“Claymore/MAC Global Solar ETF (NYSE:TAN) and Market Vectors Solar ETF (NYSE:KWT) have rallied since early June, but with earnings season fast approaching, can these ETFs break to higher ground, or will the rally run out of steam? Solar ETFs have taken a beating in 2010. (NYSE:TAN) fell from almost $11.50 per share in early January, all the way down to $6 in June, a nearly 50% drop in six months. (NYSE:KWT) saw similar results. The decline erased most of the post-crash rally in solar ETFs. Although they did not reach their all-time lows, shares were as cheap as they were toward the end of March 2009,” Don Dion Reports From The Street.
Dion goes on to say, “Over the past two months, however, the behavior of solar ETFs has changed. While they spent most of the previous year lagging the broader stock market indices, they’ve started to outperform since June. (TAN) and (KWT) bottomed earlier that month, making a higher low in early July, while the SPDR S&P 500 (NYSE:SPY) hit a new low in July. However, these are not the only ETFs to behave in this manner. The charts of European country ETFs show similar patterns, which provide some clue to the rebound in solar shares. European companies represent a significant slice of assets in the solar ETFs, and more importantly, European governments provide some of the most generous subsidies to the alternative energy sector. Country exposure is relatively straightforward. Almost 20% of KWT’s assets are in Germany, while 0.5% represent Spain. Great Britain accounts for another 1.4% of assets and its markets behaved similarly. TAN reports 27% of assets in Germany, 2.3% in the U.K. and 1.3% in Spain. Also, Switzerland’s markets have outperformed their broader European counterparts, and TAN has 5.3% of assets in that nation.”
“Beyond direct exposure to European shares are the European subsidies. First Solar (Nasdaq:FSLR)’s performance has mirrored that of European stocks, while even SunPower(Nasdaq:SPWRA) has shown similar correlation. SunPower has been among the worst performing solar stocks, hitting a new all-time low in June; shares are still down almost 50% this year, yet even it has followed the group higher. FSLR is the top holding in both solar ETFs with roughly 10% of assets, making it the most important single stock in terms of direct impact. WFR supplies the industry, however, and a good report or surprise upside could extend the rally this week. That said, I’d still look for some consolidation ahead of earnings reports in mid-August, as (TAN) and (KWT) have already gained more than 25% in July, and I wouldn’t chase shares in the wake of positive earnings this week,” Dion Reports.
Here are some more details we have put together on the Claymore/MAC Global Solar ETF (NYSE:TAN) and the Market Vectors Solar ETF (NYSE:KMT) below:
Claymore/MAC Global Solar ETF (NYSE:TAN) Visit Our (TAN) Category: HERE
The investment seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MAC Global Solar Energy index. The fund normally invests at least 90% of total assets in common stock, ADRs and GDRs that comprise the index. It generally will invest in all of the stocks comprising the index in proportion to their weightings in the index. This fund is nondiversified.
|TOP 10 HOLDINGS (52.98% OF TOTAL ASSETS)|
Market Vectors Solar ETF (NYSE:KWT) Visit Our (KWT) Category: HERE
The investment seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Ardour Solar Energy index. The fund normally invests at least 80% of total assets in equity securities, which may include depositary receipts, of U.S. and foreign companies primarily engaged in the production of solar power. It is nondiversified.
|TOP 10 HOLDINGS (67.25% OF TOTAL ASSETS)|