2019's Top ETF Shines Bright

June 18, 2019

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%
SunPower Corporation 7.41% 4.74% 3.58% 4.05%
Sunrun Inc. 51.15% 6.12% 3.63% 3.01%
TerraForm Power, Inc. Class A 3.28% 4.01% 1.58% 2.59%

Source: ETF.com; data as of June 17, 2019

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