Travel and tourism ETF rally set to continue

TThe travel and tourism industry, which has been affected by the Delta variant of COVID-19 for months, made a big comeback last week. This is especially true as airline stocks as well as online booking sites, ridesharing, entertainment and leisure companies have soared on a few earnings announcements, a better-than-ever employment report. scheduled for October and Pfizer’s PFE-promoting drug for the treatment of the new virus.

Airbnb ABNB and Expedia Group EXPE reported strong third quarter results. The travel disruptor had its strongest quarter ever with revenues up 67% from the period last year and 36% higher than two years before the pandemic. On the flip side, Expedia’s revenue grew 97% year over year with a 117% increase in gross bookings. Airbnb shares jumped 12.1% and Expedia shares jumped 15.1% when the results were announced.

Hiring resumed in October after a summer slowdown. The US economy created 531,000 jobs with new jobs in several categories such as manufacturing, hospitality, professional and business services, and unemployment fell to 4.6%. Meanwhile, Pfizer has announced that its drug COVID-19, used with an HIV drug, has significantly reduced the risk of hospitalization and death by 89%, which will likely speed up travel plans (see: all Industrial ETFs here).

That said, travel and tourism ETFs surged during the November 5 trading session. We’ve highlighted them below:

SonicShares Airlines, Hotels, Cruise Lines ETF TRYP – Up 6.6%

This fund provides exposure to a global portfolio of companies that focus on what many investors see as the “core” of business and leisure travel: the airline, hospitality and cruise industries. . It follows the Solactive Airlines, Hotels, Cruise Lines index, holding 60 shares in its basket with a well-distributed exposure. TRYP was recently launched into space in May and has so far amassed $ 5.1 million in its asset base. It trades an average daily volume of 26,000 shares and charges 75 basis points in annual fees.

US Global Jets ETF JETS – Up 6.4%

This fund provides exposure to the global airline industry, including airline operators and manufacturers worldwide, by tracking the US Global Jets Index. In total, the product holds 51 stocks which are heavily focused on the top four companies with double-digit exposure each. The other companies do not hold more than 3.1% of the shares. The fund has raised $ 3.5 billion in its asset base and has a significant trading volume of 5.9 million shares per day. It charges investors 60 basis points in annual fees and has a Tier 3 Zacks ETF (hold) with a high risk outlook (read: Profits or Oil: What impact will the upcoming Airlines ETF have?).

ETFMG Travel Tech ETF AWAY – Up 5.4%

It is the first ETF that provides direct access to the global technology-driven travel and tourism industry. It tracks the Prime Travel Technology Index, charging investors a 75 basis points annual fee. The fund has 36 stocks in its basket, with travel booking and reservation companies accounting for 51.9% of assets, followed by 17.5% shares in travel consulting companies. AWAY has accumulated $ 326.3 million in its asset base and trades an average daily volume of 190,000 shares.

AdvisorShares Hotel ETF BEDZ – Up 4.9%

This fund also made its debut in space. It has accumulated $ 9.9 million in its asset base since the end of April. It is the only actively managed ETF that invests exclusively in global hospitality and travel related services. The product contains 31 actions in its basket which are fairly distributed among the components. It charges 79 basis points in annual fees and trades an average daily volume of 9,000 shares.

CRUZ ETF on Defiance Hotels, Airlines and Cruise – Up 4.8%

This product tracks the BlueStar Global Hotels, Airlines and Cruises Index, which measures the performance of globally listed companies primarily active in the travel and tourism industries. With 53 stocks in its basket, US companies make up 45.8% of the portfolio while Panama, Japan and the UK round out the next three with single-digit exposure each. CRUZ, launched in June, has raised around $ 16.6 million in its asset base and charges 45 basis points in annual fees. The volume is lower because he trades around 12,000 shares per day on average.

ALPS Global Travel Beneficiaries ETF JRNY – Up 4.2%

This ETF, which launched on September 9, provides diversified exposure to the global travel industry by tracking the S-Network Global Travel Index. The fund’s portfolio invests in 75 companies active in booking and rental agencies, airlines and airport services, hotels, casinos and cruise lines, as well as travel-related companies identified through algorithms of ‘machine learning, such as luxury retail, entertainment, leisure, food service and beverage and payment processing providers. JRNY has accumulated $ 8.4 million in its asset base and charges 65 basis points in annual fees. It trades an average daily volume of 8,000 shares.

Solid outlook

The solid trend is expected to continue as the holiday season approaches given the reopening of national and international borders for travel.

The United States plans to lift travel restrictions and reopen to fully vaccinated international travelers on November 8. The combination of this news has boosted enthusiasm for the economic recovery and shows clear signs of a travel recovery. In fact, airlines recently reported a solid travel trend. Delta Air Lines said its international bookings had jumped 450% in the six weeks since the United States announced it was reopening to fully vaccinated travelers from abroad. The news helped propel a rally of 13% of the stock last week, the largest since November 2020. American Airlines AAL jumped 14% and Southwest Airlines (LUV) gained more than 10% for the week ( read: Travel and Tourism ETF up for grabs on easing travel restrictions in the US).

With the first positive signs in the fourth quarter and with many countries announcing new openings to international travelers, investors are now feeling increasingly confident that the recovery will continue, boosting travel demand. Additionally, airlines are forecasting strong demand for vacation travel after more than a year of travelers stranded at home.

The emergence of COVID-19 vaccine recalls is also helping to drive demand for the industry. Additionally, the $ 1.2 trillion infrastructure bill, which has passed the House of Representatives and awaits President Joe Biden’s signature, will also provide fuel for the travel industry. The bill would invest $ 550 billion in new funding in transportation projects, the utility network and broadband. Including $ 110 billion for roads, bridges and other major projects, as well as $ 66 billion for passenger and freight rail transport and $ 39 billion for public transit.

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Pfizer Inc. (PFE): Free Inventory Analysis Report

Expedia Group, Inc. (EXPE): Free Inventory Analysis Report

ETFMG Travel Tech ETF (AWAY): ETF Research Reports

American Airlines Group Inc. (AAL): Free Stock Analysis Report

ETF US Global Jets (JETS): ETF Research Reports

Airbnb, Inc. (ABNB): Free Stock Analysis Report

AdvisorShares Hotel ETF (BEDZ): ETF Research Reports

SonicShares Airlines, Hotels, Cruise Lines ETF (TRYP): ETF Research Reports

Defiance Hotel, Airline and Cruise ETF (CRUZ): ETF Research Reports

ETF ALPS Global Travel Beneficiaries (JRNY): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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