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First Trust launches motor manufacturing ETF


First Trust Advisors has launched the first ETF focused on the global manufacturing of automobiles. The First Trust NASDAQ Global Auto Index Fund (NASDAQ: CARZ), which is expected to begin trading May 10, 2011, will seek investment results that correspond generally to the price and yield (before the fund’s fees and expenses) of the NASDAQ OMX Global Auto IndexSM, which is designed to track the performance of the largest and most liquid companies engaged in the manufacturing of automobiles.

First Trust believes the timely release of this automotive ETF recognises the contributions of the automotive industry to the world economy and the millions of jobs it generates worldwide.

“First Trust is pleased to introduce the first global ETF focused on the automotive industry,” says Ryan Issakainen, Vice President, ETF Strategist, First Trust Advisors LP. “We are launching this fund as a way for investors to potentially capitalise 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. According to Zacks Equity Research, the stage has been set for growth over the next decade with the belief the global auto industry landscape will be ruled by automakers based in the six major auto markets of China, India, Japan, Korea, Western Europe and the US.”

“The International Monetary Fund projects global GDP growth to be 4.4% in 2011 and 4.5% in 2012, while emerging economies are projected to grow by 6.5% in both 2011 and 2012, strong enough to support further recovery in auto sales in developed markets and continued growth in the emerging markets,” Issakainen says.

“JD Power and Associates expects auto sales in the US to reach 13 million units, up 12% from 2010. However, in 2010, for the first time, emerging markets accounted for 51% of global light-vehicle sales, signaling the shift of power in the global automotive market that has been taking place during the past five years. Both China and India ended 2010 with sales of light vehicles up by more than 30%. Momentum in the emerging markets is expected to continue throughout 2011, with China as the driver for global market growth,” Issakainen says.

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