Transportation exchange-traded funds (ETFs) provide investors with a way to invest in a basket of stocks belonging to the transportation sector. The sector is comprised of companies that build transportation infrastructure, manufacture vehicles or other transportation equipment, and provide transportation services to people or goods, including airlines, railroads, trucking, and logistics companies. Some notable transportation companies include Delta Air Lines Inc. (DAL), CSX Corp. (CSX), and General Motors Co. (GM). Since the transportation of goods and people fluctuates in tandem with the state of the economy, increasing when the economy booms and decreasing when the economy slows, transportation ETFs are likely to hold cyclical stocks.
The transportation ETF universe is comprised of 4 distinct ETFs, excluding inverse and leveraged ETFs. The best-performing transportation ETF for Q1 2020, based on performance over the past year, is the SPDR S&P Smart Mobility ETF (HAIL). We examine the top 3 best transportation ETFs below. All numbers in this story are as of February 10, 2020.
- Performance Over 1-Year: 18.1%
- Expense Ratio: 0.45%
- Annual Dividend Yield: 1.11%
- 3-Month Average Daily Volume: 1,390
- Assets Under Management: $7.5 million
- Inception Date: December 26, 2017
- Issuing Company: State Street SPDR
HAIL is a multi-cap ETF that tracks the S&P Kensho Smart Transportation Index, which focuses on autonomous and electric car technology as well as drones. The fund follows a blended strategy, investing in both growth and value stocks. The ETF’s top three holdings include Tesla Inc. (TSLA), an electric vehicle and clean energy company; Ballard Power Systems Inc. (BLDP), a manufacturer of fuel cell products; and Nio Inc. (NIO), a China-based automobile manufacturer.
- Performance Over 1-Year: 9.0%
- Expense Ratio: 0.35%
- Annual Dividend Yield: 1.15%
- 3-Month Average Daily Volume: 10,605
- Assets Under Management: $122.8 million
- Inception Date: January 26, 2011
- Issuing Company: State Street SPDR
XTN is a multi-cap ETF that invests in U.S. transportation stocks of various market capitalizations. The fund follows a blended strategy that invests in both growth and value stocks. The ETF’s top three holdings include Uber Technologies Inc. (UBER), a ride-hailing and food-delivery services company; Old Dominion Freight Line Inc. (ODFL), a less than truckload (LTL) freight shipping company, and Spirit Airlines Inc. (SAVE), an ultra-low-cost commercial airline.
- Performance Over 1-Year: 7.7%
- Expense Ratio: 0.42%
- Annual Dividend Yield: 1.28%
- 3-Month Average Daily Volume: 199,671
- Assets Under Management: $516.5 million
- Inception Date: October 10, 2003
- Issuing Company: iShares
IYT is a multi-cap ETF focused on U.S. transportation equities across the market-cap spectrum. The fund follows a blended strategy, investing in both growth and value stocks. The ETF’s top three holdings include Norfolk Southern Corp. (NSC), Union Pacific Corp. (UNP), and Kansas City Southern (KSU), all of which are railroad companies.
