Solar ETFs Are Seeing Sunny Days

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.

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