Green stocks outperform fossil fuels in first half

But the premium over brown stocks narrowed after Iran War started

This column is for Callaway Climate Insights subscribers only, but it’s OK to share once in a while. Was it shared with you? Please subscribe.

(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)

CHAPEL HILL, N.C. (Callaway Climate Insights) — As expected, green stocks outperformed brown stocks for the first half of this year. One consequence of the Iran war, however, is that the magnitude of green stocks’ outperformance was smaller than it was in 2025.

From January through June, green stocks (as represented by the S&P Global Clean Energy Transition Index) gained 25.6% — versus 17.8% for brown stocks (as represented by the S&P Global Oil Index). Green stocks’ alpha (their outperformance) was therefore 7.8 percentage points — far smaller than their 32.5 percentage point alpha for all of 2025.

Green stocks’ outperformance was “expected” because President Donald Trump’s election rendered them so out of favor that they have to provide higher expected returns in order to entice investors to take the considerable risk of owning them. In order to provide that higher expected return, green stocks first had to fall significantly — until their prices were low enough to provide the prospect of outperforming. Fall they did both immediately before and after the November 2024 election, and their outperformance over the past 18 months is their reward for that initial suffering.