Tide Changing for Global Shipping ETF

The Claymore/Delta Global Shipping (SEA Quote) exchange-traded fund tracks the Delta Global Shipping index, which is made up of global shipping companies. As a global economic recession weighed down markets in late 2008, the ETF's value was cut to $9 in early December from $22 in early September.

But the tide for SEA in 2009 has been changing. For the three months ended May 27, the ETF's market return topped 42%, besting the MSCI EAFE index by more than 9%. While shipping rates were crushed by a drop in demand in late 2008, the tremendous demand for raw materials in emerging economies, coupled with the scrapping of an aging fleet, are compelling reasons to get on board SEA this year.

Shipping rates are reflective of the global economic trends and the changing desires of the consumer. For the most part, the international fleet is composed of a fixed number of ships, or "bottoms," so rates are dictated by supply and demand. When the demand for shipping is high, and there is more product than bottoms, shipping rates can go astronomically high. On the downside, when there are more bottoms than cargo, rates will drop to operating expenses. ...