'Tesla ETFs' drive higher on Hertz news

The Model S will join Aston Martins and Porsches in the auto rental company's 'Dream Car' fleet at 2 California airports.

By Benzinga Sep 26, 2013 12:30PM

Customers Checking in Car Rental Agency © Lawrence Manning, CorbisBy Todd Shriber, The ETF Professor


Shares of Elon Musk's Tesla (TSLA) continued their jaw-dropping run Wednesday, racing to a new all-time high on news car rental giant Hertz (HTZ) said it will offer Tesla's Model S as part of its rental fleets at international airports in Los Angeles and San Francisco.  


The news was predictably good for a pair of ETFs that should be known as "Tesla ETFs." The Market Vectors Global Alternatve Energy ETF (GEX) and the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN) both traded higher on a down day for U.S. stocks, rising to within pennies of their previous 52-week highs.


"Customer and industry support for Hertz's Dream Cars has been overwhelming, so adding the Tesla Model S to the already outstanding fleet was an easy choice," said Mark P. Frissora, Hertz Chairman and CEO in a statement.


The Model S, the Motor Trend car of the year, will be offered as part of the Hertz Dream Car lineup. What makes this important news for Tesla and the aforementioned ETFs is the validation of the Model S as a legitimate aspiration car. Just look at the other cars in the Hertz Dream Car stable: Aston Martin V8 Vantage Audi R8, Spyder, Bentley Continental GT, Cadillac CTS-V, Ferrari (California, F430), Lamborghini Gallardo, Land Rover, Range Rover Sport, Mercedes-Benz AMG (SLS, C63, E63), Mercedes-Benz (SL550, G550), Porsche (911, Cayenne, Boxster, Panamera) and the SRT Viper, according to the statement.


With shares of Tesla hovering around $185, capital-constrained investors may want to consider GEX and QCLN as avenues for gaining exposure to the high-flying stock. It looks like some investors are doing just that. Both ETFs were highlighted last week (Benzinga) as small funds that are soaring this year. At that time, GEX had less than $86 million in assets under management while QCLN had $70.6 million.


Those numbers have risen to $88.2 million and $71.4 million, respectively, in less than a week. QCLN allocated 8.15% of its weight to Tesla as of Sept. 24, while GEX had a Tesla weight of 10.7%. The stock is the largest holding in both ETFs.


Read more from Benzinga

3Comments
Sep 26, 2013 1:11PM
avatar
When the investing world figures out how TSLA sells and builds cars there will be another "quiet" bump in the stock. Elon is obviously much more educated and experienced than any "conventional" CEO I have seen. He isn't really talking about the actual business model he has put in place.
Sep 26, 2013 1:42PM
avatar
Yeah big deal. The Tesla is no Shelby GT500 Mustang, sorry.
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