For investors who have been looking for exposure to the global shipping industry via an exchange traded fund (ETF), the search is over: Claymore launched the Claymore/Delta Global Shipping Index (SEA) this morning.
Claymore President Christian Magoon tells us that they see the industry as investment in the infrastructure of the global economy. “As the world continues to be more interlinked in imports and exports, the shipping sector is a proxy for global economic sentiment.”
The basic premise of the shipping industry, Magoon says, is that they rent out capacity to haul things from raw materials and liquids to finished goods, like cars. Right now, the industry is sitting pretty, because they can lease the space for more than the cost of carry, thanks to a shortage in the number of ships available.
The global shipping industry isn’t without risk, though. Two of the biggest factors affecting it are:
1) The health of the global economy. When budgets are stretched, there’s going to be less demand, which will translate into the demand for shipping things. The opposite could be true as well, Magoon says. Strong economic growth could benefit the shipping industry.