The first ETF in Europe targeting the recovery of the travel industry is set to launch later this month.
The Airlines, Hotels and Cruise Lines UCITS ETF (TRYP) will list on the London Stock Exchange with a total expense ratio (TER) of 0.69%.
TRYP will mirror the recently launched US product – the SonicShares Airlines, Hotels and Cruise Lines ETF (TRYP) – in tracking the performance of the Solactive Airlines, Hotels and Cruise Lines index.
Being 44.7% US-focused, the index boasts 61 constituents and weights 44.6% towards airline companies, 39.8% towards hotels and 15.6% towards cruise providers.
The benchmark returned 37.7% over the 360 days to 2 June, according to data from Solactive, alongside gains just shy of 30% between the less volatile period of January 2016 to January 2020.
Between 2019 and 2020, spending on travel and leisure roughly halved, while business travel expenditure fell 52% due to lockdown restrictions.
TRYP has been listed via white-label ETF platform HANetf which said global spending on leisure travel is expected to increase by 45% in 2021, while business travel is set for a 21% uptick. Though both segments may take ‘several’ years to recover to pre-pandemic levels, the company said.
Hector McNeil co-Founder and co-CEO at HANetf and co-founder of TRYP, said: “The travel industry has been decimated after the pandemic but we are optimistic about a rebound in the travel industry in the short term due to the speed and extent of a COVID-19 vaccine roll out, business travel restarting and pent-up demand resulting from trips not taken during the pandemic.
“Over the longer term, the growth of disposable income and savings as well as the size and pace of a global economic recovery will be key factors although it may take a few years to regain the lost ground.”
The launch of TRYP comes in response to demand from European investors for a pure-play ETF targeting the recovery of the travel industry.
While this demand had already been serviced in the US, European investors’ main options to date include the iShares STOXX Europe 600 Travel & Leisure UCITS ETF (LTVL). LTVL has a constituent count of just 17, with a large focus given to its ‘leisure’ component, via 20.1% and 19.6% weightings to betting companies, Flutter Entertainment and Evolution Gaming Group, respectively.
Earlier this week, Procure partnered with HANetf to unveil Europe’s first space ETF, the Procure Space UCITS ETF (YODA), which will be the focus at ETF Stream's webinar, Space ETFs: To infinity and beyond, on 16 June.