In the lead-up to the SpaceX initial public offering, countless stories emerged about early employees and investors poised to make millions from betting on Elon Musk's ventures. However, Musk's recent activities—his work with DOGE, controversial comments on X, and a gesture at Donald Trump's inauguration that resembled a Nazi salute—have created a countercurrent: a market for funds that explicitly avoid him.
An exchange-traded fund creator named Subversive Capital, fittingly enough, has tapped into this sentiment with two new anti-Elon exchange-traded funds. These funds are legally registered by Tidal Trust I and attached to a brand called Subversive Markets Lab LLC. Bloomberg was the first to report the filing.
For the average investor, avoiding the world's richest person is tricky. Most people put money into mutual funds tied to indices like the S&P 500 and Nasdaq-100. SpaceX, already listed in FTSE Russell and MSCI indexes, was recently added to the Nasdaq-100, meaning it appears in funds that track those benchmarks. Tesla, Musk's publicly traded car company, has long been a favorite of large-cap and growth mutual funds.
The two newly registered ETFs are named the Nasdaq-100 Ex-Elon Enterprises ETF and the S&P 500 Ex-Elon Enterprises ETF. According to the prospectus, as of the filing date, the excluded enterprises are Tesla (TSLA) and Space Exploration Technologies Corp. (SPCX). Musk's other companies—Neuralink and The Boring Company—are not publicly traded, so they are not affected.
The Ex-Elon funds may also exclude other companies that become closely associated with Musk. The prospectus states that the funds seek "to provide capital appreciation through exposure to a broad universe of large-capitalization U.S. equity securities, while excluding the equity securities of companies that are founded, controlled, or led by Elon Musk, or with which Mr. Musk is otherwise primarily associated." This broad language allows for flexibility if Musk's influence expands to other public companies.
An exchange-traded fund is a type of investment fund that trades on stock exchanges, much like individual stocks. ETFs typically track an index, a commodity, or a basket of assets. They have grown in popularity due to their low costs, tax efficiency, and ease of trading. The new Ex-Elon funds are designed to replicate the performance of the Nasdaq-100 and S&P 500, but with Musk-linked stocks removed.
This is not the first time Subversive Capital has made headlines. Prior to the Ex-Elon funds, the firm earned attention for ETFs that let regular investors "invest like the oligarchy." One fund holds stocks known to be traded by Democratic members of Congress and their spouses; another mirrors holdings of Republican lawmakers. These funds tap into the growing interest in politically and socially motivated investing.
The Ex-Elon funds reflect a broader trend: values-based or exclusionary investing. Investors increasingly want to align their portfolios with their personal beliefs, whether that means avoiding fossil fuels, tobacco, or controversial CEOs. For some, Musk's polarizing public persona has become a reason to steer clear of his companies. The funds' tickers are QQNE and SPNE, and they are legally registered with the Securities and Exchange Commission.
Musk's influence on stock markets is undeniable. Tesla's stock price has been highly volatile, often responding to his tweets and public statements. SpaceX, while not publicly traded until its recent IPO, has a cult following among investors. Yet, Musk has also drawn criticism for his management style, labor practices, and political affiliations. The Nazi-like salute at the inauguration—whether intentional or not—was widely condemned and may have contributed to investor discomfort.
The concept of avoiding a single individual in a portfolio is relatively new. While many ETFs exclude sectors or industries, excluding a person is unusual. It raises questions about how to define "associated with" Musk. The prospectus gives the funds discretion, but the initial exclusions are clear: Tesla and SpaceX.
It is too early to know whether investors will pile into these Ex-Elon ETFs or whether they will perform better than standard index funds. Excluding two major companies could create tracking error—the difference between the fund's performance and that of the underlying index. For example, if Tesla or SpaceX outperform, the Ex-Elon funds will lag. Conversely, if they underperform, the funds could beat the index.
But the funds serve a psychological purpose. They allow investors to avoid supporting a figure they dislike, while still participating in the broader market. Given Musk's well-known hostility to short sellers—those who bet against his companies—the funds may also be a way to annoy him. Subversive Capital seems to embrace this cheeky approach, much like its earlier politically themed ETFs.
The launch of these funds also highlights the growing intersection of investing and social movements. Environmental, social, and governance (ESG) investing has exploded in popularity, with trillions of dollars now managed under ESG criteria. While the Ex-Elon funds are not explicitly ESG-focused, they fit into the same category of values-based investing.
One potential challenge is liquidity. Tesla and SpaceX are large-cap stocks with significant trading volumes. Excluding them from an index fund may reduce the fund's ability to track the index efficiently. However, ETF managers can use techniques like sampling or derivatives to replicate performance. Subversive Capital has not yet disclosed the fund's expense ratio or management strategy.
The timing of the launch is notable. SpaceX's inclusion in the Nasdaq-100 has made it more difficult for index investors to avoid Musk. At the same time, Musk's political and social controversies have intensified. Whether the funds attract significant assets will depend on investor appetite for exclusionary products.
Subversive Capital's filing shows that the funds are open to excluding other companies that become "closely associated" with Musk. This could include potential future IPOs of Musk ventures like Neuralink or The Boring Company, if they ever go public. It could also cover companies that Musk acquires or controls through large stakes.
In sum, the Ex-Elon ETFs represent a novel response to a highly visible and controversial figure. They give investors a tool to express their distaste for Musk while still investing in the largest U.S. companies. The funds will likely attract media attention and may inspire similar products targeting other controversial figures. Whether they become mainstream is uncertain, but they already reflect how personal conviction can shape investment choices.
The average investor's dilemma—wanting broad market exposure but preferring to exclude certain companies—has few solutions. These funds offer one. They are not the first to screen out individual stocks based on a person, but they are among the most prominent. As more people seek to align their money with their values, the Ex-Elon funds may be just the beginning.
Source: TechCrunch News