The solar industry appeared to be doomed in 2012 with ETFs
tracking the sector recording double digit losses to the extent of
50%. However, 2013 could have seen a cautious turnaround for the
Investors should note that exchange traded funds tracking the solar
industry did their best to provide investors with good gains. These
ETFs have not only shed the loss but have come a long way in
providing good returns to investors.
Investors should note that
The Market Vectors Solar Energy ETF (
is up a whopping 73.82% for the year, while the other solar ETF,
Guggenheim Solar ETF (
performed even better recording a massive gain of 108.6% (
Key Differences in Solar ETFs: KWT vs. TAN
Behind the Surge
The growth in the photovoltaic industry appears to be supported by
increased solar panel installations. Americans are seen to install
one solar photovoltaic system every four minutes, and given current
market growth projections, we could be installing one system every
minute and twenty seconds by 2016,
reports Stephen Lacy for Greentech Media
GTM Research calculates that about two-thirds of all distributed
solar systems in the U.S. were installed in the past two and half
years, and cumulative installations of distributed photovoltaic
systems will double by 2016. With installations going up every 83
seconds, capacity is projected to hit 9 gigawatts by 2016 (
Solar ETF Investing 101
Additionally, the industry growth is also being supported by lower
cost and increased competitiveness.
Moreover, China also seeks to double its upper limit for solar
power to 40 gigawatts by 2015 which is again a good development
which should boost the solar energy ETFs as China shares a healthy
asset base in both the funds. KWT has assigned 23.9% to China while
TAN has assigned 27.3%
In a boost for its own solar industry, China's Ministry of Finance
mentioned provision of tax breaks to solar products manufacturers
in order to assist those companies that are still short of good
5 Clean Energy ETFs Leading the Sector's Surge
ETFs to Play These Trends
manages an asset base of $18.9 million which it invests in a
portfolio of 33 stocks. The fund appears to be highly concentrated
in top ten holdings with a share of 60.5%. The top three holdings
include GCL-Poly Energy Holdings Ltd, Hanergy Solar Group Ltd and
MEMC Electronic Materials Inc.
American securities dominate the portfolio, with 29.2% going to the
U.S., while China and Taiwan account for 23.9% and 19.9% of the
The product is tilted towards the information technology and
industrials sectors with nearly 52.9% and 46.8.2% share,
The ETF is relatively illiquid in nature, trading in a small volume
of 2,600 shares a day. Still, KWT is up 73.8% year-to-date and has
increased 74.1% over the period of one year (
3 Top Performing Energy ETFs in Focus Now
On the other hand,
has a larger asset base of $213.1 million with 29 stocks. Hanergy
Solar Group ltd, First Solar Inc and Trina Solar LTD occupy the
first three positions in the fund.
The ETF is heavily concentrated in the technology sector, while
small and mid cap stocks dominate from a cap perspective. The
product trades in a good volume of more than 333,421 shares a day.
The fund charges 70 bps in fees and expenses.
TAN has emerged as a top performing non-leveraged ETF after several
years of dreadful performance. TAN has not only reached its
all-time high but has exceeded it.
Solar energy refers to energy released by the sun which is
converted into electricity. Although this energy accounts for a
very small portion of the energy market, it has made successful
gains in the financial world.
In fact, in years to come, solar ETFs could turn out to be a good
alternative energy investment. This is especially true if the
current positive trends continue, with both technological
innovation and oil prices remaining firm.
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FIRST SOLAR INC (FSLR): Free Stock Analysis
MKT VEC SOLAR (KWT): ETF Research Reports
GUGG-SOLAR (TAN): ETF Research Reports
TRINA SOLAR LTD (TSL): Free Stock Analysis
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