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 begun to recover from more than a year of pandemic-related declines to business, although there is still ground to be regained, as well as mounting competition to fight off: an emerging group of new startup airlines attempting to capitalize on the industry’s recovery. For investors optimistic about the industry’s long-term recovery, an airline ETF provides a way to get broad-based exposure to that trend.
- Airline stocks have outperformed the broader market over the past year.
- The best (and only) airline ETF is JETS.
- The fund’s top holdings are American Airlines Group Inc., Southwest Airlines Co., and Delta Air Lines 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 outperformed the broader market over the past 12 months, with a total return of 39.0% compared to the S&P 500’s total return of 34.5%. These performance figures and all data below are as of Aug. 6, 2021.
- Performance Over One-Year: 39.0%
- Expense Ratio: 0.60%
- Annual Dividend Yield: 0.04%
- Three-Month Average Daily Volume: 4,381,903
- Assets Under Management: $3.2 billion
- Inception Date: April 28, 2015
- Issuer: U.S. Global Investors
JETS is the only pure play airline ETF. This fund has roughly 75% of its portfolio allocated to domestic airlines and companies involved in the aviation industry (aircraft manufacturers, terminal services companies, and airports) and just over 21% invested in international companies. Canada is the main foreign play, followed by Japan, Turkey, and China.
While JETS is a multi-cap ETF, it is weighted predominantly toward midcap and large-cap companies—small-cap companies make up just 0.57% 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’ll look at the top 10 holdings for this fund.
|Top JETS Holdings|
|Company Name (Ticker)||Percent of JETS Assets||Description of Company|
|American Airlines Group Inc. (AAL)||10.0%||Domestic and international carrier|
|Southwest Airlines Co. (LUV)||9.9%||Low-cost carrier|
|Delta Air Lines Inc. (DAL)||9.8%||Domestic and international carrier|
|United Airlines Holdings Inc. (UAL)||9.4%||Domestic and international carrier|
|Allegiant Travel Co. (ALGT)||3.1%||Low-cost carrier|
|Alaska Air Group Inc. (ALK)||3.0%||Domestic airline|
|Air Canada (AC:TSX)||2.9%||Canada-based domestic and international airline|
|SkyWest Inc. (SKYW)||2.9%||Domestic regional carrier|
|Sun Country Airlines Holdings Inc. (SNCY)||2.8%||Low-cost carrier|
|JetBlue Airways Corp. (JBLU)||2.7%||Low-cost carrier|
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The Wall Street Journal. “Airline Startups Want a Piece of Post-Covid Travel.” Accessed Aug. 10, 2021.
YCharts. “Financial Data.” Accessed Aug. 10, 2021.
ETF Database. “ETF Screener: U.S. Global Jets ETF.” Accessed Aug. 10, 2021.
U.S. Global ETFs. “JETS ETF Fact Sheet.” Accessed Aug. 10, 2021.
U.S. Global ETFs. “U.S. Global Jets ETF — Overview.” Accessed Aug. 10, 2021.
ETF Database. “U.S. Global Jets ETF.” Accessed Aug. 10, 2021.