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Funds for Auto Industry Bulls

NEW YORK ( TheStreet) -- After an October for the record books, the markets kicked off November on a choppy note. Approaching the end of the year, investor fears have been rekindled, with the European crisis making its way back into the headlines.

While the sour start to the month may be enough to drive some investors back towards safe havens, I encourage investors to avoid shunning the markets entirely.

The ongoing saga involving Greece, Spain, Italy, Germany, and other members of the euro monetary bloc will continue as we move ahead. As we have seen, however, in regions outside of the EU, hints of strength are shining through.

The automotive industry is an example of one sector that has managed to stay buoyed even in the face of mounting macroeconomic headwinds. This past week investors were greeted to strong news on this front; in October, U.S. sales of new vehicles rose to the highest levels since February

According to a report from Reuters, some of the strongest performers last month included Volkswagen, Chrysler, and Nissan. Sales from Ford (F - Get Report) rose 6%, falling in line with expectations.

The past month's strong car and truck sales numbers indicate hardiness across global auto manufactures. In addition, it highlights the impressive resilience of the consumer. Even in the face of high unemployment and a seemingly endless deluge of negative news, individuals remain willing to spend on these large purchases.

Looking ahead, the auto industry may be a region of interest among those looking to target pockets of market strength. Unfortunately for ETF investors, gaining exclusive access to companies like Ford, General Motors (GM - Get Report) and Toyota (TM - Get Report) has been notoriously difficult.

In 2011, two fund companies have stepped up to the plate to unveil ETFs designed to allow investors to target the auto industry. However, in their opening months of trading, neither the Global X Automotive ETF (VROM) nor the First Trust NASDAQ Global Auto Index Fund (CARZ) have managed to gather the type of following necessary to be considered adequately liquid. As of the start of November, both funds have failed to see their average daily trading volume breach the 2,000 mark.
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PALL $60.15 0.42%
IYK $111.97 0.04%
F $13.56 -3.76%
GM $31.80 -1.97%
TM $101.70 -1.22%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

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