Transportation ETF JETS Invests in More Than Just Flight

RHL Images, CC BY SA 2.0

(Note: First in a series on post-pandemic boom ETFs)

The U.S. Global Jets ETF (NYSEARCA:JETS) is an exchange-traded fund (ETF) that traverses the world, as it invests in both U.S. and non-U.S. companies involved with the airline industry.

Companies within this fund are not solely passenger airlines, but aircraft manufacturers and airports and terminal services companies as well. JETS is a diverse ETF comprised of small-, mid- and large-cap companies throughout the United States and the world.

About 70% of the fund is weighted towards U.S. large-cap passenger airlines. It uses a tiered-index weighting methodology driven mostly by market cap and passenger load. The rest of its portfolio, both national and international, is populated with companies in supporting industries. These supporting companies are chosen according to basic factors such as gross margins, sales growth and sales yield.

JETS has an expense ratio of 0.60%, a yield of 2.35% and $1.40 billion in assets under management. Year-to-date, the fund’s total return is down 48.70%. However, this is an understandable drop. This ETF is centered around all things pertaining to flight, which has been one of the most downtrodden sectors since March due to COVID-19.

A glance at the chart shows the strength of the fund prior to COVID-19. Though it dipped sharply in early March, JETS gained its footing in early June and is now on a steady, mid-level trend.

Chart courtesy of www.stockcharts.com

The majority of JETS’s portfolio is made up of stocks, and its top five holdings are Southwest Airlines Co. (LUV), 10.87%; Delta Airlines Inc. (DAL), 9.82%; United Airlines Holdings Inc. (UAL), 9.50%; American Airlines Group Inc. (AAL), 8.45% and Allegiant Travel Co. (ALGT), 3.89%.

It may be a bit of a surprise to some investors to learn that U.S. Global Jets ETF (NYSE:JETS) is in the global transportation segment, as the majority of its weight is held in U.S. stocks. However, it earned its spot in this segment because it runs the gamut from airline companies to manufacturers and service firms.

This fund may be worth considering if it meshes with the goals of an individual investor. For investors looking to place themselves firmly in all things sky bound, JETS offers a direct approach.

Remember, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.