For those who believe the aviation sector will continue to recover from the effects of the 2009 pandemic, investing in an airline ETF can give diversified exposure to the industry without requiring direct ownership of shares in any airline.

The U.S. Global Jets ETF is the only exchange-traded fund (ETF) that only targets the airline sector (JETS). Over the past year, the airline industry's stock price has lagged behind that of the S&'P 500 Index. As of November 3rd, the S&'P 500 Airlines Industry Index has dropped 24%, versus a 19% decline in the S&'P 500 Index.

Remember that this index consists entirely of American firms, making it an imperfect gauge for the internationally focused JETS. JETS gives investors a diverse view of the aviation sector by giving them access to aircraft manufacturers, airports, terminal services, and carriers.

Exchange Traded Funds in the Airline Industry

Most of an airline ETF's holdings will be in other businesses in the airline industry. Passenger service providers, manufacturers, air freight and logistics providers, and airport service providers are all examples. A number of airline ETFs follow an index that includes airline equities. Index-based ETFs can give low-cost access to a basket of securities compared to investing in individual stocks because of their passive nature.

Future of Airline Exchange Traded Funds

Roughly 70% of the U.S. economy is driven by consumer spending. Many airline stocks' performances are sensitive to changes in consumer spending and confidence levels. People are more inclined to spend money on non-essential items when they are in the mood to spend.

The same applies to traveling. The transportation and cyclical consumer sectors include the airline industry, with economic booms and busts increasing and decreasing.

Cyclical equities like airline stocks may experience lower returns annually if the economy slows down. When this occurs, buyers tend to cut back on their discretionary spending, but airline ETFs may still be a valuable element of a balanced long-term portfolio.

Learning to Fly With Exchange-Traded Funds

Several exchange-traded funds (ETF) strategies exist for investing in the aviation industry. The U.S. Global Jets ETF is the only exchange-traded fund (ETF) available to investors who want to focus only on the commercial aircraft business.

Two more transportation ETFs are available to investors who wish to put their money into passenger and cargo airlines while also gaining exposure to the larger transport business. The IYT and XTN are exchange-traded funds (ETFs) that invest in airlines and other transportation industries.

Best Exchange-Traded Funds For The Airline Industry

The top airline ETFs provide investors with diversified, substantial industry exposure. They are very cheap to use. These features indicate high-quality ETFs with the potential to mirror the performance of their underlying index closely. A few of the top exchange-traded funds (ETFs) in the aviation industry are as follows:

U.S. Global Jets ETF

Only JETS invests exclusively in airline companies, making it a unique ETF. It has a significant stake in domestic American airlines, including DAL and UAL. JETS follows the stocks of both domestic and international airlines included in the Global Jets Index.

For the sake of diversity, it includes shares of airline and air cargo manufacturers and suppliers. In 2015, the fund was established. That's a sizable enough track record to interest investors and analyze results. Funds will incur annual fees of 0.60%, or $6 for every $1,000 invested. 2

The iShares U.S. Transportation Exchange Traded Fund

If you're looking for an ETF that will provide you exposure to the industry as a whole while also giving you exposure to a wide range of individual companies, IYT is a great option.

Its goal is to mimic an index of transportation-related stocks traded in the United States. 32% of IYT is invested in railroads, 30% in airlines, and 30% in air freight and logistics. Trucking and shipping make up the remainder of our assets. The annual expense ratio is 0.41% or $4.10 for every $1,000 invested.

SPDR Transport ETF Tracks The S&'P 500

The S&'P Transportation, Select Industry Index is followed by XTN, another sector ETF with a heavy weighting in airline equities.

About 31.50% goes to airlines, and 18.75% goes to air freight and logistics, two subsectors of the aviation business. The company also invests in the shipping, transportation, and rail industries. The annual fee is only 0.35% of total assets or $3.50 for every $1,000 invested. 4

Conclusion

An exchange-traded fund (ETF) might be a good option if you want exposure to the airline industry. You can buy equities in airlines or transportation through exchange-traded funds. Investors need to have their money spread out. You shouldn't put all of your eggs in one basket.