Interested in betting on (or shorting) the airlines industry? Capture the narrow transportation segment with the JETS ETF in 2023.
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Contents
Introduction – Why Airlines ETFs?
Airlines are a narrow play that may not move in the same direction as the much broader transportation segment of the market. As we come out of the pandemic, airline stocks are looking attractive for a potential rebound.
An airline ETF allows investors to avoid having to pick single airlines, which can be more risky and time-consuming. The JETS ETF has seen huge inflows in recent years from retail investors and hedge funds alike.
Airlines have been among the hardest hit by the pandemic after air travel was halted, and are thus arguably poised for the largest comeback. Airline stocks tanked and then recovered following 9/11, the SARS crisis, and the Global Financial Crisis of 2008.
The US Global Jets ETF (JETS) launched in 2015 and has since amassed over $4 billion in assets. It is the only pure-play airlines ETF out there. The fund seeks to track the US Global Jets Index, providing all-cap exposure to airlines around the globe.
The fund’s weighting scheme ranks by market cap and passenger load, and thus heavily tilts U.S. large cap. U.S. stocks comprise about 70% of the fund. Top 10 holdings include household names like United, Southwest, JetBlue, American Airlines, Delta, Spirit, and more. The ETF also provides exposure to aircraft manufacturers, terminal services companies, and airports, but most of its holdings (roughly 75%) go to familiar passenger airlines.
JETS has 39 holdings and an expense ratio of 0.60%.
Where To Buy This Airlines ETF
JETS should be available at any major broker. My choice is M1 Finance. The broker has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, and a modern, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.
Interested in more Lazy Portfolios? See the full list here.
Disclaimer: While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.
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