Solar ETFs Are Seeing Sunny Days

February 17th at 2:00pm by Tom Lydon

President Obama’s budget proposal includes a 12% bump for the Energy Department and it could translate into even more of a kick for solar energy exchange traded funds (ETFs).

Murray Coleman for Barron’s reports that the plan would include $457 million for solar energy research and development, among other things. [Solar ETFs Get a Boost From Goldman.]

It’s only the latest spate of good news for the sector, which several analysts projected would outperform this year for a few reasons:

  • Oil prices are moving higher again. Interest in green energy technologies often moves inversely to the price of oil and other fossil fuels.  [Clean Energy ETFs Building Momentum.]
  • President Obama recently stated his goal to have 80% of power coming from clean energy sources by 2035, which could spark a push for more legislation.
  • It’s been a good year for solar so far: in the last month, solar ETFs have gained about 12%. [Solar ETFs Get a Boost from Goldman.]

Among the sector’s major players generating decent returns and interest from investors and analysts alike include both Chinese and U.S. solar companies: First Solar (NYSE: FSLR), Yingli Green Energy (NYSE:YGE) and Sunpower (NYSE: SPWRA), Jinko Solar (NYSE: JKS) and Canadian Solar (NYSE: CSIQ) Trina Solar (NYSE: TSL) and Suntech Power (NYSE: STP), says Eric Rosenbaum for The Street. [Solar ETFs Flying High on Analysts' Boost.]

  • Guggenheim Solar (NYSEArca: TAN) is the ETF industry’s first and largest solar ETF and it owns many of the industry’s top companies, including: First Solar, 21.1%; Trina Solar, 6.8%; Suntech Power, 4.2%; Yingli Green Energy, 4.2%; and Jinko Solar, 1.2%.
  • Market Vectors Solar Energy (NYSEArca: KWT) has many of the same holdings as TAN, but in smaller allocations. First Solar, for example, is 10.6% of the fund. Others include Trina Solar, 9.2%; Yingli Green Energy, 4.5%; Suntech Power, 4.3%; and Canadian Solar, 2%.

For full disclosure, Tom Lydon’s clients own TAN. Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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