Uber, Lyft Lead A New Next Gen Travel ETF

Uber, Lyft Lead A New Next Gen Travel ETF

The next generation of travel is here and now there's an exchange-traded fund to help investors tap that theme following the debut of the ETFMG Travel Tech ETF (NYSE: AWAY), which debuted on Thursday.

What To Know

Aptly-tickered AWAY tracks the Prime Travel Technology Index (PTRAVEL). Companies in the universe are engaged in the travel technology business.

“Travel Technology Business is defined as providing technology, via the internet and internet-connected devices such as mobile phones, to facilitate the following categories: travel bookings and reservations, ride-sharing and hailing, travel price comparison, and travel advice,” according to ETFMG.

AWAY's 26 holdings “operate both direct to consumers and as providers to businesses. Companies with products and services that are predominantly tied to any of the categories of Travel Technology Business are collectively called 'Travel Technology Companies,'” said the issuer.

Why It's Important

AWAY addresses at least one issue some ETF nerds have been pondering: when and where Uber UBER and Lyft LYFT would occupy an ETF for size. Those stocks combine for 20.10% of the new ETF's weight.

The 11% weight to Uber found in AWAY makes the new fund the second-largest ETF holder of the ride-hailing firm on a percentage basis.

With a 9.1% allocation to Lyft, AWAY is by far the largest ETF owner of that stock on a percentage basis. Travel means big business for the global economy, accounting for more than 10% of global GDP on an annual basis.

Other well-known names among AWAY's top 10 holdings include Booking.com BKNGTrip.com TCOM, and the iShares MSCI South Korea ETF EWY.

What's Next

Clearly, AWAY stands to benefit from upside in Lyft and Uber and is positioned as an adequate ETF proxy on those stocks.

In addition to the ride-hailing exposure, AWAY devotes 45% of its weight to travel booking and reservations sites, 18.22% to travel advice platforms and 17.44% to travel price comparison sites.

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