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It’s a liability on most index funds. I’m too lazy to manage active trading and shorting but would buy an ETF that tracks the S&P 500 minus TSLA.

by Arubis 1y ago

the__alchemist 1y ago
This is why I care. I've been putting less into the Vanguard 500, and more into my own diverse individual stock picks... I want the S&P or similar, but without a few specific stocks like this one.
- hibikir 1y ago
  There's a few companies doing direct indexing like this, where you can give them a ban list for any given index: You can, say, also take out Microstrategy or something like that. Now, as to whether those companies will remain solvent long enough, will give you simple enough taxes, and can keep expenses low while rebalancing is another story. You are doing frontier-ish things. It's not as if you have Vanguard or Fidelity offering products like that.
  - RhysU 1y ago
    Fidelity offers such a product: https://www.fidelity.com/direct-indexing/overview https://www.fidelity.com/direct-indexing/overview > If there's a security you don't want to own, you can remove it. Dunno about Vanguard.
- throw0101c 1y ago
  > This is why I care. I've been putting less into the Vanguard 500, and more into my own diverse individual stock picks... There are equal weight funds: in the US see perhaps $RSP. Vanguard article on the topic: > There are numerous considerations when selecting an equity index exposure, including the choice between market-cap or equal-weighted methodologies. * https://www.vanguard.co.uk/professional/insights-education/insights/what-to-consider-when-choosing-between-index-weighting-approaches https://www.vanguard.co.uk/professional/insights-education/i...
rao-v 1y ago
Why not just buy a put on TSLA of the right size? It's probably cheaper to Vanguard + a put than to buy a more expensive specialized ETF
- Arubis 1y ago
  Honestly? Effort.
  - Daviey 1y ago
    I think that's the point of the suggestion, this approach is less effort/cost. Rather than have a custom ETF you can get one that includes it then individually short Tesla to counteract your identified risk. This would be cheaper and if your theory is correct, you'd outperform the S&P500.
martythemaniak 1y ago
It's only about 1-2 percent of most broad market funds, but if you do care it should be relatively easy to hedge. TSLQ is a 2X TSLA short etf, so if you have 100K in index funds, you'd buy like $750 worth of this.
- digianarchist 1y ago
  Leveraged ETFs suffer from decay and shouldn't be held long term. https://www.etf.com/sections/etf-basics/why-do-leveraged-etfs-decay https://www.etf.com/sections/etf-basics/why-do-leveraged-etf...
redox99 1y ago
Index funds usually outperform the average investor precisely because it stops them from picking and choosing like that.
- robocat 1y ago
  Actually I read the other day that it is because indexes rebalance. If you buy the shares in an index and then hold, your returns are much lower than an index fund that is rebalanced. Unfortunately I can't find reference. I also like this quote: For US stocks, Wu of Sparkline estimates that accounting for intangible assets would cut perceived overvaluation by about 25 to 50 per cent, relative to headline valuation metrics. “While the market is by no means cheap, once firms are given credit for their intangible assets, valuations look far less frothy than the headlines imply,” he says. - https://archive.is/t1On8 https://archive.is/t1On8
adamkittelson 1y ago
I moved to FSPTX a while back because it doesn't have TSLA. I'm not sure how long I'll stay there though, it has like a quarter of its holdings in NVDA now which has been great so far but it's going to hurt when the AI bubble pops.
- ac29 1y ago
  > I moved to FSPTX a while back 0.62% ER, yikes

It’s a liability on most index funds. I’m too lazy to manage active trading and shorting but would buy an ETF that tracks the S&P 500 minus TSLA.

by Arubis 1y ago

It’s a liability on most index funds. I’m too lazy to manage active trading and shorting but would buy an ETF that tracks the S&P 500 minus TSLA.

the__alchemist 1y ago

This is why I care. I've been putting less into the Vanguard 500, and more into my own diverse individual stock picks... I want the S&P or similar, but without a few specific stocks like this one.

hibikir 1y ago
There's a few companies doing direct indexing like this, where you can give them a ban list for any given index: You can, say, also take out Microstrategy or something like that. Now, as to whether those companies will remain solvent long enough, will give you simple enough taxes, and can keep expenses low while rebalancing is another story. You are doing frontier-ish things. It's not as if you have Vanguard or Fidelity offering products like that.
- RhysU 1y ago
  Fidelity offers such a product: https://www.fidelity.com/direct-indexing/overview https://www.fidelity.com/direct-indexing/overview > If there's a security you don't want to own, you can remove it. Dunno about Vanguard.
throw0101c 1y ago
> This is why I care. I've been putting less into the Vanguard 500, and more into my own diverse individual stock picks... There are equal weight funds: in the US see perhaps $RSP. Vanguard article on the topic: > There are numerous considerations when selecting an equity index exposure, including the choice between market-cap or equal-weighted methodologies. * https://www.vanguard.co.uk/professional/insights-education/insights/what-to-consider-when-choosing-between-index-weighting-approaches https://www.vanguard.co.uk/professional/insights-education/i...

rao-v 1y ago

Why not just buy a put on TSLA of the right size? It's probably cheaper to Vanguard + a put than to buy a more expensive specialized ETF

Arubis 1y ago
Honestly? Effort.
- Daviey 1y ago
  I think that's the point of the suggestion, this approach is less effort/cost. Rather than have a custom ETF you can get one that includes it then individually short Tesla to counteract your identified risk. This would be cheaper and if your theory is correct, you'd outperform the S&P500.

martythemaniak 1y ago

It's only about 1-2 percent of most broad market funds, but if you do care it should be relatively easy to hedge. TSLQ is a 2X TSLA short etf, so if you have 100K in index funds, you'd buy like $750 worth of this.

digianarchist 1y ago
Leveraged ETFs suffer from decay and shouldn't be held long term. https://www.etf.com/sections/etf-basics/why-do-leveraged-etfs-decay https://www.etf.com/sections/etf-basics/why-do-leveraged-etf...

redox99 1y ago

Index funds usually outperform the average investor precisely because it stops them from picking and choosing like that.

robocat 1y ago
Actually I read the other day that it is because indexes rebalance. If you buy the shares in an index and then hold, your returns are much lower than an index fund that is rebalanced. Unfortunately I can't find reference. I also like this quote: For US stocks, Wu of Sparkline estimates that accounting for intangible assets would cut perceived overvaluation by about 25 to 50 per cent, relative to headline valuation metrics. “While the market is by no means cheap, once firms are given credit for their intangible assets, valuations look far less frothy than the headlines imply,” he says. - https://archive.is/t1On8 https://archive.is/t1On8

adamkittelson 1y ago

I moved to FSPTX a while back because it doesn't have TSLA. I'm not sure how long I'll stay there though, it has like a quarter of its holdings in NVDA now which has been great so far but it's going to hurt when the AI bubble pops.

ac29 1y ago
> I moved to FSPTX a while back 0.62% ER, yikes