Several readers have left comments and emails about the need for a shipping exchange traded fund (ETF). There are some indexes out there that tracking shipping companies, but we’ve yet to see the ETF materialize. I met with someone from the Philadelphia Stock Exchange at an ETF conference last week. He said some of the ETF providers have shown interest in tracking their PHLX Marine Shipping Sector (SHX). This index is made up of 16 companies involved in worldwide sea transportation of liquids including oil, petroleum products and chemicals, as well as dry goods like coal, iron ore and agricultural commodities.
Shipping indexes can be a good indicator of economic growth and production, since the goods that are shipped are the raw materials, not the finished products. It also takes time to build ships and isn’t so easy to retire ships, thus any increase in demand can push the shipping indexes higher.
With providers reaching out to talk, it leads us to believe we could see a shipping ETF in the not too distant future.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.