Investors have lost a bundle this year betting on solar-panel and wind-turbine makers. Their response: to double down.
A year ago, green stocks and the funds that track them rallied tremendously in the aftermath of the market’s recovery from a pandemic-induced swoon. Solar-panel and wind-turbine companies were among firms benefiting from a surge of investor- and consumer-driven demand for renewables, despite many being small unprofitable ventures.
This year, returns are trailing the broader stock market. That is thanks, in part, to stocks having run so far and uncertainty around the Federal Reserve’s interest-rate course and how its actions may ultimately affect growth stocks.
Exchange-traded funds that track renewable-energy indexes have posted double-digit declines so far this year. BlackRock ’s has fallen 18% since December; Invesco Ltd. ’s popular has posted a 17% decline.
Even so, money continues to pour in. Professional money managers and individual traders alike have invested $6.2 billion into green-energy ETFs so far this year, according to data from Refinitiv Lipper. The inflows are on course to eclipse last year’s record $7.2 billion.