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Tesla ETFs in Focus on Weak Q1 Delivery Data

Sweta Killa
Tesla's (TSLA) decision to cut sales jobs is in sync with its plan to lower staff as part of the retail retrenchment strategy adopted in February 2019.

Tesla Motors TSLA disappointed investors as it reported weaker-than-expected deliveries for the first quarter. The company produced 77,100 vehicles (62,950 Model 3 and 14,150 Model S and Model X combined) during the quarter and delivered 63,000 (50,900 Model 3 and 12,100 Model S and X) vehicles.

Though deliveries were 110% more than the year-ago quarter, it fell 31% from the fourth quarter. The electric car maker struggled to ship its Model 3 car to customers in Europe and China for the first time despite the massive increase in deliveries in these two countries, which at times exceeded 5x that of prior peak delivery levels (read: ETFs to Watch Post Tesla Q4 Earnings Miss).

This has caused a large number of vehicle deliveries to shift to the second quarter. At the end of the first quarter, approximately 10,600 vehicles were in transit to customers globally. Given the lower-than-expected delivery volumes and several pricing adjustments, first-quarter net income is expected to be negatively impacted.

However, the company reaffirmed its forecast that it would deliver between 360,000 and 400,000 vehicles in 2019. Tesla currently has a Zacks Rank #5 (Strong Sell) and a VGM Score of D.

ETFs to Watch

The weak deliveries data has put the spotlight on ETFs having substantial allocation to this luxury carmaker. We have highlighted five of them below.

ARK Industrial Innovation ETF ARKQ

This is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials, and transportation. This approach results in a basket of 35 stocks, with TSLA occupying the top spot with 10.5%. The product has accumulated $181.8 million in its asset base and charges 75 basis points (bps) in fees per year. It sees lower volume of about 29,000 shares a day (read: Bet on NVIDIA's Largest-Ever Deal With These ETFs).

VanEck Vectors Global Alternative Energy ETF GEX

This ETF tracks the Ardour Global Index Extra Liquid, focusing on global companies that are primarily engaged in the business of alternative energy. The fund holds about 31 stocks in its basket with AUM of $91.2 million while charging 63 bps in fees per year. Average daily volume is paltry at about 5,000 shares. Tesla occupies the fifth position in the basket, with 7% allocation. In terms of country exposure, the fund is skewed toward the United States with 66.6% share while Denmark and China round off the top three spots.

ARK Innovation ETF ARKK

Like ARKQ, this is also an actively managed fund and follows the same strategy but provides exposure to genomic companies, industrial innovation companies or Web x.0 companies. In total, the fund holds 36 securities in its basket, with Tesla occupying the top position, accounting for 8.6% share. The product has accumulated $1.7 billion in its asset base and trades in a good volume of about 374,000 shares. Expense ratio comes in at 0.75%.

First Trust NASDAQ Clean Edge Green Energy Index Fund QCLN

This fund tracks the Nasdaq Clean Edge Green Energy Index and manages assets worth $98.3 million. It charges 60 bps in fees per year while trading in a light volume of around 14,000 shares per day. In total, the product holds 41 U.S. securities with Tesla Motors taking the third spot at 6.9%. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (see: all the Alternative Energy ETFs here).

ARK Web x.0 ETF ARKW

This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 37 stocks in its basket with Tesla occupying the second position at 7.2%. The ETF has amassed $512.3 million in its asset base and trades in a good average daily volume of around 144,000 shares. Expense ratio comes in at 0.75%.

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Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
ARK Web x.0 ETF (ARKW): ETF Research Reports
 
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ARK Industrial Innovation ETF (ARKQ): ETF Research Reports
 
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN): ETF Research Reports
 
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