Excellent — that’s a very focused and strategic question. Let’s frame it clearly around what each ETF really gives you, their track records, and which better fits your conviction level in the sector.
🟩 1. Core difference in their DNA
| Feature | TAN (Invesco Solar ETF) | ICLN (iShares Global Clean Energy ETF) |
|---|---|---|
| Theme purity | Pure solar — manufacturers, installers, component suppliers. | Broad renewables — solar, wind, hydro, clean utilities. |
| Holdings | ~40 (highly concentrated) | ~120 (diversified) |
| Top 10 weight | ~65 % of fund | ~45 % of fund |
| Volatility | High — moves sharply with solar cycle. | Moderate — smoothed by utility exposure. |
| Geographic mix | Mostly U.S. + China | U.S., Europe, Asia (more global) |
| Recent 3-yr perf (approx.) | –25 % (after 2021 boom/bust) | –35 % (wider clean-energy sell-off) |
| Correlation | ~0.83 with ICLN (so they move together, but not perfectly). | |
| Dividend yield | ≈ 0.6 % | ≈ 1.2 % |
(data as of late 2025; rounded from FactSet/ETFdb/BlackRock reports)
🌞 2. What you’re really betting on
TAN = “solar innovation & policy”
- Strong upside if solar manufacturing margins recover and global installations accelerate.
- Highly sensitive to Chinese pricing, U.S. tax credits (IRA), and supply-chain costs.
- Outperforms in boom phases; underperforms hard when sentiment turns. ICLN = “energy transition infrastructure”
- More utilities, project developers, and diversified clean-energy producers.
- Benefits from long-term decarbonisation spending and power-purchase agreements.
- Lower volatility, less dependent on panel price swings.
🧮 3. Portfolio logic
| Your belief / goal | Suggested approach | Rationale |
|---|---|---|
| You’re all-in on solar tech itself (panels, inverters, trackers) | 100 % TAN | Concentrated exposure to the exact solar supply chain. Big upside, high risk. |
| You believe broadly in clean energy transition but not just solar | 100 % ICLN | You capture solar plus wind, hydro, and utilities; smoother returns. |
| You want solar upside but still want ballast | 50 / 50 split | TAN adds torque; ICLN provides diversification and a steadier base. |
Historically, the 50/50 mix has had ~15–20 % lower volatility than TAN alone, with only a small performance trade-off during solar booms.
⚖️ 4. My practical view
Given what you’ve said —
“I believe in the sector,”
you’re not trying to trade short-term cycles,
and you value ethical / socially responsible exposure —
→ I’d lean 60 % ICLN / 40 % TAN or 50/50 if you’re comfortable with swings.That blend keeps you exposed to the full clean-energy ecosystem (generation + tech) without being over-concentrated in solar manufacturing, which is extremely cyclical.If, however, you see the next few years as a pure solar re-rating story (e.g., panel prices stabilising, policy support rising), then going heavier TAN (70–100 %) is justified — just brace for volatility.
🧩 Final quick summary
| Option | Risk | Diversification | Alignment with “sector believer” |
|---|---|---|---|
| 100 % TAN | 🔥 High | Low | Pure solar bet, high conviction |
| 100 % ICLN | 🧊 Moderate | High | Broad clean-energy ecosystem |
| 50 / 50 mix | ⚖️ Balanced | Moderate-High | Ideal if you want sector exposure with risk control |