Summer’s coming, and with it, so too is travel. Many of us imagine travel as just flip flops, beach drinks, globe-trotting flights, and all that comes with it, but it’s more than just getting from A to B. Luxury goods also benefit from how travelers shop on vacation. With Estee Lauder (EL) reporting earnings Wednesday this week, consider how the ALPS Global Travel Beneficiaries ETF (JRNY) can not only benefit from travel but also allow investors to play EL’s earnings this week.
No ETF has a greater weight towards EL than JRNY does, at a 4.5% weighting according to Logicly, a platform from Fintech Sigmalogic recently acquired by VettaFi. JRNY is also cheaper than some of the other strategies that offer smaller weights, charging 65 basis points (bps) overall.
EL is up significantly over the last six months, rising 29% in that time, though it has cooled off some YTD, down about -3.5%. EL delivered an earnings surprise of about 19.4% last quarter, and could surprise again against expectations that it may see a slump in earnings.
See more: “Travel ETFs Hold On To Strong YTD Returns“
The company may be facing some headwinds in developed markets but it can look to emerging markets consumers for a boost, and with good reason – emerging markets went through their inflation battle last year and are poised to ride renewed economic activity since China has reopened since its zero-COVID policies elapsed.
With significant revenue from markets like India, Brazil, Turkey, and Malaysia, EL has diversified its consumer base and has a decent weight away from a looming U.S. and European recessionary environment.
JRNY tracks the S- Network Global Travel Index – Benchmark TR Gross index and is nearing its three year milestone as an ETF, set to happen next September. JRNY has returned more than 18% over the last six months and 3% over the last month alone, notable momentum that it takes into its earnings Wednesday.
Estee Lauder earnings are just one part of the overall appeal of JRNY, holding other luxury brands like LVMH Moet Hennessy Louis Vuitton (MC) and entertainment mainstays like Walt Disney (DIS) as well. For those investors looking to get more exposure to global travel and consumer discretionary spaces that are truly global, JRNY is one solid option to consider.
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vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for JRNY, for which it receives an index licensing fee. However, JRNY is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of JRNY.
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