How can I invest in autos companies? The easiest way to get involved in the autos industry is to invest in a specialized exchange-traded fund (ETF) that owns a collection of automobile stocks. Autos ETFs, like the First Trust NASDAQ Global Autos Index Fund (wordier than a car model, we know), track the value of global autos companies – so if the sector does well overall, you should do too.

Investing in an ETF is a less risky approach than investing in an individual company because you’re not dependent on the fortunes of any one manufacturer. But if you are set on predicting the podium, it’s reasonably easy to buy shares in all the big autos firms (even Japanese ones like Toyota, whose shares you can access on US exchanges).

What else is out there? As we explored earlier, autos companies are increasingly outsourcing big chunks of their manufacturing – mostly to tech suppliers. Investing in these suppliers could be a lucrative strategy, as they’ll hopefully benefit from increased demand across the entire industry.

One such option is Panasonic, which makes batteries for electric cars (it already has partnerships with Tesla and Toyota). Another is Dutch semiconductor firm NXP, which makes the chips that power car computers; about half its revenue comes from autos sales. And German competitor Infineon could also be worth thinking about.

If you’re more interested in autonomous driving tech, Aptiv is a favorite of some investment managers. It makes software and sensors for “driver-assistance systems” and acquired self-driving startup nuTonomy in 2017. And, of course, tech giants like Alphabet and even potentially Apple are getting into the self-driving space.

Whether you choose to invest in it or not, the autos industry is pretty inescapable – and knowing how it works and what’s likely to be around the corner has hopefully given you a better understanding of where the economy’s headed. Who knows, maybe you’ve finally figured out why the chicken crossed the road…

In this Pack, you’ve learned:

🔹Almost 100 million cars are produced each year, with China in pole position

🔹Emerging markets will drive autos growth in future – and they’ll likely buy electric, autonomous cars

🔹Tariffs and the threat of recession might make the next few years tricky

🔹Autos ETFs are an easy way to invest in the industry – or you could bet on tech suppliers