U.S. Global Investors, Inc. (Nasdaq: GROW) (“the Company”), a
registered investment advisory firm that focuses on specialized
markets around the world, is excited to announce that its
U.S. Global Sea to Sky Cargo ETF (SEA) will begin
trading tomorrow, January 20, on the New York Stock Exchange
(NYSE).
SEA seeks to provide diversified access to the global sea
shipping and air freight industries. Consisting of common stocks
listed on developed and emerging market exchanges across the globe,
the ETF uses a smart-beta 2.0 strategy to determine the most
efficient sea shipping and air freight companies in the world.
Cargo ships represent approximately 70% of the ETF, while air
freight companies represent roughly 30%.
SEA is the Company’s third ETF following the U.S. Global Jets
ETF (JETS), launched in April 2015, and U.S. Global GO GOLD and
Precious Metal Miners ETF (GOAU), launched in June 2017. SEA
represents a fusion of the Company’s longstanding experience
investing in the global resources and commercial air travel
industries.
Frank Holmes, the Company’s CEO and chief investment officer,
says this could be an attractive time for investors to consider the
shipping industry.
“After years of boom-and-bust cycles, container shipping
companies today appear to have benefited greatly from favorable
pricing power,” Mr. Holmes says. “At the same time that global
demand has rocketed back to pre-pandemic levels much sooner than
anticipated, shipping companies have exercised capacity growth
discipline, as too many vessels and routes could oversaturate the
market. Consequently, shipping rates have remained highly elevated
through the end of 2021. The average global rate to ship a 40-foot
container stood at nearly $9,300 in December 2021, a threefold
increase from the same month a year earlier, according to data
provided by freight marketplace operator Freightos.”
Mr. Holmes is also the Executive Chairman of HIVE Blockchain
Technologies, Inc. (“HIVE”), a Canadian crypto-mining company that
depends on global shipping for its mining hardware.
“In the past year, HIVE has spent millions of dollars on
application-specific integrated circuit (ASIC) miners, all of them
shipped from China,” Mrs. Holmes says. “This is the kind of
first-hand experience that helped inspire the idea for
SEA.”
Besides container shipping companies, SEA also seeks to invest
in air cargo carriers, which have seen volume surge well past
pre-pandemic levels. According to the International Air Transport
Association (IATA), global cargo tonne-kilometers (CTKs) increased
9.4% in October 2021 compared to the same month in 2019.
SEA’s additional exposure to the air freight industry helps
differentiate it from its shipping ETF peers, many of which simply
track an index.
“One shipping ETF in particular, which launched in August 2021,
is an indexed fund that happens not to have any exposure to air
cargo,” Mr. Holmes says. “I believe that’s an oversight, as the
demand for air cargo services has dramatically increased since the
start of the pandemic, with consumers shifting much of their
spending from services to goods.
“It’s important for investors to be aware that global trade is a
long-term secular story, at the center of which is the global
middle class. So far this century, trade has steadily increased
with few interruptions as the number of people classified as middle
class has continued to expand, particularly in China and India.
Although the pandemic has stalled household income growth in some
regions, an incredible 1 billion Asians are forecast to join the
middle class by 2030, according to the World Data Lab. Most of
these new entrants will likely seek a middle-class lifestyle, which
we expect will support shipping and logistics companies years into
the future.”
To learn more about the Sea and Sky Cargo ETF (SEA),
click here.
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About U.S. Global Investors, Inc.
The story of U.S. Global Investors goes back more than 50 years
when it began as an investment club. Today, U.S. Global Investors,
Inc. (www.usfunds.com) is a registered investment adviser that
focuses on niche markets around the world. Headquartered in San
Antonio, Texas, the Company provides money management and other
services to U.S. Global Investors Funds and U.S. Global ETFs.
Forward-Looking Statements and Disclosure
Please consider carefully a fund’s investment objectives, risks,
charges and expenses. For this and other important information,
obtain a statutory and summary prospectus by visiting
www.usglobaletfs.com. Read it carefully before investing.
Investing involves risk, including the possible loss of
principal. Shares of any ETF are bought and sold at market price
(not NAV), may trade at a discount or premium to NAV and are not
individually redeemed from the fund. Brokerage commissions will
reduce returns. Because the fund concentrates its investments in
specific industries, the fund may be subject to greater risks and
fluctuations than a portfolio representing a broader range of
industries. The fund is non-diversified, meaning it may concentrate
more of its assets in a smaller number of issuers than a
diversified fund. The fund invests in foreign securities which
involve greater volatility and political, economic and currency
risks and differences in accounting methods. These risks are
greater for investments in emerging markets. The fund may invest in
the securities of smaller-capitalization companies, which may be
more volatile than funds that invest in larger, more established
companies. The performance of the fund may diverge from that of the
index. Because the fund may employ a representative sampling
strategy and may also invest in securities that are not included in
the index, the fund may experience tracking error to a greater
extent than a fund that seeks to replicate an index. The fund is
not actively managed and may be affected by a general decline in
market segments related to the index. Airline companies may be
adversely affected by a downturn in economic conditions that can
result in decreased demand for air travel and may also be
significantly affected by changes in fuel prices, labor relations
and insurance costs.
Smart beta refers to a type of exchange-traded
fund (ETF) that uses a rules-based system for selecting
investments to be included in the fund portfolio. Positive cash
flow indicates that a company is adding to
its cash reserves, allowing it to reinvest in the
company, pay out money to shareholders, or settle future debt
payments. A tonne-kilometer is a unit of measure of freight
transport which represents the transport of one tonne of goods
(including packaging and tare weights of intermodal transport
units) by a given transport mode over a distance of one kilometer.
The Freightos Baltic Daily Index measures the daily price movements
of 40-foot containers in 12 major maritime lanes. It is expressed
as an average price per 40-foot container.
The outbreak of the COVID-19 pandemic and the resulting actions
to control or slow the spread has had a significant detrimental
effect on the global and domestic economies, financial markets and
industries, including airlines. U.S. Global Investors continues to
monitor the impact of COVID-19, but it is too early to determine
the full impact this virus may have on commercial aviation. Should
this emerging macro-economic risk continue for an extended period,
there could be an adverse material financial impact to the U.S.
Global Jets ETF.
Distributed by Quasar Distributors, LLC. U.S. Global Investors
is the investment adviser to SEA.
All opinions expressed and data provided are subject to change
without notice. Opinions are not guaranteed and should not be
considered investment advice.
- Global Shipping Rates Have Remained Elevated
- Air Cargo Volume Has Surged Past Pre-Pandemic Levels
Holly Schoenfeldt
U.S. Global Investors, Inc.
210.308.1268
hschoenfeldt@usfunds.com
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