If you'd like a way to invest in the future of cars, including autonomous vehicles and electric batteries, Tesla has been a rewarding stock market bet, up from $20 in 2010 to close to $300 today. But it has not been stress-free, for stockholders or for Tesla founder and CEO Elon Musk. Musk recently said, more than once, that trying to ramp production of the mass market Model 3 is a living "hell", and lately, he has been sleeping on a couch at the Tesla manufacturing plant —when sleeping at all. Tesla cash flow and bankruptcy fears (which to be fair to Tesla, have trailed the company for years and many hedge fund shorts have been on the wrong side of, so far) have taken a toll in the past year on the high-flying stock, down close to $100.
For investors who do not relish life on the edge, a few exchange-traded funds have launched in the past year targeting the autonomous and electric vehicles trend. The most recent, which launched on Tuesday, is the Global X Autonomous & Electric Vehicles ETF (DRIV). It's the fourth-such ETF following the SPDR Kensho Smart Mobility ETF (XKST), KraneShares Electric Vehicles and Future Mobility Index ETF (KARS) and Innovation Shares NextGen Vehicles & Technology (EKAR), and arguably the most notable of the bunch given the success of Global X in launching thematic ETFs that hit on major technology themes.
Global X launched roughly a decade ago with ETFs tracking undercovered markets like Colombian stocks, but a look at where it has has attracted assets shows where the investor interest has been, and remains. That Colombian stock market ETF has about $110 million in assets since launching in 2009. Global X's Robotics and Artificial Intelligence ETF (BOTZ) and its Lithium & Battery Tech ETF (LIT) have $2.6 billion and $1 billion in assets under management, respectively. BOTZ, in particular, is third among all ETFs launched in the past three years in terms of asset growth.
Trading volume in DRIV (57,000) on its first day dwarfed trading in either KARS (6,900) or EKAR (3,000).
"Given the success of robotics ETFs, ROBO [Robotics & Automation Index ETF] and BOTZ, from a performance and asset gathering perspective, the supply of thematic ETFs is going to accelerate," said Todd Rosenbluth, director of ETF and mutual fund research at CFRA. "But there will be as many strikeouts as home runs."
If a big whiff is coming, a Tesla freefall won't be the cause of it. Tesla shares represent roughly 1 percent of DRIV; and about 2 percent of XKST and EKAR. Only KARS has Tesla among its top 10 holdings, at a fund weighting of 3.5 percent.