New Solar ETF Outperforms Main US Components So Far (TAN, FSLR, STP, WFR, SPWR)

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On April 15, the Claymore/MAC Global Solar Energy Index ETF (NYSE: TAN) was launched on ETF leader, the NYSE Arca. Under the ticker “TAN,” the ETF tracks 25 solar power industry companies globally for a total market cap of $5.8 billion.

The majority of the businesses are tied to solar in the ETF and are in the U.S., China, and Germany. The active stocks that trade in the U.S. on NYSE or NASDAQ are First Solar Inc. (NASDAQ: FSLR), MEMC Electronic Materials Inc. (NYSE: WFR), and Suntech Power Holdings (NYSE: STP).

Claymore believes that recent "green" trends, favorable government policy, increasing volumes of venture capital investments, and improving technology industry will drive growth and returns for the fund.

It was launched at $25.84 on April 15 and shares closed at $26.90 today. The fund has reached as high as $27.50 (also today) and hasn’t closed below the initial launching price.  That puts the solar ETF up 4.1% since the lauch, aven after a drop of 0.7% today. 

Of the top four constituents that trade actively in the U.S., the performance based upon todays closed and compared to the open on April 15 for exact comparison is as follows (with the percentage of the ETF for representation):

  • First Solar Inc. (NASDAQ: FSLR) is over 8% of the ETF weighting, up 0.8% since the ETF opened; .
  • Suntech Power Holdings (NYSE: STP) is 6.24% of the ETF weighting, up 0.78% since the ETF opened;
  • MEMC Electronic Materials Inc. (NYSE: WFR) is 5.1% of the ETF weighting, actually down 0.4% since the ETF opened;
  • SunPower Corp. (NASDAQ: SPWR) is 4.7% of the ETF weighting, actually down by 0.4% since the ETF opened.

Today may be the blame for the lag as it was a dismal day for many ofthese stocks that make up the ETF, so the results may be skewed thisclose to the launch.  On First Solar (FSLR), unfortunately it fell 4%today or that would be larger 0.8% gain would look better.  SuntechPower Holdings Co. Ltd. (STP) saw a 6% drop today.

This ETF does have foreign companies that either don’t trade in theU.S. or are very thin as you can see  by the name and weighting of theETF  Renewable Energy Corp. (7.3%), Q-Cells (7.05%), SolarWorld(5.47%).  Only 26.3% of the ETF is U.S.-based companies, so ths meansthat there will be more skewed intra-day lags between the actualintraday price and a perceived N.A.V. at any given time.

The good news is that this hasn’t killed the share volume of this ETF.With the exception of the opening day, this one hasn’t traded fewerthan 300,000 shares.  Today saw 484,214 shares trade.

Jon C. Ogg
April 23, 2008