Celebrate Fourth Of July With These ETFs

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Rapid vaccine rollouts and relaxed international border restrictions are encouraging more and more people to travel, ahead of the Fourth of July weekend. In fact, travel is in full swing this summer, as Americans eagerly pursue travel opportunities deferred for the last year and a half, according to the senior vice president, AAA Travel. This, coupled with strong demand for travel around Memorial Day, point toward a busy Independence Day.

As such, AAA projects near-record traffic for the Fourth of July holiday weekend. More than 47.7 million Americans are expected to drive or fly to a holiday destination this Independence Day (Jul 1–5). This represents an increase of 40% from last year and would mark the second-highest Independence Day travel volume on record, trailing only 2019. Of them, 43.6 million will go on road trip, 3.5 million will fly, and 0.62 million will travel by trains, buses and cruises.

About 91% of the travel is expected by car in spite of soaring gas and oil prices. Gas prices are currently hovering around $3.13 per gallon — the highest since October 2014. This is 43% higher than this time last year and 2% more than Memorial Day weekend, according to a GasBuddy analysis.

Additionally, travelers will feel the pinch of higher prices for hotels and car rentals as demand climbs. According to AAA, average daily car rental rates have increased 86% from last year. Mid-range hotel rates have increased 32-35%, with average nightly rates of $156 for AAA Two Diamond and $398 for AAA Three Diamond hotels. However, airfares on average have declined 2% from the last Independence Day.

The celebration is incomplete without fireworks and barbecues. According to the National Retail Federation (NRF), about 84% Americans plan to spend $80.54 per person this Independence Day, up from $76.49 in 2020 and $73.33 in 2019. The 35 to 44 years old age group is planning to spend the most money on food — $91.78 per person. Cookouts, barbecues and picnics continue to be the most popular activity (61%), followed by fireworks and community celebrations (33%). As such, Independence Day marks the beginning of the busiest half of the year for retailers. Many retailers are already flashing exciting deals for July Fourth and massive discounts are in the cards for a specific day.

That said, this Fourth July will be a celebration of not only freedom but also economic growth. Along with the spirit of Americans, this Independence Day should lift revenues and profits in various corners. Industries like transportation, lodging, hotel, restaurants, food, and retail will benefit the most. Investors seeking to enjoy the fanfare could tap these industries through the following ETFs.

ETFMG Travel Tech ETF (AWAY - Free Report)

This is the first ETF that offers direct access to the technology-focused global travel and tourism industry. It follows the Prime Travel Technology Index, charging investors 75 basis points (bps) in annual fees. The fund holds 35 stocks in its basket with travel bookings & reservations companies accounting for 51.9% of assets, followed by 18.5% in travel advice companies and 16.3% share in travel price comparison firms. AWAY has accumulated $379.4 million in its asset base and trades in an average daily volume of 223,000 shares.

AdvisorShares Restaurant ETF (EATZ - Free Report)

This is the actively managed and the only ETF investing exclusively in the restaurant and foodservice industry, including restaurants, bars, pubs, fast food, take-out facilities, food catering services, and more. It holds 32 securities in its basket with well-spread out exposure across each components. The fund has gathered $5.9 million in its asset base so far since its debut in late April. It charges 79 bps in annual fees and trades in average daily volume of 11,000 shares.

AdvisorShares Hotel ETF (BEDZ - Free Report)

This fund is also newly debuted in the space, having accumulated $7.7 million in its asset base since late April. It is the actively managed and the only ETF investing exclusively in the global hotel and travel-related services. The product holds 32 stocks in its basket that are pretty spread across components. It charges 79 bps in annual fees and trades in average daily volume of 13,000 shares.

Invesco Dynamic Food & Beverage ETF (PBJ - Free Report)

This product offers exposure to 32 companies engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies by tracking the Dynamic Food & Beverage Intellidex Index. The fund has amassed $98.9 million in its asset base, while trading in average daily volume of 25,000 shares. It charges 63 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report)

This fund tracks the Dynamic Leisure and Entertainment Intellidex Index and holds a small basket of 31 stocks. It is pretty well spread out across various securities and has substantial exposure to entertainment, and hotel, restaurants and leisure making up for 32.1% and 29.8% share, respectively, while media, and food and staples retailing also make up for double-digit in the portfolio. The ETF has amassed $1.6 billion in its asset base and has 0.63% in expense ratio. PEJ trades in paltry volume of 701,000 shares and has a Zacks ETF Rank #3 with a High risk outlook.

SPDR S&P Retail ETF (XRT - Free Report)

With AUM of $965.4 million, this product targets the broad retail sector by tracking the S&P Retail Select Industry Index. It holds 106 securities in its basket with key holdings in Internet & direct marketing retail, apparel retail, automotive retail, and specialty stores. The fund charges 35 bps in annual fees and trades in an average daily volume of 2.4 million shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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