US Global Jets ETF Review (Oct 2024): How to Buy it In Canada
The global airline industry saw its wings clipped during the pandemic. COVID-19 negatively impacted all sectors of the global economy, but the aviation industry was one of the worst-hit and ill-positioned to recover sectors.
Are you interested in finding a way to invest in the airline industry without having to pick your own stocks?
This US Global Jets ETF (JETS) review will give you a closer look at an investment tool you can use to invest in the global airline industry.
Our Verdict
7.5
Invest In The Global Airline Industry
Invest in a passively managed ETF to gain exposure to a globally diversified portfolio of companies in the airline industry.
What Is US Global Jets ETF?
Established on May 28, 2015, US Global Jets ETF (JETS) is a fund designed to provide you with investment returns by replicating the performance of the US Global Jets Index.
The fund is effectively designed to provide you with exposure to the global airline industry, including operators and manufacturers worldwide.
JETS is currently trading at close to $19.425.
JETS Key Facts
As of Dec 31, 2021:
- Ticker Symbol: JETS
- Exchange: New York Stock Exchange
- Assets Under Management: $2.71 Billion (As of Aug 17, 2022)
- MER: 0.60%
- Currency Traded: CAD
- Registered Accounts Availability: Yes
JETS ETF MER And Fees
The fund comes with a Management Expense Ratio (MER) of 0.60%, making it a relatively higher-cost fund to own in the long run.
US Global Jets ETF Performance And Returns
Performance as of July 31, 2022:
| NAV % | Market Value % | |
| 1 month | 7.46 | 7.27 |
| 3 month | -17.62 | -17.52 |
| 6 month | -16.55 | -16.59 |
| 9 month | -19.92 | -19.82 |
| 1 Year | -22.22 | -22.16 |
| 3 Year | -16.06 | -16.03 |
| 5 Year | -9.29 | -9.28 |
| YTD | -16.08 | -16.07 |
| Since Inception | -4.01 | -4.01 |
What Does US Global Jets ETF Invest In?
US Global Jets ETF is effectively a pure-play on the global airline industry. The fund manager invests in over 50 publicly-traded companies in the global airline industry. It includes airline operators and manufacturers that produce commercial airline jets for the industry.
The fund manager replicates the performance of the US Global Jets Index, an index that uses a smart beta 2.0 strategy to track the global airline industry, and it includes airline companies, airport operators, and any internet media and other services related to airlines.
The index uses a combination of fundamental factors to determine the most efficient airline companies to invest in and offers diversification to companies listed on stock exchanges worldwide.
Investing in JETS ETFs could be considered equivalent to investing in a group of some of the top-performing airlines worldwide.
JETS ETF Asset Allocation
The fund manager states that it invests in a globally diversified portfolio of companies in the airline industry.
However, the bulk of the fund’s asset allocation is towards US-listed securities, that account for 76.08% of its asset allocation. Its second-most significant geographical exposure is to Japanese companies, accounting for 2.91% of its asset allocation. Chinese companies come in third, accounting for 2.81% of the fund’s asset allocation.
| United States | 76.08% |
| Japan | 2.91% |
| China | 2.81% |
| Canada | 2.59% |
| Turkey | 2.43% |
| France | 1.88% |
| Spain | 1.54% |
| United Kingdom | 1.43% |
| Germany | 1.43% |
| Brazil | 1.26% |
US Global Jets ETF Fund Industry Breakdown
While JETS ETF is a pure-play on the global airline industry, the fund does diversify into a few other sectors of the global economy. Airlines account for almost 74% of the fund’s asset allocation, but it allocates 13.64% of its assets to the transportation infrastructure industry as well.
JETS ETF also allocates 7.89% of its funds to the internet industry through its exposure to internet media companies related to the airline sector.
| Airlines | 74.46% |
| Transportation Infrastructure | 13.64% |
| Internet | 7.89% |
| Transportation | 2.14% |
| Commercial Services | 1.06% |
| Other | 0.81% |
US Global Jets ETF Fund Market Cap Breakdown
JETS ETF allocates over half of its assets under management to large-cap companies, over a third of its assets to mid-cap companies, and over 4% to small-cap companies trading worldwide.
| Large Cap (over $10 Billion) | 46.07% |
| Mid Cap ($1-$10 Billion) | 49.66% |
| Small Cap (under $1 Billion) | 4.27% |
| Average Weighted Market Capitalization | $14.04 Billion |
US Global Jets ETF Top Holdings
US Global Jets ETF invests in a globally diversified portfolio of equity securities related to the airline industry, but its top holdings comprise companies listed on North American stock exchanges.
Its top three holdings comprise American Airlines Group, accounting for 9.51% of its weighting, Southwest Airlines, accounting for 9.30%, and Delta Airlines, accounting for 9.30% of its asset allocation.
| % Net Assets | Name | Ticker | Shares Held | Market ($) |
|---|---|---|---|---|
| 9.51% | AMERICAN AIRLS GROUP INC | AAL | 17,343,039.00 | 257,370,698.76 |
| 9.30% | SOUTHWEST AIRLS CO | LUV | 6,460,544.00 | 251,832,005.12 |
| 9.30% | DELTA AIR LINES INC DEL | DAL | 7,300,511.00 | 251,794,624.39 |
| 9.03% | UNITED AIRLS HLDGS INC | UAL | 6,253,898.00 | 244,277,255.88 |
| 4.28% | FRONTIER GROUP HLDGS INC | ULCC | 8,379,733.00 | 115,807,910.06 |
| 3.45% | SPIRIT AIRLS INC | SAVE | 3,851,648.00 | 93,402,464.00 |
| 3.06% | HAWAIIAN HOLDINGS INC | HA | 5,006,668.00 | 82,860,355.40 |
| 3.05% | ALASKA AIR GROUP INC | ALK | 1,765,317.00 | 82,422,650.73 |
| 2.76% | SKYWEST INC | SKYW | 3,209,505.00 | 74,781,466.50 |
| 2.74% | AIR CANADA | AC CN | 4,966,774.00 | 74,069,633.13 |
US Global Jets ETF Sector Weighting
| Sectors | Investment % | Cat % |
|---|---|---|
| Basic Materials | 0.00 | 4.32 |
| Consumer Cyclical | 9.40 | 7.56 |
| Financial Services | 0.00 | 1.69 |
| Real Estate | 0.00 | 1.30 |
| Communication Services | 0.00 | 0.87 |
| Energy | 0.00 | 0.41 |
| Industrials | 90.60 | 24.56 |
| Technology | 0.00 | 36.96 |
| Consumer Defensive | 0.00 | 0.86 |
| Healthcare | 0.00 | 5.83 |
| Utilities | 0.00 | 15.63 |
Who Runs Jets ETF?
JETS ETF is a product offered by US Global Investors, a small Texas-based investment firm established in 1968.
The investment management firm became popular when it made a surprising bet on the emerging Canadian cryptocurrency mining stock, HIVE Blockchain, during the first cryptocurrency hype in September 2017.
The investment firm saw incredible success due to its early entry into the speculative and volatile asset class. The fund has since decreased its risk through exposure to the cryptocurrency industry by capturing an US$18.2 million gain on its initial US$2.4 million investment in the space.
JETS ETF is the fund’s pure-play airline-focused fund that has been one of its top-performing funds amid the airline industry’s recovery.
Is US Global Jets ETF A Good Investment?
Determining whether US Global Jets ETF is a good investment depends on your long-term view of the global airline industry.
Historically, airlines have been some of the riskiest businesses to own because the list of major airlines that have ceased operations or relied on bankruptcy protection to reorganize themselves is extensive.
A global pandemic highlighted the challenges facing the aviation industry. Most global markets collapsed with the initial onset of the global health crisis but managed to recover to new all-time highs. Airlines suffered some of the worst losses but without the rapid recovery of the rest of the market.
The ongoing recovery in the airline industry still provides plenty of room for the fund to offer investment returns through capital gains. The airline industry is also a sector that governments worldwide cannot allow to fail, as proven by many major airlines in the past despite their challenges.
If you are hopeful about a global return to relative normalcy in a post-COVID world, JETS ETF could be a viable investment, but it entails a significant degree of capital risk.
I would advise being cautious with how much you choose to invest in the fund if you add JETS ETF to your portfolio.
How To Buy US Global Jets ETF In Canada
Conclusion
US Global Jets ETF (JETS) is one of the world’s largest ETFs trying to emulate the performance of the global industrials and transportation industries, focusing primarily on airline companies with domestic passenger flight operations.
If you are bullish on the industry’s long-term prospects, there might be no better way to get investment returns from the performance of the airline industry than JETS ETF.
If you want to narrow down your focus on the airline industry and invest in an individual airline stock to your self-directed portfolio, check out my Air Canada stock review to get a better picture of the flag-carrying Canadian airline stock.
Check out my breakdown of the best hydrogen ETFs in Canada if you are interested in an industry with promising long-term upside potential.