If You Don't Like Musk, We'll Exclude Him... Wall Street Prepares 'De-Elon' ETFs

Exchange-traded funds (ETFs) that track the Nasdaq 100 and S&P 500, but exclude Elon Musk-related companies such as SpaceX, are set to launch. Analysts note that the very act of turning preferences for or against a specific individual into a financial product is notable, and they predict it will be difficult for these ETFs to attract sustained medium- to long-term investment demand.

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According to Bloomberg News on July 9 (local time), startup ETF manager Subversive has filed applications to launch two ETFs that track the Nasdaq 100 and S&P 500 but exclude companies associated with Musk as CEO. The proposed tickers are QQNE and SPNE, respectively.

The distinctive feature of these ETFs is that they turn investors’ views on Musk into an investable product. Investors can gain exposure to the major indices while excluding companies linked to Musk as CEO from their portfolios. In this way, an investor’s stance on a specific figure—Elon Musk—can be reflected in their investment decisions. Recently, there have also been leveraged ETFs tied to Tesla and SpaceX, as well as the "ELON ETF," which takes long positions in Tesla and short positions in Ford.

Bloomberg pointed out that the ETF industry is shifting toward tailor-made products that reflect investors’ views and preferences. Asset managers are now competing to launch products that embody specific investment judgments on individual companies, management teams, or themes. According to Bloomberg, a record 214 ETFs were launched in June, the highest monthly total ever. Previously, the focus had been on low-cost index-tracking products.

Nate Geraci, President of The ETF Store, commented, "Given that Musk is such a polarizing figure, it’s only natural for ETF managers to try to capitalize on that." However, he also noted, "It may be a case of the market segmenting products too much."

Some observers argue that while such products may attract brief bursts of attention, it will be difficult to sustain steady investment demand over the medium to long term. Dave Nadig, CEO and Director of Research at ETF.com, remarked, "They might attract some money from investors who don’t think deeply about it," adding, "It’s interesting marketing, but I wouldn’t call it a product grounded in sound investment logic."

Meanwhile, SpaceX has sparked controversy over index inclusion even before its IPO. Index providers relaxed requirements to include SpaceX early, leading to its addition to the Nasdaq 100, FTSE Russell, and MSCI indices soon after its listing. Some investors welcomed this as a major investment milestone. Others, however, criticized the move, arguing that a company facing significant overvaluation concerns was added to indices before a fair market price had even been established.

This content was produced with the assistance of AI translation services.