Claymore First to Land Global Shipping ETF

The Claymore/Delta Global Shipping Index ETF (SEA) launched on the NYSE Arca exchange Monday. According to the press release [PDF], SEA will be the "First ETF to Provide Investors Access to 30 Companies in Fast Growing Shipping Sector." The fund will seek to replicate, before expenses, the performance of the Delta Global Shipping Index, by investing a minimum of 90% of its assets in Index components.

The expense ratio is listed at 0.65%, though a footnote on Claymore's website states:

The Fund’s expense ratio for its initial fiscal year is based on an assumed average asset level of $50 million. If assets are lower than $50 million, the expense ratio will be higher due to the inclusion of offering costs during the first 12 months of operations. If average assets of the Fund exceed $50 million during the Fund’s first 12 months, the expense ratio may be lower.

SEA had approximately $4 million in assets through its first day of trading (Monday). Dividends will be paid out quarterly, though a distribution has yet to be specified. According to Index Universe's Heather Bell, the underlying index's yield is upwards of 8%.

Until now, investors wanting to gain exposure to the global shipping industry had no real ETF option, with a few shipping stocks included in the iShares Dow Jones Transportation Average (IYT).

According to Chip Hanlon, Chairman and CEO of Delta Global Indices, which oversees SEA's underlying index:

The maritime shipping industry has been growing exponentially thanks to increased participation in global trade by emerging economies like China, India and Brazil... With approximately 80% of all shipments being transported by water, the increase in demand has pushed shipping activity up considerably and gained significant interest among investors.

That being said, very few of the fund's holdings are from emerging economies (though their shipping destinations increasingly are for emerging markets). 35% of SEA's holdings are Greek, with U.S. shippers a distant second, comprising 19% of the fund. Chinese and Hong Kong-based shippers make up around 6% of SEA.

Here are SEA's top holdings (courtesy of Claymore):

One side note: With volume of just 2,525 shares in its first day of trading and a total float of 160,000, traders will need to pay special attention to liquidity issues, at least until SEA washes up on more investors' radar screens.

• SEA Fund Overview
• SEA prospectus
  
• More on choosing the right ETF

Comments

[SA Editor J...:]

As a follow up to the last paragraph, since that first day of trading, volume has picked up significantly, topping out at 121,382 on Wednesday.

2008 Aug 29 09:46 AM