As evidence of increased commercial interest and product development of globally-focused transport ETFs among major providers, the following ideas have recently been either launched or filed: Claymore/Delta Global Shipping (*launched 8/25/08) (SEA), PowerShares Global Transportation (filed with SEC), and SPDR Transportation (filed with SEC). I think the increased interest by investors in transports warrants commercial development of focused ETFs in the following segments on a global basis:
1.) Railroad : A bullish segment due to pricing power as a result of limited ability to add capacity and increased demand for fuel efficient transport of energy and agricultural commodities. In addition to the four top U.S. railroads I outlined yesterday , investors should also consider Canadian National Railway (CNI), which is actually down nearly 6% over the past year compared to gains for its major competitors here in the states.
2.) Maritime : There is now an ETF for investors and traders as of the 8/25/08 launch of Claymore/Delta Global Shipping (SEA) with the Baltic Dry Index down 42.8% over the past year on concerns of a global slowdown and previous run-up which proved to be unsustainable.
3.) Short Airline : Although the industry is getting a lift from falling oil prices and presents an excellent trading vehicle due to high volatility, Southwest Airlines (LUV) is the leading company and only long-term investment vehicle I would consider as a hedge to an overall short position.
4.) Short Trucking: The top five companies by market cap in the trucking, air freight, and ground delivery segment account for over 50% of the entire global index of 49 companies with market caps over $250M US Dollars which have posted a loss over 20% in the past year on a market cap-weighted basis. As a long position and hedge to a short on the overall segment, I would consider Ryder System (R) as a long-term investment in this group based on its truck rental/leasing and supply chain management business model.
$51.12 (09/16/08)
