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  • ETFs For GM's Sequel? Maybe, Maybe Not 0 comments
    Nov 19, 2010 1:05 PM | about stocks: GM, F, PMA, XLY, BWA, AXL

    By Jason Raznick

    Alright, General Motors (NYSE:GM) has finally graced us with its IPO and sequel as a public company.

    For investors looking to play the potential success of GM the sequel without jumping directly into that stock, derivative plays are few and far between.

    Ford (NYSE:F) immediately jumps to mind, but what about ETF plays? GM isn't in any ETFs yet and it will take a little while for the stock to make its way into the S&P 500, so where do ETF investors turn to benefit from GM's success, assuming that success is realized?

    One option would be the thinly traded PowerShares Active Mega Cap ETF (NYSEARCA:PMA). Ford accounts for more than 6% of this fund's weight.

    Another option would be the Consumer Discretionary Select Sector SPDR (NYSEARCA:XLY) of which Ford is a top-10 holding at 4.7%.

    Don't bother stretching too auto parts suppliers through ETFs because companies like American Axle (NYSE:AXL) and Borg Warner (NYSE:BWA) don't account for even 2% of any of the ETFs that they're found in.

    All this makes me think that if GM performs well, it's high time for an auto-specific ETF.

    Disclosure: No position


    Disclosure: No position
    Themes: auto sector, ETFs, car, General Motors, IPO Stocks: GM, F, PMA, XLY, BWA, AXL
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