As with other industries companies in the transportation sector have created some good performances over the past years. The venture into the ETf market has opened doors for investors to diversify their portfolios with five popular transportation ETFs. The transportation sector is one of the leading sectors of the US economy.
Investors are now leveraging on the transportation sector after the global economy has started to recover and exports from China have grown. Companies popular in the transportation sector and have managed top forecasts include United Parcel Services (UPS), Delta Air Lines (DAL), FedEx (FDX) and CSX Corp (CSX). The sector include major player from airline, delivery, rail, trucks and freight companies.
Issuers in the transportation sector for ETFs include iShares, State Street, Direxion, Invesco PowerShare and Guggenheim. The total market capitalization of transportation ETFs is approximately $682 million. The five popular transportation ETFs include the following.
iShares Dow Jones Transportation Average Index (IYT)
IYT is the largest is the most popular and largest transportation ETF. It has exposure to about 21 companies dedicated to transportation by land, sea and air. Major holdings include that of Union Pacific about 11.4%, FedEx 10.22% and C.H.Robinson Worldwide of 8.84%. The expense ratio is 0.47% and total asset of approximately $640 million. It has about 31% assets in American railroads, 22 in trucking and 18% in delivery firms.
Guggenheim Shipping (SEA)
As the name suggests SEA focus on capitalizing on global shipping which is growing investor interest. It offers exposure to a diversified portfolio with 80% profits from maritime shipping. SEA has an+- expense ratio of 0.65% and a market capitalization of $10.6 million. Major holdings include Teekay LNG (TGP) of 4.26% and Golden Ocean Group Ltd (GDOCF) of 4.2%.
Guggenheim Airline ETF (FAA)
Guggenheim has more to offer for the ETF market with FAA focusing solely on airlines. This is an equal dollar weighted ETF with 67% assets in US domiciled air carriers. It has holdings in 23 companies with an expense ratio of 0.65%. Market capitalization is about $21.14million.
Direxion Airline Shares (FLYX)
This transportation ETF was launched in 2010 and is a thinly traded ETF. It has an expense ratio of 0.55% with assets in only 15 companies and a market capitalization of $3.4 million. FLYX focuses on the Arca Airline Index which measures the performance of US and international airline companies. It is more concentrated than FAA and has major holding in United Continental Holdings of 9.56% and Copa Holdings of 9.51%.
SPDR S&P Transportation ETF (XTN)
XTN is a relatively new ETF which started in 2011. It is equally weighted with an expense ratio of 0.35%. It has a market capitalization of approximately $15.35million. This transportation ETF is more diverse than IYT with assets in 40 companies. It has exposure to trucking of 35%, airlines 26%, air freight and logistics 19% and a small exposure to railroads with 15% assets. It also hold car rental companies like Dollar Thrifty (DTG), Avis Budget (CAR) and Hertz (HTZ).
