NEW YORK (TheStreet) -- The Guggenheim Shipping ETF (SEA), which had a stormy launch, appears to be a safer proposition these days and should be a good way to invest in the global economic recovery when it comes.
Originally named the Claymore Delta Global Shipping Index ETF, this fund had fallen 70% within a couple of months of its launch on the then slumping global economy. The ETF also wasn't helped by its 35% weighting in Greece.
Back then, the four largest holdings in the fund were Euroseas Limited (ESEA), Seaspan (SSW), Diana Shipping (DSX) and DHT Maritime (now known as DHT Holdings (DHT)). All four stocks got crushed in the great recession and never really came back.
Since then, Claymore has become Guggenheim, and in July 2011 the company changed the index underlying the shipping fund from Delta Global Shipping Index to the Dow Jones Global Shipping Index.This dramatically changed the makeup of the fund. Since the change, the fund has been far less volatile, and the companies populating the underlying index are more mature and more stable. Greece now only has a 9% weighting. The largest country in the fund is Denmark, with a 22% weighting. It's followed by the U.S., with 20%; Hong Kong, with 14%; and Japan, with 13%. Other countries have smaller weightings. The largest names in the fund are all foreign and include AP Moeller Maersk at 18% of the fund; Nippon Yusen and Mitsui OSK Lines, which each have a 7% weighting; Sembcorp Marine from Singapore, with 6%; and Cosco Pacific, with 5%. It is very common for very specialized funds to have 15%-20% in just one stock. This is not necessarily a bad thing, but it does require investors to spend time studying the large holding in any fund. In this case that's A.P. Moeller Maersk. The company is easy to follow. It's a relative mega-cap in Denmark, trades with a price-to-earnings ratio of 14, yields 2% and has been in an uptrend for the past few months. Anyone interested in buying SEA needs to take the time to learn about Maersk, because it would make no sense to have a negative opinion on that stock and still buy the fund.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV