Best Airline ETFs: Top Performers of 2022

2022 will not be remembered as a strong year for the airline industry, especially as the year ended with thousands of flight cancellations caused by historic winter storms. Despite increasing airfares and higher passenger volume, returns for airline ETFs were negative in 2022, as leisure travel remained below 2019 pre-COVID-19 levels, according to the U.S. Travel Association. 

Can airline ETFs rebound in 2023?

Learn how to invest in airline and transportation stocks with ETFs and see the top performers of 2022. 

How to Invest in Airlines With ETFs 

There are a few different ways to invest in airlines with ETFs. For investors wanting to invest solely in the commercial airline industry, there’s one ETF on the market, the U.S. Global Jets ETF (JETS).

For investors wanting to invest in passenger and cargo airlines and gain broader transport industry exposure at the same time, there are two other transportation ETFs that accomplish this goal. 

ETFs that invest in airline stocks, as well as other transportation industry companies, include the iShares U.S. Transportation ETF (IYT) and the SPDR S&P Transportation ETF (XTN).

The 10 Best Airline ETFs of 2022 

To arrive at our list of best airlines ETFs of 2022, we included only the three ETFs on the market that provide complete or significant exposure to passenger and cargo airline stocks. We excluded transportation ETFs that focus primarily on ground or maritime shipping, as well as alternative strategy funds, such as leveraged ETFs and ETNs, which are generally not used by the typical ETF investor. 

 

Ticker Fund 2022 Return
JETS U.S. Global Jets ETF -19.01%
IYT iShares U.S. Transportation ETF -21.73%
XTN SPDR S&P Transportation ETF -28.10%

 

U.S. Global Jets ETF 

The U.S. Global Jets ETF (JETS) invests in U.S. and non-U.S. airline companies. The airline stocks primarily consist of passenger airlines, including aircraft manufacturers and airport companies. The benchmark index uses a tiered weighting scheme driven mostly by market cap as well as passenger load. As a result, the portfolio puts about 70% of assets in U.S. large cap passenger airlines. 

  • 2022 return: -19.01% 
  • Assets under management: $2.0B 
  • Expense ratio: 0.60% 
  • As of date: December 31, 2022 

iShares U.S. Transportation ETF 

The iShares U.S. Transportation ETF (IYT) seeks to track the performance of an index that invests solely in companies defined by the Global Industry Classification Standard as transportation. The following sub-industries of transportation are included in the index: air freight and logistics, airlines, airport services, highways and rail tracks, marine, marine ports and services, railroads, and trucking. 

  • 2022 return: -21.73% 
  • Assets under management: $671.6M 
  • Expense ratio: 0.39% 
  • As of date: December 31, 2022 

SPDR S&P Transportation ETF 

The SPDR S&P Transportation ETF (XTN) tracks the performance of the S&P Total Market Index, which is an equal-weighted index of transportation stocks that must meet certain liquidity and capitalization thresholds. The benchmark index includes the transportation sub-industries of air freight and logistics, airlines, airport services, highways and rail tracks, marine, marine ports and services, railroads, and trucking. 

  • 2022 return: -28.10% 
  • Assets under management: $398.4M 
  • Expense ratio: 0.35% 
  • As of date: December 31, 2022 

Bottom Line 

Investors should keep in mind that specialty funds, such as airline ETFs, can be used as part of a diversified portfolio, but investing in a niche area of the market can also increase risk. For example, in 2021, when the U.S. economy was rebounding after the COVID-19 pandemic, the S&P 500 jumped 21.7%, whereas the airlines industry continued to suffer, and U.S. Global Jets ETF (JETS) returned -5.1%

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