Investors are currently limited to the iShares Dow Jones Transports (IYT) as a transport ETF option with net assets of $698 million and 20 component stocks (stats as of 8/8/08 from the iShares website ). The top five holdings account for 43.2% of invested assets and include the following: Burlington Northern Santa Fe (BNI, 10.7%), Union Pacific (UNP, 9.6%), FedEx (FDX, 9.1%), Overseas Shipholding Group (OSG, 6.9%), and United Parcel (UPS, 6.9%). In addition, the iShares Dow Transports ETF also includes three passenger airlines: AMR Corp. (AMR), Continental (CAL), and JetBlue (JBLU); although the combined weighting for these three companies is negligible; they represent an opportunity cost by occupying three positions in the fund and omit industry leader Southwest Airlines (LUV).
As evidence of increased commercial interest and product development of globally-focused transport ETFs among major ETF providers, the following ideas have recently been filed with the SEC: Claymore/Delta Global Shipping , PowerShares Global Transportation , and SPDR Transportation .
My strategy for a family of four global transport ETFs is outlined below with links provided to more details on the component index for each segment:
1.) Global Logistics PerformIdex - composite (30 stocks) blend of rails (8), maritime (8) , trucking (8), and air freight/delivery (6)
2.) Global Railroad BULLISHares - long rail transport
3.) Global Maritime BULLISHares - long waterway transport
4.) Global Airline BEARISHares - short passenger airlines
$65.45 (08/09/08)
