Transportation exchange-traded funds (ETFs) give investors exposure to a basket of stocks belonging to a broad range of companies in the transportation sector. The sector is composed of companies that build infrastructure, manufacture vehicles or other equipment, and provide services for the industry. This includes airlines, railroads, trucking, and logistics companies. Some notable companies in this sector include Delta Air Lines Inc. (DAL), CSX Corp. (CSX), and General Motors Co. (GM).
Transportation ETFs hold a large number of cyclical stocks because the transport of goods and people fluctuates with the economy, increasing when the economy grows and decreasing when it slows. These stocks have underperformed the broader market, with the benchmark S&P 500 Transportation (Industry Group) Index delivering a one-year trailing total return of 26.5% compared to 30.5% for the S&P 500.
- The transportation sector has underperformed the broader market over the past year.
- The transportation exchange-traded funds (ETFs) with the best one-year trailing total returns are HAIL, XTN, and FTXR.
- The top holdings of these ETFs are Veoneer Inc., Matson Inc., and Expeditors International of Washington Inc., respectively.
The transportation ETF universe is composed of six such ETFs that trade in the United States, excluding inverse and leveraged funds as well as those with less than $50 million in assets under management (AUM). The best transportation ETF, based on performance in the past year, is the SPDR S&P Kensho Smart Mobility ETF (HAIL).
Below, we’ll look at the top three transportation ETFs as measured by one-year trailing total returns. The performance figures are as of Aug. 26, 2021, while all others below are as of Aug. 27, 2021.
- One-Year Trailing Total Returns: 52.7%
- Expense Ratio: 0.45%
- Annual Dividend Yield: 0.81%
- Three-Month Average Daily Volume: 34,318
- Assets Under Management: $192.2 million
- Inception Date: Dec. 26, 2017
- Issuing Company: State Street Global Advisors
HAIL is a multi-cap fund that targets the S&P Kensho Smart Transportation Index. The index is composed of U.S.-listed companies that are involved in the development of autonomous and electric vehicle technology as well as commercial and civilian drones and other advanced transportation systems.
HAIL holds a diverse portfolio spread across a broad range of industries. Automobile manufacturers, auto parts, and equipment account for more than a third of its assets.
HAIL’s top holdings include Veoneer Inc. (VNE), an American-Swedish automotive technology company; Aspen Aerogels Inc. (ASPN), a maker of aerogel insulation used primarily in the energy sector; and Trimble Inc. (TRMB), a provider of location-based software and GSP solutions.
- One-Year Trailing Total Returns: 45.3%
- Expense Ratio: 0.35%
- Annual Dividend Yield: 1.17%
- Three-Month Average Daily Volume: 94,422
- Assets Under Management: $505.5 million
- Inception Date: Jan. 26, 2011
- Issuing Company: State Street Global Advisors
XTN is a multi-cap blended fund that attempts to track the S&P Transportation Select Industry Index. The index tracks stocks across the transportation segment of the S&P Total Market Index, including industries such as Air Freight & Logistics, Airlines, Airport Services, Highways & Rail Tracks, Marine, Marine Ports & Services, Railroads, and Trucking.
Trucking companies receive the highest allocation in XTN’s portfolio, followed by Air Freight & Logistics and Airlines. The top holdings of XTN include Matson Inc. (MATX), an ocean transportation services company; AMERCO (UHAL), the parent company of moving and self-storage company U-Haul; and Saia Inc. (SAIA), a freight shipping and logistics company.
- One-Year Trailing Total Returns: 34.1%
- Expense Ratio: 0.60%
- Annual Dividend Yield: 0.38%
- Three-Month Average Daily Volume: 69,245
- Assets Under Management: $1.1 billion
- Inception Date: Sept. 20, 2016
- Issuing Company: First Trust
FTXR is a multi-cap fund that utilizes a blended strategy, investing in value and growth stocks. The fund tracks the Nasdaq US Smart Transportation Index, which is composed of the 30 most liquid transportation securities from the NASDAQ US Benchmark Index. These securities are then ranked and weighted according to volatility, value, and growth. The trucking, railroads, and airlines industries are currently the most heavily weighted.
FTXR’s top holdings include Expeditors International of Washington Inc. (EXPD), a logistics and freight forwarding company; Blink Charging Co. (BLNK), a provider of electric vehicle charging stations; and CSX Corp. (CSX), a holding that provides rail transportation services through subsidiaries.
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