Up Nearly 50% YTD, A Shiny View on TAN ETF Holdings

Up nearly 50% this year, the Invesco Solar ETF (TAN) is easily one of this year’s best-performing non-leveraged exchange traded funds.

The Invesco Solar ETF follows the MAC Global Solar Energy Index, made up of companies in the solar energy industry. Investing 90% of its assets in the fund, holdings primarily include those in the solar information technology sector (54.95%).

TAN, which is nearly 12 years old, follows the MAC Global Solar Energy Index. That index “is comprised of companies in the solar energy industry. The index is computed using the net return, which withholds applicable taxes for non-resident investors,” according to Invesco.

Over the years, exchange traded funds focusing on alternative energy themes have had their shares of struggles, but the group is surging this year and Goldman Sachs sees more upside for some of TAN’s holdings.

Earlier this week, Goldman Sachs upgraded several sector names, including SunPower Corporation (NASDAQ:SPWR), Sunrun Inc (NASDAQ:RUN), and Solaredge Technologies Inc (NASDAQ:SEDG).

Solar Stock Catalysts

“The analyst is ‘incrementally positive on U.S. residential solar stocks’ and said the 2020 California New Homes Mandate will start generating demand soon,” according to Schaeffer’s Investment Research.

TAN and its components can be volatile investments and the solar industry has had its bouts of volatility and struggles in the past. The tariffs pinched the solar industry, creating job losses, but state initiatives, including California’s push to require all new homes built in 2020 and beyond to include solar panels, are bolstering the solar industry.

“SunPower stock hit a nearly two-year high of $11.01 earlier today, after Goldman lifted its recommendation on the renewable energy name to “buy” from “neutral,” and hiked its price target to $11 from $6, touting the solar concern’s market leadership in California,” notes Schaeffer’s. “Now, SPWR stock is eyeing its best day in more than six years, trading 31.5% higher at $10.89, at last check.”

That stock is TAN’s sixth-largest holding.

“Goldman Sachs upgraded RUN stock to “buy” from “neutral,” too, and lifted its target price to a yet-to-be touched $20 from $15,” notes Schaeffer’s.

Sunrun is TAN’s fourth-largest holding.

For more information on the renewables space, visit our renewable energy category.