Mutual Funds

A Strong Dollar Is Wreaking Havoc on Emerging Markets. A Debt Crisis Could Be Next.

The average household in Ghana is paying two-thirds more than it did last year for diesel, flour and other necessities. In Egypt, wheat is so expensive that the government has fallen half a billion dollars short of its budget for a bread subsidy it provides to its citizens. And Sri Lanka, already struggling to control a political crisis, is running out of fuel, food and medical supplies.

A strong dollar is making the problems worse.

Compared with other currencies, the U.S. dollar is the strongest it has been in two decades. It is rising because the Federal Reserve has increased interest rates sharply to combat inflation and because America’s economic health is better than most. Together, these factors have attracted investors from all over the world. Sometimes they simply buy dollars, but even if investors buy other assets, like government bonds, they need dollars to do so — in each case pushing up the currency’s value.

That strength has become much of the world’s weakness. The dollar is the de facto currency for global trade, and its steep rise is squeezing dozens of lower-income nations, chiefly those that rely heavily on imports of food and oil and borrow in dollars to fund them.

But much of the damage is already behind us.

Discordant Views: Some investors just don’t see how the Federal Reserve can lower inflation without risking high unemployment. The Fed appears more optimistic.

Weathering the Storm: The rout in the stock and bond markets has been especially rough on people paying for college, retirement or a new home. Here is some advice.

College Savings: As the stock and bond markets wobble, 529 plans are taking a tumble. What’s a family to do? There’s no one-size-fits-all answer, but you have options.

“We are in a fragile situation,” Mr. El-Erian said. “Country after country is flashing amber, and some are already flashing red.”

Many lower-income countries were already struggling during the pandemic.

Roughly 22 million people in Ghana, or a third of its population, reported a decline in their income between April 2020 and May 2021, according to a survey from the World Bank and Unicef. Adults in almost half of the households with children surveyed said they were skipping a meal because they didn’t have enough money. Almost three-quarters said the prices of major food items had increased.

Then came Russia’s invasion of Ukraine. The war between two of the world’s largest exporters of food and energy led to a big surge in prices, especially for importers like Ghana. Consumer prices have gone up 30 percent for the year through June, according to data from the research firm Moody’s Analytics. For household essentials, annual inflation has reached 60 percent or more this year, the S&P data shows.

To illustrate this, consider the price of a barrel of oil in dollars versus the Ghanaian cedi. At the beginning of October last year, the price of oil stood at $78.52 per barrel, rising to nearly $130 per barrel in March before falling back to $87.96 at the beginning of this month, a one-year increase of 12 percent in dollar terms. Over the same period, the Ghanaian cedi has weakened over 40 percent against the dollar, meaning that the same barrel of oil that cost roughly 475 cedi a year ago now costs over 900 cedi, almost twice as much.

Adding to the problem are large state-funded subsidies, some taken on or increased through the pandemic, that are now weighing on government finances.

Ghana’s president cut fuel taxes in November 2021, losing roughly $22 million in projected revenue for the government — the latest available numbers.

In Egypt, spending on what the government refers to as “supply commodities,” almost all of which is wheat for its long-running bread subsidy, is expected to come in at around 7 percent of all government spending this year, 12 percent higher — or more than half a billion dollars — than the government budgeted.

As costs ballooned throughout the pandemic, governments took on more debt. Ghana’s public debt grew to nearly $60 billion from roughly $40 billion at the end of 2019, or to nearly 80 percent of its gross domestic product from around 63 percent, according to Moody’s.

It’s one of four countries listed by S&P, alongside Pakistan, Nigeria and Sri Lanka, where interest payments alone account for more than half of the government’s revenues.

“We can’t forget that this is happening on the back end of a once-in-a-century pandemic in which governments, to try and support families as best they could, did borrow more,” said Frank Gill, an analyst at S&P. “This is a shock following up on another shock.”

In May, Sri Lanka defaulted on its government debt for the first time in its history. Over the past month, the governments of Egypt, Pakistan and Ghana have all reached out to the International Monetary Fund for a bailout as they struggle to meet their debt financing needs, no longer able to turn to international investors for more money.

“I don’t think there is a lot of appetite to lend money to some of these countries,” said Brian Weinstein, co-head of credit trading at Bank of America. “They are incredibly vulnerable at the moment.”

That vulnerability is already reflected in the bond market.

In 2016, Ghana borrowed $1 billion for 10 years, paying an interest rate of just over 8 percent. As the country’s financial position has worsened and investors have backed away, the yield — indicative of what it would now cost Ghana to borrow money until 2026 — has risen to above 35 percent.

It’s an untenable cost of debt for a country in Ghana’s situation. And Ghana is not alone. For bonds that also mature in 2026, yields for Pakistan have reached almost 40 percent.

“We have concerns where any country has yields that calls into question their ability to refinance in public markets,” said Charles Cohen, deputy division chief of monetary and capital market departments at IMF.

The risk of a sovereign debt crisis in some emerging markets is “very, very high,” said Jesse Rogers, an economist at Moody’s Analytics. Mr. Rogers likened the current situation to the debt crises that crushed Latin America in the 1980s — the last time the Fed sought to quell soaring inflation.

Already this year, more than $80 billion has been withdrawn from mutual funds and exchange-traded funds — two popular types of investment products — that buy emerging market bonds, according to EPFR Global, a data provider. As investors sell, the United States is often the beneficiary, further strengthening the dollar.

“It’s by far the worst year for outflows the market has ever seen,” said Pramol Dhawan, head of emerging markets at Pimco.

Even citizens in some of these countries are trying to exchange their money for dollars, fearful of what’s to come and of further currency depreciation — yet inadvertently also contributing to it.

“For pockets of emerging markets, this is a really challenging backdrop and one of the most challenging backdrops we have faced for many years,” Mr. Dhawan said.

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Why Silicon Valley Can’t Escape Elizabeth Holmes

SAN JOSE, Calif. — In 2016, start-up founders sang, “Theranos doesn’t represent, we are better,” in a holiday video created by the venture capital firm First Round Capital.

Over the next few years, several columnists wrote that Silicon Valley shouldn’t be blamed for Theranos.

Last month, Keith Rabois, a venture capitalist, said on Twitter that articles connecting Theranos with Silicon Valley culture contained “more fabrication than anything ever uttered by Trump.”

The technorati in Silicon Valley and beyond have long tried to separate themselves from Theranos, the blood testing start-up in Palo Alto, Calif., that was exposed for lying about its abilities. But the fraud trial of the company’s founder, Elizabeth Holmes, has shown that just as Bernard Madoff was a creature of Wall Street and Enron represented the get-rich-quick excesses of the 1990s, Theranos and its leader were very much products of Silicon Valley.

a jury found the entrepreneur guilty of four of 11 counts of fraud, starkly underlined her participation in Silicon Valley’s culture.

Ms. Holmes, 37, used the mentorship and credibility of tech industry big shots like Larry Ellison, a co-founder of Oracle, and Don Lucas, a Silicon Valley venture capitalist, to raise money from others. She lived in Atherton, Calif., amid Silicon Valley’s elite and was welcomed into their circles.

She also used the start-up playbook of hype, exclusivity and a “fear of missing out” to win over later investors. She embodied start-up hustle culture by optimizing her life for the maximum amount of work. She dismissed the “haters” and anything that interfered with her vision of a better world. She parroted mission-driven technobabble. She even dressed like Steve Jobs.

No industry wants to be judged only by its worst actors. And many venture capitalists who heard Ms. Holmes’s impossibly lofty claims didn’t fall for them. But if anyone in Silicon Valley was suspicious of her proclamations, none spoke publicly about it until after things went south.

said in a hearing in May before the trial began.

At its best, Silicon Valley is optimistic. At its worst, it is so naïve it believes its own hogwash. Throughout her trial, Ms. Holmes’s lawyers argued she was simply a wide-eyed believer. Any statements that weren’t entirely truthful, they said, were about the future. It was what investors wanted to hear, they said.

“They weren’t interested in today or tomorrow or next month,” Ms. Holmes testified. “They were interested in what kind of change we could make.”

Soon after Theranos got started in 2003, Ms. Holmes used her vision of the future to win over investors and advisers like Mr. Ellison and Mr. Lucas. Mr. Lucas, who was chairman of Theranos’s board until 2013, was involved with more than 20 investment vehicles that backed Theranos. Those included his son’s venture firm, Lucas Venture Group; another vehicle, PEER Venture Partners; and trusts and foundations associated with members of his family.

Bad Blood,” a book by John Carreyrou, a former Wall Street Journal reporter.

Brian Grossman, an investor at the heath care-focused hedge fund PFM Health Sciences, learned about Theranos through Thomas Laffont, a co-founder of Coatue Management, a prominent investment fund with a San Francisco presence. In an email that was part of the court filings, Mr. Laffont gushed that Theranos had “one of the most impressive boards I’ve ever seen” and said Mr. Grossman’s firm should let him know “ASAP” if it was interested in an introduction.

Coatue did not respond to a request for comment and PFM Health Sciences declined to comment.

embraced by many in the tech industry. “This is what happens when you work to change things,” she said in a TV interview. “First they think you’re crazy, then they fight you, and then all of a sudden you change the world.”

In the years since Theranos collapsed, more tech start-ups have followed its strategy of looking outside the small network of Sand Hill Road venture capital firms for funding. Start-ups are raising more money at higher valuations, and deal-making has accelerated. Mutual funds, hedge funds, family offices, private equity funds and megafunds like SoftBank’s Vision Fund have rushed to back them.

Mr. Salehizadeh said Silicon Valley’s shift to a focus on fund-raising over all else was one reason he had left to set up a private equity firm on the East Coast. The big money brought more glitz to tech start-ups, he said, but it had little basis in business fundamentals.

“You’re always left feeling like either you’re an idiot or you’re brilliant,” he said. “It’s a tough way to be an investor.”

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David Swensen, Who Revolutionized Endowment Investing, Dies at 67

Other money managers joining universities sought Mr. Swensen’s advice. He always suggested that they keep their offices on campus if possible, and he was sensitive to matters that students brought up, like climate change. Students have continued to push Yale to take a stronger stand on the issue.

Mr. Swensen acknowledged that greenhouse gas emissions posed a grave threat and asked managers to consider the financial risks of climate change, particularly if the government imposed carbon taxes. The investment office recently estimated that 2.6 percent of the endowment is invested in fossil fuel producers, a multi-decade low, and that it expects that decline to continue.

In 2018, Mr. Swensen said Yale would not invest in outlets that sell assault weapons. Most recently he encouraged endowments to hire more women and members of minorities.

Over the years he was a trustee or adviser to a host of institutions, including the Brookings Institution, the Carnegie Corporation, the Courtauld Institute of Art, the Chad Zuckerberg Initiative and the states of Connecticut and Massachusetts.

Mr. Swensen’s first marriage, to Susan Foster, ended in divorce. In addition to Ms. McMahon, he is survived by three children from his first marriage, Alexander Swensen, Timothy Swensen and Victoria Coleman; his mother, Grace; two brothers, Stephen and Daniel; three sisters, Linda Haefemeyer, Carolyn Popp and Jane Swensen; and two grandchildren. He lived in Killingworth, Conn.

Mr. Swensen was as concerned about the small investor as he was about his endowment. In his book “Unconventional Success: A Fundamental Approach to Personal Investment” (1995), he advised people to keep their costs low and to stick to exchange-traded funds, which invest across an entire index of stocks, rather than investing with money managers or mutual funds that select individual stocks, and where the costs can erode profits. It was virtually impossible for the average investor to get into the best private funds, he said.

Alex Traub contributed reporting.

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Money Market Funds Melted in Pandemic Panic. Now They’re Under Scrutiny.

The Trump-era working group suggested a variety of fixes. Some would revise when gates and fees kicked in, while another would create a private-sector backstop. That would essentially admit that the funds might encounter problems, but try to ensure that government money wasn’t at stake.

If history is any guide, pushing through changes is not likely to be an easy task.

Back in 2012, the effort included a President’s Working Group report, a comment process, a round table and S.E.C. staff proposals. But those plans were scrapped after three of five S.E.C. commissioners signaled that they would not support them.

“The issue is too important to investors, to our economy and to taxpayers to put our head in the sand and wish it away,” Mary Schapiro, then the chair of the S.E.C., said in August 2012, after her fellow commissioners made their opposition known.

In 2014, rules that instituted fees, gates and floating values for institutional funds invested in corporate paper were approved in a narrow vote under a new S.E.C. head, Mary Jo White.

Kara M. Stein, a commissioner who took issue with the final version, argued in 2014 that sophisticated investors would be able to sense trouble brewing and move to withdraw their money before the delays were imposed — exactly what seems to have happened in March 2020.

“Those reforms were known to be insufficient,” Ben S. Bernanke, a former Fed chair, said at an event on Jan. 3.

The question now is whether better changes are possible, or whether the industry will fight back again. While asking a question at a hearing this year, Senator Patrick J. Toomey, Republican from Pennsylvania and chair of the Banking Committee, volunteered a statement minimizing the funds’ role.

“I would point out that money market funds have been remarkably stable and successful,” Mr. Toomey said.

Alan Rappeport contributed reporting.

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Some companies are focusing on wooing individual investors, who are becoming a market force.

Dozens of companies are suddenly paying more attention to individual investors.

Small investors who buy single stocks have not been a major force in financial markets for the better part of half a century. They were growing in influence before the pandemic, partly because of the popularity of free trading apps such as Robinhood.

But with millions of Americans stuck at home during the pandemic, the trading trend escalated, Matt Phillips reports for The New York Times.

“Retail trading now accounts for almost as much volume as mutual funds and hedge funds combined,” Amelia Garnett, an executive at Goldman Sachs’s Global Markets Division, said on a recent podcast produced by the firm. “So, the retail impact is really meaningful right now.”

Tesla has long eschewed traditional communications with Wall Street. Ark Investment Management — the high-flying, tech-focused exchange-traded fund company run by the investor Cathie Wood — and Palantir Technologies, are also trying to reach small investors directly.

Before Lemonade, a company that sells insurance to consumers online, went public in July, it went on a traditional tour of Wall Street, meeting big investors and talking up its prospects. However, the company has since discovered that more than half of its shares are held by small investors, excluding insiders who own the stock, said Daniel Schreiber, its chief executive.

That has prompted a strategy adjustment. In addition to spending time communicating with analysts whose “buy” or “sell” ratings on the stock can move its price, Mr. Schreiber said, he has made a point of doing interviews on podcasts, websites and YouTube programs popular with retail investors.

“I think that they are, today, far more influential on, and command far more following in terms of stock buying or selling power than the mighty Goldman Sachs does,” Mr. Schreiber said. “And we’ve seen that in our own stock.”

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Archegos Left a Sparse Paper Trail for a $10 Billion Firm

Lawyers and securities experts said a multibillion-dollar family office like Archegos could avoid making 13F disclosures, but it would require threading a needle: The firm could have managed money for only Mr. Hwang and his spouse — not other family members, fund employees or his charity, which operated on the same floor of a Midtown Manhattan office building. The firm could also have been able to skip filing a 13F if it sold off enough stocks to fall below the $100 million threshold before the end of each quarter. It also could have requested confidential treatment from the S.E.C. to keep such disclosures private, lawyers and experts said.

Archegos was set up to make filings to the S.E.C. — it had its own Central Index Key number — but a search for documents returns no results.

The S.E.C. has opened an informal inquiry into Archegos and the spillover effects of its collapse, which caused billions of dollars in losses at banks around the globe. Regulators have declined to comment on the investigation.

Senator Sherrod Brown, chairman of the Senate Banking Committee, sent letters to the half-dozen banks that did business with Archegos — including Credit Suisse, Goldman Sachs and Morgan Stanley — seeking information about their dealings with Mr. Hwang’s firm. That includes information about any transactions that “would be subject to regulatory reporting with the S.E.C.”

The rules for 13F filings apply to “registered investment advisers and exempt reporting advisers that manage accounts on behalf of others, including advisers to separately managed accounts, private funds, mutual funds, and pension plans.” They must file if they have “discretion” over $100 million or more in securities at the end of a quarter.

Nicolas Morgan, a former S.E.C. lawyer, said a family office could get around the stock reporting requirement in only rare circumstances. It “would be outside the norm” to not file a 13F, said Mr. Morgan, a partner in the white-collar defense practice at Paul Hastings.

After the failure of Archegos, Americans for Financial Reform, an advocacy group, sent a letter to the S.E.C. calling for a review of 13F filings and whether gaps in the disclosure process created the registration exemption for family offices, which control roughly $6 trillion in assets, according to Campden Wealth, which provides research and networking opportunities to wealthy families.

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Rising Interest Rates Threaten Mutual Fund Returns

The stock market’s rally during the pandemic has been nothing short of amazing. But rising interest rates are raising the question of how long this bull market can last.

In the 12 months through March, the average general stock mutual fund tracked by Morningstar returned nearly 66 percent — a remarkable rebound after a three-month loss of nearly 22 percent at the start of last year.

The turnaround came after the Federal Reserve stepped in with support for financial markets and the economy, fueling much of the stock market’s exuberance with low interest rates.

But with the economy taking off, rates have begun to rise. At the start of a new quarter, it is a propitious moment to ask, how long can these strangely prosperous times last?

My crystal ball is no clearer now than it has ever been, alas, and I can’t time the market’s movements any better than anyone else. But this certainly a good time to assess whether you are well positioned for a possible downward shift.

As always, the best approach for long-term investors is to set up a portfolio with a reasonable, diversified asset allocation of stocks and bonds and then live with it, come what may.

Our quarterly report on investing is intended to help. If you haven’t been an investor before, we’ve included tips on how to get started. Here you will find broad coverage of recent trends, guidance for the future and reflections on personal finance in a challenging era.

It’s been a long, fine run for the stock market but a great deal of the upswing has depended on low interest rates, and in the bond market rates have been rising. Investment strategists are taking a wide array of approaches to deal with this difficult problem. For now, the bull market rides on.

Bonds provide ballast in diversified portfolios, damping the swings of the stock market and sometimes providing solid returns. Because bond yields have been rising — and yields and prices move in opposite directions — bond returns have been suffering lately. But adding a diversified selection of international bonds to domestic holdings can reduce the risk in the bond side of your investments.

Yes, the markets and the economy are complicated. That often puts people off, and stops them from taking action that can help them and their families immeasurably: investing.

But investing need not be complicated. A succinct article gives pointers on how to get started, and on how to navigate the markets for the long haul.

After a piece of virtual art known as a nonfungible token — an NFT — sold at auction for $70 million recently, NFTs have suddenly became an asset that you can invest in. Our columnist prefers real dollars.

Short-term demand for oil and gas is rising, but if climate change is to be reversed, consumption of fossil fuels will have to diminish. This leaves investors in a tough spot.

For other perspectives on finance, take a deeper look at our report:

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We Asked Congress’s Freshmen to Give Up Stock Trading. Few Were Willing.

Additional attention in this area is a notion with bipartisan support, in an era that lacks much of that. In June, Representatives Chip Roy, Republican of Texas, and Abigail Spanberger, Democrat of Virginia, introduced what they called the Trust Act.

The bill would require their colleagues, spouses and dependent children to use a qualified blind trust, as Mr. Ossoff and Mr. Kelly are doing. With such vehicles, a third party would control individual stocks, if any, and some other investment assets and keep the beneficiary from knowing much about the contents or from trading on specialized knowledge of coming legislation. (Owning and trading common investments like mutual funds would be fine.)

“This is about making it easier for members of Congress to do their job,” Mr. Roy said at the time.

And let us not forget what I outlined in detail in a November column: They’ll all end up with more money in the end, on average, if they (or their stockbrokers) stop believing that they’re smart enough to beat the market. The studies on this are legion, and a particularly fun one showed how badly people in Congress did, on average, when they tried to outsmart the market between 2004 and 2008.

It is perhaps not surprising that those who would be elected officials would not be passive investors. The same enhanced sense of self that propels many of them to run for office may well make them think they have some kind of stock-picking superpower. They almost certainly don’t — and neither do the financial advisers who are charging them handsomely. Perhaps they’ll come to their senses eventually.

Others may own stock or trade it to blow off steam, as a form of gambling. If they can afford to lose the money, and are truly not using any inside information or in a position to influence the policies that affect the companies they bet on, then there is no real harm.

But do they wish to lose elections over it?

Certainly, stock trading wasn’t the only issue at play in Georgia. But in purple parts of the country or districts where upstarts in their own party would try to make a case of it, these newly elected officials could be vulnerable. If they avoid individual stocks for political reasons rather than more principled reasons, so be it. It’s all to the good.

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As Bond Yields Rise, Stocks Remain Buoyant, for Now

The sharp rise in bond yields is forcing traders to consider that they may be holding two irreconcilable ideas in their heads.

One is that the Federal Reserve has no real control over bond market interest rates. The other is that the Fed can keep the stock market aloft as long as it tries to control interest rates.

The resilience of share prices — the S&P 500 rose 5.8 percent in the first quarter — suggests that those two ideas can coexist. But if yields continue to rise, the impact on companies, consumers and homeowners and the appeal that fatter bond yields may have to investors could produce a reckoning for stocks.

“The bond market is at an inflection point that eventually is going to be recognized by the stock market,” said Komal Sri-Kumar, president of Sri-Kumar Global Strategies. “Over the last 30 years, the bond market has only gone one way, but a change is occurring now, and it’s likely to be an abrupt one.”

CRB index, which measures a basket of commodities, rose 52 percent in the 12 months through March. Home prices rose 6 percent last year, according to the Federal Reserve Bank of St. Louis.

$1.9 trillion bill last month to help the economy after the ravages wrought by the pandemic, President Biden proposed spending $2 trillion more on infrastructure projects, albeit over several years.

That $4 trillion, give or take, would be “going into an economy saturated with $6 trillion of stimulus spending from the Trump administration,” Mr. Sri-Kumar said. So much spending is likely to push up inflation and bond yields, he said.

Michael Hartnett, chief investment strategist at Bank of America Global Research, does not expect such concerns to diminish soon.

Because of such factors as “new central bank mandates, excess fiscal stimulus,” as well as “less globalization, fading deflation from disruption, demographics, debt, we believe inflation rises in the 2020s and the 40-year bull market in bonds is over,” Mr. Hartnett said in a report.

Commodities and other hard assets should outperform in the long term, in his view, along with shares of smaller companies, value stocks and foreign stocks. The dollar, shares of big companies and bonds should do worse.

David Giroux, a portfolio manager and head of investment strategy at T. Rowe Price, said he is worried that the bill will come due for much of the government spending.

“There’s a high likelihood we will have higher corporate taxes next year,” Mr. Giroux said. “That will be a headwind for corporate earnings.”

That persuades him to avoid shares of economically sensitive companies for which “a lot of really good news is already priced in.”

He prefers “stocks with really good business models that have been left behind,” including technology giants that are off their highs, such as Amazon and Google, and companies like utilities. Other favorites include regional banks such as PNC and Huntington Bancshares.

Ms. Bitel at William Blair foresees long-term higher returns by big growth stocks. But she throws in an immense caveat: Because rising interest rates tend to force down valuations, especially on the most expensive segments of the market, there could be a sharp decline before the erstwhile Wall Street darlings excel again.

“Retail investors will be able to buy their favorite growth stocks at a 40 percent discount, but that leadership will resume,” she said, emphasizing that the 40 percent was a ballpark figure.

Ms. Bitel also suggested holding foreign stocks, in particular shares of Chinese health care companies and Japanese software companies.

Mr. Paolini recommends banks, energy and real estate, and said he is avoiding carmakers, industrial companies and home builders.

Considering the investment landscape more broadly, he said, “The outlook for the next one to three years is quite good.” Then he seemed to try to talk himself out of that belief.

“The idea that you can simply print money and everything is fine isn’t sustainable,” Mr. Paolini said. “At some point, we will realize too much has been done and the market is too high, and the situation will change quite fast. I don’t know what that level is or how far away we are from it.”

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Why Investing in Fossil Fuels Is So Tricky

As concerns about climate change push the world economy toward a lower-carbon future, investing in oil may seem a risky bet. For the long term, that may be true.

Yet for the moment, at least, oil and gas prices appear likely to continue to rise as the economy recovers from the pandemic-driven shutdown of millions of businesses, big and small.

These countervailing trends — increasing demand now and falling demand at some point, perhaps in the not-too-distant future — create a dilemma for investors.

The good news is that an array of traditional mutual funds and exchange-traded funds are available to help them navigate these uncertain waters. Some funds focus on slices of the industry, such as extracting crude oil and gas from the ground or delivering refined products to consumers. Others focus on so-called integrated companies that do it all. Some spice their holdings with some exposure to wind, solar or other alternative energy sources.

International Energy Agency forecast that oil consumption was not likely to return to prepandemic levels in developed economies.

“World oil markets are rebalancing after the Covid-19 crisis spurred an unprecedented collapse in demand in 2020, but they may never return to ‘normal,’” the I.E.A. said in its “Oil 2021” report. “Rapid changes in behavior from the pandemic and a stronger drive by governments toward a low-carbon future have caused a dramatic downward shift in expectations for oil demand over the next six years.”

alternative energy funds. Many enable investors to zero in on discrete segments of the industry.

The biggest holdings of the Invesco WilderHill Clean Energy E.T.F. are producers of raw materials for solar cells and rechargeable batteries or builders and operators of large-scale solar projects. The $2.9 billion fund yields 0.49 percent and has an expense ratio of 0.7 percent.

The First Trust NASDAQ Clean Edge Green Energy Index Fund focuses on applied green technology. Its biggest holdings are Tesla, the American maker of electric automobiles; NIO, a Chinese rival in that field; and Plug Power, which makes hydrogen fuel cells for vehicles. Also a $2.9 billion fund, it yields 0.24 percent and has an expense ratio of 0.6 percent.

The First Trust Global Wind Energy E.T.F., as its name suggests, targets wind turbine manufacturers and servicers, led by the Spanish-German joint venture Siemens Gamesa Renewable Energy and Vestas Wind Systems of Denmark, as well as operators such as Northland Power of Canada. This $423 million fund yields 0.92 percent and has an expense ratio of 0.61 percent.

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