Last September we covered Solar Energy related ETFs which were literally getting trounced at the time, and the situation has not improved nearly eight months later.
Guggenheim Solar ETF (NYSEArca: TAN) and Market Vectors Solar Energy (NYSEArca: KWT) are currently trading near all-time lows and are down 7.29% and 9.21% respectively just year to date, despite a broad market rally thus far in 2012 with the S&P 500 up 11.77%.
Those looking at TAN’s recent share price with a $22 handle should not be fooled either, as the ETF was trading in single digits for most of last year but underwent a “reverse split” which has become increasingly common in ETFs that trade below $10 because no fund sponsor wants their issues to gradually converge to zero over time.
Since inception in April of 2008, TAN has dropped an eye popping 91.38% while KWT has lost 91.66% since debuting in early May of 2008. Current top holdings in TAN are GCL-Poly Energy Holdings Limited (13.94%), FSLR (10.75%), GTAT (8.98%), MBTN (6.93%), and TSL (5.30%) while top weightings in KWT are as follows: GTAT (9.79%), WFR (8.57%), TSL (6.98%), FSLR (6.28%), and Gintech Energy Corporation (5.88%).
Some are holding out hope that a potential Presidential administration change in 2013 will breathe new life into Solar names, but this would be more of a political gamble than anything else at this point, as the underlying names in the Solar energy business continue to badly lag broad market equity benchmarks.
We do note that trading volume has picked up in TAN in recent sessions as it has bounced off of its all-time lows, but the fund still remains below its 50 day moving average (which is currently at $25.35 a share) and well below its 200 day moving averge ($33.34) so clearly much work needs to be done in order to improve the current technical picture in these sector ETFs.
Guggenheim Solar ETF