US Global Jets ETF Review: How to Buy it In Canada (2022)

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.

The picture has been different in the last few months due to rising vaccination rates and increasing demand for air travel, making the airline industry a popular recovery bet for investors worldwide.

Are you interested in finding a way to invest in the airline industry to capitalize on the recovery of airlines worldwide? My 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
US Global Jets ETF review
7.5/10Our Score

US Global Jets ETF

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.

Pros
  • Provides exposure to the global airline industry
  • Mitigates capital risk through diversification
  • Can be used to express an industry view
  • Offers a way to invest in the global airline industry recovery
Cons
  • A high-risk investment amid pandemic-related uncertainties
  • Does not diversify into fixed-income assets to mitigate capital risk

What Is US Global Jets ETF?

US Global Jets logo

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. The fund invests in publicly-traded companies in the same proportion as the securities are held by the underlying index.

Investing in JETS ETF offers you the opportunity to invest in a group of publicly-traded companies focusing on one industry in the form of a single investment.

Instead of making several individual trades to acquire the securities held by the fund, investing in JETS ETF offers you a lower-cost and hands-off approach to investing the assets held by the fund, which in this case, is the global airline industry.

What Does US Global Jets ETF Invest In?

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

This section of my US Global Jets ETF review will provide you with various breakdowns of the fund’s asset allocation across securities from different countries, industries, and the weightings based on various market capitalizations.

Fund Country Breakdown

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 75.06% of its asset allocation.

Its second-most significant geographical exposure is to Canadian securities, accounting for 4.85% of its asset allocation. Japanese companies come in third, accounting for 2.83% of the fund’s asset allocation.

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 12.86% of its assets to the transportation infrastructure industry as well.

JETS ETF also allocates 8.04% of its funds in the internet industry through its exposure to internet media companies related to the airline sector.

fund industry 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.

US Global Jets ETF Top Holdings

This section of my JETS ETF review will discuss the fund’s top holdings to give you a more specific idea about the securities held within the fund.

Top 10 Holdings

US Global Jets ETF invests in a globally diversified portfolio of equity securities related to the airline industry, but its top holdings comprise of companies listed on North American stock exchanges.

Its top three holdings comprise Delta Airlines, accounting for 10.26% of its weighting, United Airlines, accounting for 10.08%, and American Airlines Group, accounting for 10.02% of its asset allocation.

JETS ETF MER And Fees

JETS ETF MER And Fees

US Global Jets ETF is a passively-managed fund that replicates the performance of the US Global Jets Index to provide you with investment returns. However, 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

This section of my JETS ETF review will provide you with an overview of the fund’s performance over the years to give you a clearer picture of how the fund has been doing and what you can expect in terms of investment returns from the fund if you decide to invest in JETS ETF.

Performance History

I like adding a graph representing the fund’s price movements to share a visual depiction of its performance, but US Global ETFs does not provide one for JETS ETF on its website. However, the table above offers a pretty clear picture.

The global airline industry has been through a rough couple of years due to the pandemic, which reflects in the fund’s returns since its inception. With its net asset value down by 1.81% since its inception, the fund is essentially at a loss since it began trading on the stock market.

Its nine-month returns from writing show a staggering decline of almost 21%. However, the fund’s performance has improved as pandemic-related fears have started subsiding.

US Global Jets ETF saw its net asset value increase by 4.75% in the last month at writing, showing signs of life for the airline industry. Remember that past performance is not a precursor to future returns.

The JETS ETF’s performance over the next decade could be drastically different from its past performance since the fund’s inception, provided that the pandemic subsides and global demand for air travel returns close to pre-pandemic levels. It is quite literally up in the air at the moment – pun intended.

Who Runs Jets ETF?

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 worst 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

The cheapest way to buy ETFs is from discount brokers. You can purchase U.S ETFs with a Canadian trading platform, as long as you make sure it has a U.S dollar account. My top choices in Canada are:

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To learn more, check out my full breakdown of the best trading platforms in Canada here.

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.

The fund offers you hands-free exposure to a globally diversified basket of airline stocks in a single product.

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.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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