Transportation stocks have struggled this year despite lower oil prices, but there is one bright investment spot, two experts say.
“While this sector as a whole has taken on a sluggish malaise, one sub-industry appears to be relishing the 30% decline in crude oil prices this year and there is an ETF to take advantage of it,” David Fabian writes for Nasdaq.com.
“The U.S. Global Jets ETF (JETS) was launched in April 2015 and has taken flight in recent weeks as global stocks have rebounded. JETS represents the only fund of its kind dedicated to a diversified index of over 30 airline stocks. Top holdings include well-known names such as Southwest Airlines (LUV), American Airlines Group (AAL), and Delta Airlines Inc (DAL),” he wrote.
“The underlying holdings of this fund are unique in that they don’t just focus on traditional airline operators, but have expanded the group to include manufacturers as well. Boeing Co (BA) and General Dynamics Corp (GD) are just two of the top airplane makers in the mix,” he wrote.
Harm Elderman of Seeking Alpha
“This airline ETF is close to an all-time high,” he writes for Seeking Alpha. “This ETF offers low risk/low return portfolio,” but “many shareholders with airline stocks in their portfolio are currently bleeding significantly.”
Elderman said he finds airlines generally misinterpreted and intriguing investments. “For many, they seem too difficult to understand.”
Noted investor Warren Buffett has decried airline investing even though he didn’t lose any money on his most famous airline investment, Forbes reported.
At a Berkshire Hathaway annual meeting a few years ago, Buffett responded negatively when asked a question about airline investing. “Investors have poured their money into airlines and airline manufacturers for 100 years with terrible results,” Buffett said. “It’s been a death trap for investors,” he said of the airline industry.
Buffett’s view stems from an airline investing experience in 1989, when he purchased debt in US Airways.
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