Recently we examined the Global Shipping sector as measured by SEA (Guggenheim Shipping, Expense Ratio 0.66%). The general trend there has been a rise in shipping related stocks, as Crude Oil prices have rallied fiercely throughout much of August.
Another Transportation sector that should be examined here in this environment is that of Airlines. JETS (U.S. Global Jets, Expense Ratio 0.60%) debuted over a year ago in late April of 2015 and has managed to gather about $43 million in assets since inception, averaging a respectable 39,000 shares traded daily.
San Antonio, TX based U.S. Global Investors is the ETF issuer, and JETS was their first foray into the ETF market in terms of offering a product. The firm itself is certainly not new to the investment management space, and according to information on the company’s website, offers “No-Load mutual funds, ranging from natural resources, emerging markets, and infrastructure, to money market, bond and domestic funds.” So portfolio managers and investors in the ETF space likely recognize the firm’s name.
JETS has flatlined lately on lower than average trading volume, hovering above its 50 day MA for most of the month of August but still well off of its mid-April highs (when Crude Oil itself was slightly lower than today’s levels). JETS is presently the only “pure-play” ETF for Airline stocks and according to fund literature:
“[JETS] uses a smart beta strategy to track the global airline industry. The index uses fundamental screens to determine the most efficient airline companies, with an emphasis on domestic carriers, although it provides diversification through exposure to global aircraft manufacturers and airport companies. The index consists of approximately 30 to 35 common stocks listed on well-developed exchanges across the globe.”
Presently, we see a more than 81% weighting to Airline and Airline industry-related stocks in the U.S., followed by much lesser weightings to countries such as Canada (2.89%), China (2.09%), France (1.78%), United Kingdom (1.67%), Turkey (1.54%), and so on. 91% of the overall portfolio is invested directly in Airline stocks, with about 7% devoted to Aerospace and Defense names, and the remaining part of the portfolio broadly in the “Transportation” sector.
JETS shares rose $0.07 (+0.31%) to $22.52 in Wednesday afternoon trading. The one and only airline-focused ETF has fallen 9.6% year-to-date.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.