Hotel Travel Etf

Hotel Travel Etf – As the world figures out how to live with COVID-19, the travel industry is back in growth mode. U.S. travel for leisure has hit a new all-time high, but business travel is still down from pre-pandemic levels. The same goes for international travel activities. Vacations still have a long way to go to fully recover, and new digital tools for booking accommodations are on the rise. Over the next decade, some estimates show that global travel spending will increase by an average of 5% to 6% annually — more than double the expected average annual growth of the global economy.

Investing in travel ETFs makes a lot of sense now. If you think the travel industry will continue to boom and global consumers will travel more over the long term, buying a travel ETF can provide healthy investment returns.

Hotel Travel Etf

The global travel industry is a huge space that encompasses many sectors of the economy. At one end are industries such as airlines, vehicle manufacturers (including for example RVs or bikes), and energy companies. At the other end are attractions such as theme park and cruise line operators, restaurants and hotels, and rental properties. It connects both with travel agencies, digital booking services and other tools that help make travel easier.

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Picking the right stocks in such a large space can be tricky. But buying a travel ETF (exchange-traded fund) provides instant diversification through a large basket of travel sector stocks. Here are six to watch in 2023:

U.S. The Global Jets ETF is by far the largest fund on our list, with over $2.5 billion in client funds under management as of this article. It is the only ETF focused on the airline sector, an absolutely essential business for the travel destination. U.S. Global Jets ETF was launched in 2015. The annual fee is 0.6%, which is $6 per year deducted from the performance of a $1,000 invested ETF.

U.S. Most of the Global Jets ETF’s portfolio is devoted to US airlines. About a third of the assets are invested in Southwest Airlines (LUV -2.71%), Delta Air Lines (DAL -2.96%) and American Airlines (NYSE:AAL). There are also shares of international carriers in the mix, and some online travel booking shares. But overall, ETFs operate on the same plane as American Airlines stocks. This is a fund for investors who expect air travel volumes to increase gradually over time.

The PowerShares Dynamic Leisure and Entertainment ETF is from investment giant Invesco (IVZ -0.3%) . The ETF has been around since 2005 and has accumulated over $900 million in client funds. It charges an annual fee of 0.55%.

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ETFs are a very well-diversified travel sector offering. Although it is limited to 30 stocks in the leisure and entertainment sector, companies in the portfolio include events promoter and venue manager Live Nation Entertainment (LYV -1.19%), hotels Marriott International (MAR -0.84%) and businesses such as online travel. Giant Booking Holdings (BKNG -1.29% ). The PowerShares Dynamic Leisure and Entertainment ETF has underperformed the S&P 500 index since the fund’s inception, largely due to the start of the pandemic in 2020.

As its name suggests, the ETFMG Travel Tech ETF is the most sophisticated fund on our list. It has $188 million in funds under management and charges 0.75% annually. This is also a new ETF. Its beginning was in early 2020, just before the pandemic began.

Since its inception in February 2020, the ETFMG Travel Tech ETF has significantly underperformed the S&P 500. Still, a rally may eventually be in order, especially since more than half of the fund invests online in highly profitable travel software stocks. Airbnb ( ABNB -3.11% ) and Booking Holdings. The mix includes ride-hailing businesses like Uber (UBER -3.55%) , as well as smaller travel agencies and planning companies.

The Next ETF is also a new offering, launching in the summer of 2021. Defiance Hotel, Airline and Cruise ETFs have been built to recapture investor interest in the global travel sector, although the portfolio has not met them. expectations. The fund manages more than $37 million and charges 0.45% a year.

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The Defiance Hotel, Airline and Cruise ETF covers 56 stocks. The name refers to the composition of the portfolio. Major holdings include Marriott International, Delta Airlines and cruise line major Carnival (CCL -3.45%) . Despite losing the overall market in its short term, the ETF can be a good choice for investors who want to focus on lodging, air travel and cruises.

Another recent ETF offering, the ALPS Global Travel Beneficiaries ETF, has accumulated only about $12 million in funds since its launch in fall 2021. It charges an annual fee of 0.65%.

Although still small at this stage, the ALPS Global Travel Beneficiaries ETF aims to be a well-diversified investment option. Top stocks include aircraft manufacturer Boeing (BA -1.74%), entertainment company Walt Disney (DIS -1.68%) and fares and travel company American Express (AXP -2.78%) , among many other businesses already mentioned above. Its diversified approach to travel and adjacent industries could serve the ETF well in the coming years.

This last ETF is the smallest with over $6 million in client funds under management, another key travel offering. The AdvisorShares Hotel ETF focuses on hotels, lodging, casinos (gaming) and related travel ancillary industries. As an actively managed fund, it has a high expense ratio of 0.99% per annum.

Etfs For The Reopening Trade

Fund managers focus on profitable businesses that dominate their competitors. According to this article, the top three stocks in the portfolio are oil and gas worker housing specialist Target Hospitality ( TH -3.23 ), resort and vacation property manager Bluegreen Vacations Holding ( NYSE:BVH ) and Marriott. By focusing on profitable companies that haven’t been hit as hard by the pandemic as other travel companies, the ETF has done relatively well compared to some of its peers on this list. However, as most of its holdings are real estate stocks, it may not have the same growth potential as other travel ETFs.

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Although the travel industry has declined over the past few years, it is a segment of the global economy that should grow at a steady pace over the next decade. However, like other discretionary consumer spending, travel stocks tend to be more sensitive to overall economic health. Expect a lot of bumps in the road. Nevertheless, for investors who believe that travel will expand over the years, investing in a travel ETF can be a solid option for a well-diversified portfolio that includes other investment themes.

American Express is the advertising partner of The Ascent, a motley company. Nicholas Rossolillo has held positions at Airbnb and Walt Disney. Motley has held and recommended positions at Airbnb, Booking.com, Uber Technologies and Walt Disney. Motley recommends Carnival Corp., Delta Air Lines, Live Nation Entertainment, Marriott International and Southwest Airlines and the following options: long Jan 2024 calls on Walt Disney for $145 and short Jan 2024 calls on Walt Disney for $155. Motley has a disclosure policy.

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Calculated from the average return of all stock recommendations since the launch of the Stock Advisor service in February 2002. Returns until 04/26/2023.

Is Now The Right Time To Invest In Travel Stocks?

Calculated by period-weighted return since 2002. Dynamic profiles based on three-year calculations of the standard deviation of service investment returns.

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Invest well in The Motley Fool. Get stock recommendations, portfolio guidance and more from The Motley Fool’s premium services. Tourism and leisure stocks and exchange-traded funds (ETFs) that invest in them have not fared well in 2022. Even as global COVID-19 restrictions ease, a combination of toxic rising fuel prices, high inflation, geopolitical tensions and global recession concerns dampens the sector’s long-term outlook.

As a result, the Dow Jones Travel & Leisure Index and the Dow Jones Airlines Index lost 30% and 24% year-to-date (YTD), respectively. Similarly, the Invesco Dynamic Leisure and Entertainment ETF ( NYSE:PEJ ) is down more than 27% since January.

The Travel Ucits Etf

However, there is a large amount of pent-up demand