Wednesday, March 14, 2018

U.S. Fund Manager to Launch First ETF for Shipping Futures

We don't have much interest in packaged products but do want to note the further financialization of the space.
Reuters via gCaptain, March 8:
U.S.-based fund manager Breakwave Advisors is launching the first exchange-traded fund (ETF) focusing on freight futures, reflecting growing investor interest in shipping as it emerges from a near-decade long crisis, a regulatory filing showed.

Around 90 percent of traded goods by volume are transported by sea and global shipping sectors – such as dry bulk – are on course for a recovery this year, according to investors and analysts, prompting speculators to look for ways to trade.

Freight forward agreements (FFA), which allow investors to take positions on freight rates at a point in the future, are being seen as viable betting instruments.

Breakwave Dry Bulk Shipping ETF said in a prospectus filed to the SEC this week that its fund would provide investors with exposure to the daily change in the price of dry bulk FFAs by tracking the performance of a portfolio of nearest calendar derivatives contracts.

ETFs are a popular vehicle for tracking baskets of stocks, futures and derivatives, among other financial instruments, for much lower fees than actively-traded funds.

Sources familiar with matter said the ETF, the first of its kind in shipping futures, was expected to be launched in the coming weeks....MORE
Still waiting  for the Baltic exchange to get their Baltic Dry Index futures rolled out.
Shipping (hedging; speculating; gambling): "Baltic Dry Index to Become Tradable After Benchmark Changes"
"Modeling volatility of Baltic dry bulk freight index"

Shipping: "In pursuit of an LNG freight derivatives market"