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Cole Smead: Championing Energy and Banking Investments Over Tech

Posted 9/12/2026 2:31PM ET read more via Barron’s

Cole Smead, the mind behind Smead International Value Fund, has made headlines with an impressive return of nearly 50% over the past year. This remarkable performance has drawn attention not only to his investment strategies but also to the sectors and stocks he favors.

One of Smead’s key preferences lies in Canadian oil-sands stocks, which he believes offer substantial value due to their potential for growth amid the ongoing energy transition. He values this sector for its stability and long-term upside as global energy demands continue to evolve.

In addition, Smead is bullish on European banks. With the economy showing signs of recovery, he perceives these institutions as undervalued opportunities that can deliver significant returns in the near future. Smead’s insights and strategic focus could provide valuable lessons for investors looking to navigate a complex market landscape.

As always, careful analysis and a keen eye on market trends are essential for making informed investment decisions.

Cole Smead’s Smead International Value Fund: A 50% Return and Strategic Insights

In a market characterized by volatility and rapid changes, investment perspectives that stand out often do so for their uniqueness and foresight. Cole Smead, the manager of the Smead International Value Fund, has recently made waves with an impressive return of nearly 50% over the past year. This remarkable performance not only highlights Smead’s adeptness at recognizing potential investments but also underscores his strategic focus on Canadian oil-sands stocks and European banks, while notably sidestepping the technology sector.

The Appeal of Canadian Oil-Sands Stocks

One of the pivotal sectors in Smead’s portfolio is Canadian oil-sands stocks. Smead views these investments as offering substantial value, rooted in a few key considerations:

1. Growth Potential: As the global energy landscape undergoes transitions to more sustainable sources, the inherent value in oil-sands stocks is seen in their capacity to adapt and thrive amid changing energy demands. Smead believes that these stocks can deliver long-term growth, particularly with increasing energy needs.
2. Stability: Oil-sands stocks are recognized for their historical stability, providing a buffer against the more unpredictable shifts often seen in other energy sectors. Smead’s philosophy suggests that even during transitions, the demand for energy sources like oil will continue, ensuring these investments remain solid.
3. Economic Sentiment: With signs pointing toward economic recovery, there’s a growing appetite for energy investments. Smead capitalizes on this sentiment, predicting that oil sands will play a crucial role in meeting future energy needs.

A Bullish Stance on European Banks

Smead’s strategy also branches into the realm of European banks, which he considers undervalued. Here’s why he is placing his bets on this financial sector:

1. Potential for Significant Returns: The European banking sector has been under pressure in recent years due to economic challenges and regulation. However, Smead perceives an opportunity for considerable returns as the economy rebounds. Many banks are poised to benefit from improving economic conditions, making them attractive investments.
2. Favorable Market Conditions: With the gradual recovery of the European economy, Smead anticipates that banks will return to a more favorable operating environment, leading to healthier profit margins and potentially rich dividends for investors.
3. Operational Improvements: European banks have been engaging in fundamental changes in management and operations to enhance efficiency and profitability. Smead believes these improvements will see dividends not just for the institutions themselves but also for the investors who take the leap into these stocks.

Avoiding the Tech Sector

While many managers are clustering around technology stocks, drawn in by their past performance and dazzling innovations, Smead has chosen a different path. His decision to avoid tech stocks can stem from:

1. Valuation Concerns: Tech stocks can be daunting with their often inflated valuations. Smead appears to prioritize value over hype, opting for sectors that present clear growth potential without overextending on price.
2. Market Saturation: The technology space is crowded with competition and innovation, making it difficult to identify which companies will succeed long-term. Smead’s strategy seems to gravitate toward sectors where he believes the future is more predictable.
3. Focus on Dividends and Real Assets: Smead favors investments that provide tangible returns, such as dividends from banks and oil companies, in contrast to the more speculative nature of many tech stocks.

Conclusion

Cole Smead’s astute management of the Smead International Value Fund underscores a thoughtful and strategic approach to investment in the current market landscape. With nearly 50% returns fueled by a keen focus on Canadian oil-sands stocks and European banks, Smead’s investment philosophy highlights the importance of careful analysis and market foresight. For investors willing to follow his lead, the path through energy and banking may well offer substantial rewards while navigating the complexities of modern financial markets.

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