Portfolio Manager Ben Cook Appears on TD Ameritrade Network

By BP Capital Investment Team - January 26, 2021

BP Capital Fund Advisors Portfolio Manager Ben Cook, CFA discussed the firm's Energy and Midstream strategies on the TD Ameritrade Network on January 20, 2021.

Watch to Ben Cook's interview here. 

Key highlights from Ben's recent media appearances include: 

Energy equities out of the gate too quick in 2021? We don’t think so. A surprise crude oil supply cut by Saudi Arabia limiting crude global by 1mmbbls/d in February and March 2021, combined with a ‘light blue sweep’ by the Democrats has given the market a justifiable boost in confidence that favorable near-term energy supply and demand trends should further support the rebound we’ve seen thus far in 2021.

Spiking global COVID cases and renewed lockdowns are prompting continued economic stimulus which should bold well for energy demand growth. Through year end, combined global stimulus (fiscal & monetary) has totaled ~$28.5Tn or roughly 33% of global GDP. In the US we anticipate 2021 GDP could reach 6%, the highest level since 1983. Global growth should drive energy demand higher particularly as economies re-open upon broader vaccination.

Beyond the immediate impact of supporting near-term economic growth, monetary and fiscal stimulus will likely bring lasting effects in the form of higher interest rates, a dollar weakness, and higher inflation which in turn should support commodity pricing. We believe this trend should support cyclical companies which of course includes energy equities.

Vaccination and herd immunity drive an energy demand rebound to pre-COVID levels likely by the first half of 2022, at which time commodity producers will be called upon to meet a rising global appetite for both crude oil and natural gas. With industry capacity dramatically reduced in response to the sector’s downturn, rising prices will be required to invite the capital, equipment and people necessary to meet rising energy needs. In this environment commodity price ‘spikes’ are not out of the question.

The 'Energy Transition' is underway and should accelerate under a Biden Presidency and Democrat controlled congress. The transition will alter the mix of primary fuels towards zero and low carbon intensive fuels consumed on a global basis. We view these trends as secular in the sense that they should continue to unfold independent of cyclical influences that historically have defined energy commodity and equity performance. Amidst this transition we like natural gas and renewables and we think the lowest cost oil producers can thrive.

At current valuation levels, an abundance of attractive investment opportunity exists across both the renewable as well as the hydrocarbon energy value chains. While equities have risen, in some cases dramatically, we believe much of the sector has yet to discount the full potential represented by the growing needs of energy consumers around the world. As the global economy awakens from the pandemic rising energy demand should translate to an improvement in operating and financial results for many energy companies providing continued support to the sector through the balance of 2021.

Contacts: Toby Loftin tloftin@bpcfunds.com 214.405.8278 (m) and Ben Cook bcook@bpcfunds.com 214.770.9609 (m)

Disclaimer:

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Mutual fund investing involves risk. Principal loss is possible. Small and medium-capitalization companies may have more limited liquidity and greater price volatility than large-capitalization companies. Funds that concentrate in a single sector may be subject to a higher degree of risk. Energy-related companies are subject to specific risks, including fluctuations in commodity prices and consumer demand, substantial government regulation, and depletion of reserves.

Master Limited Partnerships (MLPs) and MLP investments have unique characteristics. The Fund does not receive the same tax benefits as a direct investment in an MLP.

The prices of MLP units may fluctuate abruptly and trading volume may be low, making it difficult for the Fund to sell its units at a favorable price. MLP general partners have the power to take actions that adversely affect the interests of unit holders. Most MLPs do not pay U.S. federal income tax at the partnership level, but an adverse change in tax laws could result in MLPs being treated as corporations for federal income tax purposes, which could reduce or eliminate distributions paid by MLPs to the Fund. The Fund is treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes, and therefore, is subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations (currently a maximum rate of 21%) as well as state and local income taxes. The Fund will not benefit from current favorable federal income tax rates on long-term capital gains, and Fund income and losses will not be passed on to shareholders. The Fund accrues deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax-deferred return of capital and for any net operating gains as well as capital appreciation of its investments. This deferred tax liability is reflected in the daily NAV and as a result the Fund’s after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked.

Top 10 holdings for the Hennessy BP Energy Fund can be found here. Top 10 holdings for the Hennessy BP Midstream Fund can be found here. Current and future holdings are subject to risk.

The Hennessy Funds are distributed by Quasar Distributors, LLC. The Hennessy BP Funds are sub-advised by BP Capital Fund Advisors, LLC. BP Capital Fund Advisors, LLC is not affiliated with Quasar Distributors, LLC.

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All information provided herein is for informational purposes only and should not be relied upon to make an investment decision.

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