After U.S. health officials announced the first confirmed Ebola patient who flew to Dallas from Liberia, transportation-sector exchange traded funds plunged Wednesday, with airline stocks under heavy pressure.
While there are no longer any airline-specific ETFs on the market, the iShares Transportation Average ETF (NYSEArca: IYT) and the SPDR S&P Transportation ETF (NYSEArca: XTN) both provide airline industry exposure without the commitment or risks of a single stock. IYT has a 13.9% allocation toward airliners while XTN includes a 23.5% weight in airlines. IYT dipped 2.5% Wednesday while XTN fell 2.9%. Year-to-date, IYT has increased 15.1% and XTN gained 14.8%.
United Continental Holdings (NYSE: UAL) led the drop among major airlines, falling 2.8% Wednesday. UAL makes up 3.4% of IYT’s portfolio and 2.4% of XTN.
Among U.S. airliners, United Continental has the largest exposure to Africa through its Star Alliance, CNN reports.
“I think it’s a general concern that people are going to start traveling less if this gets worse,” Joe DeNardi, a Stifel Nicolaus analyst, said in the article. “There’s no discrimination between international and domestic.”
While only a handful of U.S. flights go in and out of Africa, Denardi points out that it is up to passengers to back off from flying for fear of exposure to any danger diseases, Bloomberg reports.
The Bloomberg U.S. Airlines Index, a gauge of all 11 U.S. carriers fell as much as 3.9% Wednesday.