Gas ETFs Rise Amid Record July 4 Travel
Around 71 million people are expected to travel 50 miles or more from home over the Fourth of July holiday, according to AAA.
The forecast, which encompasses “the entire July 4th week, plus the Saturday before and the Sunday after the holiday,” predicts that there will be a 5% increase in travel versus last year.
If the numbers are accurate, it would even represent a gain of 8% versus 2019, the year before Covid hit and decimated the travel industry.
Of those 71 million, AAA projects that a record 60.6 million will travel by car, up 2.8 million from last year and 5.3 million from 2019.
Air travel is also expected to hit a record, with 5.74 million people flying on planes, while other modes of transportation—including buses, cruises and trains—will rise to 4.6 million, but fall short of 2019’s 4.79 million record, according to AAA.
Gasoline futures have been rising recently, perhaps in anticipation of the surge in demand this week. The $105 million United States Gasoline Fund (UGA) rose by 11% over the past month and is up nearly 15% since the start of the year.
However, those gains lag the one-month and year-to-date returns of 13% and 23%, respectively, for the $1.3 billion United States Oil Fund (USO).
JETS Descending
Meanwhile, despite record air travel, the US Global Jets ETF (JETS), with $1.2 billion in assets under management, hasn’t done much. It’s down 2.3% over the past month and up 5% since the start of the year—well below the S&P 500’s 16% gain.
Likewise, the Defiance Hotel Airline and Cruise ETF (CRUZ), which has $29 million in AUM, is flat over the past month and up 3% on a year-to-date basis.
AAA noted that “with new ships coming onto the market – and going for a premium – some cruise lines have been offering targeted discounts to fill older inventory for remaining cabins.”