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OFFON

INVESCO SOLAR ETF - USD

(TAN)
Delayed Quote. Delayed Nyse - 12/03 04:10:00 pm
82.16 USD   -4.83%
10/13INVESCO SOLAR ETF : Adding color to your portfolio with solar
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Invesco Solar ETF: Adding color to your portfolio with solar

10/13/2021 | 11:04am EST

Let us introduce an ETF that focuses on the energy transition and more specifically on companies that have a direct or indirect role in solar energy. For several years now, photovoltaic and solar thermal power plants have played an increasingly important role in global energy production. In addition to providing capital to an industry that wishes to have a positive impact on our planet by playing a direct role in the energy transition, this allows the investor to expose itself to a sector benefiting from a strong underlying trend. But this industry must be able to meet the technological challenges it faces while adopting business models that are sustainable and profitable in the long term.

Why invest in solar energy?

Just as Lebanon was plunged into darkness after two power plants were shut down due to lack of fuel, the problems related to traditional energies have been multiplying for some time. The megatrends point towards a drastic reduction of fossil fuels such as coal, oil or natural gas. In China, the share of coal in energy production has dropped from 75% in 1990 to 52% in 2021. The objective defined by the CCP is to reduce this production to only 5% by 2060. This is an ambitious goal that would be possible thanks to a very significant development of solar energy. The objective of the Chinese State is to go from 3% of solar energy at present to 23% in 2060.

Like any sector in strong growth, finding the future leader is an extremely complex affair if not impossible for the moment. The best solution is to gain exposure to the sector via a very strong diversification in order to take advantage of both the overall growth of the sector and the significant flow effect.

As you can see, solar energy is the fastest growing source of new energy capacity. According to BNEF forecasts, solar PV will produce 25% of the world's electricity by 2050, up from 2% today. The levelized cost of solar electricity has already fallen by 83% since 2010 due to dramatic technological advances and economies of scale. The cost of solar power will drop another 71% by 2050 (BNEF), making it by far the cheapest source of electricity.

How to simply invest in this industry?

In order to track the performance of this industry, we recommend the Invesco Solar ETF, which replicates the MAC Global Solar Energy as its underlying index.

The MAC Global Solar Energy Index focuses on companies that derive significant revenues from solar energy-related business activities, including the manufacture of solar cells and systems, producers of solar power equipment and components, and other companies that produce solar energy. These include the manufacture of solar cells and systems, producers of solar power generation equipment and components, providers of solar power system installation, development and financing, and/or the manufacture of solar energy charging and storage systems.

However, there are some risks to the industry. The solar energy industry can be significantly affected by fluctuations in energy prices, the supply and demand for alternative fuels, energy conservation, the success of exploration projects, tax incentives and subsidies, and other government regulations and policies. Moreover, let's not fool ourselves: while electricity generated by photovoltaics does not emit pollution in the process of converting solar energy into electrical energy, manufacturing, transportation, installation and recycling still have a very significant impact on the environment. In particular, the production of silicon, the primary component of photovoltaic cells, is highly criticized. But like any industry, technological advances are underway to hopefully minimise these effects.

Performance

Invesco Solar Energy has been tracking the MAC Global Solar Energy Index since April 2008. Over 10 years, the index has returned 255% or an annualized return of around 13.5%. Nevertheless, as with any fast-growing sector, volatility is a must, as evidenced by the 10-year high of 31 January 2021 at +349%.

Furthermore, if we take into account the management fee, the ETF has performed at around 10% per annum over the last 10 years

.

Invesco Solar Energy - Dist (-22.20% YTD)

Information:

- Ticker: TAN - ISIN: US46138G7060 - Price: $78.53 - PEA Eligibility: No - Expense Ratio: 0.69% - Currency: USD - Distribution policy: Distribution - Reset frequency: Quarterly - Assets under management: $2881M - Company: 54

About the Invesco Solar ETF:

At least 90% of its total assets are in securities, American Depository Receipts (ADRs) and Global Depositary Receipts (GDRs) that comprise the index. Market capitalization must be at least $150 million to be included in the index. In addition, the average daily trading value must be at least $750,000. Stocks are weighted according to the percentage of their revenue that comes from their solar operations. Thus, companies with "solar revenue" above 66% will weigh twice as much as companies with solar revenue below that amount.

Top Positions:

- Enphase Energy Inc - 10.39% - SolarEdge Technologies Inc - 10.38% - First Solar Inc - 7.26% - Xinyi Solar Holdings Ltd - 6.83% - Sunrun Inc - 6.78% - Daqo New Energy Corp ADR - 3.52% - Shoals Technologies Group Inc - 3.49% - Hannon Armstrong Sustainable Infrastructure Capital Inc - 3.09% - Sunnova Energy International Inc - 3.03% - Array Technologies Inc - 2.94%

Geographic Exposure:

- United States - 52% - China - 19% - Spain - 7% - Taiwan - 4% - Germany - 4% - Israel - 4% - South Korea - 3% - Canada - 2% - Norway - 2% - Japan - 2%

Ratios:

P/E Ratio: 54 Forward P/E: 34 ROE: 13% Average Market Cap. Average Market Cap: $7.895MM


© MarketScreener.com 2021
Stocks mentioned in the article
ChangeLast1st jan.
ARRAY TECHNOLOGIES, INC. -4.53% 16.87 Delayed Quote.-59.09%
DAQO NEW ENERGY CORP. -10.14% 43.32 Delayed Quote.-15.95%
ENPHASE ENERGY, INC. -7.62% 217.1 Delayed Quote.23.72%
FIRST SOLAR, INC. -3.71% 98.25 Delayed Quote.-0.68%
HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. -1.33% 56.38 Delayed Quote.-12.49%
INVESCO LTD. -1.41% 22.43 Delayed Quote.30.52%
INVESCO SOLAR ETF - USD -4.83% 82.16 Delayed Quote.-20.05%
LONDON BRENT OIL -0.84% 69.87 Delayed Quote.36.29%
MSCI TAIWAN (STRD) -0.38% 721.191 Real-time Quote.18.81%
S&P GSCI NATURAL GAS INDEX -2.02% 193.4638 Delayed Quote.67.51%
SHOALS TECHNOLOGIES GROUP, INC. -4.44% 26.66 Delayed Quote.0.00%
SOLAREDGE TECHNOLOGIES, INC. -3.62% 307 Delayed Quote.-3.80%
SUNNOVA ENERGY INTERNATIONAL INC. -5.73% 32.71 Delayed Quote.-27.52%
SUNRUN INC. -5.58% 39.95 Delayed Quote.-42.42%
WTI -1.39% 66.387 Delayed Quote.37.48%
XINYI SOLAR HOLDINGS LIMITED -1.26% 14.08 End-of-day quote.-30.47%
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10/13INVESCO SOLAR ETF : Adding color to your portfolio with solar
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Chart INVESCO SOLAR ETF - USD
Duration : Period :
Invesco Solar ETF - USD Technical Analysis Chart | MarketScreener
Full-screen chart
Investment themes
Asset Classes Equities
Geographical Zones World
Sector Energy
Size Small Cap
Themes Socially Responsible
Development Developed
Weighting Schemes Market Cap Weighted
Description
Index ETF MAC Global Solar Energy Stock Total Return Index - USD
Currency USD
Management fees 0.69%
AuM (2021-11-24) 3617.44 M USD
Provider Invesco
Features and characteristics
Jurisdiction United_States
Structure Open-end Fund
Date of creation 2008-04-15
Dividend Policy Distribution
Replication Method Direct (Physical)
Replication Model Full Replication
Heatmap :
AuM evolution (2021-11-24)
Last one 3617.44 M USD
1-month 2553.68 M USD
3 months 2823.49 M USD
6 months 2603.09 M USD
1-year 1550.74 M USD