The Baltic Dry Index: A Solid Gauge of Global Economic Health

Tony Daltorio, Investment U Research

Funny how bulls and bears can look at exactly the same data, yet come to completely different opinions.

Take the Baltic Dry Index, which measures charter rates for ships carrying bulk commodities, for example.

Bulls use a high reading as proof that worldwide demand is picking up, whereas bears see it in a more pessimistic light. And with the index down nearly 50% from its June 3 high, bears claim it shows the fragility of demand in China, which drives much of the global demand for commodities.

But I believe the Baltic Dry Index is a key gauge of global economic activity. And it begs two questions. What is it doing and how can we make money from it?

The Baltic Dry Index & China’s Commodity Demand

The bulls

...

A new type of ETF is becoming popular, offering alternatives to traditional sector funds in targeting different types of companies.

(Editor’s Note: The following is an excerpt from an article in the Exchange-Traded Funds Report in July. Subscribers to ETFR can read the complete piece here.)

Specialty-sector ETFs—also called “thematic” ETFs—have emerged as a major force in the ETF industry.

These ETFs run the gamut of investment possibilities, but have one thing in common: They look past traditional size and sector designations to carve out new investment areas, often driven by a single investment thesis.

Clean energy, infrastructure, nuclear power—by our count, there are now more than 40 of these unique ETFs on the market, with more than $10 billion in assets under management.

Investment manager Van Eck Global has been one of the most successful companies in carving out a foothold among specialty ETFs. Its Market Vectors Gold Miners ETF (NYSE Arca:

...

With the recent transportation-themed launches, Claymore seems to be trying to develop a theme around the sector.

 

Claymore Securities is digging into the battered transportation sector more with plans to launch the first exchange-traded fund focusing on the airlines industry.

Next month, the ETF provider says the Claymore/NYSE Arca Airline ETF should be ready to trade. The announcement comes after Claymore earlier this year launched the Claymore/Delta Global Shipping ETF (NYSE Arca: SEA).

Both ETFs fit within the area of transportation portfolios, of which there are only a handful of ETFs. The biggest is the iShares Dow Jones U.S. Transportation (NYSEArca: IYT). IYT is the only transportation ETF with a significant level of assets.

The first-mover advantage does exist for the airlines ETF (as it did in the case of SEA), since there is no airline-specific ETF in the U.S.

Claymore's SEA has not seen the type of early success

...

An Index of Top Rated Global Transport Companies The accompanying table includes the top 50 rated companies and statistics for the ETF Innovators (ETFI) Global Transportation PerformIdex, which is structured as an equally-weighted index with quarterly updates from a database of 225 companies included in the five indexes below to provide broader investment exposure compared to existing ETFs such as iShares Dow Transports (IYT) and PowerShares Global Progressive Transport (PTRP). 1.) ETFI Global Air Transport 2.) ETFI Global Personal Transport 3.) ETFI Global Maritime Transport 4.) ETFI Global Railroad Industry 5.) ETFI Global Trucking & Logistics The index is structured to include 15 companies each from railroads + trucking & logistics, 10 companies from air transport, and five companies each ...