Getting It There By Land, Sea & Air With These ETFs (IYT, FAA, SEA)

Transportation encompasses both the movement of individuals as well as the delivery of goods and services from raw material suppliers to manufactures and ultimately to consumers.  As long as there is a need to meet face to face or to have demands in one location satisfied by goods from another transportation will continue to be a vital part of our lives and economic continuity.  Let’s take a look at a couple of Exchange Traded Funds (ETFs) that can add a transportation slice to a well-balanced portfolio.

Packages

The iShares Dow Jones Transportation Average Fund (NYSE:IYT) only has 20 holdings.  The IYT fund is concentrated on the delivery of packages and commodities.  Its smallest holdings are in airlines like JetBlue, American, Delta and Southwest.

Airlines

The Claymore/NYSE Arca Airline Fund (NYSE:FAA) on the other hand focuses purely on airline stocks from the U.S. and abroad.  Besides its focus on airlines its international exposure also makes the fund interesting since its not confined to any specific region.  The German carrier Deutsche Lufthansa AG, Singapore Airlines Limited and Japanese based All Nippon Airways are all represented as a much smaller portion of the fund.

Shipping

The Claymore Shipping Fund (NYSE:SEA) has a very small asset base in comparison to the IYT fund and it has very little trading volume suggesting that individual investors should stay clear of this fund for the time being.  The SEA fund is spread out smoothly across a series of seaborne transportation operators who move everything from natural gas to iron ore across the ocean.

Conclusion

The FAA is a pure play on the airline industry.  My idea for this piece is the child of a weekend trip via JetBlue airlines.  The JetBlue aircrafts I flew on were completely full on each leg of my journey between Raleigh Durham International Airport and Washington Dulles International Airport.  While my trip was for personal reasons it made me think deeper about how transportation is such a significant part of our lives. For an investor a combination of the IYT fund and the FAA fund will deliver exposure to transports as well as a group of international transportation service providers.  More information about global issues surrounding transportation can be found at http://www.internationaltransportforum.org/.

Transportation ETFs 
 
 

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