Changes in Mass Transit Could Fuel This Leveraged Transportation ETF

Social distancing and lockdown restrictions certainly pumped the brakes on the transportation sector, but the Covid-19 pandemic also spurred businesses to turn to disruptive technology to not only survive but to change with the times–a move that could help traders of transportation exchange-traded funds (ETFs).

“When U.S. transit providers look back at the past four months, it’s possible they might see this crisis as a pivotal moment where transit agencies learned to facilitate remote work,” a Mass Transit article noted. “Some agencies may breathe a sigh of relief that they invested in cloud-based information technology (IT) systems to allow personnel to work from home, remain agile, and effectively manage the disruption.”

While that may be the case with businesses that can seamlessly integrate into the internet of things, that wasn’t the case with the transportation sector, which faced its own set of challenges.

“Yet few would argue that transit agencies operated seamlessly during the crisis,” the article stated. “For some agencies, mobile platforms were not yet in place or ready to handle the increased demand. For others, personnel were not ready to use these platforms. COVID-19 should provide a pivotal point – a wake-up call – for agencies to think proactively about building IT systems to help support and modernize operations.”

Click here to look at the five ways the transportation sector is evolving.

Moving Forward with Transportation ETFs

Leverage-hungry traders sensing an opportunity can look to funds like the Direxion Daily Transportation Bull 3X Shares (NYSEArca: TPOR). TPOR seeks daily investment results equal to 300 percent of the daily performance of the Dow Jones Transportation Average, which measures the performance of large, well-known companies within the transportation industry.

Other transportation ETFs to watch:

  1. iShares Transportation Average ETF (NYSEArca: IYT): seeks to track the investment results of the Dow Jones Transportation Average Index composed of U.S. equities in the transportation sector. The underlying index measures the performance of large, well-known companies within the transportation sector of the U.S. equity market.
  2. SPDR S&P Transportation ETF (NYSEArca: XTN): seeks to provide investment results that correspond generally to the total return performance of an index derived from the transportation segment of a U.S. total market composite index. The index represents the transportation segment of the S&P Total Market Index (“S&P TMI”).
  3. US Global Jets ETF (NYSEArca: JETS): seeks to track the performance of the U.S. Global Jets Index, which is composed of the exchange-listed common stock (or depository receipts) of U.S. and international passenger airlines, aircraft manufacturers, airports, and terminal services companies across the globe.

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