First Trust Exchange-Traded Fund II First Trust S-Network Future Vehicles & Technology ETF (CARZ) seeks to track the S-Network Future Vehicles & Technology Index, which measures companies involved in autonomous vehicles, electric vehicles, connected cars, and related automotive technology infrastructure. This thematic equity ETF provides exposure to the emerging transportation revolution across global markets.
How It Works
CARZ uses a passively managed, modified market-capitalization-weighted approach that tracks its benchmark index. The fund holds companies across the automotive technology value chain, from traditional automakers transitioning to electric vehicles to semiconductor companies enabling autonomous driving systems. Holdings are weighted based on their relevance to future vehicle technologies rather than pure market cap. The portfolio is rebalanced quarterly to maintain alignment with evolving automotive innovation trends.
Key Features
- Pure-play exposure to automotive technology transformation including electric, autonomous, and connected vehicle ecosystems globally
- Captures entire value chain from battery manufacturers to software developers, not just traditional automakers
- Thematic focus allows participation in multi-decade shift toward sustainable and intelligent transportation solutions
Risks
- This ETF can lose significant value if autonomous vehicle adoption stalls or regulatory hurdles delay electric vehicle transitions
- Technology disruption risk exists as new innovations could make current holdings obsolete within automotive sector
- High sector concentration means broad market downturns affecting consumer discretionary stocks could cause 40-50% declines during recessions
Who Should Own This
Best suited as a satellite holding (5-15% of equity allocation) for growth-oriented investors with 7+ year time horizons seeking exposure to automotive technology transformation. High risk tolerance required due to thematic volatility and emerging technology uncertainty. Appropriate for investors believing in long-term shift toward electric and autonomous vehicles.