TAN is a non-leveraged exchange traded fund that tracks the stocks of solar energy companies. It invests in anticipation bonds and common stocks. It offers investors exposure to solar power, but at very low rates of return. This fund is ideal for investors who wish to build a portfolio in solar energy.
TAN is an exchange traded non-leveraged fund
TAN is an exchange-traded fund that invests in global solar energy companies. The companies are selected based on their revenue from solar related business. The fund also tracks companies involved in the development and commercialization of solar energy technologies. Its strategy allows investors access to the high-growth opportunities of solar energy.
The fund's expense ratio is 0.3%. Its underlying Index tracks the semiconductors section of the broad-market S&P Total Market Index. Its top five holdings were Nvidia Corp. (Lattice Semiconductor Corp.), Qorvo Inc., Monolithic Power Systems Inc.
It tracks an indicator of solar energy companies
ETF TAN ETF tracks a list of companies that produce solar energy. Investors looking for a targeted exposure to solar energy are well-served by this ETF. The selection universe includes companies which produce and/or install solar power. It also includes parts suppliers to solar power equipment. It also includes companies selling solar energy to utilities.
TAN tracks the MAC Global Solar Energy Index. It invests primarily in solar-related companies, which generate more than 90% of their revenue from solar power. Its constituents include 29 publicly traded companies. Its top holdings are First Solar Inc. and GT Advanced Technologies. GCL POLY Energy Holdings Ltd. and Solar City Corp. These companies account for almost 60% of the fund’s assets.
It invests in anticipation bonds
Prediction notes can be a safe and low-risk option for investors looking to earn a low return. These securities usually have fixed maturities and are exempted tax. The government can also use these securities proceeds to finance a project such as the construction of a new park. Broome County (New York) may need $5 million to build a new park. The city has $2million in cash and may decide that it will issue anticipation notes. These notes would mature on May 20, 2023.
An anticipation note is a short term debt instrument that promises regular payments in interest and principal. These payments will be made in the future from a specific revenue source, such as tax revenues. This allows the government not to wait for cash to fund its public projects. The interest rates are also lower than other forms of financing.
It has a low return on investment
TAN is still one among the best-performing ETFs despite a low rate for return. The fund's investor guide states that it has outperformed other ETFs, including the S&P 500, since its launch in June 2013. This is a good fund to consider if you are looking for capital appreciation. TAN also outperforms the competition. It has beaten both SPDR S&P500 Trust ETFs and Global X Renewable Energy Producers ETF. TAN has seen its market value increase by more 250 percent in the first half 2015.
However, TAN ETFs may not be the best way to get exposure for solar power. The TAN ETF is very concentrated and excludes most of the wider renewable energy market. The selection universe of TAN includes companies that specialize in solar technology, equipment and related services. These companies are known as "pure-plays", and they have more than two-thirds revenue.
It is a wise investment for select individuals
The TAN Fund ETF focuses only on companies that produce solar and wind power. These technologies have long-term runways for growth. Additionally, they are more sustainable for the environment. While the costs of alternative energy sources have held them back in the past, technological advances and economies of scale are changing this narrative.
TAN could be a good investment if you are one of the few. It is however highly overvalued relative to its peers. It trades at an absurdly high PE ratio. This is despite the fact that it has expected revenue growth of 5% through 2021. Additionally, three of the seven largest companies have financial problems. The Altman Z score of three of its largest businesses is below 1.80. This means that they are at risk of going bankrupt.