Should You Invest in the U.S. Global Jets ETF (JETS)?

Zacks Equity Research
·3-min read

Looking for broad exposure to the Industrials - Transportation/Shipping segment of the equity market? You should consider the U.S. Global Jets ETF (JETS), a passively managed exchange traded fund launched on 04/30/2015.

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Industrials - Transportation/Shipping is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.

Index Details

The fund is sponsored by U.S. Global Investors. It has amassed assets over $1.71 billion, making it one of the larger ETFs attempting to match the performance of the Industrials - Transportation/Shipping segment of the equity market. JETS seeks to match the performance of the U.S. Global Jets Index before fees and expenses.

The U.S. Global Jets Index tracks the performance of Airline Companies across the globe with an emphasis on domestic passenger airlines.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.60%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.37%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Southwest Airls Co (LUV) accounts for about 11.41% of total assets, followed by Delta Air Lines Inc Del (DAL) and United Airls Hldgs Inc (UAL).

The top 10 holdings account for about 63.18% of total assets under management.

Performance and Risk

Year-to-date, the U.S. Global Jets ETF has lost about -47.59% so far, and is down about -46.04% over the last 12 months (as of 10/29/2020). JETS has traded between $12 and $32.27 in this past 52-week period.

The ETF has a beta of 1.48 and standard deviation of 41.08% for the trailing three-year period, making it a high risk choice in the space. With about 40 holdings, it has more concentrated exposure than peers.

Alternatives

U.S. Global Jets ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, JETS is a sufficient option for those seeking exposure to the Industrials ETFs area of the market. Investors might also want to consider some other ETF options in the space.

First Trust NASDAQ Transportation ETF (FTXR) tracks Nasdaq US Smart Transportation Index and the iShares Transportation Average ETF (IYT) tracks Dow Jones Transportation Average Index. First Trust NASDAQ Transportation ETF has $633.14 million in assets, iShares Transportation Average ETF has $1.18 billion. FTXR has an expense ratio of 0.60% and IYT charges 0.42%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.


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U.S. Global Jets ETF (JETS): ETF Research Reports
 
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
 
iShares Transportation Average ETF (IYT): ETF Research Reports
 
First Trust NASDAQ Transportation ETF (FTXR): ETF Research Reports
 
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