Will Travel Restrictions Amid Coronavirus Outbreak Affect Transportation ETFs?

The coronavirus outbreak could take its toll on the travel industry after companies like General Motors, Ford and other U.S. companies have been implementing employee travel restrictions to Wuhan, China. The outbreak has already taken the lives of 17 people and the latest travel setbacks could affect transportation ETFs.

Additionally, the Centers for Disease Control and Prevention and Homeland Security are already screening passengers flying to major U.S. airports from China. The World Health Organization held an emergency meeting in Geneva to discuss the outbreak, as well as how to control it from spreading further.

Latest news via a CNBC report:

  • “The Association of Flight Attendants, which represents about 50,000 cabin crew members at 20 airlines including United, said Tuesday it was contacting airlines to put in place precautions for crew members, while the Air Line Pilots Association distributed information from U.S. and international health officials on the virus.”
  • “General Motors has placed a temporary restriction on travel to the Chinese city where the outbreak emerged over the holidays, ‘out of an abundance of caution,’ the company said in a statement. “Employees are also reminded to take necessary protection measures suggested by medical authorities.”
  • “Ford Motor ‘has suspended all business travel to Wuhan, specifically, and is monitoring the situation very closely,’ a company spokesman said, adding that the Detroit automaker hasn’t suspended travel to other parts of China.”
  • “Fiat Chrysler hasn’t imposed any travel restrictions ‘at this time,’ but it’s advising employees to travel to China only for “essential business.” It’s also implemented a travel advisory for all people who need to get around in the region, a company spokesman said.”

Transportation ETFs to watch:

  1. iShares Transportation Average ETF (NYSEArca: IYT): seeks to track the investment results of the Dow Jones Transportation Average Index composed of U.S. equities in the transportation sector. The underlying index measures the performance of large, well-known companies within the transportation sector of the U.S. equity market. 
  2. SPDR S&P Transportation ETF (NYSEArca: XTN): seeks to provide investment results that correspond generally to the total return performance of an index derived from the transportation segment of a U.S. total market composite index. The index represents the transportation segment of the S&P Total Market Index (“S&P TMI”). 
  3. US Global Jets ETF (NYSEArca: JETS): seeks to track the performance of the U.S. Global Jets Index, which is composed of the exchange-listed common stock (or depository receipts) of U.S. and international passenger airlines, aircraft manufacturers, airports, and terminal services companies across the globe. 

For more real estate trends, visit ETFTrends.com.