If you pay any attention at all to the stock market, you’ll know that 2007 was a banner year for many solar panel manufacturers. Arizona-based First Solar (FSLR), for instance, returned a jaw-dropping 795% after going public in November of 2006. Whether you’re patting yourself on the back, or kicking yourself for missing out on the action, one thing remains true for all: future investment opportunities abound in the solar energy market. The tricky part is, of course, searching out the good ones while avoiding the bad ones.
As luck would have it, two helpful resources were recently launched. The first, the Ardour Solar Energy Index (Ticker: SOLRX), tracks real-time prices of 27 solar energy stocks from around the world. As Joseph LaCorte, Chairman of the SOLRX Index Commitee suggests,
Solar energy is among the most vital growth segments of the world economy and this index offers an accurate way to measure industry performance.
True, true. Companies from six countries are represented, including the heavy-hitters of the U.S., Japan, Germany and China. For a look at a similar index, be sure to see the MAC Global Solar Energy Index (ticker: SUNIDX). And for indices that track the cleantech sector at large, check out both the NASDAQ Clean Edge Index and the Cleantech Index.)
As with any new technology sector, solar and other cleantech stocks are often more volatile than average investors care to stomach. Moreover, while it’s widely expected that the cleantech sector as a whole will continue to see strong growth in coming years, it can be difficult—even impossible—to pick winners out from a crowded field.
The second resource may help some investors deal with this challenge. It’s a new, all-solar exchange traded fund (ETF) from Claymore. Dubbed the MAC Global Solar Energy Index ETF (ticker: TAN), the fund has $50 million divvied up into holdings in about 25 solar companies. Because they provide exposure across many companies, ETFs are commonly understood to provide exposure to a particular sector (or region) while lowering the risks often associated with holding shares of just one or two companies. And because they’re traded on the open market, in real time, they’re more flexible and (arguably) more liquid than mutual funds.
It’s of course far too early to tell if Claymore’s new fund will do well (it just began trading on April 15th). Some experts, however, suggest that other securities firms look likely to launch competing ETFs in the near future. This is good news for both everyday investors and solar energy companies.
[NOTE: None of the preceding should be misconstrued as investment advice, as it is simply the thoughts and observations of the author. Nor should the preceding serve as the basis of any investment decisions.]
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