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TAN: Institutional Activity in Solar Stocks in Q4

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Positive start in 2019

Solar stocks started 2019 on a solid note. The Invesco Solar ETF (TAN), which tracks the 23 largest solar stocks, has risen more than 30% in 2019. TAN has outperformed broader markets. In this series, we’ll discuss how institutional investors added to or trimmed their positions in solar stocks in the fourth quarter.

TAN

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Institutional activity in TAN

None of the top institutional investors increased their existing holdings in TAN substantially in the fourth quarter. According to the recent 13F filing, Guggenheim Investments, the biggest institutional investor in TAN, held a 6.2% stake as of December 31. UBS Financial Services and Cabot Wealth Management were net sellers of TAN in the fourth quarter. They sold 170,000 units and 110,000 units of TAN, respectively, in the fourth quarter.

Overall, 2018 was rough for solar stocks due to trade war tensions and policy uncertainties. Many domestic solar players’ revenue growth declined in 2018 compared to 2017. Solar stocks largely trended lower and fell more than 10% in the fourth quarter. Solar stocks mirrored broader markets. However, analysts expect earnings growth to increase this year due to more demand and favorable policies.

TAN is a pure-play solar ETF with an expense ratio of 0.65%. First Solar (FSLR) forms ~10%, while SunRun (RUN) forms ~6% in TAN.

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