Securities lending boosts Guggenheim's solar ETF

Most index ETFs trail their benchmarks over time by about the amount of their expenses, but the Guggenheim Solar ETF (TAN) has beaten the MAC Global Solar Energy Index by a median 360 basis points each year over the past few.

How? Like a number of other funds, TAN lends some of its holdings to investors - often shorts - in exchange for a fee which can get quite large when shorting demand is high. Since the fund's 2008 inception, "TAN had a portfolio of stocks the Street desperately wanted to short," says's Dave Nadig.

Other solar ETFs: KWT

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  • Think-About-It
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    Good reminder... and they passed those lending fees (income) on to shareholders in TAN in the form or dividends. Unfortunately, the amount of future payouts is impossible to determine, will vary widely and likely decline from historic levels as the amount of shorting in solar stocks declines as the industry matures. Still, I find TAN a good long-term holding.
    7 Jul 2014, 03:30 PM Reply Like
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