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Should You Buy Auto ETF CARZ & Follow George Soros?

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Billionaire investors George Soros is betting on the auto industry. Notably, First Trust S-Network Future Vehicles & Technology ETF (CARZ - Free Report) is off 24.7% this year while the fund has gained 11.7% past month. Overall, global automobile sales were down 8% in the first half of 2022, after a slight recovery in 2H of 2020 and 1H of 2021.

However, electric vehicle sales were up 62% globally in the first half of 2022 compared to the first half of 2021. That includes fully electric vehicles and plugin hybrids. These plugin vehicles reached 4.3 million sales in the first half of 2022, according to global EV analysis leaders at EV-Volumes, as quoted on

In the United States, auto sales were up in October even as prices begin to cool down a bit. October sales increased 28% at Toyota, 7% at Hyundai and 12% at Kia; Ford and Honda deliveries slid again.

George Soros Buying Tesla & Ford

George Soros is betting on the auto industry. His firm increased his stake in Tesla and continued to buy the debt of Ford. In contrast, Soros continued to offload his Rivian shares. The auto sector of the S&P 500 witnessed revenue growth of 32.7% in Q3 (with a beat ratio of 50%), after 21.6% growth in Q2. Earrings growth in Q3 was 31.4% with a beat ratio of 75%.

Decent sales of Motor Vehicle & Parts and the price inflation of new cars have been palpable. Both factors indicate that the business conditions remained favorable for the auto industry (read: 5 Sector ETFs to Play for Revenue Growth Potential).

Is CARZ a Pure-Play Auto ETF?

Investors may get enthusiastic with the above-mentioned facts and figures and bet on the so-called auto ETF CARZ. But they should know before investing that CARZ is more than cars. It is more of an information technology ETF. Below we detail the fund in detail:

CARZ in Focus

The First Trust S-Network Future Vehicles & Technology ETF looks to track the price and yield (before the Fund's fees and expenses) of an equity index called the S-Network Electric & Future Vehicle Ecosystem Index. The fund charges 70 bps in fees.

The 101-stock fund puts 54.64% of weight in Information Technology, followed by Consumer Discretionary (26.61%). Nvidia (5.49%), Taiwan Semiconductor Manufacturing (4.89%) and Samsung Electronics (4.69%) are the top three stocks of the fund. Apple, Microsoft and Alphabet take about 12% of the fund.

The fund rallied in the past one month. That may be because of a rally in the semiconductor space reflecting Warren Buffett’s bet on Taiwan Semiconductor. Investors should note that chip ETF iShares Semiconductor ETF (SOXX - Free Report) was up 17% past month.

Bottom Line

Investors interested in following Soros’ auto bet can thus play Ford-heavy ETFs including First Trust Nasdaq Transportation ETF (FTXR - Free Report) (Ford takes 7.5% of the fund) and iShares Self-driving EV & Tech ETF (IDRV) (Ford takes 7.5% of the fund).

Moreover, investors can also play Tesla-heavy ETFs like Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) (Tesla has 14.12% weight in the fund), Vanguard Consumer Discretionary ETF (VCR - Free Report) (Tesla has 13.82% weight in the fund) and ARK Autonomous Technology & Robotics ETF (ARKQ - Free Report) (Tesla has 9.52% weight in the fund).

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