One major listed fund manager has suggested that oil trading will not provide much upside going forward.
VanEck CEO Jan van Eck isn’t excited about traditional energy strategies, including this year’s volatile oil trade.
“The core ‘old energy’ world is just a sideways world at this point,” VanEck CEO Jan van Eck told CNBC’s “ETF Edge” on Monday.
But so far this year, the oil market situation is far from flat. On Wednesday, WTI closed at its highest level since October 8 due to concerns over President Trump and Iran. Meanwhile, Brent also rose and settled down.
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WTI crude oil
In a special statement to CNBC on Wednesday, van Eck indicated that his views remained unchanged from Monday and said the outlook period was one year.
Instead, van Eck favors stocks related to power and nuclear power, citing demand from hyperscalers and broader artificial intelligence trading.
He believes investors are underestimating the reliability of alternative energy.
“I don’t think the ‘R-word’ is really well understood,” he says. “The data center can’t go down. You can’t take an hour off.”
His company is behind the VanEck Uranium and Nuclear ETF (NLR). The fund is up more than 16% since Jan. 1 as of Wednesday’s close. Additionally, it has increased by almost 73% over the past 52 weeks.
VanEck’s website lists Cameco, Constellation Energy and BWX Technologies as the top three companies as of Tuesday. Cameco is up 21% since the beginning of the year.
Jennifer Grancio, head of global distribution at TCW, also sees the transition from old energy to new energy as one that will play out over the long term.
“We need all the energy sources to feed the beast,” she said, pointing to increased demand for electricity in data centers and manufacturing.
Grancio’s firm runs the TCW Transform Systems ETF (PWRD), which he describes as a broad portfolio that includes exposure to traditional economies, but also leans toward nuclear and efficiency companies related to power expansion.
The fund has gained about 29% over the past year.
