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Melvin & Company Introduces the First Global Solar Energy Index

Posted on: Wednesday, 9 April 2008, 15:00 CDT

MAC Indexing LLC today announced the introduction of the MAC Global Solar Energy Index (Index Ticker: SUNIDX), the first index to independently track the rapidly growing solar energy sector. Dow Jones will publish the Index, which was developed and is maintained by MAC Indexes, LLC, an affiliate of Melvin & Company that specializes in clean energy equity research and index development.

The MAC Global Solar Energy Index has been licensed to Claymore Advisors, LLC, which anticipates launching the first solar power exchange-traded fund (ETF) on the NYSE-Arca under the symbol "TAN" in April (www.claymore.com/tan).

"The creation of the MAC Global Solar Energy Index recognizes the growth of the solar sector and its maturing in terms of investment depth," said Christopher C. Melvin, Jr. Chairman and Chief Executive Officer of Melvin & Co. "Solar continues to be one of the fastest growing sectors within the clean-tech industry with a recent 47% annual growth rate and an expected 40% continued growth in the next few years."

A global portfolio of 25 leading solar companies with a combined market capitalization of nearly $100 billion comprise the index. The average market capitalization of the stocks in the Index is approximately $3.8 billion and the median is approximately $1.2 billion.

Shipments of solar modules over the six-year period from 2001-2007 showed compounded annual growth of 47%, according to PV News (www.Prometheus.org). With this strong growth, the solar industry has reached critical mass in terms of sales and profits. Photon Consulting estimates that global solar industry sales in 2007 rose by 50% to $30 billion and that pre-tax profits rose by 56% to $11 billion ("Solar Annual 2007," www.Photon-Consulting.com).

Solar power offers one of the few current mass-scale solutions to meet the world's enormous demand for clean and renewable power without pollution or greenhouse gas emissions. Solar power has the potential to reduce the world's dependence on fossil fuels. Solar power also provides electricity end-users with the ability to generate their own electricity, thus protecting themselves from power grid unreliability and from rising electricity prices charged by utilities.

The Index Methodology

The Index is designed to track companies within the following business segments of the solar power industry: solar power equipment producers; suppliers of materials or services to solar equipment producers; companies that derive a significant portion of their business, measured by the methodology set forth below, from solar power system installation, integration or finance; and companies that specialize in selling electricity derived from solar power. As defined by the MAC Indexes LLC, solar power includes two main categories:

(1) Solar photovoltaic power, which involves the conversion of sunlight into electricity through the photovoltaic process; and (2) Thermal solar power, which involves using energy from the sun to heat fluids for purposes of water or space heating or to produce electricity.

The Index is currently comprised of approximately 25 stocks selected based upon the relative importance of solar power within the company's business model. To determine whether solar power is a major component of a company's business, the Index Provider implements the following methodology.

1. All global publicly-traded companies with any connection to the solar industry are identified by company description database searches and bottom-up industry research of publicly available information and databases.

2. Based on a review of the company's public filings and company description information, companies that are identified through the initial search are put into three groups (the "Exposure Factor"):

Pure-Play Group--Companies that generate in excess of two thirds of their revenue from solar related business are considered to have their primary business in the solar industry and are placed in the Pure-Play Group. These are assigned an Exposure Factor of 1.0.

Medium-Play Group--Companies that operate in multiple industries, but have significant exposure to the solar industry -- defined as generating less than approximately two thirds but more than approximately one third of their revenue from solar related business and are placed in the Medium-Play Group. These are assigned an Exposure Factor of 0.5.

Eliminated Group--Companies with marginal exposure to the solar industry -- defined as generating less than approximately one third of their revenue from solar related business, are eliminated from consideration as an Index constituent.

3. From the securities in the Pure-Play Group and Medium-Play Group, securities eligible for inclusion in the Index must be listed on a developed market exchange, as defined above, have a minimum market capitalization greater than or equal to $250 million at the reference date preceding each reconstitution and have a minimum monthly trading value of $150 million at reference date preceding each reconstitution. Securities in the Primary and Secondary set that do not meet these criteria are excluded from consideration as an Index constituent.

The MAC Global Solar Energy Index is calculated and distributed by Dow Jones Indexes and is available via leading quote vendors.

About MAC Indexes, LLC

MAC Indexes, LLC is an affiliate of Melvin & Company that specializes in clean energy equity research and index development. Melvin & Company is an institutional research and brokerage firm based in Chicago (see www.MelvinCo.com). Melvin & Company is a fully-licensed NASD/SEC securities firm and is a member of the following organizations: Securities Investors Protection Corporation (SIPC), Securities Industry Association (SIA), Securities Traders Association (STA), National Association of Securities Professionals (NASP), National Futures Association (NFA), and Municipal Securities Rulemaking Board (MSRB). Melvin & Company was founded in 1989 by Christopher C. Melvin. Christopher Melvin is the CEO of MAC Indexes, LLC and Melvin & Company.

TAN Risk Considerations

There can be no assurance that the Fund will achieve its investment objective. An investment in the Fund is subject to risk, including possible loss of principal. Investing in non-U.S. issuers may involve unique risks, such as currency, political, economic and market risk. Investment in securities of issuers based in developing or "emerging market" countries entails all of the risks of investing in securities of non-U.S. issuers, as previously described, but to a heightened degree. Investing in securities of micro-, small- or medium-sized companies involves greater risk as these stocks may be more volatile and less liquid than those of larger or more established companies and may have returns that vary, sometimes significantly, from the overall stock market.

A significant percentage of the Index may be comprised of issuers in the solar industry or sector of the economy. If the Fund is focused in an industry or sector, it may present more risks than if it were broadly diversified. Prices of energy or alternative energy may decline. The alternative energy industry can be significantly affected by a variety of fundamental, competitive, regulatory, economic, and supply/demand factors. The solar energy industry has experienced an industry-wide shortage of polysilicon, which may place constraints on the revenue growth or productivity of solar energy companies. Solar energy companies may not be able to secure adequate and cost-effective supply of solar wafers, cells or reclaimable silicon. A lack or delay of widespread adoption or sufficient demand, changes to government subsidies, economic incentives or regulations and policies may present technical, regulatory or economic barriers to the purchase or use of solar power products thus reducing demand or causing corresponding declines in the revenues and profits of solar energy companies.

Additional risks of the Fund include but are not limited to: Non-Correlation Risk, Replication Management Risk, Issuer-Specific Changes and Non-Diversified Fund Risk. Buying or selling ETF shares will incur brokerage costs and other transactional fees. Shares of ETFs may fluctuate in price due to daily changes in trading volume. At times, shares may not have a high volume of trading.

Information contained herein and in the preliminary prospectus is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission, but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This communication shall not constitute an offer to sell or a solicitation of any offer to buy; nor shall there be any sale of these securities in any state where the offer, solicitation, or sale is not permitted.

The ETF, which is anticipated to launch in April 2008, will not be FDIC-Insured, bank-guaranteed and may lose value. Claymore Advisors, LLC will be the investment advisor of TAN. Claymore Advisors is an affiliate of Claymore Securities, Inc., 2455 Corporate West Drive, Lisle, Illinois 60532. For more information call 1-888-949-3837 or visit www.claymore.com. Member FINRA/SIPC 4/08

Source: Business Wire

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