November 23, 2020
John Kartsonas serves as the ETF Managers Group, LLC’s dry bulk shipping expert and partner in the BDRY ETF, the first and only freight forward exchange-traded product focusing exclusively on dry bulk shipping .
From 2011 to 2017, Mr. Kartsonas was a Senior Portfolio Manager at Carlyle Commodity Management, a New York-based commodities-focused investment firm part of the Carlyle Group.
He was responsible for the company’s investments in shipping and freight. During his tenure he managed one of the largest freight forward funds in the world.
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 is listed on the New York Stock Exchange and is one of more than 3,000 ETFs available to investors …
BDRY is the first and only of its kind in the world. There are no other shipping ETFs available today. This is the only way for an investor to invest directly in the shipping market.
BDRY offers investors the ability to invest directly in shipping rates, which has never happened before. It’s very similar to other commodity ETFs like oil and gold ETFs.
BDRY is directly exposed to shipping rates. These are freight rates. The shipping rate is the price that miners and producers of raw materials pay to transport their goods around the world.
For example, if you are a miner and you mine coal, you have to transport it, say, from the United States to China, so you have to hire a vessel and pay the owner to transport that good from point A to another. B.
This cost is called the shipping rate. These tariffs define the global maritime transport market.
Everything that has to do with shipping has to do with the shipping rate.
Mr. Kartsonas has more details about the investment thesis:
“For example, when you talk about construction and infrastructure spending in China, it’s all about steel. China needs to produce steel to build bridges, roads, new residential, commercial buildings, etc.
To make steel, you need the raw material, which is iron ore. China mainly imports most of its iron ore from Australia and Brazil.
So, for China to keep growing, it has to keep importing raw materials, which means increased demand for shipping.
This is essentially at the heart of the thesis of investment in maritime transport. This is global growth, mainly in Asia, reflecting the demand for raw materials.
Dry bulk transport is a market very concentrated on the Asian economy.
It doesn’t correlate with most of the daily headlines you see in the US markets. It’s not really affected by the day-to-day macro narrative, whether it’s interest rates, economic data points, or policy changes.
It’s a very idiosyncratic market as shipping rates fluctuate based on the actual supply and demand for ships and cargo to be transported.
For a full picture of this exciting new investment vehicle, read the full 3,542-word interview with Mr. Kartsounas, exclusively in the Wall Street Transcript.