A series of economic data indicators in the United States continue to strengthen, indicating an improvement in the economy. Data released by the U.S. Census Bureau showed that retail and food service sales increased by 9.8% month-on-month in March and 27.7% year-on-year; in addition, the April Consumer Confidence Index also rose from 109.0 in March to 121.7.
Two experts from the Assistant Director of the Bureau of Research and Technology Steven Polzin and Tony Choi, who came from the Office of the Assistant Director of the U.S. Research and Technology, emphasized in recent research that transportation is a necessary foundation for human economy and society, and the economy must return to the original normal living and safe working environment from the epidemic, and the demand for various means of transportation will increase.
The highly-watched Dow Jones Transportation Average has risen 22% this year. This index is mainly used to measure the performance of large and well-known companies in the US transportation industry. This index was founded in July 1884 by Charles Dow and was originally called the Dow Railroad Average, because at the end of the 19th century, the most important transportation department in the United States was the railway. Charles Dow is the co-founder of the Wall Street Journal and Dow, which was acquired by S&P Global in 2011.
We are going to focus on two ETFs focusing on the transportation industry, which may benefit from further economic recovery.
, iShares Transportation Average ETF
- Current price: US$268.92
- 52 week range: 133.08 - US$270.46
- dividend yield: 0.77%
- fee ratio: 0.42% / year
iShares Transportation Average ETF (NYSE:IYT) invested in American Airlines, Rail and Trucks and started trading in October 2003 with a net worth of approximately US$2.2 billion.
(IYT weekly chart comes from Yingwei Finance Investing.com)
IYT holds 20 stocks, tracking the Dow Jones Transportation Average Index. Among them, individual stocks in the railway industry accounted for the highest proportion, at 36.19%, followed by air cargo and logistics (27.38%), truck transportation (20.15%), aviation (10.88%) and sea transportation (5.2%).
In terms of the company, IYT's top ten holdings account for about 77% of the total funds, including railway transportation groups Kansas Southern Railway (NYSE:KSU) and Norfolk Southern Corporation (NYSE:NSC), as well as express service companies FedEx (NYSE:FDX), UPS Express (NYSE:UPS), etc.
IYT has returned 22% so far this year and has just hit a new high in recent times. Given that short-term profit-taking has just experienced rapid rises in recent weeks, there is a high possibility of short-term profit-taking, but its long-term price is still expected to rise.
It should be noted that many analysts on Wall Street believe that when IYT and other sector stocks participate in the market rebound together, it is a signal that the market is bullish.
, SPDR S&P Transportation ETF
- Current price: $88.75
- 52 week range: $42.95 - $90.35
- Dividance yield: 1.37%
- Fee ratio: 0.35%
SPDR® S&P Transportation ETF (NYSE:XTN) also invests in transportation stocks, including air cargo and logistics, airlines, airport services, road and rail, sea, sea ports and services, rail and truck transport.
(XTN weekly chart comes from Yingwei Finance Investing.com)
XTN tracks the S&P Transportation Select Industry Index, which currently holds 41 stocks. The fund began trading in January 2011 with a net worth of US$672 million. In the industry, trucking accounts for the highest share, at 33.11%, followed by aviation (24.29%) and air cargo and logistics (23.32%).27% of its funds are concentrated in the top ten stocks, including car rental company Avis (NASDAQ:CAR), a company that provides aircraft and aviation operations services, Atlas Airways Global Holdings (NASDAQ:AAWW), a freight group XPO Logistics Inc (NYSE:XPO), which provides supply chain solutions, and logistics company Konjie International Logistics (NASDAQ:EXPD).
XTN shares have risen 24% so far this year and hit an all-time high in April, and like IYT, profit-taking could put downward pressure on the fund. However, in the long run, we are still optimistic about the industry and investors can pay attention to the fund at around $85.
