The economy would get nowhere without transportation stocks.
The business of getting people and goods from point A to point B is massive. Companies in the transportation industry run trains, trucks, planes, and ships, operate warehouses, and help manufacturers move goods. Globally, transportation is an $8 trillion industry. There are so many different companies doing so many different things that an investor could fill out an entire portfolio, gaining exposure to every corner of the transportation world.
We've seen over the past few years how vital transportation is to the economy. Supply chain issues were in the news throughout the COVID-19 pandemic, with bottlenecks causing shortages in some key goods and helping to prompt fears of inflation. We've also seen the government and private sector pledge to invest massive sums in new transportation projects to ease the gridlock, creating potential opportunities for investors.
Given how broad the sector is, transportation is a natural fit for an exchange-traded fund, or ETF. An ETF allows investors to make one purchase and acquire shares in an entire range of companies operating in a single sector.
Here are some of the top ETFs for investors looking for exposure to the transportation industry without having to buy a basket of individual companies.
Six top transportation ETFs to invest in 2025
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Should you add transportation ETFs to your portfolio?
Here's why transportation ETFs could be a good choice:
- While the sector is vital to the economy, many individual transport companies have not been long-term winners. Subsectors such as airlines and truckers tend to be cyclical in nature, meaning the stocks tend to ebb and flow along with the economy.
- These types of sectors -- where there is strong potential for future growth, but individual companies tend to post choppy performances -- are ripe for ETF investing because it gives an investor exposure to the broader trends without the risks that come with trying to pick individual winners.
- The world needs well-functioning transportation systems, and the promise of technology has the potential to reinvent large portions of the transportation economy over time. A transportation ETF gives an investor a chance to go along for the ride while minimizing the risk of buying a lemon.
Important metrics for choosing transportation ETFs
Investors choosing between ETFs should take a careful look at the expense ratio, which is a calculation of the charges an investor pays to hold the fund. A higher expense ratio can eat into returns and offset gains.
Different ETFs focus on different areas, and some on the list above have exposure to companies that not every investor would consider to be a transport company. Make sure to pay attention to the holdings and check to ensure that the ETF holds aligns with the exposure you were looking for when considering the fund.
Assets under management (AUM) can also be a valuable metric because it shows the size of an ETF. A high AUM can indicate significant investor interest and help promote stability.
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