You can invest in companies that move people and products by buying shares of exchange-traded funds (ETFs) that specialize in the transportation sector. The transportation sector is one of the most broadly diversified with industrial companies representing airlines, railroads, truckers, equipment and leasing stocks, and logistics companies.
In 2017, these companies saw some unique challenges resulting from natural disaster effects, specifically from hurricanes, slowing sales and revenue across the sector. However, the recovery has the sector poised for new potential gains in 2018. Despite some lost revenue, transportation stocks did fairly well and this sector is a top contributor to the economies GDP growth which is expected to continue increasing in 2018.
Oil prices will be a key factor for transportation. Trending higher, the commodity’s price generally has an influence on transportation expenses and specifically fuel prices. In 2017, Brent crude oil edged above $60 and is expected to continue gaining in 2018. (See also: What Determines Oil Prices?)
ETFs offer some protection because they are invested in a variety of companies. Given the broad ranging factors affecting the industry, ETFs may specifically be a prudent investment for investors seeking transportation exposure. We have selected three of the top performing ETFs in the transportation sector through December 29, 2017.
Net Assets: $5.3 million
Dividend Yield: N/A
YTD Return: N/A
Expense Ratio: 1.08%