• Eric Scheyer co-manages Magnetar Capital’s MTP Energy Fund, which gained 22.8 percent, taking the 13th spot.

“Energy companies are generally in growth mode with commodity prices coming back up into a range where they can get reasonable rates of return,” Scheyer said in an interview. “We expect to see a lot of M&A and more corporate activity overall, and this presents a great opportunity set for investors with flexible strategies.”

The firm sees selective opportunity in energy service company stocks, which may benefit from increased upstream, or exploration and production, activity, he said. It also likes Canadian upstream companies, which have been negatively impacted by concerns about a potential border tax.

Multistrategy

Some multistrategy managers, who invest across asset classes, expect rising inflation and higher interest rates to make corporate debt and asset-backed securities more attractive.

• Mamdani’s PH&N Absolute Return fund rose 33.5 percent, grabbing the No. 2 spot.

“With oil stabilizing there’s an opportunity if you dig into some of these energy stocks because they were all moving in tandem,” he said. “Some are probably too rich because they’ve just traded up with oil, and some have lagged and are too cheap.”

He also likes short-duration callable bonds that could be bought back by their issuer within the next year as a “defensive trade.”

• Michael Hintze runs the CQS Directional Opportunities Fund, which ranked fourth.

Within the bond market, corporate debt “should benefit from fiscal stimulus and default rates, while likely to rise, should remain relatively low, especially if we have some inflation which would be positive,” Hintze wrote in a December letter to investors.

Rising interest rates in the U.S. are drawing Hintze to convertible bonds, loans, asset-backed securities and high-yield debt. Convertible notes “perform well during inflationary periods due to their equity optionality,” he said, while mortgage-backed securities “should benefit from accelerated pre-payments as rates rise.”

Long-Short Equity

Managers who specialize in stock-picking may see opportunity as U.S. President Donald Trump seeks to deregulate a number of industries, lower taxes and repatriate overseas cash, which could fuel more share buybacks, capital expenditures and takeovers.