Should You Invest in the U.S. Global Jets ETF (JETS)?
If you're interested in broad exposure to the Industrials - Transportation/Shipping segment of the equity market, look no further than the U.S. Global Jets ETF (JETS), a passively managed exchange traded fund launched on 04/30/2015.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
The fund is sponsored by U.S. Global Investors. It has amassed assets over $4.46 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Transportation/Shipping segment of the equity market. JETS seeks to match the performance of the U.S. Global Jets Index before fees and expenses.
The U.S. Global Jets Index tracks the performance of Airline Companies across the globe with an emphasis on domestic passenger airlines.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.04%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, United Airls Hldgs Inc (UAL) accounts for about 11.01% of total assets, followed by American Airls Group Inc (AAL) and Southwest Airls Co (LUV).
The top 10 holdings account for about 65.22% of total assets under management.
Performance and Risk
The ETF has added roughly 19.59% and it's up approximately 42.62% so far this year and in the past one year (as of 06/16/2021), respectively. JETS has traded between $15.44 and $28.71 during this last 52-week period.
The ETF has a beta of 1.61 and standard deviation of 43.35% for the trailing three-year period, making it a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.
U.S. Global Jets ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JETS is an excellent option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
First Trust NASDAQ Transportation ETF (FTXR) tracks Nasdaq US Smart Transportation Index and the iShares Transportation Average ETF (IYT) tracks Dow Jones Transportation Average Index. First Trust NASDAQ Transportation ETF has $1.20 billion in assets, iShares Transportation Average ETF has $1.99 billion. FTXR has an expense ratio of 0.60% and IYT charges 0.42%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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U.S. Global Jets ETF (JETS): ETF Research Reports
United Airlines Holdings Inc (UAL): Free Stock Analysis Report
Southwest Airlines Co. (LUV): Free Stock Analysis Report
American Airlines Group Inc. (AAL): Free Stock Analysis Report
iShares Transportation Average ETF (IYT): ETF Research Reports
First Trust NASDAQ Transportation ETF (FTXR): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.