Trucking and Logistics Index: On the Road to Profits

The accompanying table (click to enlarge) presents statistics and the seven largest companies by market cap in the ETF Innovators (ETFI) Global Trucking & Logistics Index. The top 35 rated companies in the index managed to post a gain of 1.5% in the past year, compared to losses of 34.5% for the S&P 500 SPDR ETF (SPY), 23.8% for iShares Dow Transports (IYT), and 24.9% for PowerShares Progressive Transport Portfolio (PTRP) (since its 9/23/08 market launch).

The index includes a total of 66 companies, with 53 eligible for inclusion (with market caps over the $150M minimum) in a new ETF idea which selects the top 35 rated stocks on a semi-active basis with quarterly rebalancing. The index includes companies which derive the majority of their revenue from the following activities:

1.) logistics and management support services for transportation companies

2.) all types of land-based, roadway freight forwarding + freight transportation services

3.) mail + package delivery and transportation services

The seven largest companies by market cap in the index include United Parcel Service (UPS), FedEx (FDX), Deutsche Post (DPSTYF.PK), C.H. Robinson Worldwide (CHRW), Kuehne + Nagel (Switzerland: KNIN), TNT (TNTTY.PK), and Expeditors International (EXPD).

The equally-weighted index is based on a rating system which factors in each company's market cap weight, revenue weight, historical stock price return, and other factors to choose the Top 35 rated components on a semi-active basis each quarter as a new ETF idea. Less than half of the 66 companies in the index (31) maintain U.S. listings for their stocks, making it a globally diversified index for the trucking and logistics industry.

Comments

[donzelion:]

In the past, "logistics" meant longshoremen moving cargo off of boats (or their equivalent doing the same on railroads or trucks) - but today, logistics and supply chain management seem to be undergoing profound changes.

So many of the cool gadgets and gizmos of the last decade have immediate applications in the logistics sectors (GPS, satellite imaging, fuel efficiency mechanisms, software advancements, "cloud computing," mobile telecom, etc.) that anticipating major changes makes sense. BUT so much over-investment seems to have flooded in during '06-07 that I sense a mini-dotcom effect for a while yet, at least until the technologies are adopted and the companies return to profitability (probably during the early phase of a recovery).

Jan 17 01:50 AM