Bad start to the year for the titles of the “Green” companies ….
Given that the so-called “ESG”, that is behavior, apparently right from an ecological and social point of view, is fashionable, indices have been created that contain the companies that invest in these sectors. The hope is, of course, that these indices can provide a guide to investments that combine profitability and being able to claim to be "good and fair".
It is a pity that this is not the case, that many premises and promises have not been kept, at least for now. Ethical guidance does not work, also because it is an ethics that is distorted and far from reality, and, above all, self-proclaimed.
However these indices are WilderHill Clean Energy Index, which is the basis of a related ETF, and S&P Global Clean Energy, The first index focuses on companies listed on US stock exchanges. the second deals with companies that invest in the green sector in both advanced and emerging countries. So they are two good funds, green and ecological. Are they also profitable?
Well, that's another story …
The first index already has some history, and here are its returns
Widerhill lost 57% in one year
S&P fared a little better, losing “only ” 43%.
What if you were bad and put your money in ugly and bad oil? Let's see how the S&P sector index fared and:
Oops, you would have earned 48% in one year. Not bad, in hindsight. remember that what happened last year is a lesson, but it is by no means said that it will repeat itself in the future. Indeed, if the money returns to oil, yields could fall.
What can we conclude:
- Vespasiano was right, that is "Pecunia non olet";
- if the big funds, like Citi or Blackrock tell you to do one thing, do the opposite. Not so much for the taste of the contrarian, but because the return is reached where the capital is scarce, not where it is abundant. It's the market, beauty;
- fashion must be anticipated, never followed …
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The article Bad start of the year for the titles of the “Green” companies…. comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/pessimo-inizio-danno-per-i-titoli-delle-aziende-verdi/ on Sat, 22 Jan 2022 14:11:01 +0000.