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Travel & Leisure ETFs Set to Gain on COVID-19 Vaccine News
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Travel and leisure stocks saw smooth trading on Aug 24, following the positive developments in the treatment of COVID-19 disease.
This is especially true as the Food and Drug Administration approved the use of convalescent plasma — the antibody-rich component of blood taken from recovered COVID-19 patients — as a treatment for serious coronavirus cases. At the same time, the Trump administration is seeking emergency use authorization for an experimental vaccine being developed by AstraZeneca (AZN - Free Report) and Oxford University ahead of the Nov 3 presidential election, according to the Financial Times.
The latest data indicating that new coronavirus cases in the United States are down 22% from two weeks ago after surging in July added to the strength in the space. According to the Worldometer data tracker, daily new cases were about 32,000 on Aug 23, the lowest number since Jun 22. The recent surge in daily new cases has abated, and the number of daily deaths — a key metric to monitor — has also fallen to its lowest level since Aug 2.
The dual news has infused optimism into the sectors, including cruise lines, airlines, hotel and casino operators, and travel and entertainment-booking companies. Notably, airlines and cruise sectors were among the biggest winners on the day. American Airlines (AAL - Free Report) , Delta Air Lines (DAL - Free Report) and United Airlines (UAL - Free Report) were up more than 7% each while other air carriers such as Spirit Airlines (SAVE - Free Report) , Southwest Airlines (LUV - Free Report) , and JetBlue Airways (JBLU - Free Report) gained at least 5%. Cruise line companies — Royal Caribbean (RCL - Free Report) , Norwegian Cruise Line Holdings NCLH, and Carnival Corp (CCL - Free Report) — rose 4.7%, 7.6% and 10.2%, respectively.
Hotel chains, such as Hilton Worldwide Holdings HLT, Marriott International (MAR - Free Report) and Hyatt Hotels (H - Free Report) were also among the gainers. In the travel industry, Liberty TripAdvisor LTRPA jumped 11.3% while Park Hotels & Resorts PK, TripAdvisor TRIP and Marriott International (MAR - Free Report) added 6%, 6.3% and 2.7%, respectively.
ETFs Set to Surge
Given the major progress in the development of a coronavirus vaccine and an improving economy, investors should bet on ETFs that track the sectors mentioned above. Below we have highlighted them in detail below:
This fund 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. In total, the product holds 40 securities and charges investors 60 bps in annual fees. The fund has gathered $1.4 billion in its asset base while seeing solid trading volume of nearly 4.3 million shares a day. It gained 5.6% following the vaccine news and has a Zacks ETF Rank #4 (Sell) with a High risk outlook (read: ETF Laggards are Emerging Leaders: Here's Why).
This is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. The fund holds 30 stocks in its basket with travel bookings & reservations companies accounting for 45% of assets, followed by 19.3% share in riding sharing & hailing firms. AWAY has accumulated $11.7 million in its asset base and trades in average daily volume of 10,000 shares. The fund was up 1.4% on Aug 24.
This fund targets the broad transportation sector and tracks the S&P Transportation Select Industry Index. It holds 42 stocks in its basket with 35.1% of the portfolio is dominated by trucking while air freight & logistics, and airlines take 26.9% and 21.6% share, respectively. With AUM of $225.3 million, the fund charges 35 bps in fees per year from investors and trades in a lower volume of around 36,000 shares a day. It has gained 2.3% on the day and has a Zacks ETF Rank #4 with a High risk outlook.
This fund tracks the Dynamic Leisure and Entertainment Intellidex Index and holds a small basket of 32 stocks. From an industry look, hotels, restaurants and leisure takes the largest share at 40.6% while entertainment and media round off the next two spots with double-digit exposure each. The ETF has amassed $250.9 million in its asset base and trades in average daily volume of 153,000 shares. PEJ charges 63 bps in annual fees and added 2.4% on the day. It has a Zacks ETF Rank #4 with a High risk outlook.
This ETF provides investors with exposure to companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment. It follows the MVIS Global Gaming Index, holding 42 securities in its basket. The product has AUM of $49.6 million and average daily volume of roughly 26,000 shares. It has added 0.7% following the vaccine news and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: 5 ETFs to Play Record-Breaking U.S. Gaming Sales in Q2).
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Travel & Leisure ETFs Set to Gain on COVID-19 Vaccine News
Travel and leisure stocks saw smooth trading on Aug 24, following the positive developments in the treatment of COVID-19 disease.
This is especially true as the Food and Drug Administration approved the use of convalescent plasma — the antibody-rich component of blood taken from recovered COVID-19 patients — as a treatment for serious coronavirus cases. At the same time, the Trump administration is seeking emergency use authorization for an experimental vaccine being developed by AstraZeneca (AZN - Free Report) and Oxford University ahead of the Nov 3 presidential election, according to the Financial Times.
The latest data indicating that new coronavirus cases in the United States are down 22% from two weeks ago after surging in July added to the strength in the space. According to the Worldometer data tracker, daily new cases were about 32,000 on Aug 23, the lowest number since Jun 22. The recent surge in daily new cases has abated, and the number of daily deaths — a key metric to monitor — has also fallen to its lowest level since Aug 2.
With the pandemic showing signs of abating coupled with the potential coronavirus treatment or vaccine, the demand for travel and leisure is expected to increase (read: 4 Sector ETFs & Stocks to Buy on Forecast-Beating Jobs Data).
Stocks That Gained
The dual news has infused optimism into the sectors, including cruise lines, airlines, hotel and casino operators, and travel and entertainment-booking companies. Notably, airlines and cruise sectors were among the biggest winners on the day. American Airlines (AAL - Free Report) , Delta Air Lines (DAL - Free Report) and United Airlines (UAL - Free Report) were up more than 7% each while other air carriers such as Spirit Airlines (SAVE - Free Report) , Southwest Airlines (LUV - Free Report) , and JetBlue Airways (JBLU - Free Report) gained at least 5%. Cruise line companies — Royal Caribbean (RCL - Free Report) , Norwegian Cruise Line Holdings NCLH, and Carnival Corp (CCL - Free Report) — rose 4.7%, 7.6% and 10.2%, respectively.
Hotel chains, such as Hilton Worldwide Holdings HLT, Marriott International (MAR - Free Report) and Hyatt Hotels (H - Free Report) were also among the gainers. In the travel industry, Liberty TripAdvisor LTRPA jumped 11.3% while Park Hotels & Resorts PK, TripAdvisor TRIP and Marriott International (MAR - Free Report) added 6%, 6.3% and 2.7%, respectively.
ETFs Set to Surge
Given the major progress in the development of a coronavirus vaccine and an improving economy, investors should bet on ETFs that track the sectors mentioned above. Below we have highlighted them in detail below:
U.S. Global Jets ETF JETS
This fund 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. In total, the product holds 40 securities and charges investors 60 bps in annual fees. The fund has gathered $1.4 billion in its asset base while seeing solid trading volume of nearly 4.3 million shares a day. It gained 5.6% following the vaccine news and has a Zacks ETF Rank #4 (Sell) with a High risk outlook (read: ETF Laggards are Emerging Leaders: Here's Why).
ETFMG Travel Tech ETF (AWAY - Free Report)
This is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 bps in annual fees. The fund holds 30 stocks in its basket with travel bookings & reservations companies accounting for 45% of assets, followed by 19.3% share in riding sharing & hailing firms. AWAY has accumulated $11.7 million in its asset base and trades in average daily volume of 10,000 shares. The fund was up 1.4% on Aug 24.
SPDR S&P Transportation ETF XTN
This fund targets the broad transportation sector and tracks the S&P Transportation Select Industry Index. It holds 42 stocks in its basket with 35.1% of the portfolio is dominated by trucking while air freight & logistics, and airlines take 26.9% and 21.6% share, respectively. With AUM of $225.3 million, the fund charges 35 bps in fees per year from investors and trades in a lower volume of around 36,000 shares a day. It has gained 2.3% on the day and has a Zacks ETF Rank #4 with a High risk outlook.
Invesco Dynamic Leisure and Entertainment ETF PEJ
This fund tracks the Dynamic Leisure and Entertainment Intellidex Index and holds a small basket of 32 stocks. From an industry look, hotels, restaurants and leisure takes the largest share at 40.6% while entertainment and media round off the next two spots with double-digit exposure each. The ETF has amassed $250.9 million in its asset base and trades in average daily volume of 153,000 shares. PEJ charges 63 bps in annual fees and added 2.4% on the day. It has a Zacks ETF Rank #4 with a High risk outlook.
VanEck Vectors Gaming ETF BJK
This ETF provides investors with exposure to companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment. It follows the MVIS Global Gaming Index, holding 42 securities in its basket. The product has AUM of $49.6 million and average daily volume of roughly 26,000 shares. It has added 0.7% following the vaccine news and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: 5 ETFs to Play Record-Breaking U.S. Gaming Sales in Q2).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>