Tesla has been one of the bright spots coming off a forgettable March that saw many equities take a beating due to the Covid-19 pandemic. While the electric automaker’s stock price has obviously been soaring, their bonds are now following suit.
“Prices for Tesla’s traditional bond due in 2025 reached a record 104.36 cents on the dollar Tuesday, according to MarketAxess, after the electric-car maker said it would sell up to $5 billion in stock, bolstering its balance sheet after a 5-for-1 stock split Monday,” a Wall Street Journal report noted.
“That marks a rebound from lows around 79 cents during the worst of the pandemic’s market turmoil and the latest big swing in the company’s bond prices,” the report added. “Since snapping up the company’s first conventional bond offering in 2017, investors have questioned where Tesla would get the money to repay the debt as it burned cash and struggled to turn a profit. In 2018, the bonds were near 85 cents on the dollar following a ratings downgrade, and stock price declines.”
Here are few ETFs to watch with holdings of Tesla:
- ARK Industrial Innovation ETF (NYSEArca: ARKQ): an actively-managed fund that will invest under normal circumstances primarily in domestic and foreign equity securities of autonomous technology and robotics companies that are relevant to the fund’s investment theme of disruptive innovation.
- VanEck Vectors Low Carbon Energy ETF (NYSEArca: SMOG): seeks to replicate the price and yield performance of the Ardour Global Index. “Low carbon energy companies” refers to companies primarily engaged in alternative energy, including renewable energy, alternative fuels and related enabling technologies (such as advanced batteries).
- First Trust NASDAQ Clean Edge Green Energy Index Fund (NasdaqGM: QCLN): seeks investment results that correspond generally to the equity index called the NASDAQ® Clean Edge® Green Energy Index. The index is designed to track the performance of small, mid, and large capitalization clean energy companies that are publicly traded in the United States.
Another fund to consider for a broad play on electric vehicles is the Global X Autonomous & Electric Vehicles ETF (NYSEArca: DRIV). DRIV seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Solactive Autonomous & Electric Vehicles Index.
DRIV provides:
- High Growth Potential: DRIV enables investors to access high growth potential through companies critical to the development of autonomous and electric vehicles – a potentially transformative economic innovation.
- Unconstrained Approach: DRIV’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging technological theme.
- ETF Efficiency: In a single trade, DRIV delivers access to dozens of companies with high exposure to the autonomous and electric vehicles theme.
For more market trends, visit ETF Trends.