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Should You Invest in the U.S. Global Jets ETF (JETS)?

Zacks Equity Research

Launched on 04/30/2015, the U.S. Global Jets ETF (JETS) is a passively managed exchange traded fund designed to provide a broad exposure to the Industrials - Transportation/Shipping segment of the equity market.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 14, placing it in bottom 13%.

Index Details

The fund is sponsored by U.S. Global Investors. It has amassed assets over $1.16 billion, making it one of the larger 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.

Costs

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 2.50%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 10.87% of total assets, followed by Delta Air Lines Inc Del (DAL) and United Airls Hldgs Inc (UAL).

The top 10 holdings account for about 61.28% of total assets under management.

Performance and Risk

Year-to-date, the U.S. Global Jets ETF has lost about -50.38% so far, and is down about -48.11% over the last 12 months (as of 07/31/2020). JETS has traded between $12 and $32.27 in this past 52-week period.

The ETF has a beta of 1.45 and standard deviation of 40.20% 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.

Alternatives

U.S. Global Jets ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. JETS, then, is not a great choice for investors seeking exposure to the Industrials ETFs segment of the market. Instead, there are better ETFs in the space to consider.

SPDR SP Transportation ETF (XTN) tracks S&P Transportation Select Industry Index and the iShares Transportation Average ETF (IYT) tracks Dow Jones Transportation Average Index. SPDR SP Transportation ETF has $199.80 million in assets, iShares Transportation Average ETF has $622.85 million. XTN has an expense ratio of 0.35% and IYT charges 0.42%.

Bottom Line

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
 
SPDR SP Transportation ETF (XTN): ETF Research Reports
 
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