The electric carmaker might find its way into the $34.5 billion ‘Q’s as well as other ETFs.
Tesla Motors, the Palo Alto, Calif.-based automaker, is joining the Nasdaq-100 Index on July 15, and will then be eligible to become part of a roster of ETFs outside the clean energy segment such as the $34.5 billion PowerShares QQQ Trust (NasdaqGM: QQQ).
Oracle Corp.’s departure from the index has opened the way for Tesla, the $12.8 billion electric car automaker, to not only join the Nasdaq-100 Index, but also the Nasdaq-100 Equal Weighted Index, Nasdaq said in a press release. It wasn’t immediately clear what Tesla’s respective weightings would be in the each of the indexes.
Apart from QQQ, Tesla may also find its way into other ETFs that track these benchmarks, including the Direxion Nasdaq-100 Equal Weighted Index Shares (NYSEArca: QQQE) and the $144 million First Trust Nasdaq-100 Equal Weighted ETF (NYSEArca: QQEW).
Tesla’s stock price has risen some 250 percent year-to-date, helping propel higher ETFs that own it. The $54.2 million First Trust Nasdaq Clean Edge Green Energy ETF (NasdaqGM: QCLN), which has the distinction of being the alternative energy equities ETF with the highest allocation to Tesla, is one of the best-performing funds so far in 2013, with gains nearing 60 percent. The fund has also seen its assets under management double year-to-date.
The Market Vectors Global Alternative Energy ETF (NYSEArca: GEX) has rallied some 42 percent, thanks in part to its Tesla holdings.
The electric car manufacturer behind the Tesla Model S reported a first-quarter profit amounting to a 115 percent increase in income. Revenue hit $562 million in the first quarter from $30 million in the same year-earlier period.
Oracle, a $145 billion company, no longer meets the inclusion criteria for the Nasdaq 100, a Nasdaq representative told IndexUniverse, who noted a company must be exclusively listed on the Nasdaq for inclusion. According to the index methodology, once a company fails to meet the requirements, it's replaced with the largest market capitalization security not included in the index.