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Four ETFs to put a focus on after Tesla’s Solid Q3 Earnings

Four ETFs to put a focus on after Tesla's Solid Q3 Earnings

Tesla Motors (NASDAQ: TSLAreported earnings after the market closed on Wednesday, posting strong profits for the third quarter, above analysts’ expectations on both earnings and sales. The electric vehicle manufacturer reported record sales and one of the highest profit margins in the company’s history. 

Noteworthy, in the most recent quarter, adjusted profits per share came in at $1.86, handily surpassing the Zacks Consensus Estimate of $1.39 and exceeding the previous year’s earnings of 76 cents. With a year-over-year increase of 56.8% in revenues to $13.76 billion, the company surpassed the Zacks Consensus Estimate of $13.16 billion.

Additionally, Tesla car sales rose by 77.4% year over year, while “services and other” such as its Bitcoin (BTC) acquisition boosted gross earnings by 74.6%. Furthermore, Model 3 and Model Y car deliveries set new records, contributing to the company’s strong performance.

Tesla side business. Source: Statista

Thus, to take advantage of Tesla’s success, Zacks identified four exchange-traded funds (ETFs) with a double-digit exposure to the EV manufacturer.

#1 ARK Industrial Innovation ET (ARKQ)

Investing in companies that benefit from the development of new products or services, as well as technological advancement and breakthroughs in scientific research in the fields of energy, automation, manufacturing, materials, and transportation, is a goal of ARK Industrial Innovation ET, an actively managed exchange-traded fund. 

As a result, a basket of 46 equities is created, with TSLA holding the largest share (11.3%). Additionally, there are now $2.5 billion in assets under management for this product, which has an annual charge of 75 basis points (bps) and an average trading volume of 292,000 shares per day. 

ARKQ 20-50-200 SMA lines chart. Source. data. See more stocks here.

The long-term trend is neutral, but the short-term trend is positive, indicating that the fund is gaining in popularity with traders and investors. ARKQ has been moving in an area of $75.89 – $83.52 over the past month, and it is now trading at the top of this range.

#2 ARK Next Generation Internet ETF (ARKW)

As a result of the transition in technological infrastructure, this fund concentrates on businesses anticipated to profit from the move to the cloud in terms of mobile, innovative, and local services.

Tesla, which accounts for 10% of the actively managed fund’s holdings, is the fund’s most valuable stock. The asset base of the ETF is $5.4 billion, and its annual fees are 79 bps. Of the 48 stocks in its basket, it trades 650,000 shares a day on average.

ARKW 20-50-200 SMA lines chart. Source. data. See more stocks here.

ARKW has been trading in the $135.35 – $156.69 band for the past month, and it is now trading around the top of this range.

The short-term trend is positive, while the long-term trend is neutral, some uncertainty may be detected in the medium-term time frame; however, recent action has been quite positive.

#3 ARK Innovation ETF (ARKK) 

ARKK is an actively managed fund that invests in businesses that profit from the creation of new goods or services, technical breakthroughs, and advances in scientific research. The fund’s investment objective is to generate long-term capital growth. 

Tesla is the fund’s biggest holding, with a 10% stake, accounting for all 51 equities in its portfolio. With $20.8 billion in assets under management, the product charges investors 75 bps in fees each year. Finally, It trades 5.4 million shares each day on average.

ARKK 20-50-200 SMA lines chart. Source. data. See more stocks here.

In the past month, ARKK has traded in a range of $106.35 to $120.76, which is a rather large range. In terms of price, it is presently trading at the upper end of this range. 

In addition, the short-term trend is positive, while the long-term trend is neutral, indicating that the ETF is trending upward.

#4 Simplify Volt Robocar Disruption and Tech ETF (VCAR)

This is an actively managed ETF that aims to get concentrated exposure to the leader in self-driving car technology before diversifying the exposure further via the use of options. With a 25% stake in Tesla shares and Tesla call options, it has significant exposure to the company’s stock and call options.

Yearly fees of 0.95%are charged to investors by the fund as it aims to improve its performance during periods of high volatility in Tesla. In terms of asset accumulation, the company has amassed $1.9 million and trades an average of 1,000 shares each day on the stock market.

VCAR chart. Source. See more stocks here.

VCAR has been trading in a zone between $11.50 – $12.72 over the last month, which is a significant range; it is now trading towards the top of this area. Furthermore, both the short-term and long-term trends are positive, which is an encouraging sign.


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