Invesco Solar ETF (TAN - Free Report) topped the list of the best performing ETFs in last month’s virus-led broad market sell-off with impressive returns of about 13.4%.
The rally was primarily driven by increased focus on climate change. Several factors including coal plant retirements, falling costs for renewables and continued technological innovation are fueling the need for new solar projects. Additionally, the rise of sophisticated storage assets has made solar more attractive. Further, upbeat earnings from Enphase Energy (ENPH - Free Report) and SolarEdge Technologies (SEDG - Free Report) led to a strong rally in the ETF (read: Earnings and Coronavirus Impact: 5 Best ETF Charts).
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 22 stocks in the basket. It is moderately concentrated across components with each making up for not more than 11% of the assets. U.S. firms dominate the fund’s portfolio with nearly 49.2% share, followed by China (22.2%) and Spain (7.3%). The product has amassed $594.8 million in its asset base and trades in a solid volume of around 299,000 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 (see: all the Alternative Energy ETFs).
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
Enphase Energy Inc. (ENPH - Free Report) : The stock skyrocketed 55.4% in February. It has seen positive earnings estimate revision of 26 cents for this year over the past month, and has an expected earnings growth rate of 33.7%. ENPH currently has a Zacks Rank #1 (Strong Buy) and a Growth Score of A. The stock occupies the second spot in the fund’s portfolio, making up for 10.8% share. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vivint Solar Inc. (VSLR - Free Report) : This stock takes the 13th spot in the fund’s basket with 3.7% allocation. It delivered robust returns of 38% last month. Vivint Solar saw no earnings estimate revision for this year over the past 30 days, and has an earnings growth rate of 103.1%. It has a Zacks Rank #3 and an unattractive VGM Score of F.
DAQO New Energy Corp (DQ - Free Report) : This stock takes the 12th spot in the fund’s basket, claiming 3.7% of the assets. It has jumped 29.6% in February and has seen solid earnings estimate revision of 52 cents for this year over the past 30 days. Its earnings are expected to grow 353.7% for this year. DAQO New Energy currently has a Zacks #1 and a Value Score of A (read: ETFs to Combat Climate Change).
SolarEdge Technologies Inc. (SEDG - Free Report) : The stock has rallied nearly 27.4% in the same timeframe. It has a Zacks Rank #1 and a top Growth Score of A. It has seen solid earnings estimate revision of 54 cents for this year over the past month and has an earnings growth rate of 27%. SolarEdge Technologies is the top firm, accounting for 10.9% share in TAN (read: Can Solar ETF Retain its Rally Despite Mixed Earnings?).
JinkoSolar Holding Company Limited (JKS - Free Report) : The stock has soared about 22.1% so far this year. It currently has a Zacks Rank #3 (Hold) and a Value Score of B. The stock has witnessed no earnings estimate revisions in the past month for this year and has an estimated earnings growth rate of 105.2%. It holds the 19th spot in the fund’s basket with 3.3% of the total assets.
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