Up 3,600%, this freight fund has posted the biggest gains of all on Iran war oil shock
The U.S.-Iran war has caused oil prices to surge and added to freight stress from tariffs, but no shipping trade has boomed quite like crude oil tanker futures.
TL;DR
- The Breakwave Tanker Shipping ETF (BWET) has achieved a 3,600% year-to-date gain, making it the best-performing non-levered fund in the U.S.
- Geopolitical tensions, particularly the U.S.-Iran conflict affecting the Strait of Hormuz and Houthi rebel actions in the Red Sea, are driving up oil tanker shipping costs.
- Global trade route disruptions are exacerbated by tariffs and environmental factors like drought affecting ports in Panama and Europe, leading to a shortage of ships.
- Shipping companies are experiencing record profits as freight rates increase due to high demand and limited supply.
- While relief is expected in 18-36 months with new vessels, current disruptions are anticipated to continue inflating shipping prices in the near future.
- Other freight funds like the U.S. Global Sea to Sky Cargo ETF (SEA) and SonicShares Global Shipping ETF (BOAT) offer broader exposure to these trends.
- The BWET fund's gains are primarily tied to oil tanker futures and geopolitical events, not directly to oil prices or volumes.
- The fund's investment structure and high expense ratio make it more suitable for tactical traders than long-term investors.
- Signs of diplomatic progress exist, but uncertainty remains, and the fund's performance is directly linked to the duration and intensity of shipping disruptions.