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Supply-chain chaos drives new ETF filings to ride shipping boom

(Bloomberg) — ProShares is building a new ETF to take advantage of the chaos in global supply chains, even as bottlenecks show signs of easing and commodities fall below records.

The issuer is planning to launch a supply chain logistics exchange-traded fund that will track indices of US and foreign companies involved in shipping goods and raw materials, according to a Tuesday filing.

If approved, the fund would join products to ride out the logistical snafus in the pandemic, which has pushed up transportation and freight costs – many still have legs in the inflation-stimulated trade on Wall Street project.

The Breakwave Dry Bulk Shipping ETF (ticker BDRY) was one of the best-performing ETFs in the US last year, delivering nearly 293% returns. Still, the fund, which tracks a basket of dry bulk freight futures, has had an early 2022 run and is down about 20% so far.

According to James Seifert, ETF analyst at Bloomberg Intelligence, the proposed ProShares ETF will focus on shipping equities, providing investors with a distinct business approach to BDRY.

“If ProShares can get this ETF to pull in enough assets to be profitable, they can potentially leave it alive for a long time in the future if future supply chain or logistics issues ever arise,” he said.

The fund’s gauge — the FactSet Supply Chain Logistics Index — includes trucking, rail and ocean shipping companies, as well as autonomous drone makers and transportation software companies.

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