For investors seeking momentum, First Trust NASDAQ Global Auto Index Fund (CARZ Quick QuoteCARZ - Free Report) is probably on radar now. The fund just hit a 52-week high and is up nearly 26.1% from its 52-week low price of $32.57/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 34-stock fund looks to track the NASDAQ OMX Global Auto Index. General Motors, Ford Motor and Daimler AG hold the top three spots in the fund. The product charges 70 bps in fees. The fund is heavy on Japan (33.50%) followed by United States (22.05%) and Germany (18.81%) (see all Consumer Discretionary ETFs here)

Why the Move?

Major automakers reported a jump in U.S. new vehicle sales in September. As Hurricane Harvey wreaked havoc in Texas in late August and Hurricane Irma hit Florida in early September, there were considerable damages in the auto industry. So, higher replacement demand led to a pickup in sales. The momentum should continue during the recovery in southeast Texas and Florida through at least November, as per industry experts. This clearly explains the auto ETF’s recent run-up.

More Gains Ahead? 

The fund currently has a Zacks ETF Rank #2 (Buy). Also, it seems that this fund might stay strong given a positive weighted alpha of 24.80. As a result, there is still some promise for investors who want to ride on this surging ETF.

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