Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Final hours: unlock premium data with Claim 60% OFF
2 Travel And Leisure ETFs For The Summer Holiday Season
au.investing.com/analysis/2-travel-and-leisure-etfs-for-the-summer-holiday-season-200509475
2 Travel And Leisure ETFs For The Summer Holiday Season
By Investing.com (Tezcan Gecgil/Investing.com ) | May 30, 2022 16:14 Wall Street gets a day off for Memorial Day on Monday, May 30, marking the unofficial kick-off for the busy summer travel season.
“Revenge travel” is the term we’ve been seeing after two years spent under pandemic restrictions.
Over 80% of American adults plan to travel this summer. Meanwhile, air travel has already witnessed a strong rebound, up 25% from last year. Such recovery in demand should understandably boost revenues and profitability for the travel and leisure industry.
Meanwhile, investors are also hoping to see higher share prices. They were surely encouraged by last week’s positive price action in the broader indices, i.e., S&P 500, Dow, and NASDAQ.
Yet, potential headwinds such as higher prices, geopolitical tensions, reemerging COVID-19 cases, and even supply chain issues, continue to weigh on the sector’s recovery.
Therefore, we could possibly expect further choppiness in shares of travel and leisure companies. Analysts are paying close attention to metrics from the airline industry to see if their bottom lines can improve, especially in spite of increased fuel costs.
So far in 2022, the travel and leisure industry has been vulnerable. The Dow Jones US Travel & Tourism Index has declined 25.1% year-to-date (YTD). Similarly, the Dow Jones US Travel & Leisure Index is down 17.7%.
Here are two exchange-traded funds (ETFs) to capitalize on improving travel and tourism metrics in the coming months.
1. Defiance Hotel, Airline, and Cruise ETF
- Current Price: $19.53
- 52-week range: $17.41 - $25.09
- Expense ratio: 0.45% per year
Following the pandemic, we are seeing new trends emerge in the travel industry. For instance, the growth in remote working options means individuals are able to blend work and leisure travel.
The global luxury travel market is also getting increased attention. It is expected to grow significantly at a compound annual growth rate (CAGR) of 8.8% between 2021 and 2028.
Our first fund, the Defiance Hotel, Airline, and Cruise ETF (NYSE:CRUZ), offers pure-play exposure to the travel and lodging industries. It was first listed in June 2021.
CRUZ, which tracks the BlueStar Global Hotels, Airlines, and Cruises Index, has a portfolio of 55 stocks. Close to three-quarters of the businesses come from the US. Next are those from the UK (7.4), Japan (3.2%), Ireland (2.6%), and France (2.3%).
Around 39% of the holdings are hotels, followed by airline companies (35.3%) and cruises (25.8%). Meanwhile, the top 10 stocks comprise close to 60% of $48.3 million in net assets.
Leading names include Marriott International (NASDAQ:MAR), Hilton Worldwide (NYSE:HLT), Norwegian Cruise Line (NYSE:NCLH), Delta Air Lines (NYSE:DAL) and Royal Caribbean (NYSE:RCL).
CRUZ is down 8% since January. Readers looking to benefit from the growth of the diversified travel and tourism industry could consider researching this relatively young and small fund further.
2. ETFMG Travel Tech ETF
- Current Price: $20.83
- 52-week range: $18.35 - $32.07
- Expense ratio: 0.75% per year
Digital adoption during the pandemic has had an impact on the way travelers make arrangements. For instance, according to ETFMG, around 66% of millennials, born between 1981 and 1996, book their trip on their smartphones. And 74% use it to conduct research for their travel plans.
Recent numbers show that the global market for travel technologies could grow from $8.6 billion in 2020 to $12.5 billion by 2026, at a CAGR of 6.8%.
Therefore, next up on today’s list is the ETFMG Travel Tech ETF (NYSE:AWAY), which invests in technology-focused firms within the global travel and tourism industry.
The fund started trading in February 2020, shortly before the time the pandemic started making headlines in the US. Net assets stand at $261.9 million.
With a portfolio of 33 holdings, the fund is heavily invested in travel bookings and reservations stocks (54.1%). Next are travel price comparison firms (15.6%), travel advice companies (15.1%), and ride sharing and hailing names (14.6%).
About half of the portfolio is in the leading 10 stocks. Among those are the UK-based travel platform Trainline PLC (LON:TRNT), Booking (NASDAQ:BKNG), Indian online travel group MakeMyTrip (NASDAQ:MMYT), TripAdvisor (NASDAQ:TRIP), and Australian Webjet (ASX:WEB).
Despite the growth potential of the tech-focused travel segment, AWAY hit a 52-week low on May 12. It is down 14.5% YTD and 32.7% over the past 12 months. Yet many of these stocks deserve your attention as global travelers start packing their bags in the coming quarter.
***
Interested in finding your next great stock or ETF idea? InvestingPro+ gives you the chance to screen through 135K+ stocks to find the fastest growing or most undervalued stocks in the world, with professional data, tools, and insights. Learn More »
Related Articles
Gold Stocks: Is the Time Really Now?
By Gary Tanashian - Nov 17, 2023
Gold stocks are not yet unique within the wider macro, but that does not preclude a move to 40 by GDX (NYSE:GDX). Interestingly, however, on the day this was written (pre-market,...
Semiconductors ETF Nearing Critical Inflection Point
By Chris Kimble - Aug 24, 2023
As readers know, we watch leadership sectors daily. And today is no different as we take yet another look at the Semiconductor ETF (NASDAQ:SMH) Below is a daily chart of SMH...
Commodities Remain Range-Bound Despite Last Week's Rally
By James Picerno - Jun 19, 2023
A broad measure of commodities led returns for the major asset classes last week, based on a set of ETFs through Friday’s close (June 16). But even after a strong rally,...
2 Travel And Leisure ETFs For The Summer Holiday Season
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.