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

Looking for broad exposure to the Industrials - Transportation/Shipping segment of the equity market? You should consider the U.S. Global Jets ETF (JETS), a passively managed exchange traded fund launched on 04/30/2015.

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.

Additionally, sector ETFs offer convenient 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 9, placing it in bottom 44%.

Index Details

The fund is sponsored by U.S. Global Investors. It has amassed assets over $577.05 million, making it one of the average sized 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

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

Looking at individual holdings, Southwest Airls Co (LUV) accounts for about 12.35% of total assets, followed by American Airls Group Inc (AAL) and United Airls Hldgs Inc (UAL).

The top 10 holdings account for about 68.82% of total assets under management.

Performance and Risk

So far this year, JETS has lost about -50.38%, and is down about -48.55% in the last one year (as of 04/30/2020). During this past 52-week period, the fund has traded between $12.16 and $32.30.

The ETF has a beta of 1.65 and standard deviation of 33.33% 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 S&P Transportation ETF (XTN) tracks S&P Transportation Select Industry Index and the iShares Transportation Average ETF (IYT) tracks Dow Jones Transportation Average Index. SPDR S&P Transportation ETF has $105.50 million in assets, iShares Transportation Average ETF has $417.20 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
 
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 S&P Transportation ETF (XTN): ETF Research Reports
 
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Zacks Investment Research