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Musk-Free ETFs Arrive: Investing Without the Tesla Factor
Key Points
XXSP launched in October for investors who prefer to avoid Musk-led companies.
Excluding a specific company may cause returns to differ from your intended benchmark.
Avoiding a stock in no way guarantees lower risks or higher rewards.
Love him or loathe him, Elon Musk knows how to make a splash. By turning ambitious technical ideas into high-profile ventures, Musk attracts capital, talent, and public attention.
Given Musk's fame, it's natural for many investors to want in on the action. Still, others hesitate to invest in an exchange-traded fund (ETF) heavily exposed to Musk-linked companies due to fear of concentrated risk.
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For example, while one investor may be drawn to the ARK Innovation ETF (NYSEMKT: ARKK) because of its 11.2% holding in Tesla (NASDAQ: TSLA) and 6.05% holding in SpaceX (NASDAQ: SPCX) -- as of Nov. 2, 2026 -- another may worry that the fund leans too heavily on Musk companies.
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To be Musk-free, one needs to get Subversive
If you worry about the volatility, valuations, and governance risks associated with these high-profile businesses, you're not alone. That's where the Subversive S&P 500 Redacted ETF (NYSEMKT: XXSP) is finding its niche. XXSP seeks to provide broad large-cap U.S. equity exposure while excluding Musk-led companies. At least 80% of assets provide exposure to companies in the S&P 500.
About XXSP
If XXSP sounds good to you, there are several important facts to keep in mind:
- It's a new fund: The Subversive S&P 500 Redacted ETF launched on Oct. 7, 2026, so it hasn't had much time to prove itself.
- It's small: Naturally, with less than a month of business under its belt, XXSP has only $2.4 million in assets.
- Its expense ratio may jump: XXSP's net expense ratio after a fee waiver is 0.30%. The waiver is expected to remain in effect until Jan. 28, 2028, and may increase after that.
Pros associated with buying XXSP
- Balance: For anyone already invested in Musk companies who wants a more balanced portfolio, XXSP can help achieve that balance by minimizing Musk exposure.
- Potential for fewer Musk-related market swings: Stocks tend to react sharply to headlines. Disinvesting from Musk means less exposure to public comments or decisions tied to this one high-profile executive.
- Better value alignment: If you don't support Musk's leadership practices, XXSP can help you avoid financing them.
Cons associated with buying XXSP
- Missing out on growth: If Tesla or SpaceX values rise faster than your portfolio, you could miss out on gains.
- Shaky diversification: Depending on your other holdings, your portfolio may be less diverse than you believe. For example, you may have more Musk-related holdings than you realize, not just through direct investments. Your portfolio may be exposed through funds and companies connected to Musk businesses.
- May not fit into a well-considered investment strategy: Let's say your portfolio is nicely balanced, but you simply don't like Elon Musk. Cutting investments solely because of who leads the company may be arbitrary if it's not part of a larger, consistent investment strategy.
Ultimately, the sensible choice depends on your convictions, diversification, and willingness to accept the risk of turning the Musk spigot off entirely.
Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Space Exploration Technologies. The Motley Fool has a disclosure policy.