RSSSolar: Go Green by Getting TAN
By Jim Slagle | April 11, 2008 | 4:43 PM | 0 Comments
Claymore Advisors, LLC, anticipates launching the first solar power exchange-traded fund (ETF) on the NYSE-Arca under the symbol "TAN" in April 2008, perhaps as early as next week. Claymore is the third-fastest growing exchange-traded fund (ETF) provider in 2007 according to Bloomberg's 2007 ETF data. Claymore recently received licensing from Melvin & Company (MAC), who created the first index to independently track the rapidly growing solar sector. MAC specializes in clean energy equity research and index development.
This new index will track 25 leading global solar companies with a combined market cap of nearly $100 Billion. The average market capitalization of the stocks in the Index is approximately $3.8 billion and the median is around $1.2 billion.
Solar power offers one of the few current mass-scale solutions to meet the world's enormous demand for clean and renewable power without pollution or greenhouse gas emissions. Solar power has the potential to reduce the world's dependence on fossil fuels while providing electricity end-users with the ability to generate their own electricity, thus protecting themselves from power grid unreliability and from rising electricity prices charged by utility companies.
The index is designed to track companies within the following business segments of the solar power industry: Solar power equipment producers; suppliers of materials or services to solar equipment producers; companies that derive a significant portion of their business, measured by the methodology outlined below, from solar power system installation, integration or finance; and companies that specialize in selling electricity derived from solar power.
The index is weighted by level of exposure to the solar industry and will be placed in two groups for evaluation: The Pure-Play Group and Medium-Play Group. Securities in the Pure-Play Group consider solar their core business and must generate 2/3rds of their revenue accordingly. This group will have an "exposure weighting" of 1.0. Members of the Medium-Play Group may operate in multiple industries and must derive no less than 1/3rd of total revenue from the solar industry and will have a weighting of .5. If the evaluated firm derives less than one-third of their revenue from solar related business it will not be included in the index.
Securities eligible for inclusion in the index must be listed on a developed market exchange, as defined above, have a minimum market capitalization greater than or equal to $250 million at the reference date preceding each reconstitution and have a minimum monthly trading value of $150 million at reference date preceding each reconstitution. Securities in the Primary and Secondary set that do not meet these criteria are excluded from consideration as an Index member.
For investors interested in this green investment, more details on TAN can be had at www.claymore.com/tan.
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