ETF Spotlight: TSLT Surges Amid Tesla Optimism

ETF Spotlight: TSLT Surges Amid Tesla Optimism

Shares of the high-risk ETF have soared 171% since late April.

ETF.com
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Contributing Editor
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Reviewed by: etf.com Staff
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Edited by: Ron Day

The T-Rex 2X Long Tesla Daily Target ETF (TSLT) spiked nearly 57% over the past five trading days with much of its gains coming after the electric car manufacturer reported better-than-expected second quarter deliveries. 

TSLT, which holds $333.1 million in assets and aims to deliver two times the price movement (less fees and expenses) of Tesla stock, closed a shortened Wednesday trading session at $19.27 per share, more than doubling since late April. 

The surge has dovetailed with Tesla share price gains stemming from investor optimism about its artificial intelligence, as well as automated driving initiatives and an overwhelming shareholder vote approving CEO Elon Musk's $56 billion pay package. 

etf.com: TSLT three-month performance

It has also come despite ongoing concerns about Musk's management style and increased competition in the EV market that have sent sales plunging. Tesla delivered 444,000 vehicles for its second quarter ending June 30, slightly better than analysts' consensus for 439,000, according to data provider FactSet but down nearly 5% from a year ago. 

Read More: Tesla-Focused ETFs Sink as EV Maker's Deliveries Drop

Still, Tesla shares rose 6% on Wednesday and have jumped 25% over the past five trading days. 

TSLL, ARKK Also Climb

TSLT debuted in late 2023 and carries a 1.05% expense ratio, according to etf.com data. The fund, which has generated $311 million in inflows year-to-date, is intended as a short-term tactical tool, rather than a long-term investment vehicle. As a result, the fund's returns may deviate from its goals if investors hold longer than a day due to compounding.

Other Tesla-focused ETFs and those with major holdings in the company have surged in recent weeks. The Direxion Daily TSLA Bull 2X Shares (TSLL), which has $1.3 billion in AUM, has risen 57% over just the past five days and is up 63% from a month ago. The ARK Innovation ETF (ARKK), whose largest holding is Tesla, is up 5.6% over the same timeframe, although on Wednesday, the ARK Invest said the ETF, which has more than $6.1 billion in assets, and another fund were decreasing their holdings in the firm. 

Read More: Tesla ETF Spikes as Elon Musk Inches Closer to Payday

James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer, editor and book author, he formerly held positions as a news and markets editor for the Americas at CoinDesk, where he focussed on cryptocurrencies. 

He provided editorial guidance for a Wall Street Journal best-selling book on Bitcoin and oversaw a startup newsroom focused on digital financial assets. He has edited for TheStreet and Unchained, where he wrote daily news stories about the trial of fallen crypto entrepreneur Sam Bankman-Fried. His writing has also appeared in The Hollywood Reporter, Forbes.com, AdWeek, Bankrate, The Financial Brand and The Wall Street Journal. He has also written for Forbes Insights and the Economist Intelligence Unit, including papers presented at World Economic Forums in Davos and Mumbai. 

James is the co-author of The Urban Cyclist’s Survival Guide (Triumph Books) and has been interviewed about bike safety on a number of NPR affiliates. In a prior career, Rubin was a world-ranked tennis player, once competing in Wimbledon’s qualifying rounds. He speaks fluent German and is a graduate of the Columbia University Graduate School of Journalism and received his BA at Columbia University.