ETF of the Week: U.S. Global Jets ETF

COVID-19 impacts have meant reduced travel for many, but as pandemic concerns begin to ease, travel is picking up once more as businesses begin hosting conferences again and people plan vacations. While there remains the unknown of the impact of new variants and how things will look in the fall and winter, the summer looks hopeful for many.

With the reduction in hospitalizations and mortality due to vaccines, boosters, and immunity gained from contracting COVID-19, Lydon comments on an increase in travel opportunities.

“It’s all good for overall travel, and I think people are excited to get back together. I know we’re having a conference starting next week in Miami Beach, the Exchange ETF Conference. This is the first in-person event that the ETF industry will have in over two years,” Lydon says.

Pre-pandemic, JETS had less than $100 million in AUM, but it has since grown to over $4 billion as advisors and investors believe in the upside potential for the fund and the industry.

For trend-followers, JETS is currently above its 50-day moving average but under its 200-day moving average, Jaffe points out. Lydon believes it’s an ETF that is headed up, driven by pent-up demand from COVID-19 travel restrictions and concerns.

“We look at the numbers from the major airlines, and they are feeling very confident that 90% of leisure travel is back; however, what isn’t back yet is business travel,” Lydon says.

The pandemic has created a whole new business model built around virtual meetings and a virtual workplace for white-collar positions, but Lydon believes that meeting in person is a vital component for many businesses.

“Once business travel starts to really kick in and gets to anywhere like it was before COVID, that’s going to be very, very profitable for the airline industry because they can hike prices because there’s a little bit more flexibility in ticket prices when you factor in business travel,” Lydon explains.

For long-term trend-followers, JETS could be a fund to buy once it rises above its 200-day moving average consistently, but for short-term trend-followers, it could be an investment to consider, although a 50-day average play entails more volatility and trades, as well as more ins and outs.

“As we always talk about, it really depends on the individual investor and you, whether this makes sense as a long-term buy-and-hold or, if you’re going to trade it, what’s your trading discipline; 200-day average isn’t required a lot of trading, but you’ve got to pay attention, and that’s really key and critical,” Lydon says.

For more news, information, and strategy, visit ETF Trends.