Insights

ESG Stocks Like Solar Energy Are Leaving FANG in the Dust

Something interesting is happening in technology. “ESG” stocks like solar energy are breaking out as megacaps like Apple and Alphabet drift.

The Invesco Solar Energy ETF (TAN) shot 3 percent above its previous 52-week high yesterday. Of the 40+ thematic funds tracked by Market Insights, TAN is the only one above its early-September high. It’s also the top performer in 2020 with a gain of more than 100 percent.

A combination of surging investor interest and technological breakthroughs seem to be driving the trend. The investor demand results from concerns about Environmental, Social and Governance (“ESG”) issues. Silicon Valley and large institutions are also following the movement. One estimate by DWS Group earlier this month said inflows to ESG portfolios have more than doubled from this time last year.

Invesco Solar Energy ETF (TAN) with 50- and 200-day moving averages.

But there has also been real results and performance. Tesla (TSLA) helped launch the rally last year by proving it could make electric cars profitably. Chinese rival Nio (NIO) has also taken off, along with hydrogen disruptor Plug Power (PLUG).

Still, TAN’s solar stocks remain the broadest ESG group. Market Insights covered the major earnings beats by SolarEdge Technologies (SEDG) and Enphase Energy (ENPH) earlier in the year. The biggest mover lately has been JinkoSolar (JKS). The Chinese company has almost doubled in three weeks after crushing earnings estimates and successfully ramping its photovoltaic production.

You may not know many solar stocks because most are relatively small (under $10 billion market cap) and several only trade in Asia. But if you want to start learning, here are TAN’s 10 biggest member stocks listed in the U.S.

Symbol   Name   Business  Mkt Cap YTD %
SEDG   SolarEdge   Power Optimizers    $11bln +143%
ENPH        Enphase Energy   Control Systems    $10bln +209%
RUN   SunRun   Installation    $9bln +427%
FSLR   First Solar   PV Modules    $7bln +18%
VSLR   Vivint Solar   Installation    $5bln  +451%
JKS   JinkoSolar   PV Modules    $1.7bln +75%
CSIQ   Canadian Solar   PV Modules    $2bln +54%
DQ   Daqo New Energy   Polysilicon     $1.8bln  +155%
HASI   Hannon Armstrong     Project Financing    $3bln         +30%
SPWR   SunPower   Panels, Components      $2bln +134%

This article was written by David Russell, TradeStation Securities, Inc., part of the Monex Group Inc, published on 30/09/2020.

David Russell
David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.

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