Best-Performing Energy Funds Suffered 10-Year Losses

Posted on March 1st, 2021 at 12:51 PM
Best-Performing Energy Funds Suffered 10-Year Losses

From the Desk of Jim Eccleston at Eccleston Law LLC:

The majority of the decade's top-performing energy funds have posted losses, except for one. An overall 10-year loss may signify no long-term winners among equity and energy-limited partnership mutual funds and exchange-traded products. The leading 20 funds recorded an average loss of more than 3.5 percent, according to data from Morningstar Direct. The same funds posted a one-year loss of 12.5 percent.

According to the founder of Earth Equity Advisors, holdings that comprise these sector funds track an industry that has failed to transition from fossil fuels to clean and renewable energy. The trend of low performance is likely to continue as the need to decrease emissions usage grows daily. The losses from the funds came on top of the of the 0.45 percent in fund expenses that investors paid in 2019. 

Advisors formulating long-term investment strategies should not ignore overarching trends in the short term. With the current administration emphasizing climate change, more investors will seek opportunities in a cleaner economy with less reliance on fossil fuels. Advisors should stay abreast of the changing nature of the global economy as they consider including specific sectors in client portfolios. 

Eccleston Law LLC represents financial advisors nationwide. Please contact us to discuss any issues that you may have.

Tags: eccleston, eccleston law, loss, energy funds

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