Shipping ETF Up 275% Gets a Sibling Looking to Clean Up Its Mess
(Bloomberg) -- One of the best-performing exchange-traded funds in the U.S. this year is getting a younger sibling that wants to clean up after it.
The Breakwave Dry Bulk Shipping ETF (ticker BDRY) is being joined by the Breakwave Sea Decarbonization Tech ETF (BSEA), according to ETF Managers Group. The new product, launching Tuesday, will invest in global companies that develop technologies to reduce maritime carbon emissions.
BDRY has been a star in 2021, surging 275% as supply chain issues drive up the cost of shipping. ETFMG says it’s looking to combine that boom with growing demand for products that meet higher environmental standards.
“It’s such a hot theme,” said Sam Masucci, ETFMG’s chief executive officer. “To be able to marry that to carbon technology, I don’t think there’s a better time to launch it.”
The new fund carries a 0.75% expense ratio and tracks the Marine Money Decarbonization Index, which Breakwave Advisors helps to maintain.
The gauge generally includes between 40 to 60 companies, with about 20 of the industry’s leading businesses comprising 80% the index. Products can range from batteries and new types of fuel to software that optimizes routing.
“You don’t really know today which is going to be the technology for shipping,” said John Kartsonas, founder and managing partner at Breakwave. “What you’re trying to do is invest in companies that are developing these new technologies in shipping and hopefully we’ll see who is going to be the winner down the road.”
The launch comes amid a wider boom in thematic ETFs, which target hot trends like innovation or robotics. They’ve now amassed about $168 billion of assets, up from $22 billion in 2016.
Only two U.S. exchange-traded products have performed better than BDRY so far this year, both of them tiny commodity vehicles that have barely traded.
“Breakwave has built a very nice brand along with ETF Managers in that space,” Masucci said. “We think that will accrue also to this new fund.”
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