Solar Energy ETFs Find Momentum

By
December 13, 2012
Share:

Related ETFs

Ticker Fund name
TANGuggenheim Solar
KWTMarket Vectors Solar Energy
Related ETF Lists
Global ETFs

The sun finally breaks through and starts shining a bit on solar ETFs.

Solar energy ETFs shot up this week, buoyed by a successful initial public offering of one of Silicon Valley’s largest clean-energy companies at a time when the market was already supported by reports that China plans to increase its investment in solar power.

The $49 million Guggenheim Solar ETF (NYSEArca: TAN) and the $11 million Market Vectors Solar Energy ETF (NYSEArca: KWT) were the best-performing U.S.-listed ETFs Wednesday, posting gains of 8.5 percent and 6.3 percent, respectively.

Their performance is even more impressive on a five-day stretch. TAN has tallied nearly 18 percent in gains since Dec. 7, while KWT is up 16 percent in the same period. The rally has been unaccompanied by net inflows, according to IndexUniverse’s ETF Flows Tool.

For solar energy enthusiasts, the recent run-up is a welcomed reprieve from what has been one long year of losses in solar funds, as the segment faces collapsing prices while output capacity grows.

Year-to-date, both TAN and KWT have bled roughly a third of their value, and those losses look even steeper on an annual chart. TAN has lost 40 percent in the past year, while KWT is off by 37 percent.

Still, SolarCity—one of Silicon Valley’s largest U.S. installers of residential solar system—successfully raised $92 million in its initial public offering Wednesday, after the IPO was postponed for a day.

The company, which has a market valuation of $584.6 million, has seen its revenue grow fourfold in the last five years, according to a Reuters report.

China’s announcement that it would inject another $1 billion in the solar industry this year—bumping up its support of solar power companies—was another piece of good news, even if China’s subsidies of its solar sector has sparked some concern among trade partners, Reuters reports.

 

ETF.COM CHANNELS

Learn why commodity ETFs are an essential part of a diversified portfolio with our Commodity ETFs channel.

Learn why bond ETFs are an essential part of a diversified portfolio with our bond ETF channel.

ETF DAILY DATA

The corporate bond ETFs topped the outflows list on Tuesday, Feb. 9.

PowerShares saw the biggest net inflows into its ETFs on Tuesday, Feb. 9.

ETF.COM ANALYST BLOGS

By Dave Nadig

For all the hype, here’s an example of an ETF working just as it should.

By Matt Hougan

Here's why you should attend the largest ETF conference in the world next month.

By Dave Nadig

Barclays built in a premium to this exchange-traded note, so back away.

By Sumit Roy

Why this probably isn't the start of a bear market.

ETF INDUSTRY PERSPECTIVE

By Heidi Richardson

Opportunities in Germany and the eurozone.

By Shirish Malekar

How to protect your portfolio with liquid alts.