Investors can now gain direct exposure to changes in global trade through the first freight futures-backed ETF that focuses exclusively on dry bulk shipping.
On Thursday, Breakwave Advisors and ETF Managers Group launched the Breakwave Dry Bulk Shipping ETF (NYSEArca: BDRY), which has a 1.72% expense ratio.
The Breakwave Dry Bulk Shipping ETF is an actively managed ETF that seeks to provide exposure to daily changes in the price of dry bulk freight futures by tracking three-month strip of the nearest calendar quarter of futures contracts on the Capsize 5TC Index, the Panamax 4TC Index and the Supramax 7TC Index that measure rates for shipping dry bulk freight, according to a prospectus sheet.
The initial freight futures allocation will be 50% Capesize contracts, 40% Panamax contracts and 10% Supramax contracts.
“We are thrilled to bring such an innovative product to the market, allowing investors to participate directly in the exciting world of dry bulk shipping,” John Kartsonas, Founder and Managing Partner of Breakwave Advisors LLC, said in a note. “Freight futures have historically exhibited strong cyclical returns, but for most investors it has been a very hard-to-access market. For the first time, through BDRY, a wide range of market participants can now directly access the dry bulk market using a simple, transparent, equity-like investment product.”
Shipping Is a Vital Component in Global Economy
Shipping is a key part of the global economy and an integrated part of commodity trading, covering many widely used resources like crude oil, iron ore and coal, among others.
China dominates the demand side with over 80% of incremental seaborne volumes going to China over the past decade.
“Dry bulk shipping is an essential part of the global commodity markets and a major beneficiary of infrastructure spending,” Kartsonas added. “A highly cyclical industry, dry bulk shipping is in an upturn again following several years of underperformance, in a strengthening commodity environment supported by improved industry fundamentals.“
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