John Kartsonas serves as ETF Managers Group, LLC’s Dry Bulk Shipping Expert and Partner in the BDRY ETF, the first and only freight futures exchange-traded product exclusively focusing on dry bulk shipping.
From 2011 to 2017, Mr. Kartsonas was a senior portfolio manager at Carlyle Commodity Management, a commodity-focused investment firm based in New York and part of the Carlyle Group.
He was responsible for the firm’s shipping and freight investments. During his tenure, he managed one of the largest freight futures funds globally.
In this 3,542 word interview, exclusively in the Wall Street Transcript, Mr. Kartsounas explains his investment vehicle.
“As an ETF, the ticker symbol is BDRY, and investors can buy and sell like any other stock. It’s listed on the New York Stock Exchange and is one of 3,000-plus ETFs that are available to investors…
BDRY is the first and only of its kind globally. There is no other shipping ETF available today. It is the only way for an investor to invest directly into the shipping market.
BDRY provides investor opportunity to invest directly into shipping rates, something that has never happened before. It’s very similar to other commodity ETFs like oil and gold ETFs.
BDRY owns exposure to shipping rates directly. These are freight rates. The shipping rate is the price that miners and commodity producers pay to transport their goods around the world.
For example, if you are a miner and you mine coal, you have to transport it from, let’s say, the United States to China, so you have to hire a ship and pay the ship owner to transport that good from point A to point B.
That cost is called the shipping rate. These rates define the global shipping market.
Everything that has to do with shipping has to do with the shipping rate.”
Mr. Kartsonas has more detail on the investment thesis:
“For example, when you talk about construction and infrastructure spending in China, it is all about steel. China has to produce steel to build bridges, roads, new residential, commercial buildings and so on.
In order to manufacture steel, you need the raw material, which is iron ore. China imports, basically, most of its iron ore from Australia and Brazil.
So for China to continue to grow, it needs to keep importing raw materials, and that means more demand for shipping.
That is basically at the heart of the shipping investment thesis. It is all about global growth, mainly in Asia, reflecting demand for raw materials.
Dry bulk shipping is a market very focused to the Asian economy.
It is uncorrelated to most of the day-to-day headlines that you see in the U.S. markets. It is not really affected by the day-to-day macro narrative, whether that is interest rates, economic data points or policy changes.
It is a very idiosyncratic market because shipping rates move up and down based on real supply and demand for ships and goods to transport.”
To get the complete picture on this interesting new investment vehicle, read the entire 3,542 word interview with Mr. Kartsounas, exclusively in the Wall Street Transcript.
Eaton Corp plc (ETN) May Exit Vehicle Business This Fall
October 13, 2015