Breakwave Advisors, in partnership with ETF Managers Group (ETFMG), launched the Breakwave Dry Bulk Shipping ETF (NYSE Arca: BDRY), the first freight futures exchange-traded product focusing exclusively on dry bulk shipping. BDRY is designed to provide investors direct access to an instrumental part of the global commodity market, that historically has been uncorrelated with other major asset classes.
BDRY provides long exposure to the dry bulk shipping market through a portfolio of near-dated freight futures contracts on dry bulk indices. This offers investors exposure to dry bulk freight without the need for a futures trading account. BDRY is designed to reduce the effects of rolling contracts by using a laddered strategy to buy contracts while letting existing positions expire and settle in cash.
“We are thrilled to bring such an innovative product to the market, allowing investors to participate directly in the exciting world of dry bulk shipping” said John Kartsonas, Founder and Managing Partner of Breakwave Advisors LLC, a Commodity Trading Advisor based in New York City specializing in Shipping and Freight investments. “Freight futures have historically exhibited strong cyclical returns, but for most investors it has been a very hard-to-access market. For the first time, through BDRY, a wide range of market participants can now directly access the dry bulk market using a simple, transparent, equity-like investment product.”
“Dry bulk shipping is an essential part of the global commodity markets and a major beneficiary of infrastructure spending” Mr. Kartsonas added. “A highly cyclical industry, dry bulk shipping is in an upturn again following several years of underperformance, in a strengthening commodity environment supported by improved industry fundamentals. “
The Fund will hold freight futures with a weighted average of approximately three months to expiration, using a mix of one-to-six-month freight futures, based on the prevailing calendar schedule. The Fund intends to progressively increase its position to the next calendar quarter three-month strip while existing positions are maintained and settle in cash. The initial freight futures allocation will be 50% Capesize contracts, 40% Panamax contracts and 10% Supramax contracts, rebalancing annually.