Global Utility Succeeds in 2001
Global Utility gets a boost from natural-gas stocks.
Global Utility Fund (GLUAX) is on the rebound. After suffering a 12.1% loss in 2000, it's on the mend so far in 2001. Although it has lost 4.4%, that lands it well in the category's top half, as utilities as a group have taken a breather following their relatively strong run in 2000. The fund suffered last year from its fairly heavy weighting in foreign telecom stocks. However, toward the end of last year, manager Mark Beckwith pared back many of the telecom names that he thought were adding unnecessary risk to the portfolio, like India's VSNL and Sprint PCS (PCS). This has been a boon so far in 2001, as many of those telecoms are still feeling the pain of the growth-stock sell-off.
Meanwhile, Beckwith is overweighting U.S.-based natural gas stocks like Exelon (EXC) and Calpine (CPN). He thinks that given the widespread power shortages in the U.S., these companies stand to benefit greatly and are not too expensive to keep right now. However, he is avoiding companies that have significant exposure to Latin America, which he thinks pose too much currency risk. Thus, he is steering clear of AES (AES), a company with sizable exposure to that region.