Tesla ETF Time Again

February 19, 2014

Elon Musk’s Tesla (TSLA) hit an all-time high Tuesday in advance of the electric carmaker’s after-the-close earnings report Wednesday.

Year-to-date, shares of California-based Tesla are up nearly 36%. Even that run, which comes on the heels of the stock more than quadrupling last year, two analysts boosted their price targets on Tesla Tuesday to $215 and $222 respectively.

“Analysts polled by Thomson Reuters are looking for revenue of $677.36 million, a 121% rise from the year-earlier quarter, and earnings per share of 21 cents, swinging from a 65-cent loss,” reports Donna Howell for Investor’s Business Daily.

A mere seven ETFs feature Tesla among their top-10 holdings, according to S&P Capital IQ data. Three are equal –weight funds, meaning the stock is just a small percentage of each portfolio and another, the PowerShares Global Clean Energy Portfolio (PBD) , features Tesla as its largest holding but at a weight of just 2%. [Small Sector ETFs With Huge Returns]

With another earnings update from Tesla on the way, ETF investors are again reminded that the universe of legitimate of “Tesla ETFs” boils down to the Market Vectors Global Alternative Energy ETF (GEX) and the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) . [The Elon Musk ETF]

QCLN features an 11.2% weight to Tesla, about 330 basis points more than the fund allocates to its second-largest holding, Cree (CREE). QCLN also offers the benefit of tracking the NASDAQ Clean Edge Green Energy Index, which has a lengthy track record of outperforming rival clean energy indices. [The King of Clean Energy Indices]

GEX allocates 12% of its weight to Tesla and is up more than 6% this year. However, GEX has lagged QCLN because the former allocates over 11% of its weight to Chinese stocks.

QCLN has benefited from its status as a Tesla ETF in another way. With shares of Tesla well into the triple digits, some investors are looking to ETFs as a capital efficient way of gaining exposure to the high-flying stock. That has helped QCLN bring almost $36 million of its $142.1 million in assets just this year.

First Trust NASDAQ Clean Edge Green Energy Index Fund

ETF Trends editorial team contributed to this post.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.