Want Tesla Without the Commitment? Check Out the IYK ETF

Down 6% for the year, Tesla stock has seen better days, but some analysts see only a temporary speed bump for the electric automaker. ETF investors can make an indirect play on the stock with the iShares U.S. Consumer Goods ETF (IYK).

One increasingly familiar name in the ETF space is giving Tesla her vote of confidence. Tesla represents 16% of IYK’s allocation, making it the largest holding of the fund.

“Tesla shares have slumped in recent weeks, losing 26% of their value between a record high in late January and its closing price Friday. But at least one analyst sees better times ahead — much, much better,” a CNN Business article said. “Ark Invest, run by the influential Cathie Wood, expects Tesla shares to reach at least $3,000 by 2025. That’s a rise of more than 350% from Friday’s close — and more than double Ark’s own $1,400 price target it set last year.”

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:

  1. Exposure to U.S. companies that produce a wide range consumer goods, including food, automobiles, and household goods.
  2. Targeted access to domestic consumer goods stocks.
  3. Use to express a sector view.

IYK Chart

For more news and information, visit the Equity ETF Channel.