Lucania Investments launched its second ETF on Wednesday, seeking to track a global shipping industry whose tide has risen due to pandemic-related supply chain tightening.
The SonicShares Global Shipping ETF (BOAT) debuted on the NYSE Arca with an expense ratio of 0.69%. It’s issued by Toroso Investments on behalf of Lucania under the SonicShares brand name, and joins the SonicShares Airlines, Hotels, Cruise Lines ETF (TRYP) in the company’s stable of thematic funds.
BOAT tracks the Solactive Shipping Index, which is composed of 56 domestic and international shipping companies with at least $250 million in market capitalization, and a three-month average daily trade volume of $1 million. The index tracks companies focused on cargo shipping, dry-bulk shipping, and oil and natural gas transport. It reconstitutes biannually.
The fund is the sole equities-based ocean shipping ETF on the market since the Invesco Shipping ETF (SEA) stopped trading in February 2020.
The shipping industry as a whole is fighting to keep up with surging consumer demand as countries lift restrictions on in-person economic activity as shots go into arms, with backups at ports of entry causing logistical delays for inland transport hubs.
SonicShares Founder Paul Somma told ETF.com that the larger consumer behavior changes accelerated by the pandemic is a boost to BOAT’s long-term capital appreciation goals, even though pressure on global supply chains is bound to fall from the current reopening highs.
“One driver that will not go away is e-commerce, and the supply chain that that business relies on will require efficient and cost-effective shipping,” he said. “That’s another long-term factor for this ETF.”
The focus on overseas shipping puts BOAT alongside the Breakwave Dry Bulk Shipping ETF (BDRY) as the two ETF options for investors looking for exposure to the industry, with one major caveat.
BDRY follows dry-bulk freight contracts that reflect how much it costs to ship raw agricultural and industrial products. As the world started to reopen in the spring and summer due to the deployment of COVID-19 vaccines, demand for goods of all kinds rose, in turn driving up demand for raw materials beyond the capabilities of the dry-bulk fleet currently at sea.
That spike in prices made BDRY the best-performing ETF so far this year, with returns of nearly 250% year-to-date.