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Investing in Global Demand for Cars

CARZ employs a modified market-cap weighting. If the weighting was not modified, then Toyota could have a 30% weighting in the fund by virtue of its $194 billion market cap.

CARZ has a 0.70% expense ratio and a 0.85% trailing dividend yield.

Auto stocks tend to trade like cyclicals. During large market declines, they tend to go down much more than the broad market, and during market rallies, they tend to outperform.

For now, it seems that the broad market wants to continue higher until the Federal Reserve provides more specific plans of slowing down its bond purchases. So CARZ has a good chance to trade higher, as well.

One part of the series on auto stocks and ETFs that we are doing today on TheStreet is for the authors to mention whether they have a favorite vehicle or even a dream vehicle.

As my profile notes, I am the chief of our local all-volunteer, donations-based fire department, and so my dream vehicle would be a Type 3 Wildland Engine made by Navistar (NAV). It would be a first-response engine to any wildfires in our area. The one pictured is a National Park Service vehicle, but that same model is also used by the U.S. Forest Service and other agencies.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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