The Breakwave Tanker Shipping ETF (BWET), which tracks oil tanker shipping rates, has surged nearly 5,100% in the last one year as of September 11, according to Morningstar data.
The rally makes it the best-performing non-leveraged fund in the US, as the ongoing US-Iran war disrupted tanker traffic through the Strait of Hormuz.
Similarly, the ETF has delivered 3,600% returns on year-to-date (YTD) basis, as per the data.
According to reports, supply chains and shipping routes are likely to face further disruptions after Iran-backed Houthi rebels seized control of Yemen’s key port of Mokha last week. The strategic location could enable the militia to disrupt shipping traffic in the Red Sea. The Red Sea had emerged as an “alternative” route to the increasingly risky Persian Gulf. Further north, Saudi Arabian authorities last week ordered the closure of the kingdom’s critical East-West crude oil pipeline as a precaution following multiple drone attacks launched from Iraq.
As hostilities persist, challenges in navigating the Strait intensify and new chokepoints emerge, prompting several shipping companies to avoid the region altogether. This is forcing vessels to take longer and costlier trade routes. Meanwhile, supertanker freight rates have surged to record highs, allowing shipping companies to post record profits.
Breakwave Tanker Shipping ETF performance
Breakwave Tanker Shipping ETF has delivered strong returns across different time periods. The ETF gained 280.53% over the past three months, while its one-month return stood at 114%.
Over a longer three-year period, the ETF has generated a 267.19% return, highlighting its significant appreciation amid favourable conditions in the tanker shipping market.
The ETF’s NAV returns has also remained strong across all major time frames. Its NAV surged 272.52% over the past three months and gained 115% in the last one month. On a year-to-date basis, the ETF has posted a staggering 3,600% return, while its one-year return stands at 120%.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
