“Passengers may be getting forcibly removed from flights, but you can’t drag away investors from the group. Shares of American (AAL), Delta (DAL) and United (UAL) are each up about 6% this year while Southwest (LUV) has surged 20%,” reports CNN Money. “In fact, the NYSE Arca Airline Index, which includes these four major carriers as well as some of the smaller regional ones, recently got back to levels that it last traded at nearly 16 years ago — just before the September 11 terrorist attacks.”
Those four airline stocks combine for nearly half of the roster in JETS. The ETF, which is just 26 months old, has nearly $101.5 million in assets under management.
JETS follows a type of smart-beta index that screens for multiple fundamental factors, including cash return on invested capital (CROIC) with additional inputs based on sales per share growth, gross margins, and sales yield. The ETF includes a hefty tilt toward airlines, but it also holds aircraft manufacturers and airports & terminal services.
“And with fewer airlines flying, there hasn’t been as much of a need for the industry to offer as many aggressively low fares to get leisure and business travelers on board,” according to CNN Money. “Analysts for the U.S. Global Jets (JETS) exchange-traded fund, which owns the major airlines and is up 12% in 2017, predict more smooth skies ahead. They noted in a report that strong consumer confidence is a plus and travel demand should remain strong.”
For more information on airline ETFs, visit our Airline category.