With the strike between key U.S. ports and the International Longshoremen’s Association continuing, investors may want to revisit the transportation ETFs available to them. While not all directly relate to the strike and its impacts, the category offers some impactful options. Whether that specifically means ETFs focused on cargo, or ETFs focused on passengers nearing the holidays, the space offers some potential opportunities.
The SPDR S&P Transportation ETF (XTN ), for example, has a slight lean toward passengers. Per ETF Database data, 82.4% of its holdings fall into the transportation sector. That includes both major passenger names like Lyft (LYFT) and freight transportation logistics names like C.H. Robinson (CHRW). XTN charges a 35 basis point (bps) fee for its approach. The fund has returned 6.8% over five years, beating its ETF Database Category average.
Intriguingly, the strategy stands out in transportation ETFs thanks to its equal-weight approach. That could make it an intriguing, balanced play amid the strike. At the same time, per VettaFi head of research Todd Rosenbluth, it could benefit from recent macroeconomic changes.
“XTN is equally weighted, so it has more exposure to those small and midcap companies … that could benefit from the economic efforts from the Fed cutting interest rates,” he said during a segment on Yahoo Finance.
Rosenbluth also pointed out the iShares U.S. Transportation ETF (IYT ) as another option. The fund charges a slightly larger fee than XTN’s — 39 bps. It provides a cap-weighted approach, Rosenbluth noted, though it has a slightly greater focus on infrastructure like railroads and freight via trucking. IYT has returned 9.2% over the last five years, also beating its own averages.
Together, the duo presents two notable options in the world of transportation ETFs. For investors looking at potential opportunities for transportation firms filling in the port strike gaps, the pair of funds could intrigue.
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