Aviva's Lis underweights 'challenged' oil majors

Mega-cap oil companies have a flawed business model, while unloved media stocks look excellent value, says Aviva Investors' head of UK equities David Lis.

Lis says the group's house view is to favour oil and gas stocks such outside the majors, with holdings such as BG, Premier Oil and Tullow. "We maintain an underweight in oil and gas, simply because although BP looks reasonable value after the fall it has had, we think as a mega cap it is difficult and expensive to access new resources. As a business model, mega cap oil is very challenged," he says. "We still have an emerging market tilt in terms of miners, and industrials which have been very strong this year on the back of their EM exposure." Meanwhile he expects the environment f...