Airline Industry ETF

AAA

DEFINITION of 'Airline Industry ETF'

A sector exchange-traded fund (ETF) that invests in stocks of airline companies, so as to obtain investment results that correspond to those of an underlying airline index. Because of the very limited number of airlines in most nations, an airline ETF is unlikely to be restricted only to domestic carriers, but would very likely include foreign carriers as well.

INVESTOPEDIA EXPLAINS 'Airline Industry ETF'

The airline industry is susceptible to a number of factors that can affect demand for air travel, such as recession, terrorist action, and weather-related disruption. An airline ETF may underperform at such times, as well when fuel prices are surging, since the cost of aviation fuel has a major impact on airline profitability.


By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order

RELATED TERMS
  1. Transportation Sector

    A category of stocks relating to the transportation of goods ...
  2. Leveraged ETF

    An exchange-traded fund (ETF) that uses financial derivatives ...
  3. ETF Sponsor

    The company or financial institution which creates and administers ...
  4. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
  5. Factor Investing

    An investment strategy in which securities are chosen based on ...
  6. Reverse Gold ETF

    Exchange traded funds that are designed to trade in a direction ...
Related Articles
  1. Mutual Funds & ETFs

    Spread Out Risk With Sector-Based ETFs

    These ETFs take the sector rotation strategy from institutional investors and puts it in your hands.
  2. Mutual Funds & ETFs

    An Introduction To Sector ETFs

    Find out how these specialized ETFs can give your portfolio the punch it needs.
  3. Options & Futures

    Terrorism's Effects On Wall Street

    Terrorist activity tends to have a negative impact on the markets. Find out how to take cover.
  4. Active Trading

    Is That Airline Ready For Lift-Off?

    Break through the clouds to see if these stocks will rocket higher, or crash and burn.
  5. Mutual Funds & ETFs

    These Oil ETFs Offer Cheap, Easy Access

    Interested in investing in oil and the companies that extract and refine it? Here's a list of ETFs. Just be wary of fees.
  6. Mutual Funds & ETFs

    Why Monthly Dividend ETFs are Good for Everyone

    Monthly dividend ETFs can help ease the financial stress on investors of all ages. Here are a few fund names for you to consider.
  7. Chart Advisor

    Use This ETF To Trade The Swiss Franc

    Traders were stunned last week when the Swiss National Bank removed the currency peg that tied the value of the Swiss franc to the euro.
  8. Mutual Funds & ETFs

    Your Best Bet for Healthcare Stocks: The XHE ETF

    With the decent growth and wide profit margins of medical device companies, the XHE ETF shouldn't be ignored.
  9. Chart Advisor

    Commodities Are Pulling Chile And Brazil Lower

    Strategic investors should not only keep an eye on charts of falling commodity prices, but they should also watch the impact falling commodities are having on South American nations like Chile ...
  10. Trading Strategies

    Is Goldman Sachs Still A Winner?

    Goldman Sachs might not be the best dividend play out there, but there are other reasons you might want to consider it as an investment.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center