NEW YORK (Reuters) - Tesla Inc’s more than 66 percent rally for the year is prompting some funds to make an outsized bet on the electric car maker.

The Tesla corporate logo is pictured at a Tesla electric car dealership in Sydney, Australia, May 31, 2017. REUTERS/Jason Reed

A total of 22 actively managed mutual funds and exchange-traded funds have more than 5 percent of their portfolios in the company, according to Morningstar data.

Few of these funds are actively buying shares, fund filings show, but instead are letting their stakes balloon as the stock continues to rally. Typically, fund managers prevent any one position from growing beyond 5 percent of assets in order to manage their risk.

“It’s concerning because there’s a significant risk in holding that much of any individual stock because you’re not getting the benefits of diversification, particularly with a company that is as volatile as Tesla is,” said Todd Rosenbluth, director of ETF and mutual fund research at CFRA in New York.

At 19.4 percent of assets, the $2.1-billion Baron Partners fund has the largest individual stake in Tesla, with 19.5 percent of assets, while another Baron fund, the $185-million Baron Focused Growth fund, has the second-largest position with 17.3 percent of assets in the company.

Both funds began buying shares of Tesla in 2014 and are up more than 18 percent for the year, nearly double the 10 percent gain for the broad S&P 500.

Baron declined to comment. Ron Baron, the fund’s manager, said in June that he thinks that Tesla could hit $1,000 per share by 2020, a 181-percent gain from its current price of approximately $356 per share.

At 10 percent of assets, the $66-million ARK Industrial Innovation ETF has the largest position in Tesla among all exchange-traded funds, according to Morningstar. The actively-managed fund, which aims to buy companies following a theme of disruptive innovation, is up 33.7 percent for the year.

Sector ETFs are more likely than actively-managed funds to have outsized positions in individual companies, largely because they track market-weighted indexes that themselves are often top-heavy, Rosenbluth said.

The $12.9-billion Consumer Discretionary Select SPDR ETF, for instance, has 15.1 percent of its assets in shares of Amazon.com Inc, while the $3.8 billion iShares MSCI South Korea Capped ETF holds 22.9 percent of its assets in shares of Samsung Electronics Co Ltd.

Investors in ETFs are more likely to accept greater individual company risk as long as the portfolio is representative of a sector, Rosenbluth said.