U.S. Global Investors, the issuer behind the thematic favorite U.S. Global Jets ETF (JETS), is reviving the ticker formerly used by Invesco for a fund covering shipping companies.
The U.S. Global Sea to Sky Cargo ETF (SEA) launched on the NYSE Arca Thursday. It will start with an expense ratio of 0.60% for the first $100 million in assets under management and 0.70% for funds added after that mark.
The waiver is in place until the end of April 2023. After that time, the fund will charge a pricey 1.90% in fees on all of its assets.
SEA follows an in-house index that allocates 70% to marine shipping companies and 30% to air freighters across a global investable universe, limiting itself only to companies with at least $100 million in market capitalization and $5 million in average trading volume.
The index rebalances quarterly based on cash flow return on invested capital, market capitalization and its earnings to price ratio.
Shipping costs soared in 2021 due to a combination of sustained consumer goods demand and the stop-start nature of the pandemic creating logjams at ports.
The Breakwave Dry Bulk Shipping ETF (BDRY) rode that price squeeze to a staggering 283% gain during 2021, performing better than any other fund on the U.S. market last year. However, it’s not a direct comparison to SEA as it tracks an index of shipping contracts and charges 3.76% on top of the tax implications of being a commodity pool.
The SonicShares Global Shipping ETF (BOAT), which tracks an index exclusively of maritime shipping equities, gained 23.18% since its launch in August but trailed the S&P 500 by more than 5%. With an expense ratio of 0.69%, BOAT charges 9 basis points more than SEA’s current price for similar exposure to the maritime shipping industry, until SEA’s 90 basis point waiver expires.
Contact Dan Mika at [email protected], and follow him on Twitter