Start Your Engines: Global X Introduces An Auto ETF

Global X, the New York-based ETF issuer now with 31 ETFs listed in the U.S. and over $1.8 billion in assets under management, introduced the Global X Auto ETF VROM today. The 50-stock ETF becomes the second fund devoted to the auto industry to be introduced this month. With an expense ratio of 0.65%, VROM splits its weight between auto manufacturers (74%) and parts suppliers (26%). Not surprisingly, Germany, Japan and the U.S. combine for about 69% of VROM's country allocation while South Korea also gets double-digit representation at 11.1%. Toyota Motor TM is VROM's largest holding at almost 10.3%, followed by Germany's Daimler at 10.2%. Ford F gets a weight of 9.4% and Honda HMC accounts for almost 5% of VROM's weight. While a top-10 holding for VROM, GM GM receives an allocation of just 2.7%. VROM tracks the S-Network Global Automotive Index, which is a modified cap-weighted index. “VROM provides a relatively efficient way for investors to gain diversified exposure to the global auto and auto part manufacturers industry,” said Bruno del Ama, chief executive officer of Global X Funds, in a statement. VROM will go head-to-head with the First Trust Nasdaq Global Auto Index Fund CARZ, which made its debut on May 10. The country weights are similar between the two funds, though Daimler is the largest individual holding in CARZ. Global X has been one of the most prolific issuers in terms of new ETFs in 2011, thus far rolling at 16 new funds across a wide swath of sectors and geographies. VROM is the fourth new ETF the firm has introduced in May alone.