The Best (and Only) Airline ETF for Q2 2022

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 Group Inc. (AAL), Delta Air Lines Inc. (DAL), and Southwest Airlines Co. (LUV).

The industry has started to recover from more than a year of pandemic-related declines in travel volume, although the process has been slow. Global airline capacity is expected to increase in 2022, particularly in the second half of the year, but a return to pre-pandemic levels for trans-Atlantic flights may not arrive until 2023. For investors optimistic about the industry’s long-term recovery, an airline ETF provides a way to get broad-based exposure to that trend.

There is only a single option when it comes to ETFs focused on the airline industry: the U.S. Global Jets ETF (JETS). The airline industry has underperformed compared to the S&P 500 in the past year. The benchmark S&P 500 Airlines Industry Index has provided total returns of -2.7%, below the S&P 500's 18.6% over the same period. Note that this index includes only U.S. companies and is not a perfect metric for JETS, which has a global focus. These performance figures and all data below are as of Feb. 3, 2022.

U.S. Global Jets ETF (JETS)

• Performance Over One-Year: -5.1%
• Expense Ratio: 0.60%
• Annual Dividend Yield: 0.04%
• Three-Month Average Daily Volume: 11,987,143
• Assets Under Management: $3.6 billion
• Inception Date: April 28, 2015
• Issuer: U.S. Global Investors

JETS is the only pure play airline ETF. As of Dec. 31, 2021, the date of its most recent fact sheet, this fund allocates roughly 75% of its portfolio to airlines and companies involved in the aviation industry (aircraft manufacturers, terminal services companies, and airports), with just under 25% invested in international companies. Canadian companies are the largest foreign holdings, followed by companies from Japan, Brazil, and France.

Though JETS is a multi-cap ETF, it is weighted predominantly toward large-cap and mid-cap companies—small-cap companies make up just 4.2% of the portfolio. Overall, its investment strategy is to track the U.S. Global Jets Index, although the fund doesn’t guarantee 100% replication and may invest in securities not included in the index. Below, we look at the top 10 holdings for this fund.

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