Guinness Global Energy

Investor Summary

The fund is managed by three experienced portfolio managers: Tim Guinness, founder of Guinness Global Investors with over 35 years of investment experience and degrees from Cambridge University and MIT's Sloan School; Will Riley, who joined in 2007 after six years at PricewaterhouseCoopers as a Chartered Accountant with a Master's from Cambridge; and Jonathan Waghorn, who joined in 2013 and co-manages both the Global Energy Fund and Sustainable Energy Fund. The management team combines deep sector expertise with rigorous analytical frameworks, implementing both macro and micro investment approaches. Guinness Asset Management Ltd manages $6.28 billion in total assets and operates under FCA regulation in the UK. The firm emphasizes concentrated portfolio construction with typically 30 best ideas rather than benchmark-following approaches. Recent policy changes provide greater flexibility with 25-75 stock targets and reduced management fees across fund ranges.

Fund Strategy

The Guinness Global Energy Fund seeks capital growth through exposure to global energy markets, operating on the belief that the world's population is growing at a rate of 1% per year and is projected to rise over the next 20 years by 1.5 billion people, with over 90% of this growth coming from developing countries. The investment strategy is built on the principle that easily extractable oil and gas assets remain scarce, and as they get scarcer, they will trade at higher prices. Stock selection is driven 50% by top-down macro views and 50% by bottom-up stock analysis. The portfolio comprises 30 'best ideas' and does not follow any benchmark in its sub-sector weights. The fund maintains 90% invested in companies with market capitalizations over US $1 billion and positions energy companies as a useful long-term inflation hedge given that energy prices are a significant driver of inflation.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
9.4%	38.1%	38.1%

Executive Summary

The Iran war has created the largest oil supply disruption in history, with closure of the Strait of Hormuz cutting 20m b/day of oil exports. After accounting for pipeline diversions and strategic inventory releases, the net supply shock is 10m b/day, far exceeding previous crises. This requires demand destruction through higher prices, potentially reaching $125-150/bl. The MSCI World Energy Index rose 11.6% in March while broader markets fell 6.4%, with year-to-date energy returns of 36.9%. The fund's strongest performers included Equinor, Repsol, Eni, BP and Valero. Using $90/bl Brent assumptions for 2026-27, the fund's earnings per share would rise 65%, bringing the PE ratio to 13x versus the MSCI World's 20x. With long-term oil prices of $80/bl, energy equities still offer 20% upside. The managers maintain their view that OPEC will defend reasonable oil prices while the supply disruption fundamentally alters energy market dynamics.

Forward Outlook

The managers believe Saudi's long-term objective remains to maintain a 'good' oil price around $80/bl. Were energy equities to reflect $80/bl long-term, with 2026 and 2027 estimates unchanged, there would still be a further 20% upside in energy equities. The supply disruption will persist while the Strait remains closed and continue on a declining scale for two to three months after reopening.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Apr 7 2026	2026 Q1	-	energy, Geopolitical, Iran, Natural Gas, oil, Opec, Supply Disruption, valuation	-	Iran war creates unprecedented 10m b/day oil supply shock requiring demand destruction at $125-150/bl. Energy sector outperformed with 36.9% YTD returns while broader markets declined. Fund earnings could rise 65% under $90/bl scenario, trading at 13x PE versus market's 20x. Energy equities offer 20% upside with $80/bl long-term oil assumptions.
Jan 21 2026	2025 Q4	BP, CNQ.TO, COP, CVX, FANG, SHEL, SU.TO, TTE, VLO, XOM	energy, Exploration, Gas, Integrated, oil, Production	-	Guinness Global Energy targets long-term capital growth through concentrated exposure to global energy equities. The investment thesis relies on population growth, industrialisation, and diminishing fossil fuel supplies driving energy prices higher. The fund uses a balanced top-down/bottom-up approach with value bias, holding approximately 30 large-cap energy companies across the value chain.
Oct 14 2025	2025 Q3	BKR, BP, COP, CVE, CVX, E, EOG, EQNR, FANG, GALP.LS, HAL, OMV.VI, REP.MC, SHEL, SLB, SU, TTE, VLO, WMB, XOM	energy, global, Natural Gas, oil, Opec, Russia, Ukraine	VAL HAL REP SM EOG	Guinness Global Energy maintains its bullish long-term energy thesis despite mixed September performance. Ukrainian attacks on Russian oil infrastructure create supply risks while OPEC+ manages production to support $80+ oil prices. Portfolio positioned with 54% integrated oils and 18% E&P exposure. Current valuations imply 25% upside if returns sustain at 9-10% versus market's 4% assumption.
Jul 10 2025	2025 Q2	BP, CNQ, COP, CVE, CVX, DVN, E, ENB, EOG, EQNR, FANG, GALP.LS, IMO, KMI, OMV.VI, PTR, REP.MC, SHEL, SU, TTE, XOM	dividends, energy, Geopolitical, Natural Gas, oil, Opec, valuation	-	Energy equities trade at significant discount despite robust cash generation and high return yields. Portfolio reflects $65/bl long-term oil price versus managers' $80/bl assumption, offering potential 35% upside. Geopolitical tensions create near-term volatility while OPEC+ production increases pressure prices. Strong free cashflow supports growing dividends and buybacks.
Apr 30 2025	2025 Q1	BP, CNQ, COP, CVE, CVX, DVN, E, ENB, EOG, EQNR, FANG, GALP.LS, IMO, KMI, OMV.VI, PTR, REP, SHEL, SU, TTE, XOM	dividends, energy, Geopolitical, global, Natural Gas, oil, value	-	Energy equities delivered strong Q1 performance on robust oil fundamentals and company pivot back to fossil fuels from renewables. Portfolio generates 9.8% free cash flow yields while trading at significant discounts to broader markets. Geopolitical supply risks and tighter gas markets support near-term outlook while disciplined capital allocation enables growing dividends and buybacks.
Oct 30 2024	2024 Q3	0857.HK, BP, CNQ.TO, COP, CVE.TO, CVX, DVN, E, EOG, EQNR, FANG, GALP.LS, IMO.TO, OMV.VI, PXD, REP.MC, SHEL, SU.TO, TTE, XOM	CashFlow, dividends, energy, Gas, oil, Opec, valuation	-	Energy sector remains deeply undervalued with portfolio companies generating 11% free cash flow yields while OPEC+ supply cuts and slowing US shale growth support higher oil prices. European integrated holdings like TotalEnergies offer exceptional shareholder returns. Current valuations imply $67/barrel long-term Brent, suggesting significant upside potential at normalized oil prices.
Jul 31 2024	2024 Q2	BP, CNQ, COP, CVE, CVX, DVN, E, EOG, EQNR, FANG, GALP.LS, IMO, OMV.VI, PTR, REP.MC, SHEL, SNP, SU, TTE, XOM	dividends, energy, Free Cash, global, Natural Gas, oil, Opec, valuation	-	Energy equities delivered strong first-half performance driven by rising oil prices and robust free cash generation. Portfolio companies benefit from operational leverage to $80+ oil while maintaining capital discipline. Current valuations imply $67/bl long-term oil versus $80/bl incentive price, creating significant upside as 10%+ free cashflow yields support growing dividends and buybacks.
Apr 30 2024	2024 Q1	BP, CNQ, COP, CVE, CVX, DVN, E, EOG, EQNR, FANG, GALP.LS, IMO, OMV.VI, PTR, PXD, REP.MC, SHEL, SU, TTE, XOM	dividends, energy, free cash flow, Gas, oil, Opec, valuation	-	Energy equities outperformed on stronger oil fundamentals and geopolitical tensions. The fund benefits from exceptional 11% free cash flow yields and cleaned-up balance sheets enabling growing dividends and buybacks. Portfolio trades at significant discount implying only $68/bl long-term oil despite fundamentals supporting $80+ prices, offering 25-55% upside potential at higher oil price assumptions.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Apr 7 2026

2026 Q1

energy, Geopolitical, Iran, Natural Gas, oil, Opec, Supply Disruption, valuation

Iran war creates unprecedented 10m b/day oil supply shock requiring demand destruction at $125-150/bl. Energy sector outperformed with 36.9% YTD returns while broader markets declined. Fund earnings could rise 65% under $90/bl scenario, trading at 13x PE versus market's 20x. Energy equities offer 20% upside with $80/bl long-term oil assumptions.

Jan 21 2026

2025 Q4

BP, CNQ.TO, COP, CVX, FANG, SHEL, SU.TO, TTE, VLO, XOM

energy, Exploration, Gas, Integrated, oil, Production

Guinness Global Energy targets long-term capital growth through concentrated exposure to global energy equities. The investment thesis relies on population growth, industrialisation, and diminishing fossil fuel supplies driving energy prices higher. The fund uses a balanced top-down/bottom-up approach with value bias, holding approximately 30 large-cap energy companies across the value chain.

Oct 14 2025

2025 Q3

BKR, BP, COP, CVE, CVX, E, EOG, EQNR, FANG, GALP.LS, HAL, OMV.VI, REP.MC, SHEL, SLB, SU, TTE, VLO, WMB, XOM

energy, global, Natural Gas, oil, Opec, Russia, Ukraine

VAL
HAL
REP SM
EOG

Guinness Global Energy maintains its bullish long-term energy thesis despite mixed September performance. Ukrainian attacks on Russian oil infrastructure create supply risks while OPEC+ manages production to support $80+ oil prices. Portfolio positioned with 54% integrated oils and 18% E&P exposure. Current valuations imply 25% upside if returns sustain at 9-10% versus market's 4% assumption.

Jul 10 2025

2025 Q2

BP, CNQ, COP, CVE, CVX, DVN, E, ENB, EOG, EQNR, FANG, GALP.LS, IMO, KMI, OMV.VI, PTR, REP.MC, SHEL, SU, TTE, XOM

dividends, energy, Geopolitical, Natural Gas, oil, Opec, valuation

Energy equities trade at significant discount despite robust cash generation and high return yields. Portfolio reflects $65/bl long-term oil price versus managers' $80/bl assumption, offering potential 35% upside. Geopolitical tensions create near-term volatility while OPEC+ production increases pressure prices. Strong free cashflow supports growing dividends and buybacks.

Apr 30 2025

2025 Q1

BP, CNQ, COP, CVE, CVX, DVN, E, ENB, EOG, EQNR, FANG, GALP.LS, IMO, KMI, OMV.VI, PTR, REP, SHEL, SU, TTE, XOM

dividends, energy, Geopolitical, global, Natural Gas, oil, value

Energy equities delivered strong Q1 performance on robust oil fundamentals and company pivot back to fossil fuels from renewables. Portfolio generates 9.8% free cash flow yields while trading at significant discounts to broader markets. Geopolitical supply risks and tighter gas markets support near-term outlook while disciplined capital allocation enables growing dividends and buybacks.

Oct 30 2024

2024 Q3

0857.HK, BP, CNQ.TO, COP, CVE.TO, CVX, DVN, E, EOG, EQNR, FANG, GALP.LS, IMO.TO, OMV.VI, PXD, REP.MC, SHEL, SU.TO, TTE, XOM

CashFlow, dividends, energy, Gas, oil, Opec, valuation

Energy sector remains deeply undervalued with portfolio companies generating 11% free cash flow yields while OPEC+ supply cuts and slowing US shale growth support higher oil prices. European integrated holdings like TotalEnergies offer exceptional shareholder returns. Current valuations imply $67/barrel long-term Brent, suggesting significant upside potential at normalized oil prices.

Jul 31 2024

2024 Q2

BP, CNQ, COP, CVE, CVX, DVN, E, EOG, EQNR, FANG, GALP.LS, IMO, OMV.VI, PTR, REP.MC, SHEL, SNP, SU, TTE, XOM

dividends, energy, Free Cash, global, Natural Gas, oil, Opec, valuation

Energy equities delivered strong first-half performance driven by rising oil prices and robust free cash generation. Portfolio companies benefit from operational leverage to $80+ oil while maintaining capital discipline. Current valuations imply $67/bl long-term oil versus $80/bl incentive price, creating significant upside as 10%+ free cashflow yields support growing dividends and buybacks.

Apr 30 2024

2024 Q1

BP, CNQ, COP, CVE, CVX, DVN, E, EOG, EQNR, FANG, GALP.LS, IMO, OMV.VI, PTR, PXD, REP.MC, SHEL, SU, TTE, XOM

dividends, energy, free cash flow, Gas, oil, Opec, valuation

Energy equities outperformed on stronger oil fundamentals and geopolitical tensions. The fund benefits from exceptional 11% free cash flow yields and cleaned-up balance sheets enabling growing dividends and buybacks. Portfolio trades at significant discount implying only $68/bl long-term oil despite fundamentals supporting $80+ prices, offering 25-55% upside potential at higher oil price assumptions.

QUARTER	THEMES	TAGS
2026 Q1	Oil Iran war has closed the Strait of Hormuz, disrupting 20m b/day of oil exports and creating the largest supply shock in history at 10m b/day after pipeline diversions and strategic releases. Oil prices have spiked above $100/bl with demand destruction needed to balance markets.	Supply disruption Geopolitical risk Demand destruction Strategic reserves Pipeline capacity
	Natural Gas Global LNG prices rose sharply as 20% of global LNG supplies transit the Strait of Hormuz. QatarEnergy shut production and two processing lines were damaged, rendering them offline for three to five years.	LNG Supply disruption Qatar Processing capacity Global markets
	Geopolitical War in Iran has created unprecedented energy supply disruption through closure of the Strait of Hormuz. The conflict represents the largest oil supply shock historically and has fundamentally altered energy market dynamics.	Iran Strait of Hormuz Supply shock Energy security Middle East
2025 Q4	Dividends The fund focuses on carefully selected quality companies around the globe with strong dividend growth. Portfolio managers aim to provide dividend growth and consistent returns with lower volatility over the long-term. The fund seeks high-quality, dividend-paying companies that can generate strong, consistent returns.	Dividend Growth Quality Companies Income
	AI AI infrastructure demand remained strong with SK Hynix benefiting from robust memory demand. However, concerns emerged about AI potentially hurting parts of RELX's business, leading to position exit. IT rotation and year-end softness drove sentiment weakness in pockets of IT and AI.	Memory Infrastructure Technology
	Quality The fund invests in carefully selected quality companies around the globe. Market concentration and tilt toward value created challenges for quality investors seeking to deliver a diversified portfolio. The team maintains a robust approach to valuation while owning industry leaders.	Quality Companies Valuation Industry Leaders
2025 Q3	Oil Oil prices remained mixed in September with WTI falling slightly while Brent stayed flat. Ukrainian attacks on Russian oil infrastructure and OPEC production decisions continue to drive price volatility. The fund expects oil prices to move higher over the next twenty years due to population growth, developing world industrialization, and diminishing fossil fuel supplies.	WTI Brent OPEC Production Infrastructure
	Natural Gas Natural gas prices declined in September with Asian gas down to $11/Mcf and European gas just over $10/Mcf. US gas prices sit above $3/Mcf. Chinese LNG imports appear down around 20% in September as China diversifies its gas supply through domestic production and pipeline imports.	LNG Henry Hub Storage Demand Supply
	Russia Russia faces increasing pressure from Ukrainian attacks on oil infrastructure and Western sanctions. Export revenues have fallen sharply from $21-23bn per month in early 2022 to $13-25bn currently. Ukraine has intensified attacks on Russian energy infrastructure since May, targeting both refining facilities and export terminals.	Sanctions Infrastructure Exports Revenue Attacks
	Ukraine Ukraine has strategically shifted to targeting Russian energy infrastructure with greater impact than Western sanctions have achieved. Recent attacks targeted 13 refining facilities and key export hubs like Primorsk. Ukrainian President Zelenskyy stated that strikes on Russian oil facilities are the most effective sanctions.	Infrastructure Attacks Strategy Sanctions Energy
2025 Q2	Oil Oil prices rose sharply intra-month due to Israel-Iran conflict, with Brent reaching $80/bl before falling back to $68/bl. OPEC+ continues increasing production quotas while US shale production growth slows due to lower rig counts and capital discipline.	Brent WTI OPEC Shale Iran
	Natural Gas International gas prices rose with Asian gas at $13/mcf and European gas at $10.5/mcf. Middle East tensions brought risk premia as 20% of global LNG trade travels through the Strait of Hormuz.	LNG Henry Hub Storage Exports Demand
	Geothermal Geopolitical tensions escalated with Israel bombing Iran's nuclear facilities, followed by US attacks on Iranian nuclear sites. Concerns around Strait of Hormuz accessibility as 20% of world's oil supply passes through daily.	Iran Israel Strait Nuclear Sanctions
	Dividends Portfolio companies maintain robust free cash generation with estimated 8.4% free cashflow yield at $70/bl Brent. Fixed dividends have room to grow given high free cashflow yields and ample coverage.	Cashflow Yield Coverage Growth Returns
	Buybacks Energy companies continue shareholder return programs through share buybacks, supported by strong free cash generation. Buyback programs supplement dividend payments as part of capital allocation strategy.	Repurchases Capital Returns Allocation Programs
2025 Q1	Oil Oil prices remained robust with Brent averaging $75/bl in Q1 2025, supported by lower supply expectations and geopolitical tensions. The managers believe oil remains good value at around 2.7% of global GDP, well below historical averages. They see potential for higher prices driven by OPEC+ production management and geopolitical supply disruptions.	Brent WTI OPEC Supply Geopolitical
	Natural Gas Natural gas markets remained tighter than expected in 2025, with US Henry Hub prices rising above $4/mcf by March. Record LNG exports and cold weather drove demand while production growth moderated. European gas inventories fell to lowest levels in four years due to reduced Russian imports and increased Asian competition for LNG.	Henry Hub LNG Exports Inventories Europe
	Geopolitical Geopolitical tensions dominated energy markets with US sanctions on Russian producers, Iranian refineries, and cancellation of Venezuelan concessions. These actions could negatively impact supply from Russia, Venezuela and Iran while creating space for OPEC+ to return withheld volumes to market.	Sanctions Russia Iran Venezuela Trump
	Energy Transition Companies are resetting away from low carbon investments back toward fossil fuel growth. BP announced plans to cut low carbon capex by nearly 80%, acknowledging their push into renewables was too far, too fast. The focus has shifted to oil and gas demand being robust out to 2035.	Low Carbon Renewables Reset Fossil Fuels BP
	Dividends The portfolio offers an estimated gross dividend yield of 4.4% in 2025 with ample room for growth given the high free cashflow yield of 9.8%. Fixed dividends in the portfolio have generally been growing and are supported by robust free cash generation at $80/bl Brent.	Yield Growth Free Cash Flow Sustainable Coverage
	Buybacks Strong free cash generation enables continued share buyback programs alongside dividend increases. The managers expect buybacks to supplement dividend returns, all driven by a free cash flow yield of around 10% for the portfolio, much higher than the 3.5% seen over the last twenty years.	Share Repurchases Capital Return Free Cash Flow Shareholder Returns Supplemental
2024 Q3	Oil Brent and WTI oil prices strengthened in September on OPEC+ supply cuts and declining inventories. Saudi Arabia and Russia extended voluntary production cuts through year-end, keeping markets undersupplied at 1.5m b/day. Global oil inventories declined 300m barrels over six months to late 2022 lows.	OPEC Supply Inventories Pricing Production
	Natural Gas Asian and European gas prices rose on Norwegian maintenance outages while US Henry Hub remained relatively stable. Norwegian flows to Europe fell to decade lows in early September due to high maintenance levels, creating undersupply conditions.	LNG Pipeline Storage Pricing Supply
	Integrated Oil & Gas European integrated companies generating exceptional free cash flow yields. TotalEnergies expects $100bn cumulative free cash flow 2023-28 at $80/bl Brent, representing 60% of current market cap. Companies maintaining high dividend coverage and share buyback programs.	Cashflow Dividends Buybacks Returns Valuation
	Exploration & Production US shale oil supply growth slowing as rig count falls 125 rigs from December 2022 peak. Current activity levels imply no growth over next 12 months. Portfolio includes US-focused E&P names with low enterprise value to proven reserves ratios.	Shale Drilling Reserves Production Growth
	Refiners Independent refining exposure through Valero, benefiting from recovery in refining margins. US Gulf Coast presence provides advantage in current market conditions with strong crack spreads supporting profitability.	Margins Capacity Products Processing Spreads
2024 Q2	Oil Oil prices strengthened in June with WTI closing at $81.5/bl and Brent at $87/bl. OPEC+ maintained production quotas while aspiring to add spare capacity back in 2025. The managers see oil demand growth of 1.0-1.3m b/day in 2024, with aviation being a key driver as global flights are now 13% above 2019 levels.	Brent WTI OPEC Aviation Demand
	Natural Gas US natural gas prices recovered from winter lows to $2.60/mcf in June. The market appeared undersupplied by 1 bcf/day on a weather-adjusted basis, though inventories remain at the top of historic ranges. International gas prices strengthened further with EU sanctions on Russian gas providing some market tightening.	Henry Hub LNG Storage Weather Russia
	Exploration & Production E&P companies benefited from operational leverage to rising oil prices. Diamondback Energy's acquisition of Endeavor was well received, creating a broader asset base for more efficient drilling. US shale production growth has slowed with the rig count declining from 627 in December 2022 to 479 currently.	Shale Permian Drilling M&A Leverage
	Integrated Oil & Gas Canadian integrateds like Canadian Natural Resources and Imperial Oil performed strongly, benefiting from operational leverage to rising oil prices and narrowing differentials between Canadian and US oil benchmarks. The sector continues to demonstrate strong free cash generation and capital discipline.	Canadian Differentials Free Cash Discipline Leverage
	Refiners US refining benefited from tighter capacity, especially with outages in Russia driving refining margins higher. Valero Energy was a particular beneficiary of the improved refining environment, along with integrated major Exxon's refining operations.	Margins Capacity Outages Valero Tightening
	Dividends The portfolio has an estimated gross dividend yield of 4.2% for 2024, with fixed dividends generally growing and having ample room to run further given the high free cashflow yield of over 10%. Companies are returning significant cash to shareholders through both dividends and buyback programs.	Yield Growth Cash Return Buybacks Sustainability
2024 Q1	Oil Oil prices strengthened in March driven by tighter supply/demand fundamentals, Middle Eastern tensions, and good OPEC+ compliance. Brent rose 16% year-to-date while 5-year forward prices increased 5%. The fund sees oil remaining affordable at current levels, representing only 2.8% of global GDP versus 30-year average of 3%.	Brent WTI OPEC Supply Demand
	Natural Gas Natural gas markets remained loose in 2024 due to exceptionally mild winter conditions. US Henry Hub prices fell 30% over the quarter while European gas prices declined 17%. The warmest US winter on record reduced heating demand significantly.	Henry Hub LNG Weather Storage Production
	Dividends Energy companies are generating exceptional free cash flows with the portfolio showing an estimated 11% free cash flow yield and 4.1% gross dividend yield for 2024. Fixed dividends have generally been growing with ample room to run further given high free cash generation.	Free Cash Flow Yield Distribution Growth Sustainability
	Buybacks Companies in the sector have cleaned up balance sheets with average net debt to EBITDA at about half the 15-year average, allowing higher cash distributions through both dividends and share buyback programs driven by strong free cash flow generation.	Share Repurchases Capital Return Balance Sheet Cash Generation Shareholder Returns

QUARTER

THEMES

Oil

Iran war has closed the Strait of Hormuz, disrupting 20m b/day of oil exports and creating the largest supply shock in history at 10m b/day after pipeline diversions and strategic releases. Oil prices have spiked above $100/bl with demand destruction needed to balance markets.

Supply disruption Geopolitical risk Demand destruction Strategic reserves Pipeline capacity

Natural Gas

Global LNG prices rose sharply as 20% of global LNG supplies transit the Strait of Hormuz. QatarEnergy shut production and two processing lines were damaged, rendering them offline for three to five years.

LNG Supply disruption Qatar Processing capacity Global markets

Geopolitical

War in Iran has created unprecedented energy supply disruption through closure of the Strait of Hormuz. The conflict represents the largest oil supply shock historically and has fundamentally altered energy market dynamics.

Iran Strait of Hormuz Supply shock Energy security Middle East

2025 Q4

Dividends

The fund focuses on carefully selected quality companies around the globe with strong dividend growth. Portfolio managers aim to provide dividend growth and consistent returns with lower volatility over the long-term. The fund seeks high-quality, dividend-paying companies that can generate strong, consistent returns.

Dividend Growth Quality Companies Income

AI

AI infrastructure demand remained strong with SK Hynix benefiting from robust memory demand. However, concerns emerged about AI potentially hurting parts of RELX's business, leading to position exit. IT rotation and year-end softness drove sentiment weakness in pockets of IT and AI.

Memory Infrastructure Technology

Quality

The fund invests in carefully selected quality companies around the globe. Market concentration and tilt toward value created challenges for quality investors seeking to deliver a diversified portfolio. The team maintains a robust approach to valuation while owning industry leaders.

Quality Companies Valuation Industry Leaders

2025 Q3

Oil

Oil prices remained mixed in September with WTI falling slightly while Brent stayed flat. Ukrainian attacks on Russian oil infrastructure and OPEC production decisions continue to drive price volatility. The fund expects oil prices to move higher over the next twenty years due to population growth, developing world industrialization, and diminishing fossil fuel supplies.

WTI Brent OPEC Production Infrastructure

Natural Gas

Natural gas prices declined in September with Asian gas down to $11/Mcf and European gas just over $10/Mcf. US gas prices sit above $3/Mcf. Chinese LNG imports appear down around 20% in September as China diversifies its gas supply through domestic production and pipeline imports.

LNG Henry Hub Storage Demand Supply

Russia

Russia faces increasing pressure from Ukrainian attacks on oil infrastructure and Western sanctions. Export revenues have fallen sharply from $21-23bn per month in early 2022 to $13-25bn currently. Ukraine has intensified attacks on Russian energy infrastructure since May, targeting both refining facilities and export terminals.

Sanctions Infrastructure Exports Revenue Attacks

Ukraine

Ukraine has strategically shifted to targeting Russian energy infrastructure with greater impact than Western sanctions have achieved. Recent attacks targeted 13 refining facilities and key export hubs like Primorsk. Ukrainian President Zelenskyy stated that strikes on Russian oil facilities are the most effective sanctions.

Infrastructure Attacks Strategy Sanctions Energy

2025 Q2

Oil

Oil prices rose sharply intra-month due to Israel-Iran conflict, with Brent reaching $80/bl before falling back to $68/bl. OPEC+ continues increasing production quotas while US shale production growth slows due to lower rig counts and capital discipline.

Brent WTI OPEC Shale Iran

Natural Gas

International gas prices rose with Asian gas at $13/mcf and European gas at $10.5/mcf. Middle East tensions brought risk premia as 20% of global LNG trade travels through the Strait of Hormuz.

LNG Henry Hub Storage Exports Demand

Geothermal

Geopolitical tensions escalated with Israel bombing Iran's nuclear facilities, followed by US attacks on Iranian nuclear sites. Concerns around Strait of Hormuz accessibility as 20% of world's oil supply passes through daily.

Iran Israel Strait Nuclear Sanctions

Dividends

Portfolio companies maintain robust free cash generation with estimated 8.4% free cashflow yield at $70/bl Brent. Fixed dividends have room to grow given high free cashflow yields and ample coverage.

Cashflow Yield Coverage Growth Returns

Buybacks

Energy companies continue shareholder return programs through share buybacks, supported by strong free cash generation. Buyback programs supplement dividend payments as part of capital allocation strategy.

Repurchases Capital Returns Allocation Programs

2025 Q1

Oil

Oil prices remained robust with Brent averaging $75/bl in Q1 2025, supported by lower supply expectations and geopolitical tensions. The managers believe oil remains good value at around 2.7% of global GDP, well below historical averages. They see potential for higher prices driven by OPEC+ production management and geopolitical supply disruptions.

Brent WTI OPEC Supply Geopolitical

Natural Gas

Natural gas markets remained tighter than expected in 2025, with US Henry Hub prices rising above $4/mcf by March. Record LNG exports and cold weather drove demand while production growth moderated. European gas inventories fell to lowest levels in four years due to reduced Russian imports and increased Asian competition for LNG.

Henry Hub LNG Exports Inventories Europe

Geopolitical

Geopolitical tensions dominated energy markets with US sanctions on Russian producers, Iranian refineries, and cancellation of Venezuelan concessions. These actions could negatively impact supply from Russia, Venezuela and Iran while creating space for OPEC+ to return withheld volumes to market.

Sanctions Russia Iran Venezuela Trump

Energy Transition

Companies are resetting away from low carbon investments back toward fossil fuel growth. BP announced plans to cut low carbon capex by nearly 80%, acknowledging their push into renewables was too far, too fast. The focus has shifted to oil and gas demand being robust out to 2035.

Low Carbon Renewables Reset Fossil Fuels BP

Dividends

The portfolio offers an estimated gross dividend yield of 4.4% in 2025 with ample room for growth given the high free cashflow yield of 9.8%. Fixed dividends in the portfolio have generally been growing and are supported by robust free cash generation at $80/bl Brent.

Yield Growth Free Cash Flow Sustainable Coverage

Buybacks

Strong free cash generation enables continued share buyback programs alongside dividend increases. The managers expect buybacks to supplement dividend returns, all driven by a free cash flow yield of around 10% for the portfolio, much higher than the 3.5% seen over the last twenty years.

Share Repurchases Capital Return Free Cash Flow Shareholder Returns Supplemental

2024 Q3

Oil

Brent and WTI oil prices strengthened in September on OPEC+ supply cuts and declining inventories. Saudi Arabia and Russia extended voluntary production cuts through year-end, keeping markets undersupplied at 1.5m b/day. Global oil inventories declined 300m barrels over six months to late 2022 lows.

OPEC Supply Inventories Pricing Production

Natural Gas

Asian and European gas prices rose on Norwegian maintenance outages while US Henry Hub remained relatively stable. Norwegian flows to Europe fell to decade lows in early September due to high maintenance levels, creating undersupply conditions.

LNG Pipeline Storage Pricing Supply

Integrated Oil & Gas

European integrated companies generating exceptional free cash flow yields. TotalEnergies expects $100bn cumulative free cash flow 2023-28 at $80/bl Brent, representing 60% of current market cap. Companies maintaining high dividend coverage and share buyback programs.

Cashflow Dividends Buybacks Returns Valuation

Exploration & Production

US shale oil supply growth slowing as rig count falls 125 rigs from December 2022 peak. Current activity levels imply no growth over next 12 months. Portfolio includes US-focused E&P names with low enterprise value to proven reserves ratios.

Shale Drilling Reserves Production Growth

Refiners

Independent refining exposure through Valero, benefiting from recovery in refining margins. US Gulf Coast presence provides advantage in current market conditions with strong crack spreads supporting profitability.

Margins Capacity Products Processing Spreads

2024 Q2

Oil

Oil prices strengthened in June with WTI closing at $81.5/bl and Brent at $87/bl. OPEC+ maintained production quotas while aspiring to add spare capacity back in 2025. The managers see oil demand growth of 1.0-1.3m b/day in 2024, with aviation being a key driver as global flights are now 13% above 2019 levels.

Brent WTI OPEC Aviation Demand

Natural Gas

US natural gas prices recovered from winter lows to $2.60/mcf in June. The market appeared undersupplied by 1 bcf/day on a weather-adjusted basis, though inventories remain at the top of historic ranges. International gas prices strengthened further with EU sanctions on Russian gas providing some market tightening.

Henry Hub LNG Storage Weather Russia

Exploration & Production

E&P companies benefited from operational leverage to rising oil prices. Diamondback Energy's acquisition of Endeavor was well received, creating a broader asset base for more efficient drilling. US shale production growth has slowed with the rig count declining from 627 in December 2022 to 479 currently.

Shale Permian Drilling M&A Leverage

Integrated Oil & Gas

Canadian integrateds like Canadian Natural Resources and Imperial Oil performed strongly, benefiting from operational leverage to rising oil prices and narrowing differentials between Canadian and US oil benchmarks. The sector continues to demonstrate strong free cash generation and capital discipline.

Canadian Differentials Free Cash Discipline Leverage

Refiners

US refining benefited from tighter capacity, especially with outages in Russia driving refining margins higher. Valero Energy was a particular beneficiary of the improved refining environment, along with integrated major Exxon's refining operations.

Margins Capacity Outages Valero Tightening

Dividends

The portfolio has an estimated gross dividend yield of 4.2% for 2024, with fixed dividends generally growing and having ample room to run further given the high free cashflow yield of over 10%. Companies are returning significant cash to shareholders through both dividends and buyback programs.

Yield Growth Cash Return Buybacks Sustainability

2024 Q1

Oil

Oil prices strengthened in March driven by tighter supply/demand fundamentals, Middle Eastern tensions, and good OPEC+ compliance. Brent rose 16% year-to-date while 5-year forward prices increased 5%. The fund sees oil remaining affordable at current levels, representing only 2.8% of global GDP versus 30-year average of 3%.

Brent WTI OPEC Supply Demand

Natural Gas

Natural gas markets remained loose in 2024 due to exceptionally mild winter conditions. US Henry Hub prices fell 30% over the quarter while European gas prices declined 17%. The warmest US winter on record reduced heating demand significantly.

Henry Hub LNG Weather Storage Production

Dividends

Energy companies are generating exceptional free cash flows with the portfolio showing an estimated 11% free cash flow yield and 4.1% gross dividend yield for 2024. Fixed dividends have generally been growing with ample room to run further given high free cash generation.

Free Cash Flow Yield Distribution Growth Sustainability

Buybacks

Companies in the sector have cleaned up balance sheets with average net debt to EBITDA at about half the 15-year average, allowing higher cash distributions through both dividends and share buyback programs driven by strong free cash flow generation.

Share Repurchases Capital Return Balance Sheet Cash Generation Shareholder Returns

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
Oct 14, 2025	Fund Letters	Will Riley	HAL	Halliburton Company	Energy	Oilfield Services & Equipment	Bull	NYSE	cashflow, Drilling, International, Margins, oilfield services, Pricing, Roce	Login
Oct 14, 2025	Fund Letters	Will Riley	REP SM	Repsol S.A.	Energy	Integrated Oil & Gas	Bull	Brasil Bolsa Balcão	buybacks, dividends, energy transition, Integrated, Margins, renewables, stability	Login
Oct 14, 2025	Fund Letters	Will Riley	EOG	EOG Resources Inc.	Energy	Oil & Gas Exploration & Production	Bear	NYSE	capital discipline, cashflow, inflation, oil, Production, Returns, valuation	Login
Oct 14, 2025	Fund Letters	Will Riley	VAL	Valero Energy Corporation	Energy	Oil & Gas Refining & Marketing	Bull	NYSE	buybacks, capital discipline, cashflow, dividends, efficiency, Margins, refining	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Oct 14, 2025

Fund Letters

Will Riley

HAL

Halliburton Company

Energy

Oilfield Services & Equipment

Bull

NYSE

cashflow, Drilling, International, Margins, oilfield services, Pricing, Roce

Oct 14, 2025

Fund Letters

Will Riley

REP SM

Repsol S.A.

Energy

Integrated Oil & Gas

Bull

Brasil Bolsa Balcão

buybacks, dividends, energy transition, Integrated, Margins, renewables, stability

Oct 14, 2025

Fund Letters

Will Riley

EOG

EOG Resources Inc.

Energy

Oil & Gas Exploration & Production

Bear

NYSE

capital discipline, cashflow, inflation, oil, Production, Returns, valuation

Oct 14, 2025

Fund Letters

Will Riley

VAL

Valero Energy Corporation

Energy

Oil & Gas Refining & Marketing

Bull

NYSE

buybacks, capital discipline, cashflow, dividends, efficiency, Margins, refining

TICKER	COMMENTARY
No ticker commentary found.

TICKER

COMMENTARY

No ticker commentary found.

Ticker	Put/Call	Amount Bought	Shares Bought	% Change	Weight %
No Recent Buys Data

Ticker

Put/Call

Amount Bought

Shares Bought

% Change

Weight %

No Recent Buys Data

Ticker	Put/Call	Amount Sold	Shares Sold	% Change	Weight %	Status
No Recent Sells Data

Ticker

Put/Call

Amount Sold

Shares Sold

% Change

Weight %

Status

No Recent Sells Data

Industry	Prev Quarter %	Current Quarter %	Change
No industry data available

Industry

Prev Quarter %

Current Quarter %

Change

No industry data available

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 31st March 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

Oil

Natural Gas

Geopolitical

Dividends

AI

Quality

Oil

Natural Gas

Russia

Ukraine

Oil

Natural Gas

Geothermal

Dividends

Buybacks

Oil

Natural Gas

Geopolitical

Energy Transition

Dividends

Buybacks

Oil

Natural Gas

Integrated Oil & Gas

Exploration & Production

Refiners

Oil

Natural Gas

Exploration & Production

Integrated Oil & Gas

Refiners

Dividends

Oil

Natural Gas

Dividends

Buybacks

Investor Pitches

Current Portfolio as of ( 31st March 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Will Riley Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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Guinness Global Energy