Delta Airlines Optimism Sparks Rally in Travel ETFs

Travel stocks and ETFs surged on the Apr 14 trading session especially after Delta Air Lines DAL injected optimism into the space stating that consumers will continue flying this year despite higher fares.

While most of the segments related to the travel industry spiked, U.S. Global Jets ETF JETS, Kelly Hotel & Lodging Sector ETF HOTL, Defiance Hotel, Airline, and Cruise ETF CRUZ SonicShares Airlines, Hotels, Cruise Lines ETF TRYP, and AdvisorShares Hotel ETF BEDZ led the way higher.

Though Delta Airlines reported a loss in the first quarter, it returned to profitability on the back of booming travel demand. The air carrier stated that travel demand has been robust and is keeping pace with surging fuel costs (read: 5 ETFs to Bet on the Favorite Sectors of Q1 Earnings).

The industry fundamentals remained robust for the travel sector. A strong rebound in summer travel bookings due to an accelerating return of business and international travel along with vaccine acceptance, and reopening of borders will propel the sector higher.

Let’s delve deeper into the above-mentioned ETFs:

U.S. Global Jets ETF (JETS) – Up 5.3%

U.S. Global Jets ETF provides exposure to the global airline industry, including airline operators and manufacturers from all over the world by tracking the U.S. Global Jets Index. The product holds 51 securities and charges 60 bps in annual fees (read: U.S. Stocks Log Worst Q1 in 2 Years: Top-Ranked ETFs Shine).

U.S. Global Jets ETF has gathered $3.2 billion in its asset base while sees a heavy trading volume of nearly 10.7 million shares a day. JETS has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

Kelly Hotel & Lodging Sector ETF (HOTL) – Up 5.1%

Kelly Hotel & Lodging Sector ETF targets the entire hotel & lodging industry by tracking the Strategic Hotel & Lodging Sector Index. It offers exposure to the companies focusing on hotel and lodging management and operations, lodging platform services, timeshare properties and real estate throughout the developed world. Kelly Hotel & Lodging Sector ETF holds 40 stocks in its basket and charges 78 bps in fees per year from investors.

Kelly Hotel & Lodging Sector ETF has accumulated $1.4 million in its asset base since its inception in January. It trades in a paltry average daily volume of 1,000 shares.

Defiance Hotel, Airline, and Cruise ETF (CRUZ) – Up 4.8%

Defiance Hotel, Airline, and Cruise ETF tracks the BlueStar Global Hotels, Airlines, and Cruises Index, which measures the performance of globally listed companies primarily engaged in the travel and tourism industries. Holding 55 stocks in its basket, American firms make up for 72.3% of the portfolio while Britain, Japan and the Ireland round off the next three with single-digit exposure each.

Defiance Hotel, Airline, and Cruise ETF, launched in June 2021, has gathered around $40 million in its asset base and charges 45 bps in annual fees. Volume is lower as it exchanges around 76,000 shares a day on average.

SonicShares Airlines, Hotels, Cruise Lines ETF (TRYP) – Up 4.8%

SonicShares Airlines, Hotels, Cruise Lines ETF provides exposure to a global portfolio of companies that are focused on what many investors consider to be the “core” of business and leisure travel: the airline, hotel and cruise line industries. It tracks the Solactive Airlines, Hotels, Cruise Lines Index, holding 63 stocks in its basket (read: 5 ETFs to Make the Most of Red-Hot 40-Year High Inflation).

SonicShares Airlines, Hotels, Cruise Lines ETF was launched in the space in May last year and has accumulated $12.1 million in its asset base so far. TRYP trades in an average daily volume of 73,000 shares and charges 75 bps in annual fees.

AdvisorShares Hotel ETF (BEDZ) – Up 4.2%

AdvisorShares Hotel ETF is the actively managed and only ETF investing exclusively in the global hotel and travel-related services. AdvisorShares Hotel ETF holds 30 stocks in its basket that are pretty spread across components.

AdvisorShares Hotel ETF charges 99 bps in annual fees and trades in an average daily volume of 7,000 shares. It has amassed $7.2 million in its asset base.

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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
U.S. Global Jets ETF (JETS): ETF Research Reports
 
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
 
Kelly Hotel & Lodging Sector ETF (HOTL): ETF Research Reports
 
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