Elon Musk is everywhere. Two new exchange-traded funds promise to keep him out of your investment portfolio.
Subversive ETFs, a New York ETF issuer, filed paperwork with the Securities and Exchange Commission this week to launch two “Ex-Elon” exchange-traded funds.
The proposed funds — the Nasdaq-100 Ex-Elon Enterprises ETF and the S&P 500 Ex-Elon Enterprises ETF, trading under the tickers QQNE and SPNE — would exclude companies that the fund managers determine to be “founded, controlled or led by” Musk, or with which he is primarily associated.
For now, that list contains just two names: Tesla and SpaceX.
There could be several reasons investors might not want a piece of the world’s richest man. They could object to Musk’s politics, or they don’t buy Wall Street’s sky-high expectations for SpaceX.
SpaceX’s recent addition to the Nasdaq 100, following Tesla’s inclusion in 2013, meant that millions of passive investors gained indirect exposure to another of Musk’s companies.
Under the proposal, the actively managed funds will keep at least 80% of assets in their respective index exposures, redistribute the weight of excluded companies across the remaining constituents by market cap, and reserve the right to boot other Musk ventures if they become public, such as Neuralink or The Boring Company.
Due to the S&P 500’s eligibility rules, SpaceX won’t be added to that benchmark for roughly a year or more, meaning that at launch, SPNE will effectively offer the full index minus one stock: Tesla.
Subversive ETFs is also known for its NANC and GOP funds that mirror the stock trades of Democratic and Republican members of Congress.
The firm’s filings list a planned launch date of September 21. The documents are preliminary, meaning some details, including fees, could change before the funds go live.
Whether investors bite is another question, as actively managed ETFs typically carry higher fees than plain-vanilla index trackers.
