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

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Sector ETFs are also funds of convenience, offering many ways 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 $1.47 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.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 2.12%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, American Airls Group Inc (AAL) accounts for about 14.12% of total assets, followed by Southwest Airls Co (LUV) and United Airls Hldgs Inc (UAL).

The top 10 holdings account for about 72.09% of total assets under management.

Performance and Risk

The ETF has lost about -41.37% and is down about -37.78% so far this year and in the past one year (as of 06/17/2020), respectively. JETS has traded between $12 and $32.30 during this last 52-week period.

The ETF has a beta of 1.44 and standard deviation of 39.36% 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 the best option 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 $167.88 million in assets, iShares Transportation Average ETF has $615.90 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
U.S. Global Jets ETF (JETS): ETF Research Reports
 
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
 
United Airlines Holdings Inc (UAL) : 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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