New Listing

Invesco launches solar energy ETF

ISUN tracks the MAC Global Solar Energy index

Tom Eckett

a man in a suit

Invesco has unveiled Europe’s second solar energy ETF, ETF Stream can reveal.

The Invesco Solar Energy UCITS ETF (ISUN) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.69%.

ISUN tracks the MAC Global Solar Energy index which currently offers exposure to 46 companies involved in the transition to solar energy.

The index looks to capture the entire value chain of the industry including solar power equipment producers, solar energy storage companies, raw materials suppliers and solar power system installers.

The index is weighted by modified market cap. Companies that derive 66% or more of their revenues from solar are given an exposure factor of 1.0 while companies that have revenues between 33% and 66% are given an exposure factor of 0.5.

Companies in the latter bucket see their index weighting cut by half to ensure the pure-play names have a bigger weight in the index.

To avoid liquidity risks, companies in the index must have a market cap of at least $150m and $750,000 one-month average daily trading volume.

The index is calculated by S&P Dow Jones Indices.

ISUN is a mirror strategy of the US-listed Invesco Solar ETF (TAN) which launched in April 2008 and has $3.3bn assets under management (AUM).

Gary Buxton (pictured), head of EMEA ETFs and indexed strategies at Invesco, said: “Leaders of the major economies of the world may not agree on many things but they are united in tackling climate change.

“With the goal of reaching net-zero carbon emissions in the next few decades, plans set out by the governments of the US, UK, EU and China all involve a substantial increase in their capacity to generate electricity from renewable energy.”

Richard Asplund, managing director at MAC Solar Index, said: “The index is designed to track the performance of companies globally within the solar energy industry, with diversified exposure to all solar technologies, the entire value chain and related solar equipment.

Chris Mellor, head of EMEA ETF equity and commodity product management at Invesco, added: “ISUN will be investing in companies globally across the solar industry value chain but emphasising those with significant revenues from solar-related activities.

“Pure-play solar companies will be given an increased weighting while those earning less than a third of their total revenues from solar – or any from fossil fuels – will be removed completely.”

Europe’s first solar ETF, the Solar Energy UCITS ETF (TANN), launched in June via white-label ETF issuer HANetf and tracks the EQM Global Solar Energy index.