New York-based asset manager Van Eck Global has launched the Market Vectors – Solar Energy ETF, an exchange-traded fund that seeks to replicate the price and yield performance of the Ardou
New York-based asset manager Van Eck Global has launched the Market Vectors – Solar Energy ETF, an exchange-traded fund that seeks to replicate the price and yield performance of the Ardour Solar Energy Index, on the American Stock Exchange.
The fund, which has a total net expense ratio of 0.65 per cent, is one of the first solar ETFs listed in the US, and Van Eck Global says it is unique in the degree of pure-play exposure to the global solar industry it offers.
The index contains only companies that generate at least 66 per cent of their revenues from solar energy, and on an index-weighted basis its constituents derive more than 90 per cent of their revenues from that source. The four top holdings are currently First Solar, Q-Cells, Renewable Energy and Solarworld, with weightings of 10 per cent each.
‘The Ardour Solar Energy Index was designed to serve as a true pure-play measure of the performance of the global solar energy industry,’ says Ardour index committee advisor Walter Nasdeo. ‘We look forward to working with Van Eck in introducing the index to investors through the Market Vectors – Solar Energy ETF.’
Solar constitutes the fastest-growing source of both renewable and overall energy, according to the Solar Energy Industries Association. Worldwide, the industry’s revenues are expected to grow by 30 to 35 per cent annually over the next three years, and Ardour Capital Investments forecasts that its earnings will reach USD5.6bn in 2010, up from an estimated USD3.3bn this year.
‘Solar power has become an increasingly popular source of energy around the world, with demand exploding against a backdrop of steadily declining costs and prices that reflect economies of scale and technological and manufacturing advancements,’ says Van Eck Global principal Jan van Eck.
‘With more countries seeking to mitigate rising energy prices and the threat of global warming by implementing solar-friendly policies, the global solar industry appears poised to enter a period of remarkable growth.
‘In fact, some estimates indicate that 30 per cent of the world’s energy supply could come from solar by 2040, up from less than 1 per cent today. As the pure-play leader in solar, we believe that the Solar Energy ETF will appeal to investors looking for a convenient means to access this dynamic industry.’
The Ardour Solar Energy Index is published by Ardour Global Indexes as one of a family of alternative energy industry benchmarks. The index returned 32.9 per cent over the 12 months to March 31, and 44.7 per cent over three years.
The index is a rules-based, modified capitalisation-weighted, float-adjusted index designed to enable investors to track the overall performance of a universe of listed companies engaged in the solar industry. It is weighted according to the market capitalisation of each component stock, modified to conform with asset diversification requirements in conjunction with the scheduled quarterly adjustments to the index. Index values are calculated on both a price-only and total return basis.
Founded in 2005 to develop benchmarking tools for the alternative energy industry, Ardour Global Indexes is a partnership between Ardour Capital Investments, an investment bank specialising in alternative energy finance, and S-Network Energy Technologies, a developer of indices and investment products focused on both traditional and alternative energy.
Founded in 1955, Van Eck Global managed more than USD10.8bn in assets for individuals, insurers and institutional investors at the end of March. The Solar Energy fund is the 13th ETF launched under the Market Vectors brand, which includes sector, international and municipal bond ETFs and comprised more than USD5.1bn in assets as of March.
