The Invesco Solar ETF (TAN) demonstrated strong performance in November, maintaining its spot as top ETF on VettaFi’s list of the 100 Highest 5-Year ETF Returns.
In November, TAN jumped 17.1%, bringing its year-to-date total return to 9.1%, according to YCharts.
The clean energy fund has returned 256.0% over a five-year period ending November 2, the highest five-year return out of all ETFs. The next best-performing ETF, the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN), is trailing TAN by nearly 5,600 basis points (QCLN has returned 100.8% during the same period), according to ETF Database.
The clean energy sector is expected to continue to deliver strong growth. The passing of the Inflation Reduction Act in August promises to offer a raft of tax credits to help stimulate the adoption of clean energy technologies, as well as spending for low-income and minority communities that suffer disproportionately from pollution.
TAN delivers targeted exposure to companies in the solar energy industry. Over a three-year period, TAN has returned 194.9%. TAN is up 8.82% year-to-date, recouping all losses experienced during a period of heightened volatility across sectors earlier in 2022, according to YCharts.
The fund includes 47 securities as of November 2, including First Solar Inc. (FSLR), Enphase Energy Inc. (ENPH), SolarEdge Technologies Inc. (SEDG), GCL Technology Holdings Limited (3800), and Sunrun Inc. (RUN).
Companies eligible for inclusion in TAN’s underlying index 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, according to the regulatory filings.
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