A Shipping ETF is a fund that invests in maritime shipping companies. If you want to invest in the shipping sector of the transportation industry, you may want to consider investing in a shipping ETF. A shipping ETF typically invests in shipping company stocks but they may also invest in other securities such as bonds, notes, preferred stocks, and even synthetic securities. In most cases, a shipping ETF will reduce diversification risk since your investment is spread among several different shipping companies.

Claymore Shipping ETF

One example of a shipping ETF is SEA. SEA is an exchange-traded fund that invests in stocks and other securities of maritime shipping companies.

From its introduction in 2008 until April 2010, this particular shipping ETF was known as the Claymore/Delta Global Shipping Index ETF, and it traded under the ticker symbol SEA. This ETF still trades under the symbol SEA, but its name has been changed to the Guggenheim Shipping ETF.

You can buy shares of a shipping ETF in your brokerage account or individual retirement account (IRA). Because exchange-traded funds are different from mutual funds, prices of ETF shares fluctuate during the day as the shares are traded on stock exchanges. Depending on the perceived value of an ETF security's holdings and the consequent investor demand for the shares, prices may move up or down during the day just like stock prices.

Buying an ETF is much easier than buying individual shipping stocks. You just look up the recent shipping ETF price and decide how many shares you want to buy. The Guggenheim ETF, for example, has a fairly low expense ratio which is helpful toward implementing a low cost investment strategy.

This shipping ETF is transacted in dollars (USD) so fluctuations in the value of the US dollar are expected to affect the price of the shares.