Willy Packer's $1 billion WA investment trust has topped up with shares in Russia's energy titans, deploying the millions of new inflows captured over the past two years.
Packer & Co Investigator Trust's six-monthly report shows the pooled investment fund has recently increased its exposure to Gazprom, Rosneft and Lukoil, citing their cheap earnings multiples.
The three Russian oil and gas producers accounted for about 6.5 per cent of the trust's $1.07 billion portfolio at June 30, broadening the manager's liking for energy stocks.
All up, Investigator now has nearly 18 per cent of its portfolio invested in oil and gas, including Royal Dutch Shell, BP and Chesapeake Energy.
Packer & Co said the Russian energy stocks were trading on earnings multiples of just three, against 13 for the likes of Exxon. It sees few concerns around country risk or Russia's confrontation over the Ukraine, noting that Exxon, a stock perceived by investors as "safe", was exposed to the likes of Kazakhstan and Angola.
Packer & Co returned 18.6 per cent for the year to June 30, beating the all ordinaries accumulation index (17.6 per cent) but trailing the Australian dollar-denominated MSCI World Accumulation Index (20.9 per cent). However, its average return of 14.5 per cent over the 21 years since its inception remains far superior.
Investigator counts just two Australian companies, Tap Oil and cancer therapy company Circadian Technologies, in the 44-stock portfolio, which is dominated by blue-chips, including FedEx, Colgate, Nestle, Goldman Sachs, Facebook, Google and Heineken.
The overseas weighting reflects Packer & Co's concerns about the high Australian dollar, the legacy of wages growth during the mining boom and China's faltering growth.