Exchange traded funds (ETFs) that invest in stocks related to the energy transition have outperformed the major funds tied to oil and gas firms over the past month as the decline in oil prices since mid-April dragged down shares of fossil fuel companies.
The rebound in clean energy ETFs has just begun. But it could stop in its tracks if investor sentiment sours again amid persistently high interest rates and the U.S. political debate and divisions over ESG investments.
The rising interest rates of the past two years have been a major drag on renewable energy developments, while the backlash against ESG investments in the United States has prompted investors to pull billions of U.S. dollars out of clean energy funds, including ETFs.
But at least in the past month, all major clean energy ETFs have outperformed the main oil and gas exploration ETFs by posting gains, compared to a 5% loss for SPDR S&P Oil & Gas…
