Transportation exchange-traded funds (ETFs) give investors exposure to a basket of stocks belonging to a broad range of companies in the sector. The transportation sector is comprised of companies that build infrastructure, manufacture vehicles or other equipment, and provide services for the industry. This includes airlines, railroads, trucking, and logistics companies. Some notable companies in this sector include Delta Air Lines Inc. (DAL), CSX Corp. (CSX), and General Motors Co. (GM). Transportation ETFs hold a large number of cyclical stocks because the transport of goods and people fluctuates with the economy, increasing when the economy grows and decreasing when it slows. These funds have outperformed the broader market, with the benchmark S&P 500 Transportation Industry Group Index delivering a 1-year trailing total return of 35.9% compared to 24.5% the S&P 500.
- The transportation sector outperformed the broader market over the past year.
- The ETFs with the best 1-year trailing total return are HAIL, AWAY, and XTN.
- The top holdings of these ETFs are AgEagle Aerial Systems Inc., Facedrive Inc., and Allegiant Travel Co., respectively.
The transportation ETF universe is comprised of 5 ETFs that trade in the U.S., excluding inverse and leveraged funds and those with under $50 million in assets under management (AUM). The best transportation ETF, based on performance in the past year, is the SPDR S&P Smart Mobility ETF (HAIL). Below, we'll look at the top three transportation ETFs as measured by 1-year trailing total returns. The performance figures above are as of February 26, while all other numbers in this story are as of March 1, 2021.
- 1-Year Trailing Total Returns: 122.1%
- Expense Ratio: 0.45%
- Annual Dividend Yield: 0.46%
- 3-Month Average Daily Volume: 131,144
- Assets Under Management: $235.1 million
- Inception Date: December 26, 2017
- Issuing Company: State Street SPDR
HAIL is a multi-cap fund that targets the S&P Kensho Smart Transportation Index. The index comprises companies that are involved in the development of autonomous and electric vehicle technology as well as commercial drones and other advanced transportation systems. HAIL holds a portfolio of about 59 stocks, with just over a quarter of invested assets concentrated in the 10 largest positions. The fund's top holdings include AgEagle Aerial Systems Inc. (UAVS), a commercial drone maker; Plug Power Inc. (PLUG), the maker of hydrogen fuel cell systems; and Sponsored ADR Class A shares of Baidu, Inc. (BIDU), the China-based internet services and artificial intelligence company.
- 1-Year Trailing Total Returns: 59.5%
- Expense Ratio: 0.75%
- Annual Dividend Yield: 0.03%
- 3-Month Average Daily Volume: 222,740
- Assets Under Management: $258.5 million
- Inception Date: February 12, 2020
- Issuing Company: ETF Managers Group
AWAY is a multi-cap blended fund that targets the Prime Travel Technology Index. The index comprises technology companies working in the areas of global travel and tourism. The fund specifically focuses on companies providing technology via the internet to book travel and reservations, ride sharing services, travel price comparisons, and similar services. The fund holds about 30 companies in its portfolio, with just under half of assets invested in the 10 largest holdings. The top holdings of AWAY include Facedrive Inc. (FD:TSX), a Canada-based ride sharing company; sponsored ADR Class A shares of trivago N.V. (TRVG), a Germany-based travel services company; and TripAdvisor Inc. (TRIP), a travel company operating user-generated content and comparison shopping services.
- 1-Year Trailing Total Returns: 47.5%
- Expense Ratio: 0.35%
- Annual Dividend Yield: 0.66%
- 3-Month Average Daily Volume: 89,717
- Assets Under Management: $555.4 million
- Inception Date: January 26, 2011
- Issuing Company: State Street SPDR
XTN is a multi-cap ETF that tracks the S&P Transportation Select Industry Index, investing in both growth and value stocks. The fund targets companies in the air freight and logistics, airlines, airport services, highways and rail tracks, marine, marine ports and services, railroads, and trucking industries. This ETF has significant small cap exposure, which means it may be more volatile than a typical ETF holding large stocks. The ETF's top holdings include Allegiant Travel Co. (ALGT), an ultra-low cost airline; Hawaiian Holdings Inc. (HA), a scheduled and charter air transportation company; and Avis Budget Group Inc. (CAR), a car rental company.
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