Tesla Inc. TSLA is back in the top five holdings of The Future Fund Active ETF FFND as of Nov. 15, fund manager Gary Black said on Monday.
What Happened: Tesla is now the fifth top holding in the ETF after Nvidia Corp. NVDA, Alphabet Inc. GOOG GOOGL, Salesforce Inc. CRM, and Netflix Inc. NFLX.
The Future Fund has maintained Tesla as a significant holding since its 2021 launch, though the position has been adjusted from 12.2% in October 2022 to 4.11% as of Nov. 15.
Nvidia tops the charts, accounting for 9.29% of The Future Fund Active ETF’s net assets. Alphabet’s Class A stock stands at 7.81%, Salesforce at 4.85%, and Netflix at 4.56%.
“It's called sell discipline, and in the institutional world it's critical to getting assets. No institution will hire you as a manager if you like a stock at any price,” Black said.
“Second, when $TSLA pursues a pricing strategy that causes earnings to fall by 50% and TSLA stock to fall by 70% as happened in 2022-2023, wouldn't it be better to sell high and then buy back in after the drawdown?”
Why It Matters: Tesla resorted to price cuts in late 2022 to up their sales amid an EV demand slowdown and rising competition. The price cuts weighed heavily upon Tesla’s margins and Black started trimming his position. The Tesla investor community subsequently alleged that he is engaging in short-term trading.
“Those of us who are long time TSLA bulls, who know instinctively when the stock is oversold and conversely when sentiment is too exuberant, get run out of town quickly for voicing concerns — even when those concerns turn out later to be accurate (e.g. price cuts).”
In my world, it's ok to take profits when a stock is up 150% in 8 months,” Black explained in another post on X on Monday.
Price Action: Tesla stock gained 5.6% on Monday to close at $338.74, but declined 1.35% in premarket trading on Tuesday. Year-to-date, the Tesla stock is up 36.4%, according to Benzinga Pro data.
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