This ETF Is Crushing the Market -- and There's No Way I'd Ever Invest in It
The Breakwave Tanker Shipping ETF has surged 243% year-to-date due to rising freight rates, but its sensitivity to world events makes it a risky investment. The ETF's value is highly dependent on tanker shipping rates, which can fluctuate dramatically during geopolitical disruptions.
The Breakwave Tanker Shipping ETF has seen a significant increase in value this year. This is largely due to rising freight rates, particularly for transporting crude from the Middle East to China. About 90% of the ETF's portfolio consists of TD3C futures, which track these rates. The current danger in the Strait of Hormuz has led to higher prices for crude transportation, driving up the ETF's value. However, this growth is unlikely to be sustainable in the long term. The ETF's sensitivity to global events makes it a risky investment, as its value can drop rapidly when conditions normalize.
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