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Tesla Motors Inc (TSLA) Is Not A Big Deal For Mutual Funds

Tesla Motors Inc (NASDAQ:TSLA) stock has been in a little bit of a slump in recent trading. On a regular day the company’s stock has dropped or risen by at least a couple of percent. The firm’s stock has lost more than 8% of its value in the last month of trading. That doesn’t take away from the performance of the stock in the rest of the year, however.

Tesla Motors Inc (TSLA) Is Not A Big Deal For Mutual Funds

Tesla Motors Inc (NASDAQ:TSLA) stock has increased in value by more than 400% since the start of 2013. The company has been a phenomenal success story, and its CEO Elon Musk has become something resembling almost cult figure. One section of the market appears to have ignored Tesla Motors Inc (NASDAQ:TSLA), however, and Reuters took a look at the pattern yesterday.

Mutual Funds and Tesla

Just 190 of the 2,090 actively managed U.S. equity mutual funds were holding stock in Tesla Motors Inc (NASDAQ:TSLA) before the year began. The advantage of an actively managed mutual fund to investors is supposed to lie in their ability to pick growth stocks before they take off. It’s clear that they did not finger Tesla as a source of growth.

Just 39% of large cap actively managed equity funds managed to beat the gains made by the S&P 500. At the start of the year around one quarter of Tesla Motors Inc. (NASDAQ:TSLA) was held by ETFs and index funds. It appears that mutual funds aren’t just staying away from Tesla, however; they appear to be staying away from Elon Musk.

According to the Reuters piece just seven actively managed funds owned SolarCity Corp (NASDAQ:SCTY) stock at the beginning of 2013, and just 48 own the stock now. Stock in that company has increased in value by just shy of 400% so far this year. It appears that mutual funds are stating away from Musk, though there may be another explanation.

Tesla alternate energy and risky plays

Tesla Motors Inc (NASDAQ:TSLA) is part of an emerging tech industry that seeks to change the way we produce and use energy. The company’s electric cars are incredibly popular, but they seemed like a risky bet way back in January. The same thing goes for SolarCity Corp (NYSE:SCTY) business. The companies are both seen as part of the same alternate energy sector.

That sector did take off in 2013, but the take off was difficult to predict. Mutual funds can only do so much, but if they are underperforming indices before fees, investors should take a second look at their choices.

Below are two charts to put things in perspective