Transportation ETF Likely To Keep Rolling (IYT, FDX)

Transportation giant FedEx Corp. (NYSE:FDX) recently raised its full-year forecasts despite a drop in profits and an increase in revenues in the second quarter, providing positive price support to the iShares Dow Jones Transportation ETF (NYSE:IYT). 

The Memphis-based company reported strong gains in package shipping internationally and raised its expectations for domestic shipments on expected US GDP growth and positive macroeconomic trends.  The increased revenue that the company witnessed was primarily driven by increases in online and catalog shopping by US consumers, which require shipping to either a store front or directly to the consumer’s front door.  A second force that contributed to the 12 percent year-over-year increase in revenue came from the record high exports from the Asia Pacific region that was seen. 

As for the near-term future, shipping trends are expected to remain favorable as retailers are showing a low inventory-to-sales ratio, or low investment in inventory compared to monthly sales and are expected to bump up inventory-to-sales ratios as the economy continues to show signs of prosperity and consumer spending increases. 

As mentioned above, the iShares Dow Jones Transportation ETF (NYSE:IYT) is expected to be influenced by the aforementioned as that it boasts FedEx as its top holding at 10.32% of its total asset base. 

Written By Kevin Grewal From ETF Tutor  Disclosure: No Positions  

Kevin Grewal is the founder, editor and publisher of ETF Tutor and serves as the editor at, where he focuses on mitigating risk and implementing exit strategies to preserve equity. Additionally, he is the editor at The ETF Institute, which is the only independent organization providing financial professionals with certification, education, and training pertaining to exchange-traded funds (ETFs). Prior to this, Grewal was a quantitative analyst at a small hedge fund where he constructed portfolios dealing with stock lending, exchange-traded funds, arbitrage mechanisms and alternative investments. He is an expert at dealing with ETFs and holds a bachelor’s degree from the University of California along with a MBA from the California State University, Fullerton. He is a contributing author on The Street – his articles can also be found published on various sites including Yahoo! Finance, The Globe and Mail , Daily Markets, MSN Money, Seeking Alpha, Fidelity Investments, Traders Library, and Minyanville.


 iShares Dow Jones Transportation ETF (NYSE:IYT) 

The investment seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones Transportation Average index. The fund invests at least 90% of assets in securities of the underlying index and in depositary receipts representing securities of the index. The underlying index measures the performance of the transportation sector of the U.S. equity market. It includes companies in the following primary groups: airlines, trucking, railroads, air freight, transportation services, and industrial services. The fund is non-diversified.

Top 10 Holdings (79.7% of Total Assets)  
Company Symbol % Assets
Burlington Northern Santa Fe Co (BNI) 13.68
FedEx Corporation Common Stock (FDX) 10.38
Union Pacific Corporation Commo (UNP) 10.16
C.H. Robinson Worldwide, Inc. (CHRW) 8.39
United Parcel Service, Inc. Com (UPS) 7.96
CSX Corporation Common Stock (CSX) 6.74
Norfolk Souther Corporation Com (NSC) 6.68
Expeditors International of Was (EXPD) 5.37
Kansas City Southern Common Sto (KSU) 5.33
Landstar System, Inc. (LSTR) 5.01

Leave a Reply

Your email address will not be published. Required fields are marked *