The Guinness Global Energy Fund offers investors the opportunity to gain exposure to the potentially increasing value of energy companies arising from the growing global demand for energy and from the world’s diminishing supply of hydrocarbon reserves.

This fund follows the recent UK retail market launch of the Guinness Alternative Energy Fund on 21 February 2008. It is the intention that these will be the first funds of a full stable of specialist sector and thematic funds which will enable investors to gain exposure to investments in energy, Asia and innovation.

The fund will be managed by Tim Guinness, a Citywire AAA-rated fund manager with over 26 years’ fund management experience.

Minimum investment: US$20,000
Initial charge: 2%
Annual management fee: 1.5%
Contact: For more information visit www.guinnessfunds.com
 
Philip Johnson says:
The fund will invest in companies engaged in the exploration, production and distribution of energy. Energy includes oil, natural gas, coal, nuclear, utilities and alternative energy. Activities include exploration, production and distribution.  

It will run a concentrated portfolio, investing in energy companies worldwide, both domiciled in developed economies such as the US, Europe and Asia and in emerging markets. Under normal market conditions the fund will invest in approximately 40 stocks.  

Rising energy costs have signalled the end of cheap oil. Fundamental supply-demand economics dictate that the days of cheap oil are behind us. Yet global energy consumption continues to surge. Although the alternative energy revolution is under way, mainstream energy (oil, natural gas, coal, and other fossil fuels) will remain an important energy source for years to come. Demand from the developing world will continue to outstrip global supply growth, which creates a very favourable
trading environment for energy companies.

When thinking about investment into this fund it is worth taking a look at three factors relating to oil. Firstly, oil demand has grown from 31 million barrels in 1965 to 86 million barrels per day in 2007. Secondly, looking to the future, the International Energy Agency estimate for 2030 is 116 million barrels, a further 35 per cent increase. Lastly, Chinese oil demand has grown by 93 per cent in the last ten years.

Clearly this fund is not just concerned with investing in oil-related companies; other important areas of investment will be companies connected with utilities and alternative energy. 

It is worth considering this fund as part of a well-balanced portfolio. Direct investment has a minimum subscription level for UK investors of £10,000. However, investment of less than £10,000 can be made by investing in an ISA using other platforms.