Up more than 34% this year, the Invesco Solar ETF (NYSEARCA: TAN), the largest exchange traded fund dedicated to solar equities, is one of 2019’s best-performing non-leveraged ETFs.

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. The ETF is up 40% from its Dec. 26 lows.

“One reason for the ETF’s success is that solar energy stocks often follow the price of crude oil. U.S. crude prices are up more than 30% from a December low. But the fund’s strength is mainly in its Chinese holdings,” reports Investor’s Business Daily.

Twenty-nine percent of TAN’s 22 holdings are Chinese companies.

Favorable Fundamentals for Solar

“Long term growth for solar will be organic. What will add fuel to the fire in the United States is going to be the next Democratic or environmentally friendly president or Congress,” according to Seeking Alpha. “It may not be in 2020 but may be 2024, there will however be a chief executive who will place clean energy near the top of their agenda. Until then, it is just a waiting game.”

TAN has also dealt with the US/China trade dispute with aplomb, as highlighted by the fund’s recent performance.

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