But on the upside, in a benign environment, the stocks can be good in total returns when the dividends are included.
The story behind the index is that single-hull oil tankers are scheduled to be completely phased out by 2010. A new, strong supply of ships will come into the market and keep tanker rates relatively well-balanced.
There is a shortage in dry, bulk vessels that carry iron ore and other commodities, however, that may lead to higher shipping rates within the industry. Backlogged demand for increased shipping capacity should keep charterers the upper hand when it comes to setting the rates.
Higher fuel prices has more people than ever looking for ways to transport goods, and it has led to a renaissance of sorts within the railroad industry.
Exporting goods has been keeping America afloat economically. If Claymore can get an ETF wrapped around this index quickly, it’s fair to suspect that such a fund would be one of those few industry groups that has been bucking the market trends, such as the iShares Transportation ETF (IYT). IYT is up 10.1% year-to-date.
For full disclosure, some of Tom Lydon’s clients own shares of IYT.