positive returns of 19.40 per cent over three years and 47.60 per cent over one year.
'Oil prices have risen but investors are also starting to price in a slightly higher long-term price. It is nowhere near the stock price or even the long-term futures price, but it is also nowhere near the low price they've got used to in the past,' says Mr Batchelor.