Demand growth has been strong
High barriers to additional capacity
Favorable pricing power
Stocks have performed well
We believe we’re seeing a very large, synchronized run-up in global trade as economies reopen and fiscal stimulus measures ignite consumption. Recent port congestion is a direct result of strong demand growth that has exceeded ports’ capacity to handle that growth.
Trade has been increasing for decades alongside the expansion of the global middle class.
Shipping companies can charge higher freight rates to compensate for delays, reroutes and other disruptions
In 2022, the world fleet grew only 3.1%, far below demand growth
Growing tensions in the Red Sea, a crucial artery for international trade, have sparked a significant shift in the shipping industry. This shift, we believe, offers a compelling case for global shipping stocks. The detour has had an immediate impact: soaring container freight rates. Since tensions escalated last month, global rates have nearly doubled, a clear indicator of the increased costs incurred by carriers and passed on to exporters. Shares of shipping companies have also jumped as a result.
In order to purchase one of U.S. Global Investors’ ETF products, you will need to start by opening a brokerage account with a broker-dealer. If you already have a brokerage account, simply contact your broker-dealer and let them know the ticker symbol of the ETF you are interested in. You can also make a purchase online through your broker’s website. Simply find the area labeled for trading stocks and ETFs and enter the ticker symbol of your choice.
Unlike mutual funds, exchange traded funds can trade throughout the day just like a stock. Because you buy and sell shares of an ETF on an exchange, price is determined by supply and demand throughout the day, not just at the end of the trading day.
U.S. Global Investors’ ETF products are available through various channels including broker-dealers, investment advisers, and other financial services firms, including:
Robinhood
Fidelity
E*Trade
Vanguard
Charles Schwab
SEA seeks to track the performance, before fees and expenses, of the U.S. Global Sea to Sky Index. The Index uses a smart beta 2.0 strategy, meaning it combines the benefits of passive investing and the benefits of active investing. This strategy helps determine the most efficient marine shipping, air freight and courier, and port and harbor companies in the world.
All holdings must have a minimum market cap of $100 million and must have an average three-month dollar traded value of $5 million. Companies should be listed as either Air Freight/Couriers or Marine Shipping. You cannot invest in an index.
With SEA, investors gain exposure to domestic and global shipping, cargo and logistics companies, which specialize in the shipment of products across the world. Examples of such products include oil, cars, grains, coal and finished goods.
| Fund Details | ||
|---|---|---|
| Ticker | SEA | |
| CUSIP | 26922B865 | |
| Intraday NAV | N/A | |
| Gross Expense Ratio | 3.99% | |
| Net Expense Ratio* | 0.60% | |
| Inception Date | 1/20/2022 | |
| Number of Holdings | 29 | |
| Stock Exchange | NYSE Arca | |
by a combined ranking of market capitalization, cash flow return on invested capital, cashflow- to-price and earnings-to-price get a 5% weighting each. Market capitalization must be at least $400 million.
by a combined ranking of market capitalization, cash flow return on invested capital, cashflow-to-price and earnings-to-price get a 4% weighting each. Market capitalization must be at least $300 million.
by a combined ranking of market capitalization, cash flow return on invested capital, cash-flow-to-price and earnings-to-price get a 2% weighting each. Market capitalization must be at least $100 million.
by a combined ranking of market capitalization, cash flow return on invested capital, cash-flow-to-price and earnings-to-price each get a 3% weighting each. Market capitalization must be at least $200 million.
*Pursuant to a contractual operating expense limitation between U.S. Global Investors, Inc., the Fund’s investment adviser (the “Adviser”), and the Fund, the Adviser has agreed to waive its management fees and/or reimburse Fund expenses to ensure that Total Annual Fund Operating Expenses do not exceed 0.60% for the first $100 million of the Fund’s average daily net assets and 0.70% for net assets greater than $100 million, through at least April 30, 2024, unless terminated sooner by, or with the consent of, the Trust’s Board of Trustees.
We look forward to discussing the potential benefits of the U.S. Global Sea to Sky Cargo ETF (SEA).