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Musk’s Rise to Jobs-Like Status Jolts Small ETFs with Tesla


There may never be another Steve Jobs, but SolarCity (SCTY) and Tesla’s (TSLA) Elon Musk may be the closest and next best thing. Musk is the chairman of SolarCity and CEO of Tesla and those are not the first companies he has touched that turned to gold. He co-founded PayPal, which was sold to eBay (EBAY) in 2002, and software maker Zip2. That company was sold to Compaq in 1999.

These days, it is Tesla first and foremost, then SolarCity that seem to be Musk’s priorities. Investors are pleased because Tesla is up 212% year-to-date, a surge that looks excellent until it is measured against the 279% SolarCity has added.

Select ETFs are benefiting from Musk’s Midas touch and not just in terms of returns, though that is the most important part of the equation. Due to seemingly limitless adulation heaped upon Musk by investors, some ETFs are getting bigger by the week. [Tesla's Surge Buoys Inflows To Green Energy ETF]

Tesla’s surging market value has made the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) “the Tesla ETF.” Two weeks ago, QCLN featured a 13.4% allocation to the electric car maker. Last week, that weight was up to 15.2%. As of Tuesday’s close, the ETF had a 17% weight to Tesla, according to First Trust data.

QCLN is still a small ETF with just over $42 million in assets under management, but the fund highlights the fact that life is good as “the Tesla ETF” because QCLN has attracted almost 20% of its current AUM tally in the past 60 days, according to Index Universe data.

QCLN is not the only ETF benefiting from exposure to the aforementioned pair of Musk stocks. The Market Vectors Global Alternative Energy ETF (GEX) features Tesla as its largest holding with a weight of just over 10%. GEX also has a 2.6% weight to SolarCity. The ETF has attracted $6.24 million of its $69.4 million in AUM in the past two months.

The list of ETFs adding assets on the back of SolarCity and Tesla’s good fortunes does not end there. Those two stocks are the top two holdings in the PowerShares WilderHill Clean Energy Portfolio (PBW) , combing for almost 11% of that ETF’s weight. PBW has added $6.1 million in assets over the past month, according to PowerShares flows data.

The PowerShares Global Clean Energy Portfolio (PBD) , which also features Tesla and SolarCity as its top two holdings though at lower weights than PBW, has added almost $3.8 million of its $74.9 million in assets in just the past month.

So how does influx of cash to this quartet of Musk ETFs translate in terms of returns? Very well, indeed. Over the past month, QCLN is up nearly 22% while GEX is up almost 18%.

Market Vectors Global Alternative Energy ETF

ETF Trends editorial team contributed to this article.

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.