The Sources of Energy of G20 Countries: Chart

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Coal is still one of the major energy sources in many parts of the world especially in Asia. Countries such as China, India, Indonesia, etc. rely on coal for their energy needs more than other sources. South Africa, for example depends on coal for 71% of its energy requirements according to a recent article at CFR. The author Lindsay Maizland notes that coal accounts for 30 percent of global energy consumption. This is surprising since renewable energy sources such as wind, solar, etc. have gained so much traction in the past few years.

The following chart shows the energy sources of G20 countries in 2020:

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Source: COP26: Can the World Slash Coal Use by 2030?, CFR

China is the world’s largest producer and consumer of coal. India is the next biggest coal consumer.

France and Brazil lead among the countries that are most reliant on nuclear, hydroelectric and renewable for their energy requirements. France is highly reliant on nuclear energy than any other country in the world. Similarly hydro electric power plays a major role in the energy sources of Brazil. The country is a surplus producer of electricity from hydro power and exports it to neighboring countries.

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On the Gap Between Investor Returns and Fund Returns

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Investors in funds such as mutual funds and ETFs tend to earn lower returns than the funds they own over a time period. Many studies in the past have proven this theory. The gap in return between investors and funds is due to a variety of factors such as timing the market, lack of patience, poor decisions on the part of investors, etc. It is not uncommon for investors to chase a hot fund for example based on past returns only to stampede out of it when the market turns volatile. A research study by MorningStar in August this year also shows that fund investors fared poorly in returns when compared to the total returns of the funds. The study found fund investors earned 1.7% less than the total return of funds over the 10-year period ending in December, 2020.

From the research study:

Our annual study of dollar-weighted returns (also known as investor returns) finds investors earned about 7.7% per year on the average dollar they invested in mutual funds and ETFs over the 10 years ended Dec. 31, 2020. This is about 1.7 percentage points less than the total returns their fund investments generated over the same period. This shortfall, or gap, stems from inopportunely timed purchases and sales of fund shares, which cost investors nearly one sixth the return they would have earned if they had simply bought and held.

That investor-return gap is more or less in line with the gaps we found for the four previous rolling 10-year periods. The persistent gap between the returns investors actually experience and reported total returns makes cash flow timing one of the most significant factors—along with investment costs and tax efficiency—that can influence an investor’s end results.

Our research imparts a few lessons on how investors can avoid these gaps and capture more of their fund investments’ total returns. Investors can improve their results by holding a small number of widely diversified funds, automating mundane tasks like rebalancing, avoiding narrower or highly volatile funds, and embracing techniques that put investing on autopilot, such as dollar-cost averaging.

The following chart shows the difference between investor returns and fund returns for various fund types:

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Source: Mind the Gap 2021 – A report on investor returns in the United States, MorningStar

The worst gap is for alternative funds and the next worst was for sector equity funds.

Some of the ways investors can generate a better return include:

  • Trying to time the market – that is getting out and in of funds at the wrong times
  • Avoiding high cost funds
  • Automatic reinvestment of fund distributions
  • Investing on a regular basis such as bi-weekly, monthly, etc.
  • Increasing contributions during market downturns, if possible.

Related ETFs:

  • SPDR S&P 500 ETF (SPY)
  • S&P MidCap 400 SPDR ETF (MDY)
  • SPDR Consumer Discretionary Select Sector SPDR Fund (XLY)
  • SPDR Consumer Staples Select Sector SPDR Fund (XLP)
  • SPDR Energy Select Sector SPDR Fund (XLE)
  • SPDR Financials Select Sector SPDR Fund (XLF)
  • iShares Dow Jones Select Dividend ETF (DVY)
  • SPDR S&P Dividend ETF (SDY)
  • Vanguard Dividend Appreciation ETF (VIG)

Disclosure: No Positions

National Oil Companies List by Country

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In the oil and natural gas industry, there is a group of companies called the National Oil Companies (NOCs). Unlike the private oil companies like Exxon(XOM), BP(BP), etc. the NOCs are majority or fully owned by the government of the country where they are located. For example, Pemex, the largest oil company of Mexico is owned by the state. Most of the NOCs are in emerging markets. In the developed world, a few NOCs exist such as Equinor(EQNR) of Norway.

While private oil majors may have bigger market capitalization NOCs own the most of the known oil reserves and have great influence in the domestic market and beyond.

The following charts and lists show all the NOCs of the world:

National Oil Companies (NOCs) by Country in Map:

Names of National Oil Companies (NOCs) by Country:

Source: The National Oil Company Database, National Resource Governance Institute

Disclosure: No positions

Cognitive Bias Codex: Chart

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Behavioral finance is an important subject that all investors need to educate themselves. As humans all our investment decisions are driven not always by facts and rational reasons. Emotions play a big part whether we are buying or selling a stock or any other asset. We also suffer from all types of bias from information bias to recency bias. To date, over 180 cognitive biases have been discovered as shown in the following chart:

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Source: Personal finance is 80% personal and 20% finance, FirstLinks