Kathy Wood is unhappy with the exclusion of Tesla Inc., one of her most popular investments, from a prominent index that tracks environmentally and socially friendly companies.
“Ridiculous,” was Wood’s trivial response that the S&P 500 ESG index excluded Elon Musk’s electric-vehicle maker Tesla TSLA.
From its lineup, as part of its annual rebalancing.
Read: Tesla has been dumped by the S&P ESG index and the mask crisis label is a ‘scam’
“While Tesla could play a role in removing fuel-powered vehicles off the road, it lags behind its peers when tested through a wide ESG lens,” wrote Margaret Dorn, senior director and head of the ESG Index at S&P North America. Dow Jones index, in a blog post on Tuesday.
The announcement by S&P Dow Jones Indices may come as a shock to some, given that the automaker is seen by the public as a pioneer in EV production, perhaps laying the groundwork for big manufacturers like Ford Motor F.
And General Motors Co. GM,
Those who are running largely to compete with Tesla in EVs after falling behind Musk & Co. in the low-carbon category.
Dorn points out that some of the reasons for contributing to Tesla’s boycott were related to the “low-carbon strategy” of “standard-level score reduction” and its “business code of conduct.”
Tesla, CEO of ARK Investment Management, is one of the largest and most successful investments for Wood, whose radioactivity to disruptive companies like Tesla helped him to make a name for himself on Wall Street.
However, Wood’s flagship fund was unstoppable due to the recession, which caps most of the market for growth-based, technology and technology-related investments.
Wood’s flagship ARK Innovation ETF ARKK,
By mid-February 2021 it had dropped from its peak to about 74%, and by 2022 it had fallen by more than 56%.
Tesla stock fell more than 42% from its recent peak in early November. Shares of the EV maker are still 33% off in 2022.
Meanwhile, with the S&P 500 SPX, both Ford and GM stocks fell nearly 38% year-over-year.
About 18% lower so far this year, Dow Jones Industrial Average DJIA,
More than 13% discount and technology-rich Nasdaq Composite Comp,
Musk also had concerns about excluding Tesla from the ESG index:
Readable: A ‘painful summer’? The Nasdaq Composite could sink 75% from its peak, the S&P 500 could skid 45% from its peak, warns Scott Minard of Guggenheim.