The ALPS Global Travel Beneficiaries ETF (JRNY) rallied 5.03% last week, outperforming direct ETF competitors and global markets, as represented by the Morningstar Global Markets Index.
Despite continued recession and inflationary fears across the globe, positive trends in consumer travel spending and flight bookings ascending past 2019 levels are beginning to show up in earnings across JRNY’s cash flow-focused holdings, according to a recent insight from ALPS.
Quality screening across diversified global travel stocks has begun to separate JRNY from other travel-focused strategies as earnings season unfolds. According to ALPS, due to the fund’s quarterly quality screens, JRNY has a relative underweight to both high-debt cruise lines (0% weight in JRNY as of July 22) and airlines (11.47% weight in JRNY as of July 22), which have been extremely weak this quarter on higher fuel and labor costs.
JRNY’s Global Travel Beneficiaries segment, which provides exposure to luxury retailers, entertainment leisure, and payment processing companies, gained 5.64% last week and provided the largest contribution to the total fund return, ALPS wrote.
American Express Co. (AXP US, 4.47% weight as of July 22) jumped over 7% after reporting a sizable revenue beat and raising full-year guidance, with management citing exceptional credit trends. Thule Group AB (THULE SS, 0.25% weight as of July 22) gained nearly 15% after reporting Q2 earnings, sustaining quarter-over-quarter margins and offsetting higher raw material costs by passing them on to consumers, according to ALPS.
Security application provider, Clear Secure Inc. (YOU US, 0.24% weight as of July 22), rose over 12% as the company benefited from its vast network of air travel providers, with global air travel bookings rising back to 2019 levels. Retailers, Moncler SPA (MONC IM, 0.65% weight as of July 22) and LVMH Moet Hennessy Louis Vuitton (MC FP, 4.88% weight as of July 22) also moved higher last week due to positive earnings outlooks and their ability to weather higher costs by passing them on to their affluent customer bases, gaining 10.48% and 5.89%, respectively. Spending data from payment companies shows that affluent customers have been less affected by inflation than lower-earning cohorts, according to ALPS.
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