Invesco Solar ETF TAN topped the list of the best-performing ETFs last month with impressive returns of about 23.3%.
The rally was driven by the presumptive Democratic presidential candidate Joe Biden’s push for clean energy and infrastructure plans. Biden aims to pump $2 trillion into green energy over four years to build solar panels, charging stations and more. A Biden presidency is touted to spur tens of thousands of new wind turbines and millions of new solar panels across the United States to rapidly achieve zero-carbon energy. The plan will eliminate carbon emissions from the power grid by 2035 and accelerate the uptake of electric vehicles (read: Clean Energy Stocks & ETFs to Buy as Biden Gains Popularity).
Upbeat earnings of First Solar FSLR, SolarEdge Technologies SEDG, Enphase Energy ENPH, SunPower Corp. SPWR and Canadian Solar CSIQ also added to the strength. Further, rising demand for solar panels globally and Tesla’s TSLA incredible surge led to a strong rally in the ETF.
Let’s take a closer look at the fundamentals of TAN.
TAN in Focus
This ETF offers global exposure to the solar industry by tracking the MAC Global Solar Energy Index, holding 28 stocks in the basket. It is moderately concentrated across components with each making up for not more than 10% of the assets. U.S. firms dominate the fund’s portfolio with nearly 49% share, followed by China (21.9%) and Spain (7.2%). The product has amassed $1.3 billion in its asset base and trades in a solid volume of around 621,000 shares a day. It charges investors 71 basis points in fees per year and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Solar ETF Hits New 52-Week High).
Though most of the stocks in the fund’s portfolio delivered strong returns, some stocks listed on the U.S. stock exchange outperformed. Below, we have highlighted those five best-performing stocks in the ETF with their respective positions in the fund’s basket:
Best Performing Stocks of TAN
Sunrun Inc. RUN: The stock soared about 54.1% in August. It has witnessed negative earnings estimate revision of 37 cents in the past month for this year and has an estimated earnings decline rate of 161.9%. The stock occupies the top spot in the fund’s basket with 9.7% of the total assets. It currently has a Zacks Rank #4 (Sell) and a VGM Score of F.
Vivint Solar Inc. VSLR: This stock takes the fifth spot in the fund’s basket with 6.3% allocation. It delivered robust returns of 51.8% last month. Vivint Solar has seen positive earnings estimate revisions of 33 cents for this year over the past 30 days, and has an earnings growth rate of 101.2%. It has a Zacks Rank #3 (Hold) and an unattractive VGM Score of F.
Canadian Solar Inc. CSIQ: The stock surged 46.7% in August. It carries a Zacks Rank #3 and has a VGM Score of B. The stock has seen negative earnings estimate revision of 28 cents for this year over the past month while its earnings are expected to grow 18.7%. The stock occupies the eighth position and accounts for 4.7% share in TAN (see: all the Alternative Energy ETFs).
First Solar Inc. FSLR: The stock rallied nearly 28.6% last month. It has a Zacks Rank #3 and a VGM Score of C. The company has seen positive earnings estimate revision of 3 cents for this year over the past month and has an earnings growth rate of 95.3%. First Solar is the third firm, accounting for 7.2% share in TAN.
Enphase Energy Inc. ENPH: The stock gained 27.9% in August. It has seen positive earnings estimate revision of 13 cents for this year over the past month, and has an expected earnings growth rate of 22.1%. ENPH currently has a Zacks Rank #3 and a VGM Score of D. The stock occupies the fourth position in the fund’s portfolio, making up for 7.2% share.
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