Tesla Motors reported better-than-expected deliveries for the fourth quarter 2020 with the company delivering a record 180,570 vehicles. This is good news for the iShares U.S. Consumer Goods ETF (IYK) since it’s the fund’s top holding.
IYK seeks to track the investment results of the Dow Jones U.S. Consumer Goods Index composed of U.S. equities in the consumer goods sector. The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index.
The underlying index measures the performance of the consumer goods sector of the U.S. equity market. The fund may invest the remainder of its assets in certain futures, options and swap contracts, cash and cash equivalents.
In general, IYK gives investors:
- Exposure to U.S. companies that produce a wide range consumer goods, including food, automobiles, and household goods.
- Targeted access to domestic consumer goods stocks.
- Use to express a sector view.
“This ETF offers exposure to U.S. companies that produce a wide range of consumer goods, including food, automobiles, and household goods by tracking the Dow Jones U.S. Consumer Goods Index,” a Yahoo! Finance article said. “It holds about 96 stocks in its basket with Tesla occupying the top position at 17.2% allocation. The fund has amassed $726.3 million in its asset base while trades in a volume of about 26,000 shares. It charges 43 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: 5 Big ETF Stories of 2020 Worth Watching in 2021).”
A Strong 2021 Ahead for Tesla
Per the Yahoo! Finance article, Tesla’s strong Q4 data “came on the back of a rise in demand for its more affordable and newer models. Notably, Model 3 demand has been robust over the past 10 months despite the COVID-19 pandemic.”
“For the full year, the electric carmaker delivered 499,550 (442,511 Model 3 and Y, and 57,039 Model S and X) deliveries, up 36% year over year but slightly short of the 500,000 target due to the pandemic,” the article added. “It produced 509,737 (454,932 Model 3 and Y, and 54,805 Model S and X) vehicles in 2020, up 71% year over year.”
IYW can continue to see more strength in 2021, particularly if Tesla can duplicate or best its Q4 deliveries.
“Tesla expects another year of strong growth in vehicle deliveries as it has been aggressively expanding its vehicle production capacity,” the article said. “It entered the S&P 500 Index last month and has reported five consecutive quarterly profits. Tesla shares have exploded more than 700% over the past year (read: ETFs in Focus on Tesla’s S&P 500 Debut).”
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