As consumers hunt for Travel Tuesday deals, investors may want to consider adding an allocation to travel ETFs.
Travel Tuesday, a post-Thanksgiving shopping day akin to Black Friday and Cyber Monday, offers deals on flights, hotels, and other travel-related purchases. The travel industry has demonstrated its resiliency this year, as travel spending totaled $104 billion in September (the latest data available), per the U.S. Travel Association.
2 Travel ETFs to Consider
Investors have several options for gaining exposure to the rebounding travel industry via ETFs. Two popular options are the ALPS Global Travel Beneficiaries ETF (JRNY) and the Defiance Hotel Airline and Cruise ETF (CRUZ).
JRNY comprises 78 holdings as of November 24, while CRUZ holds 58 securities. An advantage of JRNY is that it is the more diversified of the two offerings.
In addition to holding traditional travel stocks, the ALPS travel ETF holds companies that fit the theme but may not be included in other travel ETFs. This includes Disney (DIS), Uber Technologies (UBER), and American Express (AXP).
JRNY offers exposure to companies involved in the global travel industry. This includes five segments: booking and rental agencies; airlines and airport services; hotels; casinos and cruise lines; and global travel beneficiaries.
The ETF offers global exposure, with 66% of the travel ETF by weight invested in U.S. companies. The fund also offers exposure to companies based in France, Japan, China, Switzerland, and Spain, among others.
JRNY notably tilts toward larger companies than travel ETF peer CRUZ. Seventy-four percent of JRNY by weight is in large-cap companies, while 50% of CRUZ by weight is in large-caps. JRNY’s large-cap bias could support the fund during periods of market volatility.
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vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for JRNY, for which it receives an index licensing fee. However, JRNY is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of JRNY.
