As the summer driving season draws closer, the Automotive equity sector (which falls under Consumer Discretionary) has turned in impressive performance as have well known components like Daimler, Toyota Motor, Honda Motor, and Ford Motor for example.
Linked ETF CARZ (First Trust NASDAQ Global Auto, Expense Ratio 0.70%) which debuted in May two years ago, remains the only pure play way to play the sector at the moment, as an ETF product that was de-listed some time ago, VROM also offered similar exposure.
GM, which carries a 4.03% weighting in CARZ and is ranked as the ninth largest holding (fund holds 35 stocks) is a hard stock to ignore based on the recent chart action as it is currently trading at its highest levels since the summer of 2011. Top holdings in CARZ at the moment are Daimler AG (8.50%), Toyota Motor (8.44%), Honda Motor (7.89%), Ford Motor (7.76%), and Hyundai Motor (6.81%), and other well known names including Mazda, Renault, General Motors, and even Harley-Davidson Inc. are represented among the top ten in the underling index (NASDAQ Global Auto Index).
CARZ as an ETF only sees sporadic trading activity, likely because it is still reasonably new to the marketplace and not on every institutional radar (clearly). But if one looks at a chart they will see several days of healthy 25-75k share trading volume followed by days, if not weeks of very low activity.
Via the liquidity of the underlying securities, the fund can be traded in size in an efficient manner, so it would not be surprising to see activity and recognition in this fund pick up especially if the component stocks continue this impressive breakout, with CARZ +9% inside of two weeks time.
First Trust NASDAQ Global Auto
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- Honda Motor
- Ford Motor