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An airline exchange-traded fund (ETF) can provide diversified exposure to the air travel industry, including aircraft manufacturers, airline operators, airports, and terminal services. The U.S. airline industry includes major carriers such as American Airlines Inc. (AAL), Delta Air Lines Inc. (DAL) and Southwest Airlines Co. (LUV). The industry has suffered over the past year from plunging air travel due to the COVID-19 pandemic and is now preparing for a sharp pickup in summer air travel. Also, an emerging group of new start-up airlines also is attempting to capitalize on the industry’s recovery. For investors optimistic about the industry’s longterm recovery, an airline ETF provides a way to get broad-based exposure to that trend.
- Airline stocks have dramatically outperformed the broader market over the past year.
- The best (and only) airline ETF is JETS.
- The fund’s top holdings are Southwest Airlines Co., United Airlines Holdings Inc., and American Airlines Group Inc.
There is only a single option when it comes to ETFs focused on the airline industry, the U.S. Global Jets ETF (JETS). JETS has dramatically outperformed the broader market with a total return of 71.7% over the past 12 months compared to the S&P 500’s total return of 50.7%. The S&P performance figure is as of April 30, while all other data throughout are as of May 3.
- Performance over 1-Year: 71.7%
- Expense Ratio: 0.60%
- Annual Dividend Yield: 0.03%
- 3-Month Average Daily Volume: 6,185,396
- Assets Under Management: $3.9 billion
- Inception Date: April 28, 2015
- Issuer: U.S. Global Investors
JETS is the only pure play airline ETF. This fund has 80% of its portfolio allocated to domestic airlines and companies involved in the aviation industry (aircraft manufacturers, terminal services companies, and airports), and about 20% invested in international companies. While JETS is a multi-cap ETF, it is weighted predominantly toward large-cap companies. Overall, its investment strategy seeks to track the U.S. Global Jets Index which is an index of airline stocks. Below, we’ll look at the top 10 holdings for this fund.
|Top JETS Holdings|
|Company Name (Ticker)||Percent of JETS Assets||Description of Company|
|Southwest Airlines Co. (LUV)||11.4%||Low-cost carrier|
|United Airlines Holdings Inc. ( UAL)||10.6%||Domestic and international|
|American Airlines Group Inc. (AAL)||10.3%||Domestic and international carrier|
|Delta Air Lines Inc. (DAL)||10.2%||Domestic and international|
|Alaska Air Group Inc. ( ALK)||4.2%||Domestic airline|
|JetBlue Airways Corp. ( JBLU)||4.1%||Low-cost carrier|
|Spirit Airlines Inc. ( SAVE)||4.0%||Low-cost carrier|
|Allegiant Travel Co. ( ALGT)||3.8%||Low-cost carrier|
|Air Canada ( AC: TSE)||3.8%||Canada-based domestic and international airline|
|General Dynamics Corp. ( GD)||3.5%||Aerospace and defense manufacturer|
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