Written by the GQG Research Team
Up until recently, investors who had bet on oil equities over the last decade received mediocre returns, at best. Say one had invested $100 in the S&P Energy Index in 2012, that investment would have compounded to a mere $105 at the start of 2022. Instead, if one had invested $100 in the S&P 500 Index during the same period, one would have received $400. Given the poor track record of the industry, why are we so excited about the space? Put simply, we think the market dynamics have changed. On a forward-looking basis, energy supply/demand fundamentals coming out of COVID are the healthiest they have been in the last decade.