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Transport ETF (IYT) Hits New 52-Week High

For investors seeking momentum, iShares Dow Jones Transportation Average Fund IYT is probably on radar now. The fund just hit a 52-week high and is up about 27% from its 52-week low price of $136.79/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

IYT in Focus

This fund offers exposure to the broad transportation sector by tracking the Dow Jones Transportation Average Index. It holds a small basket of 20 stocks with heavy concentration on the top firm. Further, it has key holdings in air freight and logistics, airlines and railroads. The fund charges 44 bps in fees per year from investors (see: all the Industrial ETFs here).

Why the Move?

The transport sector of the broader U.S. stock market has been an area to watch given the ongoing sector rotation. Investors are currently fleeing from technology to transportation. Additionally, the sector is considered a leading indicator (a measurable economic factor that changes before the economy starts to follow a particular pattern or trend) for stocks that are providing a boost.

More Gains Ahead?

Currently, IYT has a Zacks ETF Rank of 4 or ‘Sell’ rating with a High risk outlook, suggesting that the outperformance is unlikely to continue in the months ahead. However, the fund seems to remain strong given a high weighted alpha of 21.30% and a mediocre 20-day volatility of 12.30%. Further, many of the segments that make up this ETF belong to a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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ISHARS-TRAN AVG (IYT): ETF Research Reports
 
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