Don't Forget the Other DJT: The Transporation Index

Don't Forget the Other DJT: The Transporation Index

Transportation ETFs quietly get investors' work done, without any Truth Social-type hoopla.

Reviewed by: Ron Day
Edited by: Staff

Donald Trump's ticker from 29 years ago, when his ill-fated casino empire was a listed company, returned to the stock market this week.

This time the ex-president and presumptive 2024 Republican presidential nominee has applied his initials to his social media company, Trump Media and Technology Group Corp., which converted from a special purpose acquisition corporation, or SPAC. 

Hold on: isn't DJT already out there? 

Those initials are well-known to folks who follow indexes. DJT is the index ticker for the Dow Jones Transportation Average which, like its cousin, the Dow Jones Industrial Average, is a stock price-weighted index. DJT the index contains 20 stocks, and it has been around since 1896, a bit longer than the two leading candidates for U.S. President. 

ETFs and DJT

ETF investors may not be familiar with DJT the index, even if they actively follow many of the leading transportation companies in it. That’s one of the beauties of exchange-traded funds: they can bring indexes, young and old, to life in the form of intraday-liquid, listed securities.

Since it appears DJT will not end up being a symbol for a transportation ETF any time soons, let’s focus on the existing transportation funds, whose returns are starting to trump the return of the average S&P 500 stock as measured by the $53 billion Invesco S&P 500 Equal Weight ETF (RSP)

The largest transportation industry ETF, the iShares Transportation Average ETF (IYT), stands at under $1 billion in asset ($965 million). The fund divides its holdings between airlines, railroads, and trucking companies, in addition to logistics stocks and new-economy leaders such as Uber Technologies Inc.

IYT has bested RSP on a 12-month rolling basis (monthly moving return windows) for 10 straight months through February. And as March closes, it appears, as in the famous line from the movie This Is Spinal Tap, this one will go to 11. With one trading day remaining in March, IYT is up 23% to RSP’s 13% since March 31, 2023. In addition, IYT has posted a return double that of the Dow Jones Transportation Average, the index version of the 45th President’s initials.

Transportation ETFs Quietly Getting It Done  

Eight transportation funds are screening tool. IYT is the largest and only one other, the $189 million SPDR S&P Transportation ETF (XTN), oversees more than $50 million. So, it appears that transportation stocks, purchased in ETF form, have been under the radar for some time. And, while XTN tends to track the Dow Jones Transportation Average more closely than IYT, over time they have all ended up between 250% and 277% since their common inception date in early 2011.

So, based on the past, there are a few ways to “get there” using ETFs dedicated to the transport business. DJT may be the newest conversation piece for the stock market, but the transportation sector and its niche ETFs have been providing financial advisors with some strong talking points for a very long time. 

Rob Isbitts' Wall Street career spans 5 decades and multiple roles, all dedicated to providing clarity to investors by busting classic myths and providing uncommon perspective. He did so as a fiduciary investment advisor, Chief Investment Officer and fund manager for 27 years before selling his practice in 2020. His efforts now focus exclusively on investment research, education and multimedia. He started ETFYourself and SungardenInvestment to provide straightforward commentary and access to his investment intellectual property for portfolio construction, stocks and ETFs. Originally from New Jersey, Rob and his wife Dana have 3 adult children and have lived in Weston, Florida for more than 25 years.