ETF Rides Global Shipping Boom

NEW YORK (TheStreet) -- Positive earnings from maritime shipper DryShips(DRYS Quote) earlier this week have once again drawn investor attention to the shipping industry.

As a global economic recovery thaws frozen international trade and oil prices climb, the highly cyclical business of shipping seems to be on the upswing.

One way to gain exposure to the global shipping industry is through shares of the Claymore/Delta Global Shipping ETF(SEA Quote). This ETF is up nearly 30% year to date, as oil prices and China's emergence as a major steel producer help to spur the firms that make up SEA's underlying index.

Despite the oil bubble in 2008, a global commodity boom has been afoot for the last decade. As emerging markets have tackled the expansion of infrastructure, and China has stood ready to supply steel, all eyes have been on the most efficient way to transport these goods: global shipping.

SEA attempts to offer investors a diversified exposure to shippers, and not simply concentrate on firms that just ship dry bulk or oil. The 30 companies in SEA's portfolio include h dry-bulk and tanker shippers alike. Dry-bulk ships transport finished goods like sneakers and dry commodities like iron. SEA offers exposure to dry-bulk shippers like Diana Shipping(DSX Quote) and Navios Maritime(NM Quote) through its underlying portfolio.

The top component in SEA's underlying portfolio, however, is Teekay(TK Quote), a tanker company that operates 100 ships and owns or charters an additional 36 shuttle tankers that carry crude oil from offshore platforms in the North Sea. TK also has 17 ships that transport liquefied natural gas. In addition to TK, SEA's portfolio includes other tanker firms like Frontline(FRO Quote) and General Maritime(GMR Quote).