US Global Jets ETF (JETS) surpasses USD4bn AUM

US Global Investors' airlines ETF, the US Global Jets ETF (JETS), has reached a new milestone by surpassing USD4 billion in assets under management (AUM). 

As of market close on 15 March, 2021, JETS AUM stood at approximately USD4.24 billion, a more than 2,600 per cent increase from a year earlier.

In addition, JETS closed at a 52-week high of USD28.59 on 15 March, 2021, an approximately 140 per cent increase from its pandemic low set on 15 May, 2020.

“We couldn’t be more thrilled with how JETS has done over the past 12 months, and we want to thank investors big and small for making it a USD4 billion ETF,” says Frank Holmes, CEO and chief investment officer of US Global Investors. “Our smart-beta 2.0 ETF is still the only pure-play global airlines investment vehicle currently available, with a distinctive portfolio structure that uses five key factors to pick stocks.”

Launched in 2015, JETS began attracting significant assets when airline stocks plunged in February and March 2020 due to the Covid-19 pandemic. In the first 50 trading days of 2020, before the crisis, average daily trading volume was about 315,000 shares. A year later, this figure jumped to approximately 6.7 million shares traded per day on average, a 21x increase. Participants have been as varied as retail investors to hedge funds to insurance companies.    

Now, as we head into the busy spring and summer travel seasons, we’re starting to see a substantial recovery in commercial flight demand. Close to 1.4 million passengers were screened at US airports on Friday, March 12, 2021, representing the greatest volume for a single day since March of last year. In the first half of March 2021, nearly 16.5 million total passengers boarded commercial jets in the US, the most for any month since March 2020.

“We make sure to track the US Transportation Security Administration’s (TSA) daily report on passenger volume because we’ve found it to be a reliable proxy for investor appetite,” says Holmes. “Before the pandemic, approximately 2.2 million people were cleared by the TSA per day, with international arrivals and departures making up the bulk of the volume. A year later, domestic leisure travel is beginning to rebound while international flights remain muted due to lockdowns in Canada, the European Union (EU) and elsewhere.”

The rate at which vaccines are being administered is accelerating in the US, which we believe is highly constructive for travel and tourism in general and airlines specifically. The Biden administration recently directed all 50 states to make every adult aged 18 and over eligible to receive the Covid-19 vaccine by 1 May of this year. Anticipating a summer surge, a number of domestic low-cost carriers, including Southwest and Allegiant, have announced plans to expand their networks.

United Airlines became the first US carrier to say it expected to be cash flow positive in March 2021 for the first time since the pandemic began. Other carriers have likewise signalled their optimism going forward as vaccinations continue to ramp up.