The Nashville Area ETF (
), courtesy of LocalShares, commenced trading Thursday, marking
the debut of the first city-specific ETF in the U.S. After just
one trading day, it is too early to pass judgment on NASH.
It may be debatable that Nashville, Tennessee would have been
the first city most folks would have picked to get its own ETF,
but there are plenty of companies in the region with which to
build an ETF. NASH constituents include familiar names such as
Dollar General (NYSE:
), HCA Holdings (NYSE:
) and Louisiana Pacific (NYSE:
according to issuer data
Nashville ETF Debuts Thursday
At this point it is just speculation, but if NASH is
successful, that could spark the creation of some other
. In the wake of
the largest municipal bankruptcy
in U.S. history, Detroit may not appear to be a likely candidate
to get its own ETF, let alone see that ETF deliver good
However, a basket of Detroit-area publicly traded companies
has served investors quite well this year. Using a quasi-equal
weight approach where prospective holdings of the theoretical
Detroit ETF, which we will give the ticker "MOTR," are capped at
eight percent could have yielded impressive results.
Detroit is the "Motor City," and that means Ford (NYSE:
) and General Motors (NYSE:
) must be included in MOTR's lineup. Those stocks combine for
nearly 13 percent of the weight of the First Trust NASDAQ Global
Auto Index Fund (NASDAQ:
something that has worked out very well for that
ETF this year
Auto parts suppliers BorgWarner (NYSE:
), Lear (NYSE:
) and TRW (NYSE:
) will need to be included as well. Again, not a bad thing as all
three are flirting with new highs.
Sticking in the realm of old-line U.S. companies, Whirlpool
) is not based too far from Motown. Up almost 21 percent in the
past three months, the appliances maker hit a new high
Assuming we cap all of MOTR's holdings at eight percent and
make some slight tweaks based on market value, it would be
conceivable that the six stocks just mentioned would combine for
35 to 40 percent of the Detroit ETF's weight.
Dow Chemical (NYSE:
), nearly 8.5 percent of the Materials Select Sector (NYSE:
SPDR), needs to be in MOTR, too and arguably merits a weight of
about eight percent. Let's get some staples exposure to lower
MOTR's beta a bit and another eight percent to Battle Creek-based
), which is up 15 percent year-to-date.
How about some healthcare exposure? Medical device maker
), the fourth-largest holding in the iShares U.S. Medical Devices
) fits the bill. Stryker shares have surged 27.2 percent this
year and hit a new high Thursday.
Don't forget financial services. Shares of Midland-based
Chemical Financial (NASDAQ:
) are up 25.2 percent year-to-date. Sure it is a micro-cap, but
Alma-based Firstbank (NASDAQ:
) merits a slice of MOTR's financial services pie. After all,
that stock is up 56 percent this year. Small-cap bank Flagstar
) has been a laggard this year, but has soared over 30 percent in
the past three months and could also occupy a small spot in
And there we have the first ever ETF devoted exclusively to
the greater Detroit area. Ticker: MOTR.
For more on ETFs, click
Time to Buy Detroit?
Join Marketfy's Dave Moenning on Sunday, August 4 for a free
webinar to discuss the advantage of the largest bankruptcy in
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