Tesla Motors (TSLA) is having an outstanding year. With the launch of the Model S this Spring the stock price has nearly tripled, setting the growing company up to become the most recent addition to the NASDAQ 100. This index of 100 non-financial companies consistently outpaces other market indexes, such as the S&P 500 and Dow Jones Industrial Average. Replacing software giant, Oracle (ORCL), Tesla has once again caught investor and analyst attention [check out Stocks Kicked Out Of The NASDAQ-100 (QQQ) Since 1995].
Even as Tesla continues to rake in the cash, it remains absent from the portfolios of auto ETFs and broader consumer discretionary funds. One huge positive for investors who have so far used alternative energy funds to gain exposure to the growing firm, there are a number of funds that revolve around the NASDAQ 100. Many ETFs will have to pick up Tesla when they rebalance to continue tracking their index, allowing for ETF exposure that was missing for Tesla.
Alternative energy funds such as the NASDAQ Clean Edge Green Energy Index Fund (QCLN, A) have already seen huge growth from not only the great year green energy has enjoyed, but the added bonus of heavy Tesla weightings to their portfolios. QCLN, which specifically tracks the technology firms working on clean energy components, has returned nearly 60% since the beginning of the year and 36% in just the last 13 weeks [see also Why Your Auto ETF Is Missing Out On Tesla's Rally].
New Ways to Play Tesla
The following three ETFs should soon offer a strong play for investors looking to get in on Tesla’s take off this year [check out 25 Wild ETF Charts From 1H 2013].
- QQQ (QQQ, A-): The purest play of the NASDAQ 100 Index, this fund includes the 100 largest domestic and international non financial companies on the NASDAQ. Over 14 years old, QQQ is one of the most popular ETFs on the market with $34.5 billion in assets and an 11.8% year-to-date return to beat many other market indicators.
- NASDAQ 100 Equal Weighted Index Fund (QQEW, B): Along with joining the NASDAQ 100, Tesla will also be joining its equal-weighted counterpart, which could offer a strong play for investors who see flaws in market cap weighted methodology.
- Market Vectors Gloabl Alternative Energy ETF (GEX, B-): The ETF is not a new way to play Tesla, but it’s a proven favorite. This global ETF provides exposure to companies that are principally engaged in the alternative energy industry. Besides currently holding Tesla, this ETF focuses on Cree Inc, Eaton Corporation and Cosan Ltd to provide a massive 59% return since this time last year[also check out the Socially Responsible ETFdb Portfolio].
[For more ETF analysis, make sure to sign up for our free ETF newsletter]
Follow me on Twitter @lynpaintzall