To navigate the challenges and cyclical nature of the resource sector, RBC portfolio manager Brahm Spilfogel uses a strategic investment approach that smooths out volatility. Predicting swings in commodity prices is not part of the process.
“When we look at this really big universe, we aren’t trying to guess where the commodity prices are going to go in the future,” says Spilfogel, vice-president and senior portfolio manager of Canadian Global equities at RBC Global Asset Management in Toronto. “We’re always trying to find companies that can grow either their cash flows or their resources in a flat commodity environment.”
Over the course of a cycle, whether oil prices rise or fall, the focus is on being in the top half of the industry in terms of above-average returns on invested capital. According to Spilfogel, those companies tend to do better over a longer period of time.
