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(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) — Clean energy funds haven’t performed as well as they “should” have so far this year.
That’s because they “should” have significantly beaten fossil fuel funds, given that their cost of capital is nearly double that of fossil fuel companies. But try telling that to the stock market. On average, clean and sustainable energy mutual funds and ETFs gained just 4.9% for the first three quarters of this year, according to my calculations, in contrast to 37.2% for the average fossil fuel fund and ETF. (Data through Sep. 29.)
These unexpected results illustrate two important lessons about investing in clean energy.