Oil and commodities

icone oil

Will commodity prices recover in 2017?


Beutel Goodman Canadian Equity Fund


Commodity stock valuations are a concern. Some supply-side tightening and modest improvements in China have led to outsized responses from some resource stocks. In the case of oil, many stocks have run up more on rumour than on any evidence of production cuts. Further improvement in demand could help close the valuation gap, but this may be challenging, given the outlook for modest global growth. A shift by governments from monetary to fiscal policy would help in this respect, and the November 2016 U.S. presidential election result makes this more likely.

Regardless, in the resource sector, we remain focused on a select number of quality, low-cost producers with the financial strength required to endure further volatility and capitalize on opportunities that may surface in their respective industries.

Dynamic Equity Income Fund



I have been doing this for more than 15 years and have come to the conclusion that oil is an almost impossible commodity to predict in the short term.

“That is one of the reasons that in my dividend funds I keep the resource weight minimal. I don’t want to make a major bet on stocks when I don’t know what the revenues are going to be.”

When you look to the long term, the oil business is actually a lot easier to analyze.  Today, the vast majority of the world is very concerned with carbon emissions and fossil fuels, and wants more and more renewable energies and less and less coal and oil. I think it is a course that is very hard to change, and you actually have some major oil companies talking about peak demand now.  Furthermore, the cost of renewable power, wind and solar, is plummeting. It is actually becoming much easier to get wind and solar going.


How will your portfolio be impacted if the U.S. Federal Reserve raises rates?

How do you plan on addressing these challenges?

What is the impact of volatility on your investment approach?

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