ETF Launch for Global Auto Manufacturing (CARZ, GM, F, TM, HMC)

First Trust has launched yet another global ETF, this one being based upon the NASDAQ OMX Global Auto Index.  It doesn’t take a rocket scientist to get what it invests in.  This is the launch of the First Trust NASDAQ Global Auto Index Fund (NASDAQ: CARZ) on Tuesday. This is based upon auto-makers rather than on parts-makers with a very-global weighting: Japan is 32.7%, Germany is 20.19%, and the U.S. is 17.68% of the weighting.

The breakdown in share weightings is as follows: General Motors Company (NYSE: GM) is 7.64% of the weighting; Honda Motor Co. (NYSE: HMC) is 7.18%; Toyota Motor Corporation (NYSE: TM) is 7.14% of the weighting; and Ford Motor Company (NYSE: F) is 5.67% of the weighting.  There are others as well, but those just named were the top stocks that trade on primary U.S. exchanges.  The largest component is Daimler AG with 8.28%, and others are as follows: Kia at 5.08%, Fiat Group is down 4.97%, Hyundai is 4.82%, BMW is 4.24%, and VW is 4.18%.

To be included in the index, these securities have to meet certain trading criteria.  Each must be listed on an index-eligible global stock exchange, must have a minimum worldwide market cap of $500 million or more, and needs a three-month average daily dollar trading volume of $1 million or more.  The index also employs a modified market cap weighting methodology so that larger companies do not get too highly concentrated in the ETF. 

JON C. OGG