Amplify Commodity Trust (BDRY)

Amplify Commodity Trust operates two separate exchange-traded funds: the Breakwave Dry Bulk Shipping ETF (BDRY) and the Breakwave Tanker Shipping ETF (BWET), both of which hold positions in commodity futures rather than physical cargo or equipment. The structure is elegant in concept and powerful in execution. Instead of owning ships or managing logistics directly, each fund passively tracks the movement of freight futures prices by holding contracts on the Baltic Exchange, the venerable London-based clearing house for shipping rates. This gives an ordinary investor with a brokerage account immediate exposure to the economics of dry bulk and tanker shipping—segments of the global supply chain that move everything from grain and coal to iron ore and fertilizer.

The dry bulk sector is the engine of global commodity flow. A Capesize vessel—the largest ships that can fit through the Panama Canal, designed to haul 170,000 tonnes of cargo—moves the planet’s ore, coal, and grain. Smaller Panamax and Supramax ships carry secondary routes and secondary commodities. The rates these ships command are set by supply and demand: if the world is building, prices spike because every builder needs steel, concrete, and energy. If growth stalls, rates collapse just as fast. BDRY captures that cyclicality by holding positions in the near-month futures contracts that track these rates. As a contract approaches expiration, the fund rolls the position forward to the next contract month, maintaining perpetual exposure to the freight-rate cycle without the fund itself ever taking physical delivery of grain or ore.

What distinguishes this structure is its passivity. The fund does not employ a trader to predict whether rates will rise or fall; it replicates an index published by the Baltic Exchange, updated daily. The Baltic Dry Index (BDI) and its component indices are among the oldest continuous measures of global economic activity, predating the S&P 500 by decades. They are watched obsessively by macroeconomists, commodity traders, and supply-chain professionals as a leading indicator of global demand. A surge in the BDI signals growth ahead; a collapse presages recession. By turning that index into an exchange-traded security, Amplify made a bet that enough investors would want exposure to this signal to sustain a fund. That bet has played out in volatile but meaningful trading volumes and growing interest from both retail investors and institutions seeking an alternative to traditional risk assets.

The financial returns from the fund are driven almost entirely by moves in the underlying freight rates, not by any spread or management skill. BDRY does not generate income from shipping services or cargo handling; it generates gains or losses purely from the price appreciation or depreciation of the futures contracts it holds. This makes it, mechanically speaking, a pure bet on freight rates—more similar to holding a commodity than holding a stock. The fund has experienced significant swings. In 2020 and 2021, as the global economy reopened from pandemic shutdowns, freight rates surged, making BDRY one of the best-performing ETFs in existence. In periods of economic stagnation, rates contract sharply and the fund loses value. For investors seeking to hedge against inflation or diversify away from equities and bonds, the appeal is that BDRY moves to its own rhythm, driven by the fundamentals of cargo flow rather than earnings or interest rates.

The recent shift in the freight market is instructive. Through much of 2024 and into 2025, the dry bulk sector grappled with overcapacity: too many ships built during the frothy years following the pandemic, chasing insufficient cargo to fill them. That dynamic suppressed rates below the cost of operating many vessels, a squeeze that typically leads either to scrapping (removing older ships from service) or to slow steaming and fleet lay-ups (reducing speed or parking ships temporarily to shrink supply). By mid-2025 and into 2026, that structural adjustment began to take hold, rates started to recover, and the fund responded accordingly. The economic insight is revealing: just as equity investors track manufacturing activity through purchasing managers’ indices, commodity investors track global growth through shipping—and the message from freight rates is often more honest than corporate guidance, because shipping rates are determined by auction rather than marketing.

Fee structure and mechanics

BDRY’s expense ratio is modest, typically in the range of 0.5 to 0.8 percent annually, a sliver compared to the volatility an investor might experience from freight-rate moves. The real cost to an investor is less about fees and more about the path-dependent nature of holding futures. Each month, the fund must sell the expiring contract and buy the next one forward. If the futures market is in backwardation (near-term contracts are more expensive than forward contracts), this roll creates a drag—the fund is always selling low and buying high, a mechanical headwind. If the market is in contango (forward contracts trade at a premium), rolling generates a small boost. Most of the time freight futures are in backwardation, so rolling cost is a real but manageable friction on returns.

The fund is also subject to the peculiar leverage that futures markets create. Holding a futures contract requires only a small margin deposit, leaving the rest of one’s capital uninvested. BDRY manages this by maintaining a portfolio of Treasury bonds and other highly liquid securities that generate modest yield, with futures positions sized so that the fund moves in line with the index it tracks. That conservative approach means BDRY is not a leveraged bet, just a convenient wrapper around a notoriously hard-to-access market.

The economic indicator angle

For anyone trying to read the state of global commerce, BDRY’s price history is a live dashboard. A spike in dry bulk rates usually means new orders for commodities are flooding in, a signal that factories, utilities, and builders are confident enough to commit capital. A decline flags demand destruction. The lag between freight-rate moves and official economic data is often months, which is why shipping economists and supply-chain professionals treat the BDI as a leading indicator of the business cycle. By holding BDRY, an investor is betting that they can read the freight market better than the broader market has already priced in—or hedging that their portfolio is too exposed to consumer spending and not enough to commodity-driven growth.