Last week, Tesla shares delivered an underwhelming earnings result.
It's been a challenging year for Tesla Inc. (NASDAQ: TSLA), with its share price down the most of the Magnificent 7 companies.
Tesla's share price is down 32% for the year. The next sharpest decline within the Magnificent 7 is Nvidia Corp (NASDAQ: NVDA), which has fallen 23% since the start of the year. Microsoft Corp (NASDAQ: MSFT) is down the least, after dropping just 8% for the year to date.
The electric vehicle (EV) maker has been one of the most controversial stocks in 2025. CEO Elon Musk's association with US President Donald Trump and government appointment were initially seen as positive. However, lately, an increasing number of investors have considered it a liability, with EV sales declining in several major markets.
Last week, Tesla released an underwhelming quarterly result. The company reported a staggering 71% decline in net profit, driven by a 20% decline in automotive revenue. Management attributed this to the need to update lines at its four vehicle factories to start making a refreshed version of its popular Model Y SUV. Lower average selling prices were also to blame.
While the stock lifted on CEO Elon Musk's pledge to spend less time in his government role, many investors remain concerned about the company's outlook.
Worried about Tesla's impact on your US ETF returns?
With a market capitalisation of $813 billion, Tesla shares make up a large portion of most US-focused ASX exchange-traded funds (ETFs). For example, they comprise 2.4% of Betashares Nasdaq 100 ETF (ASX: NDQ) and 1.5% of iShares S&P 500 AUD ETF (ASX: IVV). Accordingly, any dramatic drop in Tesla's share price acts as a drag on the performance of these ETFs.
While most US-focused ETFs contain Tesla as a holding, Global X Fang ETF (ASX: FANG) excludes it. Instead, Global X Fang ETF contains 10 holdings within the technology sector, each accounting for between 9% and 11% of the ETF.
Over the past five years, FANG has climbed 91%. Its management fee is also modest, at 0.35%. This gives investors exposure to America's largest technology stocks while excluding Tesla.
Foolish Takeaway
Given the number of holdings in most ETFs, investors can rarely selectively exclude a particular holding from the basket of stocks. However, Global X Fang ETF investors can invest in ten US technology stocks while opting out of Tesla. Those bullish on the US technology sector with reservations about Tesla might find this ASX ETF especially appealing.
