SAN DIEGO (ETFguide.com) - First Trust Advisors introduced a new
which targets the global automobile industry.
The First Trust NASDAQ Global Auto Index Fund (NasdaqGM: CARZ)
follows a newly established benchmark called the NASDAQ OMX Global
Auto Index which is designed to track the performance of the
largest and most liquid companies engaged in the manufacturing of
'We are launching 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,' Ryan Issakainen,
Strategist, First Trust Advisors.
has 32 holdings and the median market size of stocks within the
fund is $9.49 billion. The fund's top three holdings are Daimler
AG, General Motors and Honda Motor.
For the first quarter of 2011, General Motors (
), Ford Motors (
) and Chrysler Group all posted quarterly profits and it was the
first time since 2004 that Detroit's Big 3 have been simultaneously
in the black. Just two years ago, the U.S. auto industry was mired
in bankruptcy reorganizations and federal bailouts.
TheNASDAQ Auto Index, which serves as CARZ's underlying
benchmark, uses a modified market cap weighting methodology in
which larger companies receive a larger index weighting. The index
weighting methodology also includes caps or ceilings to prevent
high concentrations among larger stocks. The index is reconstituted
annually, rebalanced quarterly and dividends are distributed
J.D. Power and Associates expects auto sales in the U.S. to
reach 13 million units, up 12% from 2010. A larger portion of sales
is expected to come from emerging markets with China as the key
driver for global market growth.
The annual expense ratio for CARZ is 0.70%.