Tesla ETFs Drive Higher On Hertz News
Shares of Elon Musk's Tesla (NASDAQ: TSLA) continued their jaw-dropping run Wednesday, racing to a new all-time high on news car rental giant Hertz (NYSE: HTZ) said it will offer Tesla's Model S as part of its rental fleets at international airports in Los Angeles and San Francisco.
The news was predictably good for a pair of ETFs that should be known as "Tesla ETFs." The Market Vectors Global Alternatve Energy ETF (NYSE: GEX) and the First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ: QCLN) both traded higher on a down day for U.S. stocks, rising to within pennies of their previous 52-week highs.
"Customer and industry support for Hertz's Dream Cars has been overwhelming, so adding the Tesla Model S to the already outstanding fleet was an easy choice," said Mark P. Frissora, Hertz Chairman and CEO in a statement.
The Model S, the Motor Trend car of the year, will be offered as part of the Hertz Dream Car lineup. What makes this important news for Tesla and the aforementioned ETFs is the validation of the Model S as a legitimate aspiration car. Just look at the other cars in the Hertz Dream Car stable: Aston Martin V8 Vantage Audi R8, Spyder, Bentley Continental GT, Cadillac CTS-V, Ferrari (California, F430), Lamborghini Gallardo, Land Rover, Range Rover Sport, Mercedes-Benz AMG (SLS, C63, E63), Mercedes-Benz (SL550, G550), Porsche (911, Cayenne, Boxster, Panamera) and the SRT Viper, according to the statement.
With shares of Tesla hovering around $185, capital-constrained investors may want to consider GEX and QCLN as avenues for gaining exposure to the high-flying stock. It looks like some investors are doing just that. Both ETFs were highlighted last week as small funds that are soaring this year. At that time, GEX had less than $86 million in assets under management while QCLN had $70.6 million.
Those numbers have risen to $88.2 million and $71.4 million, respectively, in less than a week. QCLN allocated 8.15 percent of its weight to Tesla as of September 24 while GEX had a Tesla weight of 10.7 percent. The stock is the largest holding in both ETFs.
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