First Trust is the first fund provider to offer an exchange traded fund focusing on the automobile industry.
According to ETFGuide, the newly launched First Trust NASDAQ Global Auto Index Fund (NasdaqGM: CARZ) will try to reflect the performance of the NASDAQ OMX Global Auto Index, which uses a modified market-cap weighting methodology.
The new ETF has 32 holdings, with top three holdings including Daimler AG at 8.28%, General Motors (NYSE: GM) at 7.64% and Honda Motor (NYSE: HMC) at 5.67%. Top country holdings include Japan at almost a third of the fund, Germany at a little over 20% and the U.S. at around 18%. The fund has an expense ratio of 0.70%.
Ryan Issakainen, Vice President, ETF Strategist, of First Trust, stated the firm launched this fund “as a way for investors to potentially capitalize on the trend toward increasing demand of automobiles, which has led automakers and suppliers to grow in emerging markets and consolidate operations in mature markets.”
Issakainen also commented that investors will be able to gain exposure to the growing automobile industry, stating that “the stage has been set for growth over the next decade with the belief the global auto industry landscape will be ruled by automakers based in the six major auto markets of China, India, Japan, Korea, Western Europe and the U.S.,” reports Olivier Ludwig for IndexUniverse.
Max Chen contributed to this article.