A tipping point for green energy

Sources: Bloomberg and Wells Fargo Investment Institute. Daily data from January 1, 2014 to September 30, 2021. Fossil fuel stocks are represented by the total return of the S&P Supercomposite Energy Index which measures those companies included in the S&P Composite 1500 that are classified as members of the GICS® Energy sector. Clean energy stocks are represented by the total return of the S&P Global Clean Energy Index which measures the performance of global companies that represent the listed clean energy universe. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. Equity securities are subject to market risk which means their value may fluctuate in response to general economic and market conditions and the perception of individual issuers. Investments in equity securities are generally more volatile than other types of securities.

Key Takeaways

  • After years of being “dead money,” fossil fuel stocks finally began to bounce in late 2020. At the same time, clean energy stocks took a well-deserved breather after substantial gains.
  • Renewables appear to be the future, but investors should keep in mind that the transition will take many years — possibly decades. Traditional energy companies could, at times, offer good value and outperform.