Travel ETFs are taking off; Add exposure with these 2 ETFs
The Travel Price Index (TPI) fell 2.7% in July month-on-month, while overall consumer prices (CPI) were unchanged, marking the first monthly drop in the month. LPI since January 2022.
While July marked the first monthly decline in the TPI since January 2022 and the largest decline since April 2020 on an annual basis, the growth in the TPI (+11.5%) was considerably lower than that of June (+17, 5%), but higher than the CPI (+8.5%) in July, according to the US Travel Association.
There are many ETFs available to investors that provide broad exposure to the booming travel industry. Three popular options are ALPS Global Travel Beneficiaries ETF (JRNY) and the Defiance Hotel Airline and Cruise ETF (CRUZ).
Both funds have rebounded significantly over the past month. JRNY and CRUZ rose 15.6% and 13.3%, respectively, over a one-month period. Year-to-date, the funds are down -13.3% and -19.4%, respectively.
JRNY is the more diversified of the two offerings and has an expense ratio of 65 basis points, slightly above the category average of 62 basis points. The fund has raised $12.3 million in assets under management since its inception in September 2021, according to VettaFi.
Comprised of 81 holdings, JRNY’s top holdings currently include Boeing Company (BA), Walt Disney Company (DIS), LVMH Moet Hennessy Louis Vuitton (MC) and Airbnb Inc. (ABNB) as of August 12, according to VettaFi.
CRUZ is the cheapest option in the segment, with an expense ratio of 45 basis points.
Comprised of 57 holdings, CRUZ’s top holdings include Marriott International Inc. (MAR), Hilton Worldwide (HLT), Delta Air Lines Inc. (DAL), Carnival Corporation (CCL) and Southwest Airlines Co. (LUV) as of August 12 , according to VettaFi.
Consumer demand for leisure persists, making this a potentially good time to enhance portfolios with greater exposure to travel and leisure.
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vettafi.com is owned by VettaFi, which also owns the index provider for JRNY. VettaFi is not the sponsor of JRNY, but the affiliate of VettaFi receives index license fees from the sponsor ETF.