Flying The Friendly Skies With Uncle Warren, JETS Is The New Buffett ETF

Who says you can't teach an old dog new tricks? Warren Buffett previously eschewed investing in airlines after generating some less than Buffett-esque results on an old iteration of U.S. Airways.

Buffett's Changed Stance

Give Buffett some credit for being flexible because recent regulatory filings reveal Buffett's Berkshire Hathaway Inc. now holds stakes in at least three major U.S. carriers. The latest Form 13F regulatory filing revealed a 21.8-million-share stake in American Airlines Group Inc AAL as of the end of the third quarter.

Buffett's financial service's conglomerate also picked up 6.33 million shares of Delta Air Lines, Inc. DAL and 4.53 million shares of United Continental Holdings Inc UAL.

Following The Oracle Of Omaha

For investors looking to leave the stock-picking acumen to Buffett, which is a fine idea, the U.S. Global Jets ETF JETS suddenly has credibility as a legitimate “Buffett ETF.” JETS, the lone exchange-traded fund dedicated to airline stocks, features Delta, United Continental and American as three of its top four holdings.

That trio combines for about 38 percent of the lineup in JETS. The underlying index for JETS, the U.S. Global Jets Index, “uses a smart beta strategy to track the global airline industry. The index uses fundamental screens to determine the most efficient airline companies” according to US Global.

But wait. There's more. A CNBC report, citing Buffett, said the Oracle of Omaha has added a stake in Southwest Airlines Co LUV since the end of the end of the third quarter. Southwest, the largest discount carrier in the United States, is the second-largest holding in JETS behind Delta at a weight of about 12.8 percent.

In other words, Berkshire Hathaway now owns stakes in companies that comprise more than half the lineup in JETS.

JETS jumped nearly 1.9 percent on the news Tuesday, extending a run that has seen the airline ETF gain more than 10 percent in just five trading sessions. On November 3 JETS was saddled with a year-to-date loss, now it is higher by 6.6 percent this year.