Airlines have shown resilience after a tough 2020, heading into 2021 with newfound optimism on the back of continued vaccine rollouts and borders reopening for both leisure and business travel. As rising cases of the Delta variant have once again sparked fear in some tourists, however, will the positive outlook for the global airline industry be short-lived?
In the upcoming webcast, Can Airline Investors Finally Remove Their Seatbelts?, Frank Holmes, CEO, U.S. Global Investors, will discuss whether the markets could be reaching a peak in “fear” over industry concerns, and why airline sentiment has the potential to improve, particularly heading into the busy holiday travel months.
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.
JETS follows the U.S. Global Jets Index, which uses fundamental screens to select airline companies, placing 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, which 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 accelerated as the outlook for an effective COVID-19 vaccine became more promising, pushing airline stocks higher.
“Despite the downturn in flight demand this summer, we remain bullish in the long term. This week the FDA fully approved the Pfizer vaccine, giving government agencies and private corporations the green light to mandate vaccinations if they choose to. People at higher health risks in Germany, Israel and the U.S. have already begun receiving a booster shot against the virus,” Holmes said in a recent note.
“In May 2020, legendary investor Bill Miller said that if you don’t own the airlines, ‘you’re making a bet against the vaccine.’ Nearly a year and a half later, I still see the vaccine as part of the path forward to commercial air travel’s full recovery,” he added.
Financial advisors who are interested in learning more about the airline industry can register for the Wednesday, September 22 webcast here.