How Has The Invasion of Ukraine Affected Returns for Fossil Fuel ETFs Compared to Clean Energy ETFs?

Context

The invasion of Ukraine has thrown global energy markets into turmoil. On the one hand, countries are clamoring for additional production of oil and gas due to Russian production restricted by sanctions. On the other hand, the ensuing energy crisis has led to a strategic re-orientation in several countries to wean their economies off of fossil fuels altogether and towards clean energy.

How has the market reacted to this dichotomy in its search for yield? Here I compare the largest clean energy ETF: iShares Global Clean Energy ETF (ICLN) to the largest fossil fuel ETF: SPDR S&P Oil & Gas Exploration & Production ETF (XOP). The goal is to assess how returns have tracked since the Russian invasion on February 24th and determine which investment track markets seem more keen on pursuing.

CleanvFossil <-c("ICLN", "XOP") %>%
    tq_get(get  = "stock.prices",
           from = "2022-02-24",
           to   = "2022-10-12") %>%
    group_by(symbol) %>%
     tq_transmute(select     = adjusted, 
                 mutate_fun = periodReturn, 
                 period     = "weekly", 
                 col_rename = "Returns")

CleanvFossil %>%
ggplot(aes(x = date, y = Returns, color = symbol)) +
  geom_line() +
  scale_x_date(date_labels="%b",date_breaks  ="1 month")+
  labs(
    x = "Date",
    y = "Adjusted Returns",
    title = "Clean Energy Has Had More Stable Returns Since Invasion of Ukraine",
    subtitle = "Comparing the Largest Clean Energy (ICLN) and Fossil Fuel (XOP) ETFs",
    caption = "Data source: TidyQuant",
    color = "")+
  theme_pander()