ETF Spotlight: Guggenheim Airline (FAA) | ETF Trends

ETF Spotlight on Guggenheim Airline (NYSEArca: FAA), part of a weekly series.

Assets: $51 million

Objective: Tracks the NYSE Arca Global Airline Index, minus fees and expenses.

Holdings: Top holdings include United Airlines (NYSE: UAL, 16.4%), Southwest Airlines (NYSE: LUV, 13.8%) and Delta (NYSE: DAL, 12.8%)

What You Should Know

  • FAA reserves its largest allocation for United States airlines, which get 71.8% of the fund’s weight.
  • Other countries in the fund include Germany (5.3%), Japan (5.2%), Singapore (5.1%) and the United Kingdom (3.6%)
  • Mid-cap companies are the largest weighting, at 54%. Large-caps account for 27.3% and small-caps account for 18.7%.
  • This is the only ETF that gives pure-play exposure to the airline industry

The Latest News

  • The airline industry is coming off its best earnings season since the third quarter of 2007
  • Proof of the global travel industry mending can be found in Delta Air Lines Inc. (NYSE: DAL), which said Wednesday it posted a profit in the third quarter and expects to repeat that in the fourth. The Associated Press reports that most of the recovery owes to international flights and higher baggage fees.
  • U.S. Airways (NYSE: LCC) credited its better than expected earnings with the fact that they’ve cut costs, raised money from assorted fees and got smarter about ticket prices.
  • American Airlines (NYSE: AMR) credited its earnings results with an improvement in the average fare per mile, which rose 11% from last summer. [Airline ETF Grows on the Fly.]
  • Passenger revenue in the third quarter rose 19% on higher demand and ticket prices, while revenue from cargo shipments surged 28% on higher volume and prices. [Airline Merger News Boosts ETF.]

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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.