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

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·3 min read
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  • GROW

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.

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 9, placing it in bottom 44%.

Index Details

The fund is sponsored by U.S. Global Investors. It has amassed assets over $718.97 million, 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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 2.81%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 11.73% of total assets, followed by American Airls Group Inc (AAL) and Delta Air Lines Inc Del (DAL).

The top 10 holdings account for about 67.47% of total assets under management.

Performance and Risk

So far this year, JETS has lost about -57.21%, and is down about -55.77% in the last one year (as of 05/22/2020). During this past 52-week period, the fund has traded between $12 and $32.30.

The ETF has a beta of 1.46 and standard deviation of 35.43% for the trailing three-year period, making it a high risk choice in the space. With about 34 holdings, it has more concentrated exposure than peers.

Alternatives

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 good 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.

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 $121.74 million in assets, iShares Transportation Average ETF has $434.80 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
 
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
 
iShares Transportation Average ETF (IYT): ETF Research Reports
 
SPDR SP Transportation ETF (XTN): ETF Research Reports
 
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Zacks Investment Research