Transportation sector exchange traded funds plowed through crippling winter conditions, outperforming the broader stock market so far this year.
Last week, the American Trucking Association revealed that the For-Hire Truck Tonnage Index increased 2.8% in February, after declining 4.5% the previous month.
“It is pretty clear that winter weather had a negative impact on truck tonnage during February,” ATA Chief Economist Bob Costello, said in the report. “However, the impact wasn’t as bad as in January because of the backlog in freight due to the number of storms that hit over the January and February period.”
The markets feared that the back-to-back winter storms would slow transportation, commerce and the overall economy.
“The fundamentals for truck freight continue to look good,” Costello added. “Several other economic indicators also snapped back in February. We have a hole to dig out of from such a bad January, but I feel like we are moving in the right direction again. I remain optimistic for 2014.”
The SPDR S&P Transportation ETF has a heavy 36.4% allocation toward the trucking sub-sector while the iShares Transportation Average ETF includes a 16% weight toward trucking.