After declining on Wednesday, SolarEdge Technologies (SEDG) is the top gainer in the S&P 500 in midday trading on Thursday, lifting clean energy ETFs.
SolarEdge is up nearly 8% as the stock rebounds off yesterday’s losses when it fell 1.18% on Wednesday. Investors looking to add exposure to SolarEdge can look to the Invesco Solar ETF (TAN), which weights the security at 8.83%, more than any other ETF available to investors as of April 13, according to ETF Database.
TAN has held the top spot on VettaFi’s list of the 100 Highest 5-Year ETF Returns for the past several months. The clean energy ETF has returned an annualized 24.75% over a five-year period ending April 12, the highest five-year return out of all ETFs.
“Thematic investing a higher risk higher reward strategy that requires patience and a longer term approach,” Todd Rosenbluth, head of research at VettaFi, said. “Clean energy securities particularly focus on solar has added value and the Invesco solar ETF offering provides diversification benefits for a moderate fee.”
TAN delivers targeted exposure to companies in the solar energy industry. The fund includes 46 securities as of April 12. The top holdings in the clean energy ETF include First Solar Inc (FSLR), Enphase Energy Inc. (ENPH), SolarEdge Technologies Inc. (SEDG), Xinyi Solar Holdings Ltd (968), and GCL Technology Holdings Limited (3800).
Companies eligible for inclusion in TAN’s underlying index, according to regulatory filings, include solar power equipment producers, including ancillary or enabling products such as tracking systems, inverters, batteries, or other solar energy storage systems; suppliers of raw materials, components, or services to solar producers of developers; companies that produce solar equipment fabrication systems; companies involved in solar power system installation, development, integration, maintenance, or finance; companies that produce hydrogen using solar energy; companies that produce solar-powered charging systems for electric vehicles or other electrical devices; companies selling systems that use solar thermal energy to produce heat or electricity; and companies that sell electricity that derives from solar power.
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