Seismic reflections : Commodity prices only a side issue

Oil and gas stocks have taken a beating on the back of recent falls in global oil prices. However, while both small and large caps are affected by oil price volatility, our analysis suggests endogenous factors have far more of an impact on juniors than their larger cousins. Investments in smaller E&P companies obviously carry significant risks; however, oil price exposure is probably not top of the list. And for this reason alone we suggest a balanced oils portfolio should always contain some smaller stocks.

Download PDF