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 10, placing it in bottom 38%.
The fund is sponsored by U.S. Global Investors. It has amassed assets over $2.33 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.
When considering an ETF’s total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
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 1.86%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund’s holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Southwest Airls Co (LUV) accounts for about 11.41% of total assets, followed by Delta Air Lines Inc Del (DAL) and United Airls Hldgs Inc (UAL).
The top 10 holdings account for about 63.18% of total assets under management.
Performance and Risk
So far this year, JETS has lost about -33.15%, and is down about -32.89% in the last one year (as of 11/20/2020). During this past 52-week period, the fund has traded between $12 and $32.27.
The ETF has a beta of 1.46 and standard deviation of 42.40% 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, JETS is a reasonable option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.
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 $724.41 million in assets, iShares Transportation Average ETF has $1.30 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
Southwest Airlines Co. (LUV): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
United Airlines Holdings Inc (UAL): 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.