In second place was Miller/Howard Investment Inc., based out of Woodstock, N.Y., with its North American Energy strategy delivering a gross one-year return of 44.18%.
Michael Roomberg, New York-based portfolio manager at Miller/Howard Investments, said that North American Energy is a diversified energy equity strategy that invests across the entirety of the North American energy value chain with particular emphasis on exploration, development and production; pipelines; refineries; petrochemicals; and energy services.
"This strategy benefited last year from an overweight towards U.S. upstream producers, which benefited from high prices relative to some of the more stable, midstream pipeline companies within our investment universe as well as the outperformance of refineries, which benefited from the resurgence in demand for transportation fuels, as well as price dislocation from natural gas spikes in Europe," Mr. Roomberg said.
One of the names that helped give rise to Miller/Howard's outperformance was Occidental Petroleum, which Mr. Roomberg said benefited from elevated commodity prices that allowed the company to fix the majority of issues with its balance sheet.
Mr. Roomberg says the strategy's objective is to outperform the S&P 1500 Energy index, which it has managed to do in 10 of the last 11 years.
Orleans Capital Management, based out of Mandeville, La., came in third place with its energy opportunities strategy returning a gross 40.81%.
Morningstar's Mr. Welch said in an email that the strategy has an energy exposure of 82% as well as other holdings in utilities and solar technology.
Top holdings contributing to its performance included ConocoPhillips, Chevron Corp. and Exxon Mobil Corp. according to Mr. Welch.
The strategy also benefited from energy services names such as Schlumberger and Halliburton Co.
In an interview, John Crain, research analyst at Orleans Capital Management, described the strategy as an all-of-the-above approach to energy, which includes investments in solar panel technology company First Solar Inc. and Quanta Services Inc., an electric power and other infrastructure services provider.
Boston-based Newton Investment Management North America LLC's global natural resources strategy was the fourth best-performing equity strategy, yielding a gross one-year return of 35.93%.
"This is a long-only equity fund focused on investing in natural resources equities," said Albert Chu, portfolio manager and global natural resources and research analyst at Newton. "The three big (categories) would be… oil (and) natural gas; traditional fossil fuel; then the metals and mining, (such as) steel, copper, iron or aluminum."
Some of the largest holdings for the strategy in 2022 were Hess Corp., mining company Freeport-McMoRan Inc. and hydrocarbon exploration company EOG Resources Inc.
On average, the strategy holds roughly 40 to 60 highly liquid mid- to large-cap stocks, Mr. Chu said.
"We don't take very concentrated positions, even though the overall name count is pretty concentrated; individual names don't get over 5%," he said. "Typically we have several things in the hopper to generate alpha and return. (Our) team philosophy, summarized, is pure alpha."
He added that his team's first goal is to identify as many levers for alpha as possible. That starts by getting to understand commodity cycles and the idiosyncratic drivers of them. One example he used to highlight this was the shock to commodity prices following Russia's invasion of Ukraine.
The second lever for generating alpha is looking to a diverse range of companies within energy. Even within a category like upstream, a wide dispersion of energy categories are there such as U.S. shale, Permian Basin, offshore and more. He said that the fund shifts to where the value chain is going.
"The last level of alpha is just good old fashioned going out there and kicking the tires," he said. "We interview management teams, we understand the company from the ground up, we look for changes in operating and financial leverage, any bottom-up stories in a new management team, new strategy … when you combine all those three levers of alpha, that gives you a much better view of the space you're investing in and it opens up a lot more opportunities, and generates excess returns."
In fifth place was the Horizon Research Select mid-cap growth strategy returning a gross 27.31%.
Steven Bregman, New York-based president and co-founder, said that the strategy was put together in anticipation of a damagingly high inflationary environment within the U.S.
"We own securities that would be inflation beneficiaries," he said.
He added that there are certain sectors within an inflationary environment that, due to the nature of companies' business model, are likely to do well or suffer minimally depending on the source of inflation, such as a shortage of critical commodities or monetary inflation. The U.S. is currently experiencing both, he said.
Mr. Bregman said that the largest holding in the strategy in 2022 was Texas Pacific Land Corp., the Dallas-based real estate operating firm with land in West Texas.
"It's probably the best oil and natural gas royalty company you can find," he said. "So what'll happen is a Chevron or an Occidental Petroleum is minding their own business. They're drilling on land they bought, but it just so happens that TPL has some royalty interests in that land, and they have to pay TPL a 1/16th share of the revenues they produce."
Mr. Bregman reiterated that the portfolio is built largely of companies whose business models make them natural inflation beneficiaries and are, as he described, "asset light," meaning that they lack balance sheet-heavy assets, as well as smaller employee head counts.
