Elon Musk is very difficult to avoid, and not just because he’s made it nearly impossible to block him on Twitter. When SpaceX went public, it got all up in everyone’s business—whether they wanted to hold the stock or not—thanks to recent rule changes that allow so-called “mega-cap companies” to be fast-tracked for inclusion in major indexes and, in turn, weasel their way into mutual funds and ETFs.
Now at least one investment firm is offering people an opt-out. According to a report from Business Insider, New York-based Subversive ETFs is preparing to launch two “Ex-Elon” funds that will allow investors to spread their money around without any of it getting any of Musk’s stink on it.
One of the funds would track the Nasdaq 100, and the other would follow the S&P 500. Both would exclude any company “founded, controlled or led by” Elon Musk.
For now, that just means no Tesla and no SpaceX—though who knows, it might drop to just one given the swirling rumors about the possibility of the two companies being combined to create a Musk monopoly. But it would presumably also include OpenAI once it goes public, given Musk’s role as founder of that firm. There is also Neuralink and its brain-interface devices that it is trying to install in people’s skulls, and the Boring Company and its tunnels to nowhere hanging out there and waiting for the opportunity to go public.
The number of Musk companies might be low, but exposure to them does have an effect on investors. In its first day of inclusion in the Nasdaq 100, the price slipped nearly 7%. And some of the people who were holding SpaceX stock or bought it up immediately following the initial public offering were banking on the stock getting major pickup by getting fast-tracked for the index. Per the Wall Street Journal, mutual funds and ETFs with about $800 billion in assets under management are expected to pick up SpaceX shares in an effort to track the index, which is expected to create an uptick in the share price.
A cynical view of that might be that the whole idea is to maximize the exposure to SpaceX that the general public has, effectively making them take on the shares through their passively managed funds so they are stuck holding the bag while the company’s early investors—those still waiting to get anything back from their investments in X or xAI, which got rolled into SpaceX before it went public—cash out. And a non-cynical view might be naive.
But whether you want to avoid Musk because you don’t want to be made a sucker or you have moral objections to his involvement in anything, at least now there’s an option.
Source: Original Article
