Thread: Why has Oil & Gas been so volatile? Since 2018, the majority of all CDN E&P buying has come from high-turnover funds. Thus any WTI weakness had them rushing to the exits. Encouragingly, low-turnover funds have become the main buyer in 3Q
More energy inst. buying trends:
2/ As CDN Oil & Gas names hinted at bigger dividends & more growth post Q2 earnings, we saw these 'style' of funds be the dominant buyer in Q3. This theme likely continues as balance sheets allow for more ‘shareholder friendly’ items and growth into 2023 #WTI
3/ Importantly, some of the largest global funds are now picking up CDN Oil & Gas names. Given their AUM size, it can take multiple quarters to establish a position, suggesting there is more large block buying to come in future quarters #energy #CrudeOil #OOTT
4/ Since 2018, most buying of CDN Oil & Gas names have been from energy focused funds. Q2 was the time where the 'Generalist' investor finally came back and Q3 looks to repeat this trend again (and in size)! The sector remains 'investable' for the Generalist investor now #energy
5/ Energy security is a global theme and foreign investors continue to see CDN Oil & Gas names attractive, buying $3.5 bln in Q3. (offsetting selling from CDN fund managers). With the TSX Index 20% Energy, CDN investors likely still come back to the space #EnergyCrisis #alberta
6/ In total, we saw $3.3 bln in net buying of CDN E&Ps in Q3 (based on institutional 13F filings of more than 5,000 funds that have held a CDN Oil & Gas stock). Overall, the trend looks very favorable heading into 2023 #energy #investing
Follow @JeremyMcCreaCFA @RaymondJamesCDN
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