Insights

Put energy market trends into perspective through insights from our energy experts

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Process

Understand how the energy value chain works and how each segment is defined

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Opportunities

Learn more about investment opportunities across the energy value chain

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Insights

Energy is an exciting sector with attractive return potential and the ability to hedge against rising rates and inflation. Recent technological advances have helped the US become a leading global energy producer and will likely continue to create compelling investment opportunities.

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MLPs ready to rumble

Portfolio Manager Stephen Maresca provides views on the road ahead for MLPs, including the potential impact of the Trump administration and rising rates.

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Improving supply demand dynamics favor rising oil prices

Jennison Associates provides their views on how energy supply / demand dynamics are shifting and the potential impact on oil prices.

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A "Goldilocks" scenario for oil prices

Current oil prices may be good for a more sustainable and powerful energy recovery.

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Energy Cycle Dynamics: Two steps forward, one step back

Explore how the energy cycle works and the factors that influence energy supply, demand and prices.

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Growing demand for energy

The global population is expected to grow by 1.8 billion people by 2040, fueling demand for energy. Oil and gas are anticipated to meet 53% of the world's energy needs through 2040 and will require investments of around $10 trillion.1

Attractive return potential

Since 1970, on average, positive periods of rising oil prices were 7.8 times stronger and 1.2 times longer than negative periods.2 And, continued cost efficiencies are enabling energy producers to profit at lower oil prices.

Hedge against rising rates and inflation

Commodities typically benefit from rising rates and inflation with valuations that tend to rise when traditional stocks and bonds fall, making them a source of diversification in investment portfolios.

Navigating the Energy Value Chain

The energy value chain is the connective process of finding and extracting oil and gas (upstream), transporting and storing the resources (midstream) and refining and distributing them to end users (downstream). Each segment of the energy value chain is driven by different factors, making it possible to uncover attractive investment opportunities regardless of energy price movement.

Energy Value Chain  


Opportunities Across the Energy Value Chain

Jennison Associates is a leader in energy investing with over $6 billion in assets under management and more than 20 years of experience investing in energy.4 Jennison's Global Natural Resources team provides insights into emerging upstream and downstream energy trends. Jennison's Infrastructure team has been investing in midstream infrastructure companies since the late 1990s and includes downstream analysts that specifically cover the utilities sector and chemicals industry.

Upstream

 
Prudential Jennison Natural Resources Fund

Seeks long-term capital growth by investing in companies that own, explore, mine, process, and develop natural resources commodities.

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Midstream

 
Prudential Jennison MLP Fund

Seeks total return, through a combination of current income and capital appreciation, by investing primarily in Master Limited Partnerships (MLPs) and MLP-related investments.

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Downstream

 
Prudential Jennison Utility Fund

Seeks total return that includes capital appreciation and current income by investing in utilities and utility-related companies.

Prudential Jennison Global Infrastructure Fund

Seeks total return by investing worldwide in companies that own, operate, build, and service infrastructure assets.

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1 Source: OPEC World Oil Outlook 2016.

2 Source: Morningstar Direct, Prudential Investments as of 8/31/16.

3 Source: Morningstar and Jennison Associates. Oil represented by WTI crude oil, Gas represented by Henry Hub Natural Gas, Upstream represented by S&P Commodity Producers Oil & Gas Exploration & Production Index, Midstream represented by Alerian MLP Index, Downstream represented by S&P Sector Utility Index.

4 Source: Jennison Associates as of 12/31/16.

Diversification does not assure a profit or protect against loss in declining markets. The Alerian MLP Index is a composite of the 50 most prominent energy master limited partnerships (MLPs). It provides investors with an unbiased, comprehensive benchmark for this emerging asset class. The index, which is calculated using a float-adjusted, capitalization-weighted methodology, is disseminated in real time on a price-return basis. The S&P 500 Sector Utility Index is an unmanaged, market capitalization-weighted index including those companies considered electric, gas, or water utilities, or companies that operate as independent producers and/or distributors of power. The S&P Commodity Producers Oil & Gas Exploration & Production Index includes the largest publicly traded companies involved in the exploration and production of oil and gas around the world. Henry Hub Natural Gas measures spot price of natural gas and is seen as the primary price set for the North American natural gas market. West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing. WTI is the underlying commodity of the New York Mercantile Exchange’s oil futures contracts.

The Prudential Jennison Utility Fund won the 2017 Lipper Award in the "Utility Funds" category for the 5-year period.

In the Lipper Fund Awards, funds had to be registered for sale in the respective country as of the end of 2016 and the fund had to have at least 36 months of performance history as of the end of the evaluation year. S&P 500 Index funds, specialty diversified equity funds and specialty/miscellaneous funds were not eligible to receive classification awards. Rankings do not take sales charges into account. Past performance is no guarantee of future results. Prudential Jennison Utility Fund is the #1 Utility Fund (Class Z) out of 47 funds for the 5-year period ended 11/30/2016. Rankings for the 3- and 10-year periods were 16 out of 49 and 16 out of 44 funds, respectively. The awards are based on the risk-adjusted returns for the period ended 11/30/2016. From Thomson Reuters Lipper Awards, © 2017 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.



 

0270847-00011-00 Ed. 04/2017