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4-Star ETFs Poised to Pop: Guggenheim Solar

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the Guggenheim Solar ETF (NYSE: TAN  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Guggenheim Solar and see what CAPS investors are saying about the ETF right now.

Guggenheim Solar facts

Inception April 2008
Total Assets $75.7 million
Investment Approach Seeks investment results that correspond generally to the performance of the MAC Global Solar Energy Index of solar stocks.
Expense Ratio 0.65%
Dividend Yield 0.9%
1-Year / 3-Year Annualized Returns (60.8%) / (33.5%)
Major Holdings With High CAPS Interest (at least 1,000 Active Picks) and Portfolio Weight

First Solar (Nasdaq: FSLR  ) (13%)

MEMC Electronic Materials (NYSE: WFR  ) (5.3%)

Trina Solar (NYSE: TSL  ) (3.8%)


Market Vectors Solar Energy ETF (NYSE: KWT  )

PowerShares Global Clean Energy (NYSE: PBD  )

Sources: Morningstar and Motley Fool CAPS.

On CAPS, 93% of the 462 members who have rated Guggenheim Solar believe the ETF will outperform the S&P 500 going forward. These bulls include latinoeconomist and All-Star kirkydu, who is ranked in the top 2% of our community.

Just last month , latinoeconomist tapped Guggenheim Solar as a cheap way to get some sun: "Get tanned at half price. The collapse of a sector ETF makes no sense, especially when countries like Japan, Germany, China and the US are going in the direction of solar, wind and other renewable energy."

Guggenheim Solar, in particular, sports a portfolio whose stocks average a cheapish P/E of 9.4. That represents a discount to other green ETF alternatives like Market Vectors Solar Energy (11.1) and PowerShares Global Clean Energy (12.9).

CAPS All-Star kirkydu elaborates on the bull case:

Solar energy has reached near grid parity in the southwestern U.S. during peak energy production periods due to significant increases in efficiency over the past five years. Efficiency continues to improve, production is becoming less costly and fossil fuels have stable to increasing costs by comparison. Over the next decade, regardless of government support, solar will move from a middle of the night infomercial to prime time, as solar makes market progress naturally. The Guggenheim Solar Energy Index ETF, TAN, is one of two great ways (Market Vectors Solar Energy) to have a concentrated position in solar as the sector outperforms from current price levels which are severely oversold on European debt concerns and industry consolidation.

What do you think about Guggenheim Solar, or any other ETF for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional ETFs is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track the Guggenheim Solar ETF? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of First Solar. Motley Fool newsletter services have recommended buying shares of First Solar. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

Read/Post Comments (3) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 13, 2011, at 2:16 PM, OutperformOrDie wrote:

    I would agree that both TAN and KWT are severely undervalued. I would encourage Fools to buy into the weakness as it won't be around very long.

    Despite European debt worries, China cutting solar subsidies and the United States government "looking into questionable solar company practices," let's be honest here, solar demand is and has been doubling every year for over six years. Grid parity is here for California and with prices becoming more reasonable every quarter, it will just be a matter of time until the majority of the United States can produce their energy at rates comparable to other forms of energy.

    Solar is here to stay and despite opposition and resistance from individuals who know not what they're talking about, investing in solar ETFs is a great way to mitigate risk while taking advantage of the industry as a whole while it marches to prime time.

    Just as the auto industry of the early 1900s showed us, there will be many companies who try to become major players but only a handful will emerge. Betting on just one company may prove to be disappointing in the long run as the industry is in its infancy and solar ETFs provide a safer way of betting on solar rather than placing your bets on one single player.

    Disclosure: I'm long KWT.

  • Report this Comment On October 14, 2011, at 2:24 PM, Brettze wrote:

    I just dont understand why we need to use "clean energy" as if we are feeling quilty about dirty fossil fuels.. I view "clean energy" as more energy that we need because we cannot produce much more oil, natural gas, etc as fast as our growing economy demands. So the real question about "clean energy" is profitability.. How do we attract investors to put much more money in "clean (more) energy" and be able to enjoy "clean" growth and captial gains... Our government can do so much with credits and stuff but the most of the money will have to come from investors.. If we want the govenrment to offer much more credits for clean energy, we need to put much more capital in "more" clean energy. Our govenrment cannot pull the whole job on its own.. I am sure that if more of us put much more money in "more clean energy", the govenrment will follow with much more credits and stuff. This is how it should work.. Risk?? Oh sure, we dont know which "more clean" stocks will succeed or fail. For now, we know which ones are already the biggest and baddest but someday, a unknown name will become the biggest and baddest . No one knows so that is why it is not easy for the govenrment to choose which one to help... Otherwisely, we can just sit on our hands and allow Big Oil, Gas and Coal to dictate our economy in the future. They still control our energy future even though they have their own ideas about "more clean energy" themselves.. Theirs may be better than the recently new "more clean energy" stocks for the future. Nobody knows , really. The bottom line is that it is not longer the economy, stupid any more.. it is now the energy or "more clean energy" , stupid! Get busy now! Millons are still unemployed and are getting fed up with the lingering actions on our energy future.. It will require a longtime to plan, buiild and complete " more clean energy" projects. We already realized that years ago, yet we are moving too slowly ... we are actually selling stocks , why? What about more energy conservation ideas?? Maybe it is also energy conservatoin, stupid!!! as well... ?????

  • Report this Comment On October 15, 2011, at 2:19 AM, OutperformOrDie wrote:



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