Travel ETF offers exposure to fast-growing industry
There are now more than 3,000 ETFs available in the U.S., according to Morningstar
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Exchange-traded funds, or ETFs, are a pooled type of investment, which resembles a mutual fund that can offer an investor an opportunity to track a particular index or market sector.
For example, if someone is interested in investing in the travel sector, the ETFMG Travel Tech ETF is an ETF that tracks a portfolio of companies that are a subset of the global travel and tourism industry.
"The ETFMG Travel Tech ETF is a great example of how an investor can express bullishness in the travel industry in a way that captures new travel habits of younger generations," explained Stephen Gardner, director at ETFMG, in West Palm Beach, Florida. "Millennials and Gen-Z are showing significant preference for spending a larger percentage of their income on travel experiences. Given these younger generations' propensity to use technology, we think the convergence of travel and tech are optimizing global travel."
Also, according to Gardner, the use of ETFs is growing at a staggering rate due to the fact that the ETF structure is tax efficient, allowing for intraday tradability, and offering diversification that ranges from broad market exposure to thematic exposures that transcend traditional industry classifications.
A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., December 28, 2021. (Reuters/Andrew Kelly / Reuters Photos)
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AWAY | AMPLIFY ETF TRUST TRAVEL TECH ETF | 19.36 | -0.01 | -0.06% |
How this ETF focuses on travel
Gardner explained the ETF is composed of companies that offer travel bookings and reservations; ride-sharing and hailing; travel price comparison and travel advice.
ADVICE FOR THE FIRST-TIME ETF BUYER
"The companies within AWAY are typically less capital intensive than airlines who have overhead costs of fuel and fleet maintenance and hotels who are tasked with property maintenance and optimal occupancy," he says.
WHY ETFS ARE A GOOD INVESTMENT VALUE
AWAY is a passively managed ETF, launched in February 2020, that gives investors exposure to 33 travel tech stocks by buying as little as one share.
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Here are the top 10 holdings in AWAY:
- Trip.com
- Tongcheng – Travel China's online travel industry
- Travelsky Technology – the dominant provider of information technology services to the Chinese air travel and tourism industries
- Uber
- MakeMyTrip Limited – an Indian online travel company founded in 2000
- Amadeus
- Airbnb
- Trainline – a quick and easy way to book train tickets across Europe
- Webjet – is Australia and New Zealand's No. 1 online travel agency
- Booking Holdings – brands include Booking.com, Priceline.com, Agoda.com, Kayak, Rentalcars.com and OpenTable