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This article identifies and analyzes the best airline ETF that you can buy. Spoiler alert: it’s the only one that you can buy.
Best Airline ETF: Overview
There is only one airline ETF on the market: the U.S. Global Jets ETF (JETS).
This fund provides investors access to the global airline industry, including airline operators and manufacturers from all around the world.
Here is a quick snapshot of the U.S. Global Jets ETF:
- 1-Year Performance: -7.59%
- Expense Ratio: 0.60%
- Annual Dividend Yield: 0.04%
- AUM: $4.03 billion
- 3 Month Avg. Volume: 11,786,758
- Number of Holdings: 52
- Inception Date: 2015
JETS follows an index that tries to identify the most efficient airline companies quarter by quarter.
Its “smart beta 2.0” strategy uses a combination of fundamental factors to determine inclusion and allocation for the fund. Let’s see what the index came up with for the recent quarter:
Best Airline ETF: Top Holdings, Industry Breakdown, & Geographic Breakdown
Here are the top ten holdings in the U.S. Global Jets ETF (JETS):
- Delta Air Lines (DAL) 10.53%
- United Airlines Holdings (UAL) 10.30%
- American Airlines Group (AAL) 9.56%
- Southwest Airlines Co. (LUV) 9.48%
- Spirit Airlines (SAVE) 3.30%
- Alaska Air Group (ALK) 3.19%
- Air Canada (AC) 3.13%
- JetBlue Airways (JBLU) 3.09%
- Sun Country Airlines Holdings (SNCY) 2.99%
- Allegiant Travel Company (ALGT) 2.71%
These top ten holdings account for 58% of the total assets in the fund.
If our math checks out, the remaining 42 holdings make up the rest of JETS. Their allocations range from 0.42% to 2.64% of net assets.
Most of the holdings in the U.S. Global Jets ETF are large-cap stocks – about 53% of assets come from companies with a market cap above $10 billion.
Approximately 34% belong to mid-cap companies ($1-$10 billion), and 4% are from small-caps.
Here is a breakdown of the best airline ETF by industry:
- Airlines – 73.96%
- Transportation Infrastructure – 12.86%
- Internet – 8.04%
- Commercial Services – 2.94%
- Transportation – 1.94%
- Other – 0.26%
It makes sense for the “Airlines” subsector to receive three out of every four dollars invested in JETS.
However, JETS investors have exposure to the entire value chain.
The ETF owns companies that manufacture the planes, such as Boeing, Airbus, General Dynamics, and other key infrastructure companies like Textron.
It invests in Internet companies like Expedia and Booking Holdings that help travelers find the right flight and hotel for their trip.
Once the travelers arrive at the airport, JETS companies like Aena manage the airport terminals to ensure operations go as planned.
Then the airliner takes the traveler from point A to B – and hopefully, the Commercial Services companies in JETS put their luggage on the right plane.
The following is a breakdown of assets by country:
- The United States 75.06%
- Canada 4.85%
- Japan 2.83%
- Brazil 2.22%
- France 2.10%
- Spain 2.06%
- Turkey 1.90%
- The United Kingdom 1.53%
- Germany 1.50%
- China 1.30%
Given the fund’s name, the large allocation to companies in the United States makes sense.
But “Global” is also in the name, hence the material weighting to international companies.
Most of these international companies are region-specific airliners.
They are small relative to the likes of Delta and Southwest but typically the largest airliner in their respective country.
Other Things to Know
This ETF does a ton of trading volume. We believe that algorithms trade this thing based on positive and negative sentiment regarding COVID-19.
Trading algorithms can scrape headlines and directionally trade this ETF in the blink of an eye.
We don’t recommend trying to beat these algorithms in the short term. You’re their exit liquidity if you’re using your fingers and a smartphone.
JETS is best suitable for a directional, long-term bet on the recovering airline industry for the retail investor.
Alternatives to the Best Airline ETF
You can also gain exposure to the airline industry by investing in a travel sector ETF. Here are the top travel funds to consider:
- ETFMG Travel Tech ETF (AWAY)
- Defiance Hotel Airline and Cruise ETF (CRUZ)
- SonicShares Airlines, Hotels, Cruise Lines ETF (TRYP)
- AdvisorShares Hotel ETF (BEDZ)
- ALPS Global Travel Beneficiaries ETF (JRNY)
- Direxion Daily Travel & Vacation Bull 2X Shares (OOTO)
- ETFMG 2X Daily Travel Tech ETF (AWYX)
Keep in mind that these invest in companies outside of the airline industry too, and some don’t invest in a single airliner stock.
Another alternative investment is an Aerospace & Defense ETF.
Companies in these ETFs design and manufacture the planes that are flown by the airliners in the JETS ETF.
Or you could always just buy individual airline stocks. The top four holdings in JETS make up 40% of the entire fund.
You’ll sacrifice diversification for the potential for higher returns – and you’ll pay less in fees.
Airline ETFs: FAQs
What is a good airline ETF?
The U.S. Global Jets ETF (JETS) is a good airline ETF for investors seeking exposure to the airline industry. It is the only airline ETF on the market, and it invests in a variety of airlines and airline-related equities.
What ETF holds airline stocks?
The U.S. Global Jets ETF (JETS) holds the most popular airline stocks, such as Delta, Southwest, United, American Airlines, and Spirit. JETS is an efficient investment vehicle if you want to access the best airline stocks.
What is the best airline to buy stock in?
Delta Air Lines (DAL), United Airlines (UAL), and American Airlines (AAL) are the best airlines to buy stock in. They are the top three holdings in the best and only airline ETF, the U.S. Global Jets ETF (JETS).
Is there a travel sector ETF?
Several travel ETFs provide investment exposure to the travel niche of the consumer discretionary market. Some of the best travel sector ETFs include the ETFMG Travel Tech ETF (AWAY), the Defiance Hotel Airline and Cruise ETF (CRUZ), and the SonicShares Airlines, Hotels, Cruise Line ETF (TRYP). Consider the Direxion Daily Travel & Vacation Bull 2X Shares (OOTO) if you want to day-trade the travel sector with leverage.
Bottom Line: Best Airline ETF
JETS is your one-stop shop for investing in the airline industry.
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This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we selected the best airline ETF.