Transportation ETFs Getting Support

A few months ago, billionaire investor Warren Buffett gave the future health and vitality of the transportation sector a nod when he purchased Burlington Northern Santa Fe for $100 a share. In fact, he even named his favorite economic indicator rail car loadings.

Buffett made a bet on railroads because they're an indicator of the domestic economy's health. As more goods are purchased or ordered and raw materials are demanded, railroads will increasingly be called to service to transport those items.

But there's another reason railroads might be worth a gander: climate change. Traveling and shipping by rail produces, on average, three to 10 times less carbon dioxide than road and air transportation, according to the UIC, an organization of the railway sector based in Paris.

 Other countries have already gotten on board: China has spent heavily on a high-speed rail network, for example, while the global railway transportation systems market hit $7.1 billion last year and continues to grow. Developing countries are fast recognizing that railways are a vital part of their social infrastructure.

•  iShares Dow Jones Transportation Average (NYSEArca: IYT)
• PowerShares Global Progressive Transport (NYSEArca: PTRP)