Solar Energy ETFs Find Momentum

December 13, 2012

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.



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

Learn how currency-hedged ETFs can reduce the currency risk in your portfolio.


Investors took profits on U.S. equity ETFs on Friday, Nov. 20.

Top three issuers saw net inflows in their products on Monday, Nov. 23.


By Dave Nadig

With the SEC looking to regulate liquidity, should bond ETF investors worry?

By Matt Hougan’s conference offered several actionable ideas for investors.

By Dave Nadig

The exchange just proposed the latest rule to reinvent history on bad ETF trades.

By Matt Hougan

Best deal in the history of finance gets better.


By Nicholas Kalivas

The case for low-volatility, currency-hedged exposure in Europe.

By Nick Stonestreet

ETF firm builds out its business.

By Nicholas Kalivas

A sector-momentum strategy may be just what your portfolio needs in the current market environment.