Q: Hi, Current Energy Sector weight in 5i Portfolios is as follows:
Balanced : 10.10 % ( SU,ENB)
Income : 7.00 % ( ENB)
Growth : 3.00 % ( KEL,TVE)
Your general recommendation is 7-10% weighting in the Energy Sector, based on individual investor profile/risk/objectives. Could you help understand following:
1. Should we include ENB, as a part of Energy Sector exposure in our personal portfolio like 5i does. Or, ENB should only be considered as Energy Sector exposure for individuals with low/moderate risk tolerance and objectives, suitable for Balanced or Income Portfolio allocation - Not for individuals with Growth as primary Objective.
2. Your general recommended allocation to Energy sector is 7-10%. Do you see current valuations in Energy sector, specially after a recent 15-20% pullback, attractive to increase the weight in Balanced and Growth Portfolio ( specially Growth portfolio - from current 3% ). Any reason Growth portfolio has a low allocation?
In your recent responses, you have made a strong case that the sector still has legs and investors should continue to have a reasonable exposure to the sector. Your recommendation is also well supported by Demand/supply factors, Ukraine and China situation etc. We currently have a 9% weight through CNQ,SU and TOU and an additional 6% through ENB. Just reviewed all 5i portfolios and trying to assess, if there is a need to reduce some positions. Our main objective is income but we are also comfortable to participate, if Sector shows promise of Growth ( of course, with attached risk ). Thanks
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Asked by rajeev on July 12, 2022