Praetorian Capital, an investment management company, released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund was up by 15.26% net of fees and its year-to-date returns were up by 11.95%. Many of the core portfolio positions of the fund appreciated moderately in the fourth quarter while Event-Driven book also delivered a positive return. For more information on the fund’s top picks in 2022, please check its top five holdings.
In its Q4 2022 investor letter, Praetorian Capital mentioned United States Brent Oil Fund, LP (NYSE:BNO) and explained its insights for the company. Founded in 1971, United States Brent Oil Fund, LP (NYSE:BNO) is an exchange-traded security. The stock closed at $24.99 per share on March 21, 2023.
Here is what Praetorian Capital has to say about United States Brent Oil Fund, LP (NYSE:BNO) in its Q4 2022 investor letter:
“I believe that years of reduced capital expenditures, along with ESG restricting capital access, combined with Western governments that are openly hostile to fossil fuels, have created an environment for dramatically higher oil prices. While we could purchase oil producers, I feel it is far more conservative to simply own the physical commodity itself.
During the fourth quarter, I swapped out our December WTI 2025 futures for the Brent Oil Fund, LP (NYSE:BNO) as I wanted to diversify our oil exposure from WTI and into a global commodity that is less likely to be manipulated by the US government. I also believe that over time, BNO should earn a roll yield, much like it did for most of 2022. Finally, I wanted more exposure to the front of the oil curve, as that is likely to be where the action will be. This position swap was done at a time when the spread between Brent Oil and our futures had compressed by a decent amount, allowing us to avoid paying up substantially for the above-mentioned benefits. We also purchased some shorter-dated futures at around the same time. I believe that this leveraged play on oil gives us the most upside to oil and ultimately inflation, while exposing us to reduced risk when compared to producers.”
Our calculations show that United States Brent Oil Fund, LP (NYSE:BNO) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. United States Brent Oil Fund, LP (NYSE:BNO) was in 2 hedge fund portfolios at the end of the third quarter of 2022, compared to 1 fund in the previous quarter. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q4 2022 page.
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Disclosure: None. This article is originally published at Insider Monkey.
