SAN ANTONIO, TX, January 19, 2022 (GLOBE NEWSWIRE) — US Global Investors, Inc. ( GROW) (“the Company”), a registered investment advisory firm focused on specialized markets around the world, is pleased to announce that its US Global Sea to Sky Cargo ETF (SEA) will be traded on the New York Stock Exchange () tomorrow, January 20.
SEA strives to provide diversified access to the global ocean shipping and air freight industry. Composed of common stocks listed on stock exchanges in both developed and emerging markets around the world, the ETF uses a smart beta 2.0 strategy to identify the world’s most efficient ocean shipping and air freight companies. Cargo ships account for around 70% of the ETF, while air carriers account for around 30%.
SEA is the company’s third ETF after the US Global Jets ETF (JETS), launched in April 2015, and US Global GO GOLD and Precious Metal Miners ETF (GAU), which was launched in June 2017. SEA is an amalgamation of the firm’s long history of investing in global resources and commercial air travel.
Frank Holmes, the company’s CEO and chief investment officer, says this could be an attractive time for investors to consider the shipping industry.
“After years of boom-and-bust cycles, container shipping companies today seem to have benefited greatly from cheap pricing,” says Holmes. “While global demand has snapped back to pre-pandemic levels much earlier than expected, shipping companies have exercised discipline over capacity growth as too many ships and routes could oversaturate the market. As a result, shipping fees remained significantly elevated until the end of 2021. The average global fee for shipping a 40-foot container was nearly $9,300 in December 2021, a tripling from the same month last year, according to data provided by freight marketplace operator Freightos.”
Mr. Holmes is also Executive Chairman of HIVE Blockchain Technologies, Inc. (“HIVE”), a Canadian crypto mining company that relies on global shipping for its mining hardware.
“Over the past year, HIVE has spent millions of dollars on application-specific integrated circuits (ASICs), all shipped from China,” says Ms. Holmes. “It’s the kind of first-hand experience that helped inspire the idea for SEA.”
In addition to container shipping companies, SEA also wants to invest in air freight companies, whose volumes have risen well above pre-pandemic levels. According to the International Air Transport Association (IATA), global cargo tonne-kilometres (CTKs) increased by 9.4% in October 2021 compared to the same month in 2019.
SEA’s additional exposure to the air freight industry helps set it apart from its shipping ETF peers, many of which simply track an index.
“One shipping ETF in particular, which launched in August 2021, is an indexed fund that just so happens to have no exposure to air freight,” says Holmes. “I believe this is an oversight as demand for air freight services has increased dramatically since the pandemic began and consumers have shifted much of their spending from services to goods.
“It is important for investors to realize that global trade is a long-term, secular story centered on the global middle class. So far this century, trade has steadily increased with few interruptions as the number of people classified as middle class has continued to increase, particularly in China and India. Although the pandemic has halted household income growth in some regions, a staggering 1 billion Asians are expected to join the middle class by 2030, according to World Data Lab. Most of these new entrants will likely aspire to a middle-class lifestyle, which we expect will support shipping and logistics companies for years to come.”
To learn more about the Sea and Sky Cargo ETF (SEA), click here.
About US Global Investors, Inc.
US Global Investors’ history stretches back more than 50 years when it began as an investment club. Today, US Global Investors, Inc. (www.usfunds.com) is a registered investment adviser focusing on niche markets around the world. Headquartered in San Antonio, Texas, the firm provides wealth management and other services for US Global Investors Funds and US Global ETFs.
Forward-Looking Statements and Disclosures
Please review carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, a statutory prospectus and summary prospectus can be obtained by visiting it www.usglobaletfs.com. Read it carefully before investing.
Investing involves risk, including the possible loss of capital. Shares of an ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV, and are not redeemed individually from the fund. Broker commissions reduce returns. Because the fund focuses its investments in certain industries, the fund may be subject to greater risk and volatility than a portfolio that represents a broader range of industries. The fund is undiversified, which means it may concentrate more of its assets in a smaller number of issuers than a diversified fund. The Fund invests in foreign securities, which involve greater volatility and political, economic and currency risks and different accounting policies. These risks are greater when investing in emerging markets. The Fund may invest in the securities of smaller capitalization companies, which may be more volatile than funds that invest in larger, more established companies. The fund’s performance may deviate from that of the index. Because the Fund may employ a representative sampling strategy and also invest in securities not included in the Index, the Fund may experience greater tracking error than a Fund that attempts to track an index. The fund is not actively managed and may be affected by a general decline in market segments related to the index. Airlines can be adversely affected by a downturn in economic conditions, which can result in lower demand for air travel, and can also be significantly affected by changes in fuel prices, labor relations and insurance costs.
Smart beta refers to a type of exchange-traded fund (ETF) that uses a rules-based system to select investments to include in the fund’s portfolio. Positive cash flow indicates that a company is increasing its cash reserves, allowing it to reinvest in the company, return money to shareholders, or pay off future debt payments. A tonne-kilometre is a unit of measurement of freight transport representing the transport of one tonne of goods (including packaging and tare for intermodal transport units) by a given mode of transport over a distance of one kilometer. The Freightos Baltic Daily Index measures the daily price movements of 40ft containers on 12 major sea routes. It is expressed as the average price per 40ft container.
The outbreak of the COVID-19 pandemic and the resulting measures to contain or slow the spread are having a significant adverse impact on the global and domestic economy, financial markets and industry, including airlines. US Global Investors continues to monitor the impact of COVID-19, but it is too early to determine the full impact this virus could have on commercial aviation. Should this emerging macroeconomic risk continue for an extended period, it could have an adverse material financial impact on the US Global Jets ETF.
Distributed by Quasar Distributors, LLC. US Global Investors is the investment advisor to SEA.
All opinions expressed and data provided are subject to change without notice. Opinions are not guaranteed and should not be considered investment advice.