The Breakwave Tanker Shipping ETF (BWET) has emerged as the top-performing ETF in America, surging 5,100% over the past year and 3,600% year-to-date. The fund's exceptional gains stand in stark contrast to other leading ETFs, which rely on leverage to achieve their returns: a 2x long Dell ETF is up 1,170%, a 2x long Micron ETF is up 530%, and a 2x long Marvell ETF is up 390%.
BWET's performance is directly tied to escalating geopolitical tensions in critical shipping corridors. Renewed military conflict in the strait of Hormuz and the Bab el-Mandeb, along with attacks on Saudi Arabia's crude oil infrastructure, have created severe logistical threats that have caused oil tanker chartering rates to spike dramatically.
How the Fund Works
BWET does not own tankers, oil, or shipping company stocks. Instead, it holds a rolling basket of near-dated freight futures, with approximately 90% of its exposure tied to the Middle East-to-China supertanker route. The fund's sponsor, Amplify, charges a 3.5% expense ratio.
Shipping Rate Surge Drives Growth
The cost to transport oil has skyrocketed as shipping companies have raised rates in response to physical and political threats. On March 2, the benchmark Gulf-to-China supertanker rate reached a then-record daily rate of $423,736, doubling within two days. Oil prices have more than doubled since the start of the year.
BWET's assets under management have grown substantially from $2 million at the start of the year to $200 million currently.
Recent Developments
On Thursday night, social media users posted imagery of a smoke plume nearly 100 kilometers long over Saudi Arabia's East-West oil pipeline southeast of Medina. The imagery was verified by NASA thermal data and Reuters. BWET jumped 10% on Friday morning in response, trading above $700 a share for the first time.
In June, a memorandum signed to reopen the strait of Hormuz collapsed within days, causing BWET to lose over 40% before recovering its losses by July.
Risk Considerations
According to Breakwave founder John Kartsonas, "There is no risk mitigation." The fund sponsor's own disclosures warn investors that "extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future."
