For investors seeking momentum, First Trust NASDAQ Global Auto ETF (CARZ Quick QuoteCARZ - Free Report) is probably on radar. The fund just hit a 52-week high, and is up roughly 112% from its 52-week low price of $19.88/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

CARZ in Focus

This fund offers a pure-play global exposure to 34 auto stocks. It is a large-cap centric fund with Japanese firms accounting for 31.7% exposure while Germany and the United States round off the next two spots with 24.4% and 16.9% share, respectively. The product charges 70 bps in fees per year (see: all the Consumer Discretionary ETFs here).

Why the Move?

The auto industry has been an area to watch lately given the rebounding sales from the coronavirus-related lows and buyers returning to showrooms. Strong consumer demand for pick-up trucks and sport-utility vehicles as well as lower interest rates are driving the industry’s growth. The Fed has pledged to keep rates at lower levels until the end of 2023 that will continue to accelerate lending and boost consumer spending. Persistent lower interest rates have encouraged new-car buying, pushing more consumers to avail loans.

More Gains Ahead?

Currently, CARZ has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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