Airline ETF Waiting to Be Cleared for Takeoff
December 9th at 10:00am by Tom Lydon
Until now, there hasn’t been a truly focused airline exchange traded fund (ETF) available for investors. But sometime in January, Claymore is expected to launch such a fund: the Claymore/NYSE Arca Airline ETF.
According to the Securities and Exchange Commission (SEC) filing, the fund will contain 26 names in the passenger airline industry – 70% of which are domestic, 30% of which are global. The top three components in each of the two categories will be weighted up to 15% for domestic airlines and 4.5% for international.
The index provider is Archipelago Holdings, Inc.
At the moment, the closest thing investors have to an airline ETF would be the iShares Dow Jones U.S. Transportation (IYT), which has several airlines in small percentages.
The industry has had its share of challenges this year, mostly owing to record oil prices hit this summer coupled with slowing consumer spending. But things are looking up for the airline industry: losses in 2009 are predicted to shrink to half of this year’s level, report Andrea Rothman and Steve Rothwell for Bloomberg.
In the last 12 months, carriers have lost $5 billion. As oil has retreated from all-time highs, predictions for next year have gotten a little rosier, but the industry could still be in the red.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.