JETS tracks U.S. Global Jets Index, which is comprised of U.S. and international passenger airline companies, aircraft manufacturers and airports and terminal services companies. The universe of airline companies around the globe is screened for investability, a minimum market cap of $100 million and liquidity. The underlying index will hold between 30 and 35 airline companies. [New Airline ETF Takes Off]
JETS has another catalyst, though it is one the ETF has yet to acknowledge: Lower oil prices. The United States Oil Fund (NYSEArca: USO) is off 3.6% over the past month and JETS has been notably worse over that period, though a case can be made that JETS and oil prices are unlikely to continue falling in unison.
“US airlines are very oil sensitive (10% off the oil price has historically led to 14% outperformance), are cheap on P/E relatives and oversold. Capital discipline still looks reasonable (with capex to sales still at the low end of its historical range),” notes Credit Suisse.
Last month, the bank put outperform ratings on Delta (NYSE: DAL), Southwest (NYSE: LUV), United Continental (NYSE: UAL) and JetBlue (NasdaqGS: JBLU). Those are four of JETS’s top five holds and the quartet combines for just over 38% of the ETF’s weight.
US Global Jets ETF
