US-listed JETS currently has $4bn AUM
Europe’s first ETF targeting the recovery of the global airline industry will launch later this month.
U.S. Global Jets UCITS ETF (JETS) will list on the London Stock Exchange later this month via white-label ETF platform HANetf with a total expense ratio (TER) of 0.65%.
JETS tracks the U.S. Global Jets index of 52 companies associated with the airline industry.
The US-listed JETS ETF launched in 2015 and had $40m assets under management (AUM) at the start of 2020. Enjoying a surge of popularity since the height of the coronavirus pandemic, the strategy recently passed the $4bn assets milestone.
The products’ underlying index has seen 19.3% returns since inception in June 2011, versus 57.3% in the past 12 months.
While the remit of the companies within the JETS basket are international, it is worth noting all ten of its top holdings are US-based and alone claim a weighting of 56.4%.
JETS will look to target the continued recovery of the aviation and travel industries, with global expenditure on leisure and business travel falling by 50% and 52%, respectively, between 2019 and 2020.
The two segments are expected to post respective upticks of 45% and 21% in 2021.
However, with many companies already posting double-digit share price recoveries so far this year, there will be some valid questions raised about how much of the immediate bounce-back has already been priced in before an aviation-focused wrapper is available to European investors.
Frank Holmes, CEO and CIO of US Global Investors, commented: “We still believe there is great upside potential in terms of European commercial flight demand, especially now that EU officials have agreed that member states should start allowing fully vaccinated foreigners to visit.
“Like US investors, Europeans are signalling that they want investment vehicles that seek to capitalise on the reopening of the global economy.
“According to the European Fund and Asset Management Association’s (EFAMA) review of investment trends in 2020, UCITS net assets increased 7.6% during the year, with much of this growth occurring in the fourth quarter, when vaccine breakthroughs raised hopes that travel restrictions would be ending sooner rather than later.”
Hector McNeil co-founder and co-CEO at HANetf added: “It is no secret that the travel industry has suffered tremendously as a result of the coronavirus pandemic. However, as the light at the end of the tunnel begins to shine more brightly, many investors will have rightly identified the sector as one of the key recovery stories of 2021.”
The arrival of JETS follows last week’s launch of the Airlines, Hotels and Cruise Lines UCITS ETF (TRYP), Europe’s first dedicated travel industry product.