The coronavirus pandemic stalled travel plans for many people over the past few years. And all that pent-up demand could make the next year or two especially strong for airline companies. Although oil prices are high right now, that’s not likely to persist over the long term. If not for the war in Ukraine, oil prices would likely be a whole lot lower today. So between high demand for air travel and an inevitable drop in oil prices, airline stocks could be among the best stocks to be holding right now.
A great way to gain exposure to that sector is by invest in an exchange-traded fund (ETF). The U.S. Global Jets ETF (NYSE Arca: JETS) holds some of the top airlines in the world, including United Airlines Holdings (NASDAQ:UAL), Delta Air Lines (NYSE:DAL), and American Airlines Group (NASDAQ:AAL) – they each account for more than 11% of the fund’s total weight. Although the fund is heavily tilted towards U.S. airlines, it also holds shares of companies that are in based in Canada, Turkey, Germany, and other parts of the world.
The ETF has an expense ratio of 0.60% and has been around for seven years, since 2015. Year to date, the fund has declined by 9%, performing a bit better than the S&P 500 and its 16% thus far in 2022. However, there’s a lot more potential for the fund in the near future, as once airlines start getting busier and performing better, the fund will surge. Buying now before that recovery takes places could set up investors for some great returns.