One holding is EOG Resources (EOG), which produces oil and gas in the Marcellus Shale of Pennsylvania and the Permian Basin in Texas. EOG's return on equity has improved as the well costs declined.
Another holding is Anadarko Petroleum (APC). Besides working in U.S. shale fields, the company has proved to be an efficient operator in deepwater.
Ivy Energy aims to overweight companies that seem poised to record strong growth. During the past five years, the fund returned 15.3% annually, outperforming 73% of its peers.
Portfolio manager David Ginther favors companies that own pipelines and storage systems that service the gas shale fields. He says demand will grow as more manufacturers shift to low-cost gas."We will need more pipelines and more ways to process gas," he says. One holding is MarkWest Energy Partners (MWE), a master limited partnership that operates storage and processing facilities in the Marcellus Shale. Its dividend yield is 5.4%. U.S. Global Investors Global Resources has about half its assets in energy stocks. Hicks, the portfolio manager, favors exploration and production companies that can grow rapidly. He looks for businesses that have the most promising acreage and lowest costs. One holding is Continental Resources (CLR), a leading producer in the Bakken formation of North Dakota. "They should increase production at a rapid clip over the next three years," Hicks says. Another holding is oil services giant Halliburton (HAL). The company assists drillers that are using hydraulic fracturing to develop shale fields. At the time of publication, the author held no positions in any of the stocks mentioned. Follow @StanLuxenberg This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.