Follow the Raging Oil Bulls

摘要

The winning strategy for fund investors this year can be summed up with a simple image: a big, black gusher of oil. Oil prices that raced from $40 a barrel to more than $55 carried funds focused on natural resources to an average total return of 10.9% for the first quarter, more than five times the gain of any other fund category. With strong global demand and most suppliers pumping flat out, the outperformance should continue as the year goes on. Naturally, higher energy prices are weighing on the broad stock market And so is the specter of higher inflation-and higher interest rates. The Federal Reserve recently hinted that there may be a longer cycle of rate hikes than many market participants had expected. That signal also removes any remaining allure of bonds as a refuge: For the past several years exposure to bonds helped offset down days in . the stock market But lately bonds haven't provided much ballast: While investors in U.S. diversified equity funds saw not a dribble of a return as their funds fell an average 3%, the average bond fund also showed a loss, down 0.9%. (Fund data are for the first quarter through Mar. 28. They're calculated by Standard & Poor's, which, like BusinessWeek, is a part of The McGraw-Hill Companies.)