Commodity markets are booming in 2022 amid a wave of catalysts. Turns out, that's been equally as harsh for ESG and ethically focused share baskets.
As a sector – which is still poorly defined on Australian public markets, mind you – renewables have lagged other segments such as financials, utilities and materials this year.
How can we tell? Whilst there's no specific ASX renewables index, EFTs tracking the segment have crept downwards this year, as is shown further below.
Evidently, as markets have endured volatility in 2022, that's translated to a fairly strong headwind for ASX renewables shares, and at the end of the day, the sector is in the red in 2022.
Nonetheless, scaling back to the start of the year, some names have absorbed losses better than others. Let's take a look at those.
'Green' shares aren't in the green
Unfortunately, on an individual stock level, what we define as a 'renewables' share is quite narrow. Actually, there are no real winners per se, but some shares absorbed selling pressures better than others.
Let's talk in terms of energy first and, with that, results aren't good.
Renewables investor Infratil Ltd (ASX: IFT) is down 2.45% year to date but has whipsawed higher over the past three months. Although, its price chart looks like a 9.0 scale reading on the Richter scale.
Meanwhile, Genesis Energy Ltd (ASX: GNE), owner of a diverse portfolio of thermal and renewable generation assets located in different parts of New Zealand, has slipped 3.3%.
Trends are similar across the board and it appears any capital that's left the sector has been shipped straight across to the adjacent resources, traditional energy, and wider commodities segments.
Alas, it's no better for the exchange-traded funds (ETFs), with the Vanguard Ethically Conscious International Shares INDEX ETF (ASX: VESG) creeping down by 13%.
Meantime, the VanEck MSCI Australian Sustainable Equity ETF (ASX: GRNV) has fallen by more than 5% and is in a similar vein to the product above.
Finally, the Russell Investments Australian Responsible Investment ETF (ASX: RARI) has crept up hard in 2022 and is 4 basis points higher in that time.
It's important to zoom out
Longer term – since last January to be specific – the picture's a bit different. Three of the four securities have remained buoyant over that time, albeit Genesis Energy, which slipped more than 21% into the red.
The VESG ETF seems to have outperformed this bunch and was the star player until volatility crept in this year and it has since consolidated returns.
It has now levelled off and is rangebound alongside the fellow MSCI Australian Sustainability ETF from VanEck.
That's something to think about.
