Travel is so much about tech these days and there’s an ETF for that.

Airbnb listed in December 2020, just ahead of the pandemic lockdowns that basically shuttered global travel.

But we’ve seen a booming return to travel as we all wanted to get out after two years of lockdown and add to that the new work from home nomadic lifestyle that gained traction under lockdowns.

However we now see high inflation and interest rates that must be hurting consumers even as inflation is starting to recede. That said recent results and forecasts from Carnival Cruises show demand remains very strong and the problem is higher input costs that are squeezing markets.

At the end of the day we as a global population like to travel and businesses like AirBNB make it easier and in many cases cheaper. Data also shows that 66% of millennials book their trip using a smartphone. 74% use it to research.

Those wanting to benefit from this re-opening trade (and the remote working trend) in the hospitality sector can buy individual stocks but there is also an NYSE listed ETF called AWAY that gives “exposure to the technology-focused companies within the global travel and tourism industry”.

So we get tech and travel.

The travel booking and reservations sub-sector is just over 58% of the index, travel price comparison 14.8%, travel advice 14.2% and ride-sharing and hailing is 10.2%. A great spread with the top ten stocks (out of 34 within the ETF) as below.

AWAY ETF Top 10 holdings as at 24 June 2023.

A TER of 0.75% is perhaps a little higher than we’re used to for offshore ETFs. But a niche product like this ETF will often have higher expenses.

No dividends as most are early stage but what really struck me is that having listed in February 2020 the ETF is down around a third after the tech bear market of last year. But as we are traveling more and the tech around travel matures this is a good looking ETF, even if speculative and only for a small portion of your portfolio..

Simon Brown

At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.