As global economies start to signs of life and growth, ETF provider, Claymore Securities recently announced the re-launch of the Claymore Shipping ETF (SEA), giving investors an opportunity to play a potential increase in global trade and a growing maritime shipping industry.
SEA seeks to replicate the performance of the Delta Global Shipping Index which includes companies that derive at least 80% of their revenues from operating or leasing ships or from the transportation of goods. Another prerequisite of the companies that are included in the Delta Global Shipping Index is that they have at least $250 million in market capitalization and a 30-day average daily trading volume of at least $2 million.
As for SEA, the ETF will carry an expense ratio of 0.65% and allocates nearly 68.9% of its sector weightings to industrials and the remaining 36.1% to energy. Additionally, it boasts Seaspan Corp (SSW), Teekay Shipping Corp (TK), General Maritime Corp (GMR) and Teekay Tankers (TNK) as its top holdings. Lastly, SEA allocates its assets with the following geographical weightings: Greece (18.55%), United States (12.31%), Bermuda (10.29%), Japan (10.24%), Hong Kong (10.01%) and China (8.43%).
During the global recession, many ships and were sidelined in an effort to reduce idle capacity, however, things are slowly starting to change. This change can be illustrated by the recent performance of the Baltic Dry Shipping Index, which measures shipping costs for commodities, and generally increases as the number of shipments increases. The Index is up nearly 28% over the past four months.
In a nutshell, as long as economies around the world continue to grow and the demand for transporting goods increases, the global maritime shipping industry will likely reap the benefits.
Disclosure: No Positions