Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

2 Travel And Leisure ETFs For The Summer Holiday Season

By Investing.com (Tezcan Gecgil/Investing.com )ETFsMay 16, 2022 04:07AM ET
www.investing.com/analysis/2-travel-and-leisure-etfs-for-the-summer-holiday-season-200624231
2 Travel And Leisure ETFs For The Summer Holiday Season
By Investing.com (Tezcan Gecgil/Investing.com )   |  May 16, 2022 04:07AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Memorial Day, at the end of May, marks the start of the US summer travel season. And this year, according to the US Travel Association, “about 6 in 10 Americans are planning at least one summer trip.”

In 2019, before the coronavirus pandemic, the travel and tourism industry contributed well over $1 trillion to US gross domestic product (GDP).

While Americans gear up to enjoy a more open world this summer, investors are researching travel and leisure stocks that stand to boost revenues and profitability.

Warmer weather, as well as time off from work and school, will also put the focus on leisure and entertainment companies as this year “spending is forecast to exceed the pre-pandemic peak by 14%, following the plunge in 2020.”

However, consumers and businesses are also keeping a close eye on inflation, especially soaring energy prices. In addition, the ongoing geopolitical tensions and resurgence of COVID-19 cases in China still imply potential setbacks to the travel sector’s recovery.

As such, volatility in share prices of travel and leisure companies could continue well into the summer months. So far, in 2022, the Dow Jones Travel & Tourism Index has lost 26.6%. Similarly, the Dow Jones Travel & Leisure Index is down 20.2%.

With that information, today’s article introduces two exchange-traded funds (ETFs) that deserve readers’ attention ahead of the summer travel season.

1. Invesco Dynamic Leisure and Entertainment ETF

  • Current Price: $40.44
  • 52-week range: $38.29 - $54.62
  • Dividend yield: 0.52%
  • Expense ratio: 0.55% per year

Our first fund, the Invesco Dynamic Leisure and Entertainment ETF (NYSE:PEJ), provides access to shares of leisure and entertainment firms. It started trading in June 2005.

PEJ Weekly Chart
PEJ Weekly Chart

PEJ, which tracks the Dynamic Leisure & Entertainment Intellide Index, currently holds a basket of 31 stocks. The top 10 names account for close to half of net assets of $1.3 billion. Put another way, it is a concentrated fund.

Sysco (NYSE:SYY), which distributes food and related products; McDonald’s (NYSE:MCD); Marriott International (NASDAQ:MAR); online travel agency Booking (NASDAQ:BKNG); Fox Corp (NASDAQ:FOXA); and Walt Disney (NYSE:DIS) lead the names on the roster.

Around half of the companies in the portfolio come from the hotels, restaurants, and leisure segment. Next are businesses from the entertainment industry (30.8%), followed by media (13.4%), food and staples retailing (4.7%), and interactive media and services (2.8%).

PEJ is down roughly 17% since January and 5% over the past 12 months. It hit a record high on June 2, 2021, but is currently changing hands at a 52-week low. Those traders who watch price and time cycles to analyze potential turning points may want to pay attention to the current levels.

Trailing P/E and P/B ratios stand at 33.05x and 4.85x. A potential decline below $40 would improve the margin of safety for readers who expect spending by the US consumer to stay strong in the coming months..

2. SonicShares Airlines Hotels Cruise Lines ETF

  • Current Price: $4.16
  • 52-week range: $3.80 - $6.35
  • Expense ratio: 0.75% per year

Recent metrics point out that the global tourism market could grow from $3.95 trillion in 2021 to $4.55 trillion this year, at a compound annual growth rate (CAGR) of over 15%. Meanwhile, the World Travel & Tourism Council (WTTC) expects the travel and tourism industry to create nearly 126 million new jobs globally over the next decade.

Next up on our list of funds is the SonicShares™ Airlines, Hotels, Cruise Lines ETF (NYSE:TRYP). It offers exposure to a global portfolio of companies in the airline, hotel, and cruise line industries.

TRYP Weekly Chart
TRYP Weekly Chart

TRYP tracks the Solactive Airlines, Hotels, Cruise Lines Index. The fund was launched in May 2021, and oversees $11.42 million in net assets, so it is a relatively new and small fund without much trading history.

With a portfolio of 61 mid- and large-capitalization (cap) companies, the fund is heavily weighted toward those based in North America (65.8%). The remaining companies come from Europe (17.4%), Asia/Pacific (16.2%), and Central and South America (0.7%).

In terms of sub-sectoral allocations, we see hotels, restaurants and leisure (39.7%); airlines (38.6%); and equity real estate investment (21.7%). The top 10 holdings comprise almost half of the fund.

Among those names are VICI Properties (NYSE:VICI), Host Hotels & Resorts (NASDAQ:HST), Marriott International, Delta Air Lines (NYSE:DAL), Hilton Worldwide Holdings (NYSE:HLT), and Southwest Airlines (NYSE:LUV).

TRYP hit a 52-week low on Mar. 8. As we write, it is down 10.4% year-to-date (YTD) and 18.5% over the past 12 months. Buy-and-hold investors may want to keep TRYP on the radar screen.

2 Travel And Leisure ETFs For The Summer Holiday Season
 

Related Articles

Tim Knight
If You’re Right…… By Tim Knight - Jun 28, 2022

I’d like to trot out our old friend IYR (real estate ETF) once again as a prospective short-sale candidate (or, in my case, long puts, as I did acquire those today). The little...

2 Travel And Leisure ETFs For The Summer Holiday Season

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
STEVE JACKSON
STEVE JACKSON May 16, 2022 3:04PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
JETS ETF is the only airline ETF. it too is down.
Jacky Lam
Jacky Lam May 16, 2022 7:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
good idea, thank you for sharing
Mohd Izhar Muslim
Mohd Izhar Muslim May 16, 2022 4:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wow! That so lovely, Thank you for sharing the article 💯
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email