Simmons & Co. International reports the institutional ownership of energy equity as of first-quarter 2010 was underweight by 29 basis points (2.9%). This compares to the fourth quarter of 2009 when the 13(f) institutional holdings of energy equities were underweight by 360 basis points.
Institutional portfolio weightings of energy-sector securities decreased marginally (less than 5 basis points) quarter-over-quarter to 7.9%. The extreme underweight position continues to be somewhat illusory, according to Simmons & Co., as it is driven by the massive market cap of the major/integrated subsector, where 13(f) institutions were underweight by 250 basis points.
Major/integrated institutional ownership weighting remained flat with the S&P 500 (down 50 basis points to 6.3%) decreasing its weighting, according to Simmons & Co. Institutions net sold $858 million of major/integrated equity after purchasing $2.9 billion during fourth-quarter 2009.
In oil services, the S&P 500 weighting remained flat at 1.8% in the first quarter. Institutional investors also held oil-service weighting flat as well at 1.7% and remained underweight the S&P by 10 basis points.
Institutional investors net sold $32.1 billion of oil-service equity during the first quarter, less than the $39.2 billion of net sales during the fourth quarter. An equally weighted index of oil service companies rose 5.4% (up 7.9% in the fourth quarter). The subsector outperformed the S&P 500, which returned +4.9%.
For E&Ps, the S&P 500 weighting decreased 20 basis points to 2.1%. Institutional investors remained underweight (-10 basis points) the S&P. During the first quarter, they divested $36 billion (8.5% of E&P market cap) of equity from their portfolios. An equally weighted index of E&Ps declined 0.3% (+8.8% in the fourth quarter). The subsector underperformed the S&P 500, which returned +4.9%.
New York-based BlackRock Institutional Trust Co. remains the largest holder of energy equity, with $57.7 billion as of March 31. This accounts for 7.7% of its portfolio and includes holdings in 157 energy stocks. BlackRock held $28 billion in major/integrated, $14.2 billion in E&Ps and $11.9 billion in oil services.
Legal & General Investment Management (UK) is now the most heavily weighted firm in the Top 10 towards energy with 15.3% of its holdings in the sector, according to Simmons & Co. The firm added 530 basis points compared to fourth-quarter 2009. The other top institutional investors are BlackRock Investment Management with 14.8% of its portfolio in energy, Wellington Management Co. with 11.2% of its portfolio and Columbia Management Advisors with 10.9% invested in energy.
The top 10 energy holders combined to net purchase $14.4 billion of energy equity during the quarter.
Recommended Reading
TPH: Lower 48 to Shed Rigs Through 3Q Before Gas Plays Rebound
2024-03-13 - TPH&Co. analysis shows the Permian Basin will lose rigs near term, but as activity in gassy plays ticks up later this year, the Permian may be headed towards muted activity into 2025.
Sangomar FPSO Arrives Offshore Senegal
2024-02-13 - Woodside’s Sangomar Field on track to start production in mid-2024.
CNOOC Makes 100 MMton Oilfield Discovery in Bohai Sea
2024-03-18 - CNOOC said the Qinhuangdao 27-3 oilfield has been tested to produce approximately 742 bbl/d of oil from a single well.
Proven Volumes at Aramco’s Jafurah Field Jump on New Booking Approach
2024-02-27 - Aramco’s addition of 15 Tcf of gas and 2 Bbbl of condensate brings Jafurah’s proven reserves up to 229 Tcf of gas and 75 Bbbl of condensate.
Shell Brings Deepwater Rydberg Subsea Tieback Onstream
2024-02-23 - The two-well Gulf of Mexico development will send 16,000 boe/d at peak rates to the Appomattox production semisubmersible.