Specialist sector and thematic ETF issuer SonicShares has launched a new ETF providing pure-play exposure to companies engaged in maritime shipping.
The fund offers a play on the reopening trade by targeting companies engaged in maritime shipping.
The SonicShares Global Shipping ETF (BOAT US) has been listed on NYSE Arca through private-label ETF platform Tidal ETF Services.
According to SonicShares, by targeting the global shipping industry, BOAT enables investors to express a bullish view on the anticipated recovery of the global economy with shipping playing a critical role in the manufacturing, distribution, and retail sectors.
Paul Somma, Founder of SonicShares, said: “Shipping tends to be an unseen activity for most of us, but about 90% of what’s in our homes was shipped here from overseas. It’s one of the many reasons why shipping is considered both the backbone and bellwether of the global economy.”
Methodology
The fund is linked to the Solactive Global Shipping Index which selects its constituents from an initial universe primarily consisting of developed market stocks. Eligible inclusions must have market capitalizations greater than $250 million and average daily trading volumes above $1m.
The methodology harnesses FactSet’s Revere Business Industry Classification System (RBICS) to screen for firms classified to container shipping, dry bulk shipping, crude oil shipping, and natural gas shipping industries.
Constituents are weighted by float-adjusted market capitalization subject to an individual cap of 5% on the eight largest stocks and an individual cap of 4% on any other security. Reconstitution and rebalancing occur semi-annually.
The index currently contains 46 names with just under half (46%) of the weight allocated to companies listed in the US, a fifth (19%) to firms in Japan, and the remainder to stocks listed in Europe.
Notable positions include Mitsui O.S.K. Lines (10.4%), Hapag-Lloyd (8.4%), K Line (7.5%), A.P. Moller – Maersk (6.5%), Matson (5.7%), Atlas (5.3%), and DFDS (5.0%).
The ETF comes with an expense ratio of 0.69%.
The fund offers an alternative to the Breakwave Dry Bulk Shipping ETF (BDRY US) which is the only other ETF currently targeting the shipping industry. BDRY employs a different approach, however, by going long futures contracts for dry bulk shipping space – primarily used to transport major hard commodities such as iron ore, coal, grain. This fund, issued by ETF Managers Group, currently houses $90m in assets and comes with a punchy expense ratio of 3.32%. It is one of the best-performing ETFs year-to-date with a return of 228.6%, as of 14 August 2021.
SonicShares made its ETF debut in May 2021 with the introduction of the SonicShares Airlines, Hotels, Cruise Lines ETF (TRYP US). TRYP tracks the Solactive Airlines, Hotels, Cruise Lines Index offering a play on the global reopening trade by targeting firms operating within major travel industries. It comes with an expense ratio of 0.75%.