An Auto ETF is shifting to high gear as U.S. consumers replace damaged vehicles in the wake of the disastrous hurricane landfalls.
The First Trust NASDAQ Global Auto Index Fund (NasdaqGM: CARZ), which provides access to global automobile manufacturers, gained 9.0% over the past month, compared to the 2.5% rise in the S&P 500. CARZ also added 0.8% Wednesday after major automakers revealed higher U.S. new vehicle sales in September.
According to Autodata Corp., seasonally adjusted annualized rate of U.S. car and light truck sales in September increased to 18.57 million units from 17.72 units year-over-year, Reuters reported.
For example, sales at number one U.S. automaker General Motors surged nearly 12% in September compared to the same month last year as a 43% jump in sales of crossover and a 10% increase for pickup trucks offset an 11% dip for passenger cars.
The “overall strength of the U.S. economy is the main force driving the market,” GM chief economist Mustafa Mohatarem told Reuters, with recovery in hurricane-damaged areas “spurring new and used vehicle sales.”
Analysts and industry experts previously expected hurricanes Harvey and Irma would provide automakers with their first monthly gains in 2017 after sales had been weakening since hitting a record in 2016.