After being grounded by the global pandemic, airlines are once again ready to take flight.
In the upcoming webcast, Airline Stocks Cleared for Departure This Summer, Frank Holmes, CEO and Chief Investment Officer, U.S. Global Investors, will explain how airlines are poised to benefit from pent-up consumer demand heading into the historically busy summer travel season.
Investors can look to the U.S. Global Jets ETF (NYSEArca: JETS), the lone ETF dedicated to airline stocks, to access the growing global airline industry.
“With JETS, investors gain exposure not just to domestic airlines, but to international airlines as well. This is crucial, as the emergence and growth of the middle class in the developing world has arguably been one of the most important factors in the worldwide rise in air travel demand. JETS offers exposure not just to airlines but also to the industries that support them, including aircraft manufacturers, airports and terminal service industries,” according to a U.S. Global ETFs research note.
JETS follows the U.S. Global Jets Index, which uses fundamental screens to select airline companies, with an emphasis on domestic carriers, along with global aircraft manufacturers and airport companies.
Many have turned to JETS as a way to bet on the broad recovery of the airline industry that has been among the hardest hit by the coronavirus pandemic after global governments halted air travel in a bid to contain the virus. The play has also been a way for investors to bet against Warren Buffett, Berkshire Hathaway Inc.’s chief executive, who sold major stakes in the four biggest U.S. carriers earlier this year.
JETS has also become a popular way for many retail investors to gain diversified exposure to the airline industry, as opposed to betting on single airliners. JETS saw significant inflows from deep-value investors and institutional investors like hedge fund managers. These inflows have accelerated as the outlook for an effective COVID-19 vaccine has become more promising, pushing airline stocks higher.
Holmes has also pointed out that the improvement in the airline industry has coincided with the increased vaccination rollouts across the world. As of June 1, over half of all U.S. adults are either fully or partially vaccinated, putting the U.S. well ahead of other developed and emerging countries.
“I expect the next major recovery story to be Europe, which is still lagging behind the U.S. in terms of vaccination rates but accelerating. On June 1, a new digital COVID passport went live in seven European Union (EU) member countries, allowing travelers to move more freely throughout the bloc,” Holmes said in a recent note.
Financial advisors who are interested in learning more about the airline industry can register for the webcast here.