FedEx Casts Spotlight on Transportation ETF

Although much of the economic-related headlines and debate throughout this week will be focused on the comments made during Fed Chairman Ben Bernanke's press conference and the troubles facing the European Union, there are a handful of other stories investors will want to keep tabs on in the days ahead.

For instance, on Wednesday, the transportation sector will be interesting to watch as FedEx (FDX), the delivery services titan, steps up to the earnings plate.

Low Gas Prices May Not Benefit Obama

All Eyes on Europe, Jobs Report in Coming Week

First Niagara: Financial Winner

ETF investors looking to target FedEx and the rest of the transportation industry during the week will want to turn to the iShares Dow Jones Transportation Average Index Fund (IYT).

Designed to reflect the performance of the well-known index for which it is named, IYT boasts exposure to a basket of 21 companies dedicated to moving people and goods by land, sea, and air. Major holdings include Union Pacific (UNP), CH Robinson Worldwide (CHRW), JB Hunt Transportation Services (JBHT), and Kansas City Southern (KSU).

FedEx is ranked as IYT's second largest position, accounting for close to 10% of its index. The firm, along with other members of the delivery industry like United Parcel Services (UPS) altogether represents 22% of IYT's assets. Other major sector slices include railroads (27%) and trucking (23%).

By heavily leaning its assets towards these defensive corners of the transports sector, investors can be ensured that over the long run IYT will perform in a relatively conservative manner. While companies hailing from more aggressive corners of the transports sector such as airlines and marine shipping can be found among its holdings, these companies together account for a considerably smaller chunk of the fund's portfolio. In total, these two subcomponents represent 16% of IYT's index.