TAN ETF: Claymore MAC Global Solar Energy ETF

A new ETF or exchange traded fund is now available in the market for investors looking to make investments in the Solar Energy Sector within the Alternative Energy Investments. Below we discuss a fund called Claymore MAC Global Solar Energy TAN ETF which specifically focuses only on Solar Energy Sector and invests on in companies operating in Solar Energy business.

Which index will be tracked by Claymore MAC Global Solar Energy TAN ETF?
The Claymore MAC Global Solar Energy ETF is an exchange traded fund and will attempt to track the performance of an equity index called the MAC Global Solar Energy Index. This Claymore MAC Global Solar Energy ETF will attempt to generate a correlation anywhere between 0.95 and 1 between the ETF and underlying index performance. That would mean if the MAC Global Solar Energy Index generates a return of 10%, then the Claymore MAC Global Solar Energy ETF may generate a return between 9.5% and 10%.
The MAC Global Solar Energy Index (Ticker: SUNIDX) contains 25 securities and is a total return index truly global in nature. Maximum geographical exposure is China – 29.92%, Germany – 29%, USA- 26.3%, followed by Norway, Spain and Switzerland in single digits. It is a mix of large cap – 27%, Mid cap- 29% and small cap – 42% exposure.
The top holdings are: First Solar Inc. 9.10%, Renewable Energy Corp. ASA 7.40%, Q-Cells AG 6.20%, MEMC Electronic Materials Inc. 6.00%, Suntech Power Holdings Co. Ltd. ADS 5.70%, SolarWorld AG 5.10%

How will the money be invested in Claymore MAC Global Solar Energy TAN ETF?
The Claymore MAC Global Solar Energy TAN ETF claims to be a low cost passive ETF fund. Around 90% of the investor"s money will be put in shares ADR, GDR that comprise the Index. The Index is designed to track companies within the following business segments of the solar energy industry: companies that produce solar power equipment and products for end-users, companies that produce fabrication products (such as the equipment used by solar cell and module producers to manufacture solar power equipment) or services (such as companies specializing in the solar cell manufacturing or the provision of consulting services to solar cell and module producers) for solar power equipment producers, companies that supply raw materials or components to solar power equipment producers or integrators; companies that derive a significant portion of their business (measured in the manner set forth below under “Index Methodology" section) from solar power system sales, distribution, installation, integration or financing; and companies that specialize in selling electricity derived from solar power.

What is the expense ratio of Claymore MAC Global Solar Energy TAN ETF?
The expense ratio of Claymore MAC Global Solar Energy TAN ETF is capped at 0.65% till December 2010.

Related Competitor Product: KWT ETF: Market Vectors Solar Energy ETF: Van Eck Global Solar Energy ETF

What are the risks involved in Claymore MAC Global Solar Energy TAN ETF?
There is a risk of sector underperformance – if solar energy sector does not perform well, then the returns on this Claymore MAC Global Solar Energy TAN ETF will be in loss. Another risk is due to foreign exchange or forex risk. Since this ETF is global in nature, there will be significant exposure to forex risk.
This fund also has exposure to emerging market, which may turn out to be risky. Also, the returns may be affected due to security specific local tax laws, accounting methods, geo-political problems, etc.

Any other information available about Claymore MAC Global Solar Energy TAN ETF
The Claymore MAC Global Solar Energy TAN ETF will trade on NYSE ARCA exchange and will have the NAV Symbol TANIV, CUSIP 18383M621.
As of 28th july 2008, the NAV of Claymore MAC Global Solar Energy TAN ETF was USD 22.30.

This Claymore MAC Global Solar Energy TAN ETF can be a good investment for investors looking for Solar Energy specific investments.