Global energy ETFs saw a sharp pickup in investor interest through the first quarter of 2026. However, this trend has since reversed – highlighting how quickly sentiment can turn in energy markets.
Kenneth Lamont, Principal at Morningstar, explained: “Investors poured $15.9bn into global energy ETFs between January and mid-April 2026, as the outbreak of conflict in the Middle East led to a re-rating of the asset class.
“That compares with net redemptions of $7.8bn across the whole of 2025, meaning we’ve seen the unwinding of more than two years of structural selling in a matter of weeks. In 2025, energy ETFs lost money in 34 of 51 weeks – even as the Morningstar Global Energy index returned +11% for the year.
“Investors had been systematically underweighting the sector. When the conflict began, that light positioning appears to have amplified the urgency of re-entry: 13 of the 15 weeks since January have recorded inflows, with several weeks topping $1bn and the strongest single week seeing $2.7bn flow in.
“Performance has followed. The Morningstar Global Energy Index had risen by 36% YTD in late March. However, the most recent two weeks have seen the first back-to-back outflows since the conflict began, as the index pulled back from its peak. Whether that marks the start of a rebalancing, or early anticipation of de-escalation, will be the key question for the sector in the weeks ahead.”
The full dataset can be found here. Source – Morningstar
