There is an index SEA investors should follow, that being the Baltic Dirty Tanker Index (BIDY). The index aggregates rates from major trade routes every day and is a good indicator of overall shipping rates hired to move crude oil, according to Market Realist.
Companies such as Frontline (NYSE: FRO), Nordic American Tanker (NYSE: NAT) and Teekay Tankers (NYSE: TNK) are among the investable crude tanker names. Nordic American and Frontline combine for 5.5% of SEA’s weight.
SEA’s largest holding is Denmark’s A.P. Moller – Maersk, which operates across multiple businesses, not just shipping. The company had $59 billion in revenue in 2012. SEA is also home to Teekay LNG Partners (NYSE: TGP), a shipper of liquefied natural gas, and Teekay LNG Partners (NYSE: TOO), a provider of offshore oil storage services. [Shipping ETF Looks for More Gains]
Bottom line: There is a perception that SEA is the “Baltic Dry Index ETF.” The reality is that is not true and the chart above shows sometimes that is a good thing.
ETF Trends editorial team contributed to this post.