“Unless something unexpectedly positive happens with oil prices, we believe there will be a sharp falloff in rig activity,” according to investment bank Global Hunter Securities.
While the shipping ETF may move with the Baltic Tanker Dry Index (BCIY), SEA does not specifically transport dry bulk commodites. SEA tracks the Dow Jones Global Index, a collection of dividend-paying global shipping firms. The ETF includes a 37.0% tilt toward the energy-related industries.
Instead, SEA investors should follow the Baltic Tanker Dirty Index (BDIY). The index aggregates rates from major trade routes every day and is a good indicator of overall shipping rates hired to move crude oil. [Shipping ETF Trouncing Baltic Dry Index]
Guggenheim Shipping ETF
For more information on the shipping industry, visit our shipping category.
Max Chen contributed to this article.