TAN is a tradeable exchange fund that tracks the stock of solar energy companies. It not only invests in common stocks but also holds anticipation notes. It offers investors exposure to solar power, but at very low rates of return. Investors who want to build a solar portfolio will find this fund a good option.
TAN is an un-leveraged exchange traded funds
TAN is an ex-traded fund that invests globally in solar energy companies. Selection of companies is based on the amount of revenue they generate 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 expense ratio for this fund is 0.35%. The fund's underlying index tracks semiconductors in 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 index that includes solar energy companies
ETF TAN ETF tracks an index that includes solar energy companies. Investors who are looking to gain a narrow exposure to the sun's energy potential will find it a good choice. 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 is designed to track the MAC Global Solar Energy Index. It invests in companies that are solar-related and generate more than 90% of their revenues from solar power. It includes 29 publicly traded companies. Its top holdings are First Solar Inc. and GT Advanced Technologies. GCL POLY Energy Holdings Ltd. and Solar City Corp. Together, these companies account for nearly 60% of the fund’s assets.
It invests its money in anticipation notes
An anticipation note is a safe, low-risk way to invest that offers a low rate for return. These securities have fixed maturities, and are often exempt from taxes. The government can also use these securities proceeds to finance a project such as the construction of a new park. Broome County in New York may require $5 million to create a park. So the city may decide to issue anticipation bonds. These notes would mature May 2023.
An anticipation loan is a short-term instrument of debt that promises regular payments for principal and interest. These payments will be made in the future from a specific revenue source, such as tax revenues. This allows for the government to proceed with public projects while not waiting for cash. The interest rates are also lower than other forms of financing.
It has a low yield rate of return
TAN continues to be one of the most successful ETFs despite its low rate of return. This fund has outperformed all other ETFs since June 2013, according to the investor guide. If you're looking for capital appreciation, this fund may be worth your consideration. TAN has outperformed its competitors, beating both the SPDR S&P500 Trust ETF and Global X Renewable Energy Producers ETF. TAN has seen its market value increase by more 250 percent in the first half 2015.
However, if you're looking to get exposure to solar power, the TAN ETF may not be the best choice for you. The TAN fund is highly concentrated and cuts out most of the broader renewable energy market. The TAN selection universe includes companies that are experts in solar technology, equipment, and related services. These companies are called "pure-plays" - they consider the solar industry as their primary business and generate more than two-thirds of their revenue.
It is a good investment for a select few
The TAN Energy Trust Fund (ETF) is a fund that focuses solely on solar and wind energy companies. These technologies offer long-term growth potential. They are also better for the environment. Although alternative energy sources were expensive in the past, technology advances and economies are changing the narrative.
In other words, if you're a selective few, TAN might be a good investment. It is still highly valued compared to its peers. It is trading at an absurd PE ratio which isn’t justified by the expected revenue growth through 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.