TAN is a non-leveraged exchange traded fund that tracks the stocks of solar energy companies. It also invests, in addition to common stocks, in anticipation notes. It gives investors exposure and returns to solar energy. However, the return is very low. This fund is ideal for investors who wish to build a portfolio in solar energy.
TAN is a non-leveraged exchange traded fund
TAN is an exchange traded fund that invests into global solar energy companies. The companies are selected based on their revenue from solar related business. Additionally, the fund tracks companies who are involved in developing solar energy technologies. Its strategy allows investors the opportunity to take advantage of the high-growth potential for solar energy.
The fund charges a cost ratio of 0.35%. The fund's index underlying tracks the broad-market S&P Total Market Index semiconductors. Its top five holdings are Nvidia Corp. and Lattice Semiconductor Corp. Qorvo Inc. and Monolithic Power Systems Inc.
It tracks an indicator of solar energy companies
The TAN ETF is an ETF that tracks an index of solar energy companies. 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. In addition, it includes companies that market solar energy to utilities.
TAN tracks the MAC Global Solar Energy Index. It invests mainly in solar-related firms that produce more than 90% revenue from solar power. Its constituents include 29 publicly listed companies. Its top holdings are First Solar Inc. and GT Advanced Technologies. GCL POLY Energy Holdings Ltd. and Solar City Corp. These companies make up nearly 60% of the assets of the fund.
It invests its money in anticipation notes
You should look into investing in anticipation notes if you are looking for a low-risk, safe investment that will yield low returns. These securities are generally exempted from tax because they have fixed maturities. The proceeds of these securities can be used by the government to fund a specific program, such as the creation of a new public parks. Broome County in New York may require $5 million to create a park. The city has $2million of cash available so it might decide to issue anticipation note. These notes would mature in May 2023.
An anticipation note is a short-term debt instrument that promises regular payments of interest and principal. These payments will be made using a specific revenue source like tax revenues. This allows the government to move forward with public projects without waiting for cash in the short term. Additionally, interest costs are lower than with other sources of financing.
It has a low rate return
TAN is still one among the best-performing ETFs despite a low rate for return. The investor guide says that TAN has outperformed S&P 500 since it was launched 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's concentration is high and it excludes the majority of the wider renewable power market. The TAN fund includes companies that focus on solar technology, equipment, or related services. These companies are known as "pure-plays", and they have more than two-thirds revenue.
It is an excellent investment for a selected few
The TAN ETF focuses on wind and solar energy companies. These technologies are capable of long-term growth. They are also better for the environment. The cost of alternative energy sources has held them back in the past but technological advances and economies-of-scale are changing this story.
TAN could be a good investment if you are one of the few. It is overvalued in comparison to its peers. Its absurd PE ratio is not justified by its expected revenue growth up to 2021. Additionally, three of the seven largest companies have financial problems. Three of the largest companies in the group have Altman Z scores below 1.80. This indicates that they may go bankrupt.