The best-performing ETF of 2019 isn't a tech fund, or a single-country play; it’s a renewable power fund.
So far in 2019, the $344 million Invesco Solar ETF (TAN), a renewable energy ETF that tracks the global solar power industry, has risen a whopping 45.1%. In contrast, the SPDR S&P 500 ETF Trust (SPY) has risen 15.9%.
With natural gas prices on a downward slide and the Trump administration devoted to supporting the domestic fossil fuel industry, the fact that a solar power ETF has outperformed all other ETFs is surprising, to say the least (read: "ETF Of The Week: Solar Fund Shines").
But TAN's outperformance isn't just a quirk of its famously brisk securities lending practice. Other renewable energy ETFs are also posting high year-to-date returns, including the $162 million Invesco WilderHill Clean Energy ETF (PBW); and the $5 million SPDR Kensho Clean Power ETF (XKCP). PBW and XKCP have risen 32.3% and 28.0%, respectively:
Source: StockCharts.com; data as of June 7, 2019
Secret Sauce Is Solar
What unites these three ETFs is an emphasis on solar power. All three ETFs have gotten a substantial performance boost from holdings in Enphase Energy (ENPH) and SolarEdge Technologies Corporation (SEDG), whose stock prices have skyrocketed 266% and 132%, respectively, year to date.
Enphase Energy comprises 7% of TAN, 6% of XKCP and 5% of PBW, while SolarEdge Technologies makes up 9% of TAN, 5% of XKCP and 4% of PBW.
The three ETFs' portfolios share several other high-flying solar stocks as well, listed in the table below.
(You can use our stock finder tool to find an ETF's allocation to a certain stock.)
|Stock Allocations In Clean Power ETFs|
|Stock||YTD Return||TAN Allocation||XKCP Allocation||PBW Allocation|
|Atlantica Yield plc||6.51%||4.00%||1.79%||2.99%|
|Canadian Solar Inc.||35.71%||5.01%||3.07%||3.41%|
|Daqo New Energy Corp. Sponsored ADR||94.36%||4.09%||2.65%||3.89%|
|Enphase Energy, Inc.||266.38%||7.01%||5.88%||5.13%|
|First Solar, Inc.||44.25%||10.37%||4.52%||3.53%|
|JinkoSolar Holding Co., Ltd. Sponsored ADR||59.29%||4.82%||2.68%||3.91%|
|SolarEdge Technologies, Inc.||131.85%||9.32%||4.61%||3.98%|
|TerraForm Power, Inc. Class A||3.28%||4.01%||1.58%||2.59%|
Source: ETF.com; data as of June 17, 2019