Hedge funds are pivoting on energy trades, cutting long-standing bullish positions in oil stocks while easing off shorts in renewables, according to a report by Bloomberg citing new data from alternative investment analytics firm Hazeltree.
Bloomberg Green’s analysis of positions held by around 700 equity-focused hedge funds – collectively managing $700bn – shows that, on average, funds have been net short the S&P Global Oil Index for seven of the nine months since October 2024. That marks a sharp reversal from 2021–2024, when net longs dominated.
The move comes amid rising OPEC+ output, growing inventories, and concerns over slowing demand in the US and China.
Funds are also unwinding bearish bets on solar. Net shorts in the Invesco Solar ETF fell to just 3% in June – the lowest since April 2021 – while wind stocks remain in net long territory despite a recent pullback. Managers cite improving fundamentals, a stabilising policy backdrop under the Trump administration’s budget bill, and AI-driven forecasts for surging electricity demand.
Green equities have rallied since April, with the S&P Clean Energy Index up 18% and the Invesco Solar ETF gaining more than 18% over the same period, while the main S&P oil benchmark has fallen around 4%. In China, solar-linked stocks have rebounded 19% from April lows as overcapacity fears ease.
Electric vehicle exposure remains under pressure, with funds still net short the KraneShares EV & Future Mobility ETF, though short interest has dropped to near five-year lows. BloombergNEF forecasts that EV adoption could displace 19 million barrels a day of oil demand by 2040.
