3 Transportation ETFs Picking Up Steam

June 12, 2014

2. iShares Transportation Average ETF (IYT | B-62)

IYT provides exposure to the transportation industry through one of the most archaic weighting schemes in the market: price-weighting, whereby it holds a fixed number shares of the selected stocks and lets the changes in price determine their weights.

The catch is that price levels are rarely indicative of anything, so while IYT holds about 25 percent more FedEx than UPS, UPS’ market cap is slightly higher than that of FedEx.

The fund is up about 11 percent year-to-date, and its top three holdings include Pacific Union, FedEx and shipping transport company Kirby Corp.

“We’re positive on rails and trucking, and we think we’re at the cusp of signs of acceleration in the U.S. economy,” said Corridore. “Railroad companies are doing very well in expanding operating margins and that should continue.”

IYT_YTD_Perf

 

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